EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
Dated as of January 15, 2003
Among
XXXXXXX & XXXXXXX,
LONGBOW MERGER SUB, INC.
And
3-DIMENSIONAL PHARMACEUTICALS, INC.
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TABLE OF CONTENTS
Page
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ARTICLE I
The Merger
SECTION 1.01. The Merger .............................................. 2
SECTION 1.02. Closing ................................................. 2
SECTION 1.03. Effective Time .......................................... 2
SECTION 1.04. Effects of the Merger ................................... 3
SECTION 1.05. Certificate of Incorporation and By-laws. ............... 3
SECTION 1.06. Directors ............................................... 3
SECTION 1.07. Officers ................................................ 3
ARTICLE II
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock ................................. 3
SECTION 2.02. Exchange of Certificates ................................ 5
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of the Company ........... 8
SECTION 3.02. Representations and Warranties of Parent and Sub ........ 43
ARTICLE IV
Covenants Relating to Conduct of Business
SECTION 4.01. Conduct of Business ..................................... 46
SECTION 4.02. No Solicitation ......................................... 53
ARTICLE V
Additional Agreements
SECTION 5.01. Preparation of the Proxy Statement;
Stockholders' Meeting .................................. 56
SECTION 5.02. Access to Information; Confidentiality .................. 58
SECTION 5.03. Commercially Reasonable Efforts ......................... 58
SECTION 5.04. Company Stock Options; Warrants ......................... 60
SECTION 5.05. Indemnification, Advancement of
Expenses, Exculpation and Insurance .................... 61
SECTION 5.06. Fees and Expenses ....................................... 62
SECTION 5.07. Public Announcements .................................... 63
SECTION 5.08. Stockholder Litigation .................................. 64
SECTION 5.09. Employee Matters ........................................ 64
SECTION 5.10. Stockholder Agreement Legend ............................ 65
SECTION 5.11. Consents and Other Action ............................... 66
ARTICLE VI
Conditions Precedent
SECTION 6.01. Conditions to Each Party's Obligation to
Effect the Merger ...................................... 66
SECTION 6.02. Conditions to Obligations of Parent
and Sub ................................................ 66
SECTION 6.03. Conditions to Obligation of the Company ................. 68
SECTION 6.04. Frustration of Closing Conditions ....................... 69
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01. Termination ............................................. 69
SECTION 7.02. Effect of Termination ................................... 71
SECTION 7.03. Amendment ............................................... 71
SECTION 7.04. Extension; Waiver ....................................... 71
SECTION 7.05. Procedure for Termination or Amendment .................. 72
(ii)
ARTICLE VIII
General Provisions
SECTION 8.01. Nonsurvival of Representations
and Warranties ......................................... 72
SECTION 8.02. Notices ................................................. 72
SECTION 8.03. Definitions ............................................. 73
SECTION 8.04. Interpretation .......................................... 75
SECTION 8.05. Consents and Approvals .................................. 76
SECTION 8.06. Counterparts ............................................ 76
SECTION 8.07. Entire Agreement; No Third-Party
Beneficiaries .......................................... 76
SECTION 8.08. GOVERNING LAW ........................................... 76
SECTION 8.09. Assignment .............................................. 76
SECTION 8.10. Specific Enforcement;
Consent to Jurisdiction ................................ 77
SECTION 8.11. Severability ............................................ 77
Annex I Index of Defined Terms
Exhibit A Restated Certificate of Incorporation of the Surviving
Corporation
(iii)
AGREEMENT AND PLAN OF MERGER (this "Agreement") dated
as of January 15, 2003, among XXXXXXX & XXXXXXX, a New
Jersey corporation ("Parent"), LONGBOW MERGER SUB, INC., a
Delaware corporation and a wholly owned Subsidiary of Parent
("Sub"), and 3-DIMENSIONAL PHARMACEUTICALS, INC., a Delaware
corporation (the "Company").
WHEREAS the Board of Directors of each of the Company and Sub has
approved and declared advisable, and the Board of Directors of Parent has
approved, this Agreement and the merger of Sub with and into the Company (the
"Merger"), upon the terms and subject to the conditions set forth in this
Agreement, whereby each issued and outstanding share of common stock, par value
$.001 per share, of the Company ("Company Common Stock"), other than (i) shares
of Company Common Stock directly owned by Parent, Sub or the Company and (ii)
the Appraisal Shares, will be converted into the right to receive $5.74 in cash;
WHEREAS simultaneously with the execution and delivery of this
Agreement and as a condition to Parent's willingness to enter into this
Agreement, Parent and certain stockholders of the Company (the "Principal
Stockholders") entered into an agreement (the "Stockholder Agreement") pursuant
to which the Principal Stockholders agreed to vote, approve and adopt this
Agreement and to take certain other actions in furtherance of the consummation
of the Merger upon the terms and subject to the conditions set forth in the
Stockholder Agreement; and
WHEREAS Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements
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contained in this Agreement, and subject to the conditions set forth herein, the
parties hereto agree as follows:
ARTICLE I
The Merger
SECTION 1.01. The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the General Corporation Law
of the State of Delaware (the "DGCL"), Sub shall be merged with and into the
Company at the Effective Time. Following the Effective Time, the separate
corporate existence of Sub shall cease and the Company shall continue as the
surviving corporation in the Merger (the "Surviving Corporation") and shall
succeed to and assume all the rights and obligations of Sub in accordance with
the DGCL.
SECTION 1.02. Closing. The closing of the Merger (the "Closing") will
take place at 10:00 a.m. on a date to be specified by the parties, which shall
be no later than the second business day after satisfaction or (to the extent
permitted by law) waiver of the conditions set forth in Article VI (other than
those conditions that by their terms are to be satisfied at the Closing, but
subject to the satisfaction or (to the extent permitted by law) waiver of those
conditions), at the offices of Cravath, Swaine & Xxxxx, Worldwide Plaza, 000
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless another time, date or place is
agreed to in writing by Parent and the Company; provided, however, that if all
the conditions set forth in Article VI shall not have been satisfied or (to the
extent permitted by law) waived on such second business day, then the Closing
shall take place on the first business day on which all such conditions shall
have been satisfied or (to the extent permitted by law) waived. The date on
which the Closing occurs is referred to in this Agreement as the "Closing Date".
SECTION 1.03. Effective Time. Subject to the provisions of this
Agreement, as soon as practicable on the Closing Date, the parties shall file
with the Secretary of State of the State of Delaware a certificate of merger
(the "Certificate of Merger") executed and acknowledged by the parties in
accordance with the relevant provisions of the DGCL and, as soon as practicable
on or after the Closing
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Date, shall make all other filings or recordings required under the DGCL. The
Merger shall become effective upon the filing of the Certificate of Merger with
the Secretary of State of the State of Delaware, or at such later time as Parent
and the Company shall agree and shall specify in the Certificate of Merger (the
time the Merger becomes effective being the "Effective Time").
SECTION 1.04. Effects of the Merger. The Merger shall have the effects
set forth in Section 259 of the DGCL.
SECTION 1.05. Certificate of Incorporation and By-laws. (a) The Ninth
Restated Certificate of Incorporation of the Company (the "Company Certificate")
shall be amended at the Effective Time to be in the form of Exhibit A and, as so
amended, such Company Certificate shall be the Restated Certificate of
Incorporation of the Surviving Corporation until thereafter changed or amended
as provided therein or by applicable law.
(b) The By-laws of Sub, as in effect immediately prior to the
Effective Time, shall be the By-laws of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law.
SECTION 1.06. Directors. The directors of Sub immediately prior to the
Effective Time shall be the directors of the Surviving Corporation until the
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.
SECTION 1.07. Officers. The officers of Sub immediately prior to the
Effective Time shall be the officers of the Surviving Corporation until the
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.
ARTICLE II
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
shares of Company
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Common Stock or any shares of capital stock of Parent or Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of
capital stock of Sub shall be converted into and become one validly issued,
fully paid and nonassessable share of common stock, par value $0.01 per
share, of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. Each
share of Company Common Stock that is directly owned by the Company, Parent
or Sub immediately prior to the Effective Time shall automatically be
canceled and shall cease to exist, and no consideration shall be delivered
in exchange therefor.
(c) Conversion of Company Common Stock. Each share of Company
Common Stock issued and outstanding immediately prior to the Effective Time
(other than shares to be canceled in accordance with Section 2.01(b) and
the Appraisal Shares) shall be converted into the right to receive $5.74 in
cash, without interest (the "Merger Consideration"). At the Effective Time,
all such shares of Company Common Stock shall no longer be outstanding and
shall automatically be canceled and shall cease to exist, and each holder
of a certificate which immediately prior to the Effective Time represented
any such shares of Company Common Stock (each, a "Certificate") shall cease
to have any rights with respect thereto, except the right to receive the
Merger Consideration. The right of any holder of a Certificate to receive
the Merger Consideration shall be subject to and reduced by the amount of
any withholding that is required under applicable tax law.
(d) Appraisal Rights. Notwithstanding anything in this Agreement
to the contrary, shares (the "Appraisal Shares") of Company Common Stock
issued and outstanding immediately prior to the Effective Time that are
held by any holder who is entitled to demand and properly demands appraisal
of such Appraisal Shares pursuant to, and who complies in all respects
with, the provisions of Section 262 of the DGCL ("Section 262") shall not
be converted into the right to receive the Merger Consideration as provided
in Section 2.01(c),
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but instead such holder shall be entitled to payment of the fair value of
such Appraisal Shares in accordance with the provisions of Section 262. At
the Effective Time, all Appraisal Shares shall no longer be outstanding,
shall automatically be canceled and shall cease to exist, and each holder
of Appraisal Shares shall cease to have any rights with respect thereto,
except the right to receive the fair value of such Appraisal Shares in
accordance with the provisions of Section 262. Notwithstanding the
foregoing, if any such holder shall fail to perfect or otherwise shall
waive, withdraw or lose the right to appraisal under Section 262, or a
court of competent jurisdiction shall determine that such holder is not
entitled to the relief provided by Section 262, then the right of such
holder to be paid the fair value of such holder's Appraisal Shares under
Section 262 shall cease and such Appraisal Shares shall be deemed to have
been converted at the Effective Time into, and shall have become, the right
to receive the Merger Consideration as provided in Section 2.01(c). The
Company shall serve prompt notice to Parent of any demands for appraisal of
any shares of Company Common Stock, and Parent shall have the right to
participate in and direct all negotiations and proceedings with respect to
such demands. Prior to the Effective Time, the Company shall not, without
the prior written consent of Parent, voluntarily make any payment with
respect to, or settle or offer to settle, any such demands, or agree to do
any of the foregoing.
SECTION 2.02. Exchange of Certificates. (a) Paying Agent. Prior to the
Effective Time, Parent shall appoint JPMorgan Chase or another comparable bank
or trust company to act as paying agent (the "Paying Agent") for the payment of
the Merger Consideration. At the Effective Time, Parent shall deposit, or cause
the Surviving Corporation to deposit, with the Paying Agent, for the benefit of
the holders of Certificates, cash in an amount sufficient to pay the aggregate
Merger Consideration required to be paid pursuant to Section 2.01(c) (such cash
being hereinafter referred to as the "Exchange Fund").
(b) Exchange Procedures. As soon as practicable after the
Effective Time, Parent shall cause the Paying Agent to mail to each holder of
record of a Certificate (i) a form of letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title
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to the Certificates shall pass, only upon proper delivery of the Certificates to
the Paying Agent and which shall be in customary form and have such other
provisions as Parent may reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for the Merger
Consideration. Each holder of record of a Certificate shall, upon surrender to
the Paying Agent of such Certificate, together with such letter of transmittal,
duly executed, and such other documents as may reasonably be required by the
Paying Agent, be entitled to receive in exchange therefor the amount of cash
which the number of shares of Company Common Stock previously represented by
such Certificate shall have been converted into the right to receive pursuant to
Section 2.01(c), and the Certificate so surrendered shall forthwith be canceled.
In the event of a transfer of ownership of Company Common Stock which is not
registered in the transfer records of the Company, payment of the Merger
Consideration may be made to a person other than the person in whose name the
Certificate so surrendered is registered if such Certificate shall be properly
endorsed or otherwise be in proper form for transfer and the person requesting
such payment shall pay any transfer or other taxes required by reason of the
payment of the Merger Consideration to a person other than the registered holder
of such Certificate or establish to the reasonable satisfaction of Parent that
such tax has been paid or is not applicable. Until surrendered as contemplated
by this Section 2.02(b), each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender the
Merger Consideration which the holder thereof has the right to receive in
respect of such Certificate pursuant to this Article II. No interest shall be
paid or will accrue on any cash payable to holders of Certificates pursuant to
the provisions of this Article II.
(c) No Further Ownership Rights in Company Common Stock. All
cash paid upon the surrender of Certificates in accordance with the terms of
this Article II shall be deemed to have been paid in full satisfaction of all
rights pertaining to the shares of Company Common Stock formerly represented by
such Certificates. At the close of business on the day on which the Effective
Time occurs, the stock transfer books of the Company shall be closed, and there
shall be no further registration of transfers on the stock transfer books of the
Surviving Corporation of the shares of Company Common Stock that were
outstanding immediately prior
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to the Effective Time. If, after the Effective Time, any Certificate is
presented to the Surviving Corporation for transfer, it shall be canceled
against delivery of cash to the holder thereof as provided in this Article II.
(d) Termination of the Exchange Fund. Any portion of the
Exchange Fund which remains undistributed to the holders of the Certificates for
nine months after the Effective Time shall be delivered to Parent, upon demand,
and any holders of the Certificates who have not theretofore complied with this
Article II shall thereafter look only to Parent for, and Parent shall remain
liable for, payment of their claim for the Merger Consideration.
(e) No Liability. None of Parent, Sub, the Company, the
Surviving Corporation or the Paying Agent shall be liable to any person in
respect of any cash from the Exchange Fund properly delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
If any Certificate shall not have been surrendered prior to two years after the
Effective Time (or immediately prior to such earlier date on which any Merger
Consideration would otherwise escheat to or become the property of any
Governmental Entity), any such Merger Consideration shall, to the extent
permitted by applicable law, become the property of Parent, free and clear of
all claims or interest of any person previously entitled thereto.
(f) Investment of Exchange Fund. The Paying Agent shall invest
the cash in the Exchange Fund as directed by Parent. Any interest and other
income resulting from such investments shall be paid to Parent.
(g) Lost Certificates. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
Parent, the posting by such person of a bond in such reasonable amount as Parent
may direct as indemnity against any claim that may be made against it with
respect to such Certificate, the Paying Agent shall deliver in exchange for such
lost, stolen or destroyed Certificate the applicable Merger Consideration with
respect thereto.
(h) Withholding Rights. Parent, the Surviving Corporation or the
Paying Agent shall be entitled to deduct
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and withhold from the consideration otherwise payable pursuant to this Agreement
to any holder of shares of Company Common Stock such amounts as Parent, the
Surviving Corporation or the Paying Agent is required to deduct and withhold
with respect to the making of such payment under the Internal Revenue Code of
1986, as amended (the "Code"), or any provision of state, local or foreign tax
law. To the extent that amounts are so withheld and paid over to the appropriate
taxing authority by Parent, the Surviving Corporation or the Paying Agent, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of the shares of Company Common Stock in respect of
which such deduction and withholding was made by Parent, the Surviving
Corporation or the Paying Agent.
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of the Company. Except as
set forth in the disclosure schedule (with specific reference to the particular
Section or subsection of this Agreement to which the information set forth in
such disclosure schedule relates; provided, however, that any information set
forth in one section of the Company Disclosure Schedule shall be deemed to apply
to each other Section or subsection thereof or hereof to which its relevance is
readily apparent on its face) delivered by the Company to Parent prior to the
execution of this Agreement (the "Company Disclosure Schedule"), the Company
represents and warrants to Parent and Sub as follows:
(a) Organization, Standing and Corporate Power. Each of the
Company and its Subsidiaries has been duly organized, and is validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or formation, as the case may be, and has all requisite power
and authority and possesses all governmental licenses, permits,
authorizations and approvals necessary to enable it to use its corporate or
other name and to own, lease or otherwise hold and operate its properties
and other assets and to carry on its business as presently conducted and as
currently proposed by its management to be conducted, except where the
failure to have such government licenses, permits, authorizations or
approvals individually or in
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the aggregate has not had and would not reasonably be expected to have a
Material Adverse Effect. Each of the Company and its Subsidiaries is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership, leasing
or operation of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so
qualified or licensed individually or in the aggregate has not had and
would not reasonably be expected to have a Material Adverse Effect. The
Company has made available to Parent, prior to the execution of this
Agreement, complete and accurate copies of the Company Certificate and its
By-laws (the "Company By-laws"), and the comparable organizational
documents of each of its Subsidiaries, in each case as amended to the date
hereof. The Company has made available to Parent complete and accurate
copies of the minutes (or, in the case of minutes that have not yet been
finalized, drafts thereof) of all meetings of the stockholders of the
Company and each of its Subsidiaries, the Board of Directors of the Company
and each of its Subsidiaries and the committees of each of such Board of
Directors, in each case held since August 4, 2000 and prior to the date
hereof.
(b) Subsidiaries. Section 3.01(b) of the Company Disclosure
Schedule lists each of the Subsidiaries of the Company and, for each such
Subsidiary, the state of incorporation or formation and, as of the date
hereof, each jurisdiction in which such Subsidiary is qualified or licensed
to do business. All the issued and outstanding shares of capital stock of,
or other equity interests in, each such Subsidiary have been validly issued
and are fully paid and nonassessable and are owned directly or indirectly
by the Company free and clear of all pledges, liens, charges, encumbrances
or security interests of any kind or nature whatsoever (collectively,
"Liens"), and free of any restriction on the right to vote, sell or
otherwise dispose of such capital stock or other equity interests. Except
for the capital stock of, or voting securities or equity interests in, its
Subsidiaries, the Company does not own, directly or indirectly, any capital
stock of, or other voting securities or equity interests in, any
corporation, partnership, joint venture, association or other entity.
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(c) Capital Structure. The authorized capital stock of the
Company consists of 45,000,000 shares of Company Common Stock and 5,000,000
shares of preferred stock, par value $.001 per share ("Company Preferred
Stock"). At the close of business on January 14, 2003, (i) 22,595,758
shares of Company Common Stock were issued and outstanding, (ii) no shares
of Company Common Stock were held by the Company in its treasury, (iii)
5,633,499 shares of Company Common Stock were reserved for issuance
pursuant to the Equity Compensation Plan of the Company, as amended, and
the 2000 Equity Compensation Plan of the Company, as amended (such plans,
collectively, the "Company Stock Plans"), of which 3,884,538 shares of
Company Common Stock were subject to outstanding Company Stock Options, and
47,787 shares of Company Common Stock were subject to vesting and
restrictions on transfer (collectively, "Company Restricted Stock"), (iv)
no shares of Company Preferred Stock were issued or outstanding or were
held by the Company as treasury shares and (v) warrants to acquire 106,329
shares of Company Common Stock from the Company pursuant to the warrant
agreements set forth on Section 3.01(c) of the Company Disclosure Schedule
and previously delivered in complete and correct form to Parent (the
"Warrants") were issued and outstanding. Except as set forth above in this
Section 3.01(c), at the close of business on January 14, 2003, no shares of
capital stock or other voting securities or equity interests of the Company
were issued, reserved for issuance or outstanding. There are no outstanding
stock appreciation rights, "phantom" stock rights, performance units,
rights to receive shares of Company Common Stock on a deferred basis or
other rights (other than Company Stock Options and Warrants) that are
linked to the value of Company Common Stock (collectively, "Company
Stock-Based Awards"). Section 3.01(c) of the Company Disclosure Schedule
sets forth a complete and accurate list, as of January 14, 2003, of all
outstanding options to purchase shares of Company Common Stock
(collectively, "Company Stock Options") under the Company Stock Plans or
otherwise, and all outstanding Warrants, the number of shares of Company
Common Stock (or other stock) subject thereto, the grant dates, expiration
dates, exercise or base prices (if applicable) and vesting schedules
thereof and the names of the holders thereof. No shares of Company Common
Stock are subject to
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repurchase by the Company at a fixed purchase price. All outstanding
Company Stock Options are evidenced by stock option agreements, restricted
stock purchase agreements or other award agreements, in each case in the
forms set forth in Section 3.01(c) of the Company Disclosure Schedule, and
no stock option agreement, restricted stock purchase agreement or other
award agreement contains terms that are inconsistent with such forms. As of
the close of business on January 14, 2003, there were outstanding Company
Stock Options to purchase 1,162,531 shares of Company Common Stock with
exercise prices on a per share basis lower than the Merger Consideration,
and the weighted average exercise price of such Company Stock Options was
equal to $2.67. As of the close of business on January 14, 2003, there were
outstanding Warrants to purchase 101,829 shares of Company Common Stock
with exercise prices on a per share basis lower than the Merger
Consideration. Each Company Stock Option may, by its terms, be canceled in
connection with the transactions contemplated hereby for a lump sum cash
payment in accordance with and to the extent required by Section 5.04(a).
All Warrants may, by their terms, be canceled in exchange for a lump sum
cash payment in accordance with and to the extent required by Section
5.04(b). All outstanding shares of capital stock of the Company are, and
all shares which may be issued pursuant to the Company Stock Options or the
Warrants will be, when issued in accordance with the terms thereof, duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights. There are no bonds, debentures, notes or other
indebtedness of the Company having the right to vote (or convertible into,
or exchangeable for, securities having the right to vote) on any matters on
which stockholders of the Company may vote. Except as set forth above in
this Section 3.01(c), (x) there are not issued, reserved for issuance or
outstanding (A) any shares of capital stock or other voting securities or
equity interests of the Company, (B) any securities of the Company
convertible into or exchangeable or exercisable for shares of capital stock
or other voting securities or equity interests of the Company or (C) any
warrants, calls, options or other rights to acquire from the Company or any
of its Subsidiaries, and no obligation of the Company or any of its
Subsidiaries to issue, any capital stock, voting securities, equity
interests or securities convertible
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into or exchangeable or exercisable for capital stock or voting securities
of the Company and (y) there are not any outstanding obligations of the
Company or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any such securities or to issue, deliver or sell, or cause to be
issued, delivered or sold, any such securities. Neither the Company nor any
of its Subsidiaries is a party to any voting agreement with respect to the
voting of any such securities. Except as set forth above in this Section
3.01(c), there are no outstanding (1) securities of the Company or any of
its Subsidiaries convertible into or exchangeable or exercisable for shares
of capital stock or voting securities or equity interests of any Subsidiary
of the Company, (2) warrants, calls, options or other rights to acquire
from the Company or any of its Subsidiaries, and no obligation of the
Company or any of its Subsidiaries to issue, any capital stock, voting
securities, equity interests or securities convertible into or exchangeable
or exercisable for capital stock or voting securities of any Subsidiary of
the Company or (3) obligations of the Company or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any such outstanding securities or
to issue, deliver or sell, or cause to be issued, delivered or sold, any
such securities.
(d) Authority; Noncontravention. The Company has all requisite
corporate power and authority to execute and deliver this Agreement and,
subject to receipt of the Stockholder Approval, to consummate the
transactions contemplated by this Agreement. The execution and delivery of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated by this Agreement have been duly authorized by
all necessary corporate action on the part of the Company and no other
corporate proceedings on the part of the Company are necessary to authorize
this Agreement or to consummate the transactions contemplated hereby,
subject, in the case of the consummation of the Merger, to the obtaining of
the Stockholder Approval. This Agreement has been duly executed and
delivered by the Company and, assuming the due authorization, execution and
delivery by each of the other parties hereto, constitutes a legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms,
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subject to bankruptcy, insolvency, moratorium, reorganization or similar
laws affecting the rights of creditors generally and the availability of
equitable remedies. The Board of Directors of the Company, at a meeting
duly called and held at which all directors of the Company were present,
duly and unanimously adopted resolutions (i) approving and declaring
advisable this Agreement, the Merger and the other transactions
contemplated by this Agreement, (ii) declaring that it is in the best
interests of the stockholders of the Company that the Company enter into
this Agreement and consummate the Merger and the other transactions
contemplated by this Agreement on the terms and subject to the conditions
set forth in this Agreement, (iii) directing that the adoption of this
Agreement be submitted as promptly as practicable to a vote at a meeting of
the stockholders of the Company and (iv) recommending that the stockholders
of the Company adopt this Agreement, which resolutions, as of the date of
this Agreement, have not been subsequently rescinded, modified or withdrawn
in any way. The execution and delivery of this Agreement do not, and the
consummation of the Merger and the other transactions contemplated by this
Agreement and compliance with the provisions of this Agreement will not,
conflict with, or result in any violation or breach of, or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to the loss
of a benefit under, or result in the creation of any Lien in or upon any of
the properties or other assets of the Company or any of its Subsidiaries
under, (x) the Company Certificate or the Company By-laws or the comparable
organizational documents of any of its Subsidiaries, (y) any loan or credit
agreement, bond, debenture, note, mortgage, indenture, lease or other
contract, agreement, obligation, commitment, arrangement, understanding,
instrument, permit, franchise or license, whether oral or written (each,
including all amendments thereto, a "Contract"), to which the Company or
any of its Subsidiaries is a party or any of their respective properties or
other assets is subject or (z) subject to the governmental filings, the
obtaining of the Stockholder Approval and the other matters referred to in
the following sentence, any (A) statute, law, ordinance, rule or regulation
applicable to the Company or any of its Subsidiaries or
14
their respective properties or other assets or (B) order, writ, injunction,
decree, judgment or stipulation, in each case applicable to the Company or
any of its Subsidiaries or their respective properties or other assets,
other than, in the case of clauses (y) and (z), any such conflicts,
violations, breaches, defaults, rights, losses or Liens that individually
or in the aggregate have not had and would not reasonably be expected to
have a Material Adverse Effect. No consent, approval, order or
authorization of, action by or in respect of, or registration, declaration
or filing with, any Federal, state, local or foreign government, any court,
administrative, regulatory or other governmental agency, commission or
authority or any non-governmental self-regulatory agency, commission or
authority (each, a "Governmental Entity") is required by or with respect to
the Company or any of its Subsidiaries in connection with the execution and
delivery of this Agreement by the Company or the consummation of the Merger
or the other transactions contemplated by this Agreement, except for (1)
the filing of a premerger notification and report form by the Company under
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and
the rules and regulations thereunder (the "HSR Act"), and the receipt,
termination or expiration, as applicable, of approvals or waiting periods
required under the HSR Act or any other applicable competition, merger
control, antitrust or similar law or regulation, (2) the filing with the
Securities and Exchange Commission (the "SEC") of (A) a proxy statement
relating to the adoption by the stockholders of the Company of this
Agreement (as amended or supplemented from time to time, the "Proxy
Statement") and (B) such reports under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), as may be required in connection with this
Agreement and the transactions contemplated by this Agreement, (3) the
filing of the Certificate of Merger with the Secretary of State of the
State of Delaware and appropriate documents with the relevant authorities
of other states in which the Company or any of its Subsidiaries is
qualified to do business, (4) any filings required under the rules and
regulations of the Nasdaq National Market and (5) such other consents,
approvals, orders, authorizations, actions, registrations, declarations and
filings the failure of which to be obtained or made individually or in the
15
aggregate has not had and would not reasonably be expected to have a
Material Adverse Effect.
(e) Company SEC Documents. The Company has filed all reports,
schedules, forms, statements and other documents (including exhibits and
other information incorporated therein) with the SEC required to be filed
by the Company since August 4, 2000 (the "Company SEC Documents"). As of
their respective filing dates, the Company SEC Documents complied in all
material respects with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), or the Exchange Act, as the case may be,
and the rules and regulations of the SEC promulgated thereunder applicable
to such Company SEC Documents, and none of the Company SEC Documents
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading. Except to the extent that information contained in
any Company SEC Document has been revised, amended, supplemented or
superseded by a later-filed Company SEC Document, none of the Company SEC
Documents contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements (including the
related notes) of the Company included in the Company SEC Documents
complied at the time they were filed as to form in all material respects
with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles in the United
States ("GAAP") (except, in the case of unaudited statements, as permitted
by the rules and regulations of the SEC) applied on a consistent basis
during the periods involved (except as may be indicated in the notes
thereto) and each fairly presented in all material respects the
consolidated financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal year-end audit adjustments). Parent
shall receive a certificate
16
signed by the chief executive officer and the chief financial officer of
the Company in their capacities as such, on or prior to the Closing Date,
with respect to the most recent annual report on Form 10-K and all reports
on Form 10-Q, all reports on Form 8-K and all definitive proxy materials
filed with the SEC, in each case subsequent to the filing of the most
recent Form 10-K and any amendments thereto filed prior to the date hereof
and except for any such reports or proxy materials that have been certified
pursuant to 18 U.S.C. Section 1350 (collectively, the "Covered Reports")
stating that, to such person's knowledge, (i) no Covered Report contained
an untrue statement of material fact as of the end of the period covered by
such report (or in the case of a report on Form 8-K or definitive proxy
materials, as of the date on which it was filed) and (ii) no Covered Report
omitted to state a material fact necessary to make the statements in such
Covered Report, in light of the circumstances under which they were made,
not misleading as of the end of the period covered by such report (or in
the case of a report on Form 8-K or definitive proxy materials, as of the
date on which it was filed). Except as disclosed in the Company SEC
Documents filed by the Company and publicly available prior to the date of
this Agreement (the "Filed Company SEC Documents"), neither the Company nor
any of its Subsidiaries has any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) which individually or
in the aggregate have had or would reasonably be expected to have a
Material Adverse Effect. None of the Subsidiaries of the Company are, or
have at any time since August 4, 2000 been, subject to the reporting
requirements of Sections 13(a) and 15(d) of the Exchange Act.
(f) Information Supplied. None of the information supplied or to
be supplied by the Company specifically for inclusion or incorporation by
reference in the Proxy Statement will, at the date it is first mailed to
the stockholders of the Company and at the time of the Stockholders'
Meeting, contain any 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, in light of the circumstances under which they
are made, not misleading, except that no representation or
17
warranty is made by the Company with respect to statements made or
incorporated by reference therein based on information supplied by or on
behalf of Parent or Sub in writing specifically for inclusion or
incorporation by reference in the Proxy Statement. The Proxy Statement will
comply as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder.
(g) Absence of Certain Changes or Events. Except for liabilities
incurred in connection with this Agreement and except as disclosed in the
Filed Company SEC Documents or as expressly permitted pursuant to Section
4.01(a)(i) through (xvi), since the date of the most recent audited
financial statements included in the Filed Company SEC Documents, the
Company and its Subsidiaries have conducted their respective businesses
only in the ordinary course consistent with past practice, and there has
not been any Material Adverse Change, and from such date until the date
hereof there has not been (i) any declaration, setting aside or payment of
any dividend or other distribution (whether in cash, stock or property)
with respect to any capital stock of the Company or any of its
Subsidiaries, other than dividends or distributions by a direct or indirect
wholly owned Subsidiary of the Company to its shareholders, (ii) any
purchase, redemption or other acquisition by the Company or any of its
Subsidiaries of any shares of capital stock or any other securities of the
Company or any of its Subsidiaries or any options, warrants, calls or
rights to acquire such shares or other securities, (iii) any split,
combination or reclassification of any capital stock of the Company or any
of its Subsidiaries or any issuance or the authorization of any issuance of
any other securities in respect of, in lieu of or in substitution for
shares of their respective capital stock, (iv) (A) any granting by the
Company or any of its Subsidiaries to any current or former director,
officer, employee or consultant of the Company or its Subsidiaries of any
increase in compensation, bonus or fringe or other benefits or any granting
of any type of compensation or benefits to any current or former director,
officer, employee or consultant not previously receiving or entitled to
receive such type of compensation or benefit, except for normal increases
in cash compensation (including cash bonuses) in the
18
ordinary course of business consistent with past practice or as was
required under any Company Benefit Agreement or Company Benefit Plan in
effect as of the date of the most recent audited financial statements
included in the Filed Company SEC Documents, (B) any granting by the
Company or any of its Subsidiaries to any current or former director,
officer, employee or consultant of the Company or any of its Subsidiaries
of any right to receive any increase in severance or termination pay, or
(C) any entry by the Company or any of its Subsidiaries into, or any
amendments of, (1) any employment, deferred compensation, consulting,
severance, change of control, termination or indemnification agreement or
any other agreement with or involving any current or former director,
officer, employee or consultant of the Company or any of its Subsidiaries
or (2) any agreement with any current or former director, officer, employee
or consultant of the Company or any of its Subsidiaries the benefits of
which are contingent, or the terms of which are materially altered, upon
the occurrence of a transaction involving the Company of a nature
contemplated by this Agreement (all such agreements under this clause (C),
collectively, "Company Benefit Agreements"), (D) any adoption of, any
amendment to or any termination of any Company Benefit Plan, or (E) any
payment of any benefit under, or the grant of any award under, or any
amendment to, or termination of, any bonus, incentive, performance or other
compensation plan or arrangement, Company Benefit Agreement or Company
Benefit Plan (including in respect of stock options, "phantom" stock, stock
appreciation rights, restricted stock, "phantom" stock rights, restricted
stock units, deferred stock units, performance stock units or other
stock-based or stock-related awards or the removal or modification of any
restrictions in any Company Benefit Agreement or Company Benefit Plan or
awards made thereunder) except as required to comply with applicable law or
any Company Benefit Agreement or Company Benefit Plan in effect as of the
date of the most recent audited financial statements included in the Filed
Company SEC Documents, (v) any damage, destruction or loss to any tangible
asset of the Company or any of its Subsidiaries, whether or not covered by
insurance, that individually or in the aggregate has had or would
reasonably be expected to have a Material Adverse Effect, (vi) any change
in
19
accounting methods, principles or practices by the Company materially
affecting its assets, liabilities or businesses, except insofar as may have
been required by a change in GAAP or (vii) any material tax election or any
settlement or compromise of any material income tax liability.
(h) Litigation. Except as disclosed in the Filed Company SEC
Documents, there is no suit, action or proceeding pending or, to the
Knowledge of the Company, threatened against or affecting the Company or
any of its Subsidiaries or any of their respective assets that individually
or in the aggregate has had or would reasonably be expected to have a
Material Adverse Effect, nor is there any judgment, decree, injunction,
rule or order of any Governmental Entity or arbitrator outstanding against,
or, to the Knowledge of the Company, investigation by any Governmental
Entity involving, the Company or any of its Subsidiaries or any of their
respective assets that individually or in the aggregate has had or would
reasonably be expected to have a Material Adverse Effect.
(i) Contracts. Except as disclosed in the Filed Company SEC
Documents and except with respect to licenses and other agreements relating
to intellectual property, which are the subject of Section 3.01(p), as of
the date hereof, neither the Company nor any of its Subsidiaries is a party
to, and none of their respective properties or other assets is subject to,
any contract or agreement that is of a nature required to be filed as an
exhibit to a report or filing under the Securities Act or the Exchange Act
and the rules and regulations promulgated thereunder. None of the Company,
any of its Subsidiaries or, to the Knowledge of the Company, any other
party thereto is in violation of or in default under (nor does there exist
any condition which upon the passage of time or the giving of notice or
both would cause such a violation of or default under) any Contract, to
which it is a party or by which it or any of its properties or other assets
is bound, except for violations or defaults that individually or in the
aggregate have not had and would not reasonably be expected to have a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries
has entered into any Contract with any Affiliate of the Company that is
currently in effect
20
other than agreements that are disclosed in the Filed Company SEC
Documents. Neither the Company nor any of its Subsidiaries is a party to or
otherwise bound by any agreement or covenant restricting the Company's or
any of its Subsidiaries' ability to compete or by any agreement or covenant
restricting in any respect the research, development, distribution,
training, sale, supply, license, marketing or manufacturing of products or
services of the Company or any of its Subsidiaries.
(j) Compliance with Laws; Environmental Matters. (i) Except with
respect to Environmental Laws, the Employee Retirement Income Security Act
of 1974, as amended ("ERISA") and taxes, which are the subjects of Sections
3.01(j)(ii), 3.01(l) and 3.01(n), respectively, and except as set forth in
the Filed Company SEC Documents, each of the Company and its Subsidiaries
is in compliance with all statutes, laws, ordinances, rules, regulations,
judgments, orders and decrees of any Governmental Entity applicable to it,
its properties or other assets or its business or operations (collectively,
"Legal Provisions"), except for failures to be in compliance that
individually or in the aggregate have not had and would not reasonably be
expected to have a Material Adverse Effect. Each of the Company and its
Subsidiaries has in effect all approvals, authorizations, certificates,
filings, franchises, licenses, notices and permits of or with all
Governmental Entities (collectively, "Permits"), including all Permits
under the Federal Food, Drug and Cosmetic Act of 1938, as amended (the
"FDCA"), and the regulations of the Federal Food and Drug Administration
(the "FDA") promulgated thereunder, necessary for it to own, lease or
operate its properties and other assets and to carry on its business and
operations as presently conducted and as currently proposed by its
management to be conducted, except where the failure to have such Permits
individually or in the aggregate has not had and would not reasonably be
expected to have a Material Adverse Effect. There has occurred no default
under, or violation of, any such Permit, except for any such default or
violation that individually or in the aggregate as has not had and would
not reasonably be expected to have a Material Adverse Effect. The
consummation of the Merger, in and of itself, would not cause the
revocation or cancellation of any such Permit that individually or in the
aggregate would reasonably
21
be expected to have a Material Adverse Effect. No action, demand,
requirement or investigation by any Governmental Entity and no suit, action
or proceeding by any other person, in each case with respect to the Company
or any of its Subsidiaries or any of their respective properties or other
assets under any Legal Provision, is pending or, to the Knowledge of the
Company, threatened, other than, in each case, those the outcome of which
individually or in the aggregate have not had and would not reasonably be
expected to have a Material Adverse Effect.
(ii) Except for those matters disclosed in the Filed Company SEC
Documents and those matters that individually or in the aggregate have not
had and would not reasonably be expected to have a Material Adverse Effect:
(A) each of the Company and its Subsidiaries is, and has been, in
compliance with all applicable Environmental Laws and has obtained and
complied with all Permits required under any Environmental Laws to own,
lease or operate its properties or other assets and to carry on its
business and operations as presently conducted and as currently proposed by
its management to be conducted; (B) there have been no Releases or
threatened Releases of Hazardous Materials in, on, under or affecting any
properties currently or, to the Knowledge of the Company, formerly owned,
leased or operated by the Company or any of its Subsidiaries; (C) there is
no investigation, suit, claim, action or proceeding pending, or to the
Knowledge of the Company, threatened against or affecting the Company or
any of its Subsidiaries relating to or arising under Environmental Laws,
and neither the Company nor any of its Subsidiaries has received any
written notice of any such investigation, suit, claim, action or
proceeding; (D) neither the Company nor any of its Subsidiaries has entered
into or assumed by contract or operation of law or otherwise, any
obligation, liability, order, settlement, judgment, injunction or decree
relating to or arising under Environmental Laws; and (E) to the Knowledge
of the Company, there are no facts, circumstances or conditions that would
reasonably be expected to form the basis for any investigation, suit,
claim, action, proceeding or liability against or affecting the Company or
any of its Subsidiaries relating to or arising under Environmental Laws.
The term "Environmental Laws" means all Federal, state, local
22
and foreign laws (including the common law), statutes, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices,
Permits, treaties or binding agreements issued, promulgated or entered into
by any Governmental Entity, relating in any way to the environment,
preservation or reclamation of natural resources or endangered species, the
presence, management, Release or threat of Release of, or exposure to,
Hazardous Materials, or to human health and safety. The term "Hazardous
Materials" means (1) petroleum products and by-products, asbestos and
asbestos-containing materials, urea formaldehyde foam insulation, medical
or infectious wastes, poly-chlorinated biphenyls, radon gas, radioactive
substances, chlorofluorocarbons and all other ozone-depleting substances or
(2) any chemical, material, substance, waste, pollutant or contaminant that
is prohibited, limited or regulated by or pursuant to any Environmental
Law. The term "Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
disposing or migrating into or through the environment or any natural or
man-made structure.
(k) Absence of Changes in Company Benefit Plans; Labor
Relations. Except as disclosed in the Filed Company SEC Documents or as
expressly permitted pursuant to Section 4.01(a)(i) through (xvi), since the
date of the most recent audited financial statements included in the Filed
Company SEC Documents, there has not been any adoption or amendment by the
Company or any of its Subsidiaries of any collective bargaining agreement
or any employment, bonus, pension, profit sharing, deferred compensation,
incentive compensation, stock ownership, stock purchase, stock
appreciation, restricted stock, stock option, "phantom" stock, performance,
retirement, thrift, savings, stock bonus, paid time off, perquisite, fringe
benefit, vacation, severance, disability, death benefit, hospitalization,
medical, welfare benefit or other plan, program, policy, arrangement or
understanding (whether or not legally binding) maintained, contributed to
or required to be maintained or contributed to by the Company or any of its
Subsidiaries or any other person or entity that, together with the Company,
is treated as a single employer under Section 414(b), (c), (m) or (o) of
the Code (each, a "Commonly Controlled Entity"), in each
23
case providing benefits to any current or former director, officer,
employee or consultant of the Company or any of its Subsidiaries
(collectively, the "Company Benefit Plans"), or any material change in any
actuarial or other assumption used to calculate funding obligations with
respect to any Company Pension Plans, or any change in the manner in which
contributions to any Company Pension Plans are made or the basis on which
such contributions are determined, other than amendments or other changes
as required to ensure that such Company Benefit Plan is not then out of
compliance with applicable law, or reasonably determined by the Company to
be necessary or appropriate to preserve the qualified status of a Company
Pension Plan under Section 401(a) of the Code. Except as disclosed in the
Filed Company SEC Documents, there exist no currently binding Company
Benefit Agreements. There are no collective bargaining or other labor union
agreements to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound. As of the date
hereof, none of the employees of the Company or any of its Subsidiaries are
represented by any union with respect to their employment by the Company or
such Subsidiary. As of the date hereof, since August 4, 2000, neither the
Company nor any of its Subsidiaries has experienced any labor disputes,
union organization attempts or work stoppages, slowdowns or lockouts due to
labor disagreements.
(l) ERISA Compliance. (i) Section 3.01(l)(i) of the Company
Disclosure Schedule contains a complete and accurate list of each Company
Benefit Plan that is an "employee pension benefit plan" (as defined in
Section 3(2) of ERISA) (sometimes referred to herein as a "Company Pension
Plan"), each Company Benefit Plan that is an "employee welfare benefit
plan" (as defined in Section 3(1) of ERISA) and all other Company Benefit
Plans. The Company has provided to Parent complete and accurate copies of
(A) each Company Benefit Plan (or, in the case of any unwritten Company
Benefit Plans, descriptions thereof), (B) the two most recent annual
reports on Form 5500 required to be filed with the Internal Revenue Service
(the "IRS") with respect to each Company Benefit Plan (if any such report
was required), (C) the most recent summary plan description for each
Company Benefit Plan for which such summary
24
plan description is required and (D) each trust agreement and insurance or
group annuity contract relating to any Company Benefit Plan. Each Company
Benefit Plan has been administered in all material respects in accordance
with its terms. The Company, its Subsidiaries and all the Company Benefit
Plans are all in compliance in all material respects with the applicable
provisions of ERISA, the Code and all other applicable laws, including laws
of foreign jurisdictions, and the terms of all collective bargaining
agreements.
(ii) All Company Pension Plans intended to be tax-qualified have
received favorable determination letters from the IRS with respect to "TRA"
(as defined in Section 1 of Rev. Proc. 93-39), and have timely filed with
the IRS determination letter applications with respect to "GUST" (as
defined in Section 1 of Notice 2001-42), to the effect that such Company
Pension Plans are qualified and exempt from Federal income taxes under
Sections 401(a) and 501(a), respectively, of the Code, no such
determination letter has been revoked (or, to the Knowledge of the Company,
has revocation been threatened) and no event has occurred since the date of
the most recent determination letter or application therefor relating to
any such Company Pension Plan that would reasonably be expected to
adversely affect the qualification of such Company Pension Plan or
materially increase the costs relating thereto or require security under
Section 307 of ERISA. In addition, all Company Pension Plans have been, or
shall have been by the end of the 2002 plan year, amended to comply with
the requirements of the Economic Growth and Tax Relief Reconciliation Act
of 2001 which are or have become effective on or before the end of the 2002
plan year, as set forth in Notice 2001-42. All Company Pension Plans
required to have been approved by any foreign Governmental Entity have been
so approved, no such approval has been revoked (or, to the Knowledge of the
Company, has revocation been threatened) and no event has occurred since
the date of the most recent approval or application therefor relating to
any such Company Pension Plan that would reasonably be expected to
materially affect any such approval relating thereto or materially increase
the costs relating thereto. The Company has delivered to Parent a complete
and accurate
25
copy of the most recent determination letter received prior to the date
hereof with respect to each Company Pension Plan, as well as a complete and
accurate copy of each pending application for a determination letter, if
any. The Company has also provided to Parent a complete and accurate list
of all amendments to any Company Pension Plan as to which a favorable
determination letter has not yet been received.
(iii) Neither the Company nor any Commonly Controlled Entity has
(A) maintained, contributed to or been required to contribute to any
Company Benefit Plan that is subject to Title IV of ERISA or (B) has any
unsatisfied liability under Title IV of ERISA.
(iv) All reports, returns and similar documents with respect to
all Company Benefit Plans required to be filed with any Governmental Entity
or distributed to any Company Benefit Plan participant have been duly and
timely filed or distributed. None of the Company or any of its Subsidiaries
has received notice of, and to the Knowledge of the Company, there are no
investigations by any Governmental Entity with respect to, termination
proceedings or other claims (except claims for benefits payable in the
normal operation of the Company Benefit Plans), suits or proceedings
against or involving any Company Benefit Plan or asserting any rights or
claims to benefits under any Company Benefit Plan that would give rise to
any material liability, and, to the Knowledge of the Company, there are not
any facts that could give rise to any material liability in the event of
any such investigation, claim, suit or proceeding.
(v) All contributions, premiums and benefit payments under or in
connection with the Company Benefit Plans that are required to have been
made as of the date hereof in accordance with the terms of the Company
Benefit Plans have been timely made or have been reflected on the most
recent consolidated balance sheet filed or incorporated by reference into
the Filed Company SEC Documents. Neither any Company Pension Plan nor any
single-employer plan of any Commonly Controlled Entity has an "accumulated
funding deficiency" (as such term is defined in Section 302 of ERISA or
Section 412 of the Code), whether or not waived.
26
(vi) With respect to each Company Benefit Plan, (A) there has not
occurred any prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) in which the Company or any of its
Subsidiaries or any of their respective employees, or any trustee,
administrator or other fiduciary of such Company Benefit Plan, or any agent
of the foregoing, has engaged that would reasonably be expected to subject
the Company or any of its Subsidiaries or any of their respective
employees, or a trustee, administrator or other fiduciary of any trust
created under any Company Benefit Plan, to the tax or penalty on prohibited
transactions imposed by Section 4975 of the Code or the sanctions imposed
under Title I of ERISA and (B) neither the Company nor any of its
Subsidiaries nor, to the Knowledge of the Company, any trustee,
administrator or other fiduciary of any Company Benefit Plan nor any agent
of any of the foregoing, has engaged in any transaction or acted in a
manner, or failed to act in a manner, that would reasonably be expected to
subject the Company or any of its Subsidiaries or, to the Knowledge of the
Company, any trustee, administrator or other fiduciary, to any liability
for breach of fiduciary duty under ERISA or any other applicable law. No
Company Benefit Plan or related trust has been terminated, nor has there
been any "reportable event" (as that term is defined in Section 4043 of
ERISA) for which the 30-day reporting requirement has not been waived with
respect to any Company Benefit Plan during the last five years, and no
notice of a reportable event will be required to be filed in connection
with the transactions contemplated by this Agreement.
(vii) Section 3.01(l)(vii) of the Company Disclosure Schedule
discloses whether each Company Benefit Plan that is an employee welfare
benefit plan is (A) unfunded or self-insured, (B) funded through a "welfare
benefit fund", as such term is defined in Section 419(e) of the Code, or
other funding mechanism or (C) insured. Each such employee welfare benefit
plan may be amended or terminated (including with respect to benefits
provided to retirees and other former employees) without material liability
(other than benefits then payable under such plan without regard to such
amendment or termination) to the Company or any of its Subsidiaries at any
time after the
27
Effective Time. Each of the Company and its Subsidiaries complies in all
material respects with the applicable requirements of Section 4980B(f) of
the Code or any similar state statute with respect to each Company Benefit
Plan that is a group health plan, as such term is defined in Section
5000(b)(1) of the Code or such state statute. Neither the Company nor any
of its Subsidiaries has any material obligations for retiree health or life
insurance benefits under any Company Benefit Plan (other than for
continuation coverage required under Section 4980(f) of the Code).
(viii) None of the execution and delivery of this Agreement, the
Stockholder Agreement, the obtaining of the Stockholder Approval or the
consummation of the Merger or any other transaction expressly contemplated
by this Agreement or the Stockholder Agreement (including as a result of
any termination of employment on or following the Effective Time) will (A)
entitle any current or former director, officer, employee or consultant of
the Company or any of its Subsidiaries to severance or termination pay, (B)
accelerate the time of payment or vesting, or trigger any payment or
funding (through a grantor trust or otherwise) of, compensation or benefits
under, increase the amount payable or trigger any other material obligation
pursuant to, any Company Benefit Plan or Company Benefit Agreement or (C)
result in any breach or violation of, or a default under, any Company
Benefit Plan or Company Benefit Agreement. The total amount of all payments
and the fair market value of all non-cash benefits (other than Company
Stock Options and Company Restricted Stock) that may become payable or
provided to any director, officer, employee or consultant of the Company or
any of its Subsidiaries under the Company Benefit Agreements (assuming for
such purpose that such individuals' employment were terminated immediately
following the Effective Time as if the Effective Time were the date hereof)
will not exceed the amount set forth in Section 3.01(l)(viii) of the
Company Disclosure Schedule.
(ix) Neither the Company nor any of its Subsidiaries has any
material liability or obligations, including under or on account of a
Company Benefit Plan, arising out of the hiring of persons to provide
services to the Company or any of its Subsidiaries and
28
treating such persons as consultants or independent contractors and not as
employees of the Company or any of its Subsidiaries.
(x) No deduction by the Company or any of its Subsidiaries in
respect of any "applicable employee remuneration" (within the meaning of
Section 162(m) of the Code) has been disallowed or is subject to
disallowance by reason of Section 162(m) of the Code.
(m) No Excess Parachute Payments. Other than payments or benefits
that may be made to the persons listed in Section 3.01(m) of the Company
Disclosure Schedule ("Primary Company Executives"), no amount or other
entitlement or economic benefit that could be received (whether in cash or
property or the vesting of property) as a result of the execution and
delivery of this Agreement, the Stockholder Agreement, the obtaining of the
Stockholder Approval, the consummation of the Merger or any other
transaction contemplated by this Agreement or the Stockholder Agreement
(including as a result of termination of employment on or following the
Effective Time) by or for the benefit of any director, officer, employee or
consultant of the Company or any of its Affiliates who is a "disqualified
individual" (as such term is defined in proposed Treasury Regulation
Section 1.280G-1) under any Company Benefit Plan, Company Benefit Agreement
or otherwise would be characterized as an "excess parachute payment" (as
such term is defined in Section 280G(b)(1) of the Code), and no
disqualified individual is entitled to receive any additional payment from
the Company or any of its Subsidiaries, the Surviving Corporation or any
other person in the event that the excise tax required by Section 4999(a)
of the Code is imposed on such disqualified individual (a "Parachute Gross
Up Payment"). Section 3.01(m) of the Company Disclosure Schedule sets
forth, calculated as of the date of this Agreement, (i) the "base amount"
(as such term is defined in Section 280G(b)(3) of the Code) for each
Primary Company Executive and each other disqualified individual (defined
as set forth above) whose Company Stock Options will vest pursuant to their
terms in connection with the execution and delivery of this Agreement, the
Stockholder Agreement, the obtaining of the Stockholder Approval, the
consummation of the Merger or any other transaction contemplated by this
29
Agreement or the Stockholder Agreement (including as a result of any
termination of employment on or following the Effective Time) and (ii) the
estimated maximum amount of "parachute payments" as defined in Section 280G
of the Code that could be paid or provided to each Primary Company
Executive as a result of the execution and delivery of this Agreement, the
Stockholder Agreement, the obtaining of the Stockholder Approval, the
consummation of the Merger or any other transaction contemplated by this
Agreement or the Stockholder Agreement (including as a result of any
termination of employment on or following the Effective Time).
(n) Taxes. (i) Each of the Company, its Subsidiaries and each
Company Consolidated Group has filed or has caused to be filed in a timely
manner (within any applicable extension period) all tax returns required to
be filed with any taxing authority pursuant to the Code (and any applicable
U.S. Treasury regulations) or applicable state, local or foreign tax laws.
All such tax returns are complete and accurate in all material respects and
have been prepared in substantial compliance with all applicable laws and
regulations. Each of the Company, its Subsidiaries and each Company
Consolidated Group has paid or caused to be paid (or the Company has paid
on its behalf) all taxes due and owing, and the most recent financial
statements contained in the Filed Company SEC Documents reflect an adequate
reserve (determined in accordance with GAAP) (excluding any reserves for
deferred taxes established to reflect timing differences between book and
tax income) for all taxes payable by the Company and its Subsidiaries for
all taxable periods and portions thereof accrued through the date of such
financial statements.
(ii) No tax return of the Company or any of its Subsidiaries or
any Company Consolidated Group is or has ever been under audit or
examination by any taxing authority, and no notice of such an audit or
examination has been received by the Company or any of its Subsidiaries or
any Company Consolidated Group. There is no deficiency, refund litigation,
proposed adjustment or matter in controversy with respect to any material
amount of taxes due and owing by the Company or any of its Subsidiaries or
any Company Consolidated
30
Group. Each deficiency resulting from any completed audit or examination
relating to taxes by any taxing authority has been timely paid or is being
contested in good faith and has been reserved for on the books of the
Company. No issues relating to any material amount of taxes were raised by
the relevant taxing authority in any completed audit or examination that
could reasonably be expected to recur in a later taxable period. The
relevant statute of limitation is closed with respect to Federal, state,
local and foreign tax returns of the Company, its Subsidiaries and any
Company Consolidated Group for all years through 1998. There is no
currently effective agreement or other document extending, or having the
effect of extending, the period of assessment or collection of any taxes of
the Company or its Subsidiaries or any Company Consolidated Group, nor has
any request been made in writing for any such extension, and no power of
attorney (other than powers of attorney authorizing employees of the
Company to act on behalf of the Company) with respect to any taxes has been
executed or filed with any taxing authority.
(iii) None of the Company or any of its Subsidiaries will be
required to include in a taxable period ending after the Effective Time
taxable income attributable to income that accrued (for purposes of the
financial statements of the Company included in the Filed Company SEC
Documents) in a prior taxable period (or portion of a taxable period) but
was not recognized for tax purposes in any prior taxable period as a result
of (A) an open transaction disposition made on or before the Effective
Time, (B) a prepaid amount received on or prior to the Effective Time, (C)
the installment method of accounting, (D) the completed contract method of
accounting, (E) the long-term contract method of accounting, (F) the cash
method of accounting or Section 481 of the Code or (G) any comparable
provisions of state or local tax law, domestic or foreign, or for any other
reason, other than any amounts that are specifically reflected in a reserve
for taxes on the financial statements of the Company included in the Filed
Company SEC Documents.
(iv) The Company and its Subsidiaries have complied with all
applicable statutes, laws, ordinances, rules and regulations relating to
the
31
payment and withholding of any material amount of taxes (including
withholding of taxes pursuant to Sections 1441, 1442, 3121 and 3402 of the
Code and similar provisions under any Federal, state, local or foreign tax
laws) and have, within the time and the manner prescribed by law, withheld
from and paid over to the proper governmental authorities all material
amounts required to be so withheld and paid over under applicable laws.
(v) None of the Company or any of its Subsidiaries has
constituted either a "distributing corporation" or a "controlled
corporation" as such terms are defined in Section 355 of the Code in a
distribution of stock outside of the affiliated group of which the Company
is the common parent qualifying or intended to qualify for tax-free
treatment (in whole or in part) under Section 355(a) or 361 of the Code.
(vi) Neither the Company nor any of its Subsidiaries has filed a
consent under Section 341 of the Code concerning collapsible corporations.
(vii) Neither the Company nor any of its Subsidiaries joins or has
joined, for any taxable period in the filing of any affiliated, aggregate,
consolidated, combined or unitary tax return other than consolidated tax
returns for the consolidated group of which the Company is the common
parent.
(viii) No claim has ever been made by any authority in a
jurisdiction where any of the Company or its Subsidiaries does not file a
tax return that it is, or may be, subject to a material amount of tax by
that jurisdiction.
(ix) Neither the Company nor any of its Subsidiaries is a party to
or bound by any tax sharing agreement, tax indemnity obligation or similar
agreement, arrangement or practice with respect to taxes (including any
advance pricing agreement, closing agreement or other agreement relating to
taxes with any taxing authority).
(x) No "ownership change" (as described in Section 382(g) of the
Code) has occurred or will occur prior to the Effective Time that would
have the effect
32
of limiting the use of "pre-change tax losses" (as described in Section
382(d) of the Code) of the Company and its Subsidiaries following the
Effective Time.
(xi) No taxing authority has asserted any material liens for taxes
with respect to any assets or properties of the Company or its
Subsidiaries, except for statutory liens for taxes not yet due and payable.
(xii) Neither the Company nor any of its Subsidiaries has been a
United States real property holding corporation within the meaning of
Section 897(c)(2) of the Code during the applicable period specified in
Section 897(c)(1)(A)(ii) of the Code.
(xiii) As used in this Agreement (A) "tax" or "taxes" shall include
(whether disputed or not) all (x) Federal, state, local and foreign income,
property, sales, use, excise, withholding, payroll, employment, social
security, capital gain, alternative minimum, transfer and other taxes and
similar governmental charges, including any interest, penalties and
additions with respect thereto, (y) liability for the payment of any
amounts of the type described in clause (x) as a result of being a member
of an affiliated, consolidated, combined, unitary or aggregate group and
(z) liability for the payment of any amounts as a result of being party to
any tax sharing agreement or as a result of any express or implied
obligation to indemnify any other person with respect to the payment of any
amounts of the type described in clause (x) or (y); (B) "Company
Consolidated Group" means any affiliated group within the meaning of
Section 1504(a) of the Code, or any other similar state, local or foreign
law, in which the Company (or any Subsidiary of the Company) is or has ever
been a member or any group of corporations with which the Company files,
has filed or is or was required to file an affiliated, consolidated,
combined, unitary or aggregate tax return; (C) "taxing authority" means any
Federal, state, local or foreign government, any subdivision, agency,
commission or authority thereof, or any quasi-governmental body exercising
tax regulatory authority; and (D) "tax return" or "tax returns" means all
returns, declarations of estimated tax payments, reports, estimates,
information returns
33
and statements, including any related or supporting information with
respect to any of foregoing, filed or to be filed with any taxing authority
in connection with the determination, assessment, collection or
administration of any taxes.
(o) Title to Properties. (i) Neither the Company nor any of its
Subsidiaries owns any real property. Each of the Company and its
Subsidiaries has good and valid leasehold or sublease interests or other
comparable contract rights in or relating to all of its real properties and
other tangible assets necessary for the conduct of its business as
currently conducted and as currently proposed by its management to be
conducted, except as have been disposed of in the ordinary course of
business and except for defects in title, easements, restrictive covenants
and similar encumbrances that individually or in the aggregate have not
materially interfered with, and would not reasonably be expected to
materially interfere with, its ability to conduct its business as presently
conducted and as currently proposed by its management to be conducted. All
such properties and other assets, other than properties and other assets in
which the Company or any of its Subsidiaries has a leasehold or sublease
interest or other comparable contract right, are free and clear of all
Liens, except for Liens that individually or in the aggregate have not
materially interfered with, and would not reasonably be expected to
materially interfere with, the ability of the Company or any of its
Subsidiaries to conduct their respective businesses as presently conducted
and as currently proposed by its management to be conducted.
(ii) Each of the Company and its Subsidiaries has complied in all
material respects with the terms of all material leases or subleases to
which it is a party and under which it is in occupancy, and all leases to
which the Company is a party and under which it is in occupancy are in full
force and effect, except for such failure to be in full force and effect
that individually or in the aggregate has not had and would not reasonably
be expected to have a Material Adverse Effect. Each of the Company and its
Subsidiaries is in possession of the properties or assets purported to be
leased under all its material leases. Neither the Company nor any of its
Subsidiaries has received any
34
written notice of any event or occurrence that has resulted or could result
(with or without the giving of notice, the lapse of time or both) in a
default with respect to any material lease or sublease to which it is a
party.
(p) Intellectual Property. (i) Subject to Sections 3.01(p)(ii)
and 3.01(p)(v), each of the Company and its Subsidiaries owns, or is
validly licensed or otherwise has the right to use (without any obligation
to make any fixed or contingent payments, including royalty payments) all
patents, patent applications, trademarks, trademark rights, trade names,
trade name rights, domain names, service marks, service xxxx rights,
copyrights, software, technical know-how and other proprietary intellectual
property rights and computer programs (collectively, "Intellectual Property
Rights") which are material to the conduct of the business of the Company
and its Subsidiaries, taken as a whole, in each case free and clear of all
Liens. The Company has the legal power to convey the rights granted to it
under any license for any Intellectual Property Right taken by the Company
and its Subsidiaries. The Company is not subject to any contractual, legal
or other restriction on the use of any Intellectual Property Rights
(including Intellectual Property Rights with respect to the DiscoverWorks
and Thermofluor technologies) which are owned by or licensed to the
Company.
(ii) No claims are pending or, to the Knowledge of the Company,
threatened that the Company or any of its Subsidiaries is infringing
(including with respect to the manufacture, use or sale by the Company or
any of its Subsidiaries of their respective commercial products or of their
respective Intellectual Property Rights) the rights of any person with
regard to any Intellectual Property Right which individually or in the
aggregate have had or would reasonably be expected to have a Material
Adverse Effect. To the Knowledge of the Company, no person or persons are
infringing the rights of the Company or any of its Subsidiaries with
respect to any Intellectual Property Right in a manner which individually
or in the aggregate has had or would reasonably be expected to have a
Material Adverse Effect.
35
(iii) No claims are pending or, to the Knowledge of the Company,
threatened with regard to the ownership by the Company or any of its
Subsidiaries of any of their respective Intellectual Property Rights which
individually or in the aggregate have had or would reasonably be expected
to have a Material Adverse Effect.
(iv) Section 3.01(p)(iv) of the Company Disclosure Schedule sets
forth, as of the date hereof, a complete and accurate list of all patents,
registered trademarks and applications therefor, copyright registrations
(if any) and, to the Knowledge of the Company, domain name registrations
(if any), owned by or licensed to the Company or any of its Subsidiaries.
All patents and patent applications listed in Section 3.01(p)(iv) of the
Company Disclosure Schedule are either (a) owned by, or are subject to an
obligation of assignment to, the Company or a Subsidiary of the Company
free and clear of all Liens or (b) licensed to the Company or a Subsidiary
of the Company free and clear (to the Knowledge of the Company) of all
Liens. The patent applications listed in Section 3.01(p)(iv) of the Company
Disclosure Schedule that are owned by the Company or any of its
Subsidiaries are (and such applications that are licensed to the Company or
any of its Subsidiaries are to the Company's Knowledge) pending and have
not been abandoned, and have been and continue to be timely prosecuted. All
patents, registered trademarks and applications therefor owned by the
Company or any of its Subsidiaries have been (and all such patents,
registered trademarks and applications licensed to the Company or any of
its Subsidiaries have been to the Company's Knowledge) duly registered
and/or filed with or issued by each appropriate Governmental Entity in the
jurisdiction indicated in Section 3.01(p)(iv) of the Company Disclosure
Schedule, all necessary affidavits of continuing use have been (or, with
respect to licenses, to the Company's Knowledge have been) timely filed,
and all necessary maintenance fees have been (or, with respect to licenses,
to the Company's Knowledge have been) timely paid to continue all such
rights in effect. None of the patents listed in Section 3.01(p)(iv) of the
Company Disclosure Schedule that are owned by the Company or any of its
Subsidiaries has (and no such patents that are licensed
36
to the Company or any of its Subsidiaries has to the Company's Knowledge)
expired or been declared invalid, in whole or in part, by any Governmental
Entity. There are no ongoing interferences, oppositions, reissues,
reexaminations or other proceedings involving any of the patents or patent
applications listed in Section 3.01(p)(iv) of the Company Disclosure
Schedule and owned by the Company or any of its Subsidiaries (or to the
Company's Knowledge, licensed to the Company or any of its Subsidiaries),
including ex parte and post-grant proceedings, in the United States Patent
and Trademark Office or in any foreign patent office or similar
administrative agency, other than as have not had or would not reasonably
be expected to have a Material Adverse Effect. In the Company's opinion,
there are no published patents, patent applications, articles or other
prior art references that could adversely affect the validity of any patent
listed in Section 3.01(p)(iv) of the Company Disclosure Schedule in a
material way. To the Knowledge of the Company, each of the patents and
patent applications listed in Section 3.01(p)(iv) of the Company Disclosure
Schedule that are owned by the Company or any of its Subsidiaries properly
identifies (and to the Knowledge of the Company such patents and
applications licensed to the Company or any of its Subsidiaries properly
identify) each and every inventor of the claims thereof as determined in
accordance with the laws of the jurisdiction in which such patent is issued
or such patent application is pending. Each inventor named on the patents
and patent applications listed in Section 3.01(p)(iv) of the Company
Disclosure Schedule that are owned by the Company or any of its
Subsidiaries has executed (and such inventors named on such patents and
applications licensed to the Company or any of its Subsidiaries to the
Company's Knowledge have executed) an agreement assigning his, her or its
entire right, title and interest in and to such patent or patent
application, and the inventions embodied and claimed therein, to the
Company or a Subsidiary of the Company, or in the case of licensed Patents,
to the appropriate owners. To the Knowledge of the Company, no such
inventor has any contractual or other obligation that would preclude any
such assignment or otherwise conflict with the obligations of such inventor
to the Company or such Subsidiary under such agreement with the Company or
such Subsidiary.
37
(v) Section 3.01(p)(v) of the Company Disclosure Schedule sets
forth a complete and accurate list of all options, rights, licenses or
interests of any kind relating to Intellectual Property Rights granted (i)
to the Company or any of its Subsidiaries (other than software licenses for
generally available software and except pursuant to employee proprietary
inventions agreements (or similar employee agreements), non-disclosure
agreements and consulting agreements entered into by the Company or any of
its Subsidiaries in the ordinary course of business), or (ii) by the
Company or any of its Subsidiaries to any other person.
(vi) The Company and its Subsidiaries have used reasonable efforts
to maintain their material trade secrets in confidence, including entering
into licenses and contracts that generally require licensees, contractors
and other third persons with access to such trade secrets to keep such
trade secrets confidential.
(q) Voting Requirements. The affirmative vote of holders of a
majority of the outstanding shares of Company Common Stock at the
Stockholders' Meeting or any adjournment or postponement thereof to adopt
this Agreement (the "Stockholder Approval") is the only vote of the holders
of any class or series of capital stock of the Company necessary to adopt
this Agreement and approve the transactions contemplated hereby.
(r) State Takeover Statutes. The Board of Directors of the
Company has unanimously approved the terms of this Agreement and the
Stockholder Agreement and the consummation of the Merger and the other
transactions contemplated by this Agreement and the Stockholder Agreement,
and such approval represents all the action necessary to render
inapplicable to this Agreement, the Stockholder Agreement, the Merger and
the other transactions contemplated by this Agreement and the Stockholder
Agreement, the restrictions on "business combinations" (as defined in
Section 203 of the DGCL ("Section 203")) set forth in Section 203 to the
extent, if any, such restrictions would otherwise be applicable to this
Agreement, the Stockholder Agreement, the Merger and the other transactions
contemplated by this Agreement and the Stockholder Agreement. No other
state takeover statute or similar statute or regulation applies to this
Agreement, the
38
Stockholder Agreement, the Merger or the other transactions contemplated by
this Agreement or the Stockholder Agreement.
(s) Brokers and Other Advisors. No broker, investment banker,
financial advisor or other person (other than Lazard, Freres & Co. LLC
("Lazard")), the fees and expenses of which will be paid by the Company, is
entitled to any broker's, finder's, financial advisor's or other similar
fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the Company. The
Company has delivered to Parent complete and accurate copies of all
agreements under which any such fees or expenses are payable and all
indemnification and other agreements related to the engagement of the
persons to whom such fees are payable. The fees and expenses of all
accountants, brokers, financial advisors (including Lazard), legal counsel
(including Xxxxxx, Xxxxx & Xxxxxxx LLP, Xxxxxxxx, Xxxxxx & Finger and
Sterne, Kessler, Xxxxxxxxx & Fox P.L.L.C.), financial printers and other
persons retained by the Company in connection with this Agreement or the
Stockholder Agreement or the transactions contemplated hereby or thereby
incurred or to be incurred by the Company will not exceed the fees and
expenses set forth in Section 3.01(s) of the Company Disclosure Schedule.
(t) Opinion of Financial Advisor. The Company has received the
oral opinion of Lazard, dated the date hereof, to the effect that, as of
such date, the Merger Consideration is fair, from a financial point of
view, to the holders of shares of Company Common Stock (other than Parent
or Sub). A signed copy of the written opinion confirming such oral opinion
will be delivered to Parent promptly after delivery thereof to the Company.
(u) Development, Distribution, Marketing, Supply and
Manufacturing Agreements. (i) Section 3.01(u) of the Company Disclosure
Schedule sets forth, as of the date hereof, a complete and accurate list of
all Contracts to which the Company or any of its Subsidiaries is a party
relating to (x) research, development, distribution, training, sale,
supply, license, marketing or manufacturing that have a
39
remaining value of $60,000 or more individually (provided that the
aggregate obligations with respect to such Contracts not so scheduled shall
not exceed $300,000) and (y) the distribution, in each case, by third
parties of any product of the Company or any Subsidiary of the Company or
any product or patent or other Intellectual Property Right licensed by the
Company or any Subsidiary of the Company. Notwithstanding the foregoing, no
consulting agreement shall be required to be set forth on Section 3.01(u)
of the Company Disclosure Schedule pursuant to clause (x) of the
immediately preceding sentence unless such consulting agreement has a
remaining value of $75,000 or more individually (provided that the
aggregate obligations with respect to such consulting agreements not so
scheduled shall not exceed $1,000,000). The Company has made available to
Parent a complete and accurate copy of each such Contract.
(ii) Section 3.01(u)(ii) of the Company Disclosure Schedule sets
forth a complete and accurate list of all Contracts to which the Company or
any of its Subsidiaries is a party relating to the research, development,
distribution, training, sale, supply, license, marketing or manufacturing
by third parties of any product of the Company or any Subsidiary of the
Company or any product, patent or other Intellectual Property Right
licensed by the Company or any Subsidiary of the Company, which grant an
exclusive right to such third party for the research, development,
distribution, supply, license, marketing or manufacturing of any such
product, patent or other Intellectual Property Right.
(v) Regulatory Compliance. (i) As to each product subject to the
FDCA and the FDA regulations promulgated thereunder or similar Legal
Provisions in any foreign jurisdiction that are developed, manufactured,
tested, distributed and/or marketed by the Company or any of its
Subsidiaries (each such product, a "Medical Device", a "Biologic" or a
"Drug", as the case may be), each such Medical Device, Biologic or Drug is
being developed, manufactured, tested, distributed and/or marketed in
compliance with all applicable requirements under the FDCA and similar
Legal Provisions, including those relating to investigational use,
premarket clearance or marketing
40
approval to market a Medical Device, and applications or abbreviated
applications to market a new Biologic or a new Drug, good manufacturing
practices, labeling, advertising, record keeping, filing of reports and
security, except for failures in compliance that individually or in the
aggregate have not had and would not reasonably be expected to have a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries
has received any material notice or other material communication from the
FDA or any other Governmental Entity (A) contesting the premarket clearance
or approval of, the uses of or the labeling and promotion of any products
of the Company or any of its Subsidiaries or (B) otherwise alleging any
violation applicable to any Medical Device, Biologic or Drug by the Company
or any of its Subsidiaries of any Legal Provision.
(ii) No Medical Device, Biologic or Drug has been recalled,
withdrawn, suspended or discontinued by the Company or any of its
Subsidiaries in the United States or outside the United States (whether
voluntarily or otherwise). No proceedings in the United States or outside
of the United States of which the Company has Knowledge (whether completed
or pending) seeking the recall, withdrawal, suspension or seizure of any
Medical Device, Biologic or Drug are pending against the Company or any of
its Subsidiaries nor have any such proceedings been pending at any prior
time.
(iii) As to each Biologic or Drug of the Company or any of its
Subsidiaries for which a biological license application, new drug
application, investigational new drug application or similar state or
foreign regulatory application has been approved, the Company and its
Subsidiaries are in compliance with 21 U.S.C. Sections 355, Section 626 of
the Public Health Service Act or 21 C.F.R. Parts 312, 314, 600 or 601 et
seq., respectively, and similar Legal Provisions and all terms and
conditions of such applications, except for any such failure or failures to
be in compliance which individually or in the aggregate has not had and
would not reasonably be expected to have a Material Adverse Effect. As to
each such drug, the Company and any relevant Subsidiary of the Company, and
the officers, employees or agents of the Company or such Subsidiary, have
included in the application for such drug, where
41
required, the certification described in 21 U.S.C. Section 335a(k)(1) or
any similar Legal Provision and the list described in 21 U.S.C. Section
335a(k)(2) or any similar Legal Provision, and each such certification and
list was true, complete and correct in all material respects when made. In
addition, the Company and its Subsidiaries are in substantial compliance
with all applicable registration and listing requirements set forth in 21
U.S.C. Section 360 and 21 C.F.R. Part 207 and all similar Legal Provisions.
(iv) No article of any Biologic or Drug manufactured and/or
distributed by the Company or any of its Subsidiaries is (A) adulterated
within the meaning of 21 U.S.C. Section 351 (or similar Legal Provisions),
(B) misbranded within the meaning of 21 U.S.C. Section 352 (or similar
Legal Provisions) or (C) a product that is in violation of 21 U.S.C.
Section 355 (or similar Legal Provisions), except for failures to be in
compliance with the foregoing that individually or in the aggregate have
not had and would not reasonably be expected to have a Material Adverse
Effect.
(v) Neither the Company nor any of its Subsidiaries, nor, to the
Knowledge of the Company, any officer, employee or agent of the Company or
any of its Subsidiaries, has made an untrue statement of a material fact or
fraudulent statement to the FDA or any other Governmental Entity, failed to
disclose a material fact required to be disclosed to the FDA or any other
Governmental Entity, or committed an act, made a statement, or failed to
make a statement that, at the time such disclosure was made, would
reasonably be expected to provide a basis for the FDA or any other
Governmental Entity to invoke its policy respecting "Fraud, Untrue
Statements of Material Facts, Bribery, and Illegal Gratuities", set forth
in 56 Fed. Reg. 46191 (September 10, 1991) or any similar policy. Neither
the Company nor any of its Subsidiaries, nor, to the Knowledge of the
Company, any officer, employee or agent of the Company or any of its
Subsidiaries, has been convicted of any crime or engaged in any conduct for
which debarment is mandated by 21 U.S.C. Section 335a(a) or any similar
Legal Provision or authorized by 21 U.S.C. Section 335a(b) or any similar
Legal Provision. Neither the Company nor any of its Subsidiaries, nor, to
the Knowledge of the Company, any officer, employee
42
or agent of the Company or any of its Subsidiaries, has been convicted of
any crime or engaged in any conduct for which such person or entity could
be excluded from participating in the federal health care programs under
Section 1128 of the Social Security Act or any similar Legal Provision.
(vi) Neither the Company nor any of its Subsidiaries has received
any written notice that the FDA or any other Governmental Entity has (a)
commenced, or threatened to initiate, any action to withdraw its approval
or request the recall of any Medical Device, Biologic or Drug, (b)
commenced, or threatened to initiate, any action to enjoin production of
any Medical Device, Biologic or Drug or (c) to the Company's Knowledge,
commenced, or threatened to initiate, any action to enjoin the production
of any medical device, biologic or drug produced at any facility where any
Medical Device, Biologic or Drug is manufactured, tested or packaged,
except for any such action that individually or in the aggregate has not
had and would not reasonably be expected to have a Material Adverse Effect.
(vii) To the Knowledge of the Company, there are no facts,
circumstances or conditions that would reasonably be expected to form the
basis for any investigation, suit, claim, action or proceeding against or
affecting the Company or any of its Subsidiaries relating to or arising
under (a) the FDCA or the regulations of the FDA promulgated thereunder or
(b) the Social Security Act or regulations of the Office of the Inspector
General of the Department of Health and Human Services.
(w) Insurance. Section 3.01(w) of the Company Disclosure Schedule
contains a complete and accurate list of all policies of fire, liability,
workers' compensation, title and other forms of insurance owned, held by or
applicable to the Company (or its assets or business) as of the date
hereof, and the Company has heretofore made available to Parent a complete
and accurate copy of all such policies, including all occurrence-based
policies applicable to the Company (or its assets or business) for all
periods prior to the Closing Date. All such policies (or substitute
policies with substantially similar terms and
43
underwritten by insurance carriers with substantially similar or higher
ratings) are in full force and effect, all premiums with respect thereto
covering all periods up to and including the Closing Date have been paid,
and no notice of cancellation or termination has been received with respect
to any such policy except for such policies, premiums, cancellations or
terminations that individually or in the aggregate have not had and would
not reasonably be expected to have a Material Adverse Effect. Such policies
are sufficient, in the reasonable opinion of the Company, for compliance by
the Company with (i) all requirements of applicable laws and (ii) all
Contracts to which the Company is a party, and each of the Company and its
Subsidiaries has complied in all material respects with the provisions of
each such policy under which it is an insured party. The Company has not
been refused any insurance with respect to its assets or operations by any
insurance carrier to which it has applied for any such insurance or with
which it has carried insurance, during the last five (5) years. There are
no pending or, to the Knowledge of the Company, threatened claims under any
insurance policy that individually or in the aggregate have had or would
reasonably be expected to have a Material Adverse Effect.
SECTION 3.02. Representations and Warranties of Parent and Sub. Parent
and Sub represent and warrant to the Company as follows:
(a) Organization, Standing and Corporate Power. Each of Parent
and Sub is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is incorporated and
has all requisite corporate power and authority to carry on its business as
now being conducted. Each of Parent and Sub is duly qualified or licensed
to do business and is in good standing in each material jurisdiction in
which the nature of its business or the ownership, leasing or operation of
its properties makes such qualification or licensing necessary.
(b) Authority; Noncontravention. Each of Parent and Sub has all
requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement and the
44
consummation of the transactions contemplated by this Agreement have been
duly authorized by all necessary corporate action on the part of Parent and
Sub and no other corporate proceedings on the part of Parent or Sub are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement and the transactions contemplated
hereby do not require approval of the holders of any shares of capital
stock of Parent. This Agreement has been duly executed and delivered by
each of Parent and Sub and, assuming the due authorization, execution and
delivery by the Company, constitutes a legal, valid and binding obligation
of Parent and Sub, as applicable, enforceable against Parent and Sub, as
applicable, in accordance with its terms, subject to bankruptcy,
insolvency, moratorium, reorganization or similar laws affecting the rights
of creditors generally and the availability of equitable remedies. The
execution and delivery of this Agreement do not, and the consummation of
the Merger and the other transactions contemplated by this Agreement and
compliance with the provisions of this Agreement will not, conflict with,
or result in any violation or breach of, or default (with or without notice
or lapse of time, or both) under, or give rise to a right of, or result in,
termination, cancellation or acceleration of any obligation or to the loss
of a benefit under, or result in the creation of any Lien in or upon any of
the properties or other assets of Parent or Sub under (x) the Restated
Certificate of Incorporation or By-laws of Parent or the Certificate of
Incorporation or By-laws of Sub, (y) any Contract to which Parent or Sub is
a party or any of their respective properties or other assets is subject,
in any way that would prevent, materially impede or materially delay the
consummation by Parent of the Merger (including the payments required to be
made pursuant to Article II) or the other transactions contemplated hereby
or (z) subject to the governmental filings and other matters referred to in
the following sentence, any (A) statute, law, ordinance, rule or regulation
applicable to Parent or Sub or their respective properties or other assets
or (B) order, writ, injunction, decree, judgment or stipulation, in each
case applicable to Parent or Sub or their respective properties or other
assets, and in each case, in any way that would prevent, materially impede
or materially delay the consummation by Parent of the
45
Merger (including the payments required to be made pursuant to Article II)
or the other transactions contemplated hereby. No material consent,
approval, order or authorization of, action by or in respect of, or
registration, declaration or filing with, any Governmental Entity is
required by or with respect to Parent or Sub in connection with the
execution and delivery of this Agreement by Parent and Sub or the
consummation by Parent and Sub of the Merger or the other transactions
contemplated by this Agreement, except for (1) the filing of a premerger
notification and report form by Parent under the HSR Act and the receipt,
termination or expiration, as applicable, of approvals or waiting periods
required under the HSR Act or any other applicable competition, merger
control, antitrust or similar law or regulation and (2) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware.
(c) Information Supplied. None of the information supplied or to
be supplied by or on behalf of Parent or Sub specifically for inclusion or
incorporation by reference in the Proxy Statement will, at the date it is
first mailed to the stockholders of the Company and at the time of the
Stockholders' Meeting, contain any 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, in light of the circumstances
under which they are made, not misleading.
(d) Interim Operations of Sub. Sub was formed solely for the
purpose of engaging in the transactions contemplated hereby, has engaged in
no other business activities and has conducted its operations only as
contemplated hereby.
(e) Capital Resources. Parent has sufficient cash to pay the
aggregate Merger Consideration.
46
ARTICLE IV
Covenants Relating to Conduct of Business
SECTION 4.01. Conduct of Business. (a) Conduct of Business by the
Company. During the period from the date of this Agreement to the Effective
Time, except as set forth in Section 4.01(a) of the Company Disclosure Schedule
or as consented to in writing in advance by Parent or as otherwise permitted
pursuant to this Section 4.01(a)(i) through (xvi), the Company shall, and shall
cause each of its Subsidiaries to, carry on its business in the ordinary course
consistent with past practice and as currently proposed by the Company to be
conducted prior to the Closing (including in respect of research and development
activities and programs) and in compliance in all material respects with all
applicable laws, rules, regulations and treaties and, to the extent consistent
therewith, use all commercially reasonable efforts to preserve intact its
current business organizations, keep available the services of its current
officers, employees and consultants and preserve its relationships with
customers, suppliers, licensors, licensees, distributors and others having
business dealings with it with the intention that its goodwill and ongoing
business shall be unimpaired at the Effective Time. In addition to and without
limiting the generality of the foregoing, during the period from the date of
this Agreement to the Effective Time, except as otherwise set forth in Section
4.01(a) of the Company Disclosure Schedule, the Company shall not, and shall not
permit any of its Subsidiaries to, without Parent's prior written consent:
(i) (x) declare, set aside or pay any dividends on, or make any
other distributions (whether in cash, stock or property) in respect of, any
of its capital stock, other than dividends or distributions by a direct or
indirect wholly owned Subsidiary of the Company to its shareholders, (y)
split, combine or reclassify any of its capital stock or issue or authorize
the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock or (z) purchase, redeem or
otherwise acquire any shares of its capital stock or any other securities
thereof or any rights, warrants or options to acquire any such shares or
other securities, except for purchases, redemptions or other acquisitions
of capital stock or other securities required under the
47
terms of any plans, arrangements or agreements existing on the date hereof
between the Company or any of its Subsidiaries and any director or employee
of the Company or any of its Subsidiaries (complete and accurate copies of
which have been heretofore delivered to Parent);
(ii) issue, deliver, sell, grant, pledge or otherwise encumber or
subject to any Lien any shares of its capital stock, any other voting
securities or any securities convertible into, or any rights, warrants or
options to acquire, any such shares, voting securities or convertible
securities, or any "phantom" stock, "phantom" stock rights, stock
appreciation rights or stock based performance units, including pursuant to
Contracts as in effect on the date hereof (other than the issuance of
shares of Company Common Stock upon the exercise of Company Stock Options
or Warrants, in each case outstanding on the date hereof in accordance with
their terms on the date hereof);
(iii) amend the Company Certificate or the Company By-laws or other
comparable charter or organizational documents of any of the Company's
Subsidiaries, except as may be required by law or the rules and regulations
of the SEC or The Nasdaq Stock Market, Inc.;
(iv) directly or indirectly acquire (x) by merging or
consolidating with, or by purchasing assets of, or by any other manner, any
person or division, business or equity interest of any person or (y) any
asset or assets that, individually, has a purchase price in excess of
$60,000 or, in the aggregate, have a purchase price in excess of $300,000,
except for new capital expenditures, which shall be subject to the
limitations of clause (vii) below, and except for purchases of components,
raw materials or supplies in the ordinary course of business consistent
with past practice;
(v) (x) sell, lease, license, mortgage, sell and leaseback or
otherwise encumber or subject to any Lien or otherwise dispose of any of
its properties or other assets or any interests therein (including
securitizations), except for sales of inventory and used equipment in the
ordinary course of business consistent with past practice; or (y) enter
into, modify or amend any lease of property, except for
48
modifications or amendments that are not materially adverse to the Company
and its Subsidiaries taken as a whole;
(vi) (x) incur any indebtedness for borrowed money or guarantee
any such indebtedness of another person, issue or sell any debt securities
or calls, options, warrants or other rights to acquire any debt securities
of the Company or any of its Subsidiaries, guarantee any debt securities of
another person, enter into any "keep well" or other agreement to maintain
any financial statement condition of another person or enter into any
arrangement having the economic effect of any of the foregoing or (y) make
any loans, advances or capital contributions to, or investments in, any
other person, other than to employees in respect of travel expenses in the
ordinary course of business consistent with past practice;
(vii) make any new capital expenditure or expenditures which,
individually, is in excess of $50,000 or, (x) during the period beginning
on the date hereof and ending on April 30, 2003, in the aggregate, are in
excess of $1,000,000, or (y) during the period beginning on May 1, 2003, in
the aggregate, are in excess of $300,000 during any calendar month;
(viii) except as required by law or any judgment, (v) pay,
discharge, settle or satisfy any claims, liabilities, obligations or
litigation (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge, settlement or satisfaction
in the ordinary course of business consistent with past practice or in
accordance with their terms, of liabilities disclosed, reflected or
reserved against in the most recent financial statements (or, if
applicable, the notes thereto) of the Company included in the Filed Company
SEC Documents (for amounts not in excess of such reserves) or incurred
since the date of such financial statements in the ordinary course of
business consistent with past practice, (w) cancel any indebtedness, (x)
waive or assign any claims or rights of substantial value or (y) waive any
benefits of, or agree to modify in any respect, or, subject to the terms
hereof, fail to enforce, or consent to any matter with respect to which
consent is required under, any standstill or similar
49
agreement to which the Company or any of its Subsidiaries is a party or (z)
waive any material benefits of, or agree to modify in any material respect,
or, subject to the terms hereof, fail to enforce in any material respect,
or consent to any matter with respect to which consent is required under,
any material confidentiality or similar agreement to which the Company or
any of its Subsidiaries is a party;
(ix) enter into any Contracts relating to the research, clinical
trial, development, distribution, training, sale, supply, license,
marketing, co-promotion or manufacturing by third parties of products of
the Company or any Subsidiary of the Company or products licensed by the
Company or any Subsidiary of the Company, or the Intellectual Property
Rights of the Company or any Subsidiary of the Company, which,
individually, has a value in excess of $60,000 or, in the aggregate, have a
value in excess of $300,000;
(x) enter into, modify, amend or terminate any Contract or waive,
release or assign any material rights or claims thereunder, which if so
entered into, modified, amended, terminated, waived, released or assigned
would reasonably be expected to (A) adversely affect in any material
respect the Company, (B) impair in any material respect the ability of the
Company to perform its obligations under this Agreement or (C) prevent or
materially delay the consummation of the transactions contemplated by this
Agreement;
(xi) enter into any Contract to the extent consummation of the
transactions contemplated by this Agreement or compliance by the Company
with the provisions of this Agreement would reasonably be expected to
conflict with, or result in a violation or breach of, or default (with or
without notice or lapse of time, or both) under, or give rise to a right
of, or result in, termination, cancellation or acceleration of any
obligation or to the loss of a benefit under, or result in the creation of
any Lien in or upon any of the properties or other assets of the Company or
any of its Subsidiaries under, or give rise to any increased, additional,
accelerated, or guaranteed right or
50
entitlements of any third party under, or result in any material alteration
of, any provision of such Contract;
(xii) enter into any Contract containing any restriction on the
ability of the Company or any of its Subsidiaries to assign its rights,
interests or obligations thereunder, unless such restriction expressly
excludes any assignment to Parent or any of its Subsidiaries in connection
with or following the consummation of the Merger and the other transactions
contemplated by this Agreement;
(xiii) sell, transfer or license to any person or otherwise extend,
amend or modify any rights to the Intellectual Property Rights of the
Company or any of its Subsidiaries;
(xiv) except as otherwise contemplated by this Agreement or as
required to ensure that any Company Benefit Plan or Company Benefit
Agreement is not then out of compliance with applicable law or to comply
with any Contract or Company Benefit Agreement entered into prior to the
date hereof (complete and accurate copies of which have been heretofore
delivered to Parent), (A) adopt, enter into, terminate or amend (I) any
collective bargaining agreement or Company Benefit Plan or (II) any Company
Benefit Agreement or other agreement, plan or policy involving the Company
or any of its Subsidiaries and one or more of their respective current or
former directors, officers, employees or consultants, (B) increase in any
manner the compensation, bonus or fringe or other benefits of, or pay any
bonus of any kind or amount whatsoever to, any current or former director,
officer, employee or consultant, except for planned salary increases and
payment of bonuses, each as described in Section 4.01(a)(xiv) of the
Company Disclosure Schedule, (C) pay any benefit or amount not required
under any Company Benefit Plan or Company Benefit Agreement or any other
benefit plan or arrangement of the Company or any of its Subsidiaries as in
effect on the date of this Agreement, other than as contemplated in clause
(B), (D) grant or pay any severance or termination pay or increase in any
manner the severance or termination pay of any current or former director,
officer, employee or consultant of the Company or any of its Subsidiaries,
(E) grant any awards under any
51
bonus, incentive, performance or other compensation plan or arrangement,
Company Benefit Agreement or Company Benefit Plan (including the grant of
Company Stock Options, Company Restricted Stock, "phantom" stock, stock
appreciation rights, "phantom" stock rights, stock based or stock related
awards, performance units or restricted stock or the removal of existing
restrictions in any Company Benefit Agreements, Company Benefit Plans or
agreements or awards made thereunder), other than as contemplated in clause
(B), (F) amend or modify any Stock Option or Warrant, (G) take any action
to fund or in any other way secure the payment of compensation or benefits
under any employee plan, agreement, contract or arrangement or Company
Benefit Plan or Company Benefit Agreement, (H) take any action to
accelerate the vesting or payment of any compensation or benefit under any
Company Benefit Plan or Company Benefit Agreement or (I) materially change
any actuarial or other assumption used to calculate funding obligations
with respect to any Company Pension Plan or change the manner in which
contributions to any Company Pension Plan are made or the basis on which
such contributions are determined;
(xv) except as required by GAAP, revalue any material assets of
the Company or any of its Subsidiaries or make any change in accounting
methods, principles or practices; or
(xvi) authorize any of, or commit, resolve, propose or agree to
take any of, the foregoing actions.
(b) Other Actions. The Company, Parent and Sub shall not, and
shall not permit any of their respective Subsidiaries to, take any action that
would, or that would reasonably be expected to, result in any of the conditions
to the Merger set forth in Article VI not being satisfied.
(c) Advice of Changes; Filings. The Company and Parent shall
promptly advise the other party orally and in writing of (i) any representation
or warranty made by it (and, in the case of Parent, made by Sub) contained in
this Agreement that is qualified as to materiality becoming untrue or inaccurate
in any respect or any such representation or warranty that is not so qualified
becoming untrue or inaccurate in any material respect or (ii) the
52
failure of it (and, in the case of Parent, of Sub) to comply with or satisfy in
any material respect any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement; provided, however, that no such
notification shall affect the representations, warranties, covenants or
agreements of the parties (or remedies with respect thereto) or the conditions
to the obligations of the parties under this Agreement. The Company and Parent
shall, to the extent permitted by law, promptly provide the other with copies of
all filings made by such party with any Governmental Entity in connection with
this Agreement and the transactions contemplated hereby, other than the portions
of such filings that include confidential information not directly related to
the transactions contemplated by this Agreement.
(d) Certain Tax Matters. During the period from the date of this
Agreement to the Effective Time, the Company shall, and shall cause each of its
Subsidiaries to, (i) timely file all tax returns ("Post-Signing Returns")
required to be filed by or on behalf of each such entity; (ii) timely pay all
taxes due and payable in respect of such Post-Signing Returns that are so filed;
(iii) accrue a reserve in the books and records and financial statements of any
such entity in accordance with past practice for all taxes payable by such
entity for which no Post-Signing Return is due prior to the Effective Time; (iv)
promptly notify Parent of any suit, claim, action, investigation, proceeding or
audit (collectively, "Actions") pending against or with respect to the Company
or any of its Subsidiaries in respect of any material amount of tax and not
settle or compromise any such Action without Parent's consent; (v) not make any
material tax election or settle or compromise any material tax liability, other
than with Parent's consent or other than in the ordinary course of business; and
(vi) cause all existing tax sharing agreements, tax indemnity obligations and
similar agreements, arrangements or practices with respect to taxes to which the
Company or any of its Subsidiaries is or may be a party or by which the Company
or any of its Subsidiaries is or may otherwise be bound to be terminated as of
the Closing Date so that after such date neither the Company nor any of its
Subsidiaries shall have any further rights or liabilities thereunder. Any tax
returns described in this Section 4.01(d) shall be complete and correct in all
material respects and shall be prepared on a basis consistent with the past
practice of the Company and in a
53
manner that does not distort taxable income (e.g. by deferring income or
accelerating deductions), provided that no Post-Signing Returns shall be filed
with any taxing authority without Parent's prior written consent.
SECTION 4.02. No Solicitation. (a) The Company shall not, nor shall it
authorize or permit any of its Subsidiaries or any of their respective
directors, officers or employees or any investment banker, financial advisor,
attorney, accountant or other advisor, agent or representative (collectively,
"Representatives") retained by it or any of its Subsidiaries to, directly or
indirectly through another person, (i) solicit, initiate or knowingly encourage,
or take any other action designed to, or which would reasonably be expected to,
facilitate, any Takeover Proposal or (ii) enter into, continue or otherwise
participate in any discussions or negotiations regarding, or furnish to any
person any information, or otherwise cooperate in any way with, any Takeover
Proposal. Without limiting the foregoing, it is agreed that any violation of the
restrictions set forth in the preceding sentence by any Representative of the
Company or any of its Subsidiaries shall be a breach of this Section 4.02(a) by
the Company. The Company shall, and shall cause its Subsidiaries to, immediately
cease and cause to be terminated all existing discussions or negotiations with
any person conducted heretofore with respect to any Takeover Proposal and
request the prompt return or destruction of all confidential information
previously furnished. Notwithstanding the foregoing, at any time prior to
obtaining the Stockholder Approval, in response to a bona fide written Takeover
Proposal that the Board of Directors of the Company determines in good faith
(after consultation with outside counsel and a financial advisor of nationally
recognized reputation) constitutes or would reasonably be expected to lead to a
Superior Proposal, and which Takeover Proposal was not solicited after the date
hereof and was made after the date hereof and did not otherwise result from a
breach of this Section 4.02(a), the Company may, if its Board of Directors
determines in good faith (after consultation with outside counsel) that it is
required to do so in order to comply with its fiduciary duties to the
stockholders of the Company under applicable law, and subject to compliance with
Section 4.02(c), (x) furnish information with respect to the Company and its
Subsidiaries to the person making such Takeover Proposal (and its
Representatives) pursuant to a customary confidentiality agreement (which need
not restrict
54
such person from making an unsolicited Takeover Proposal) not less restrictive
of such person than the Confidentiality Agreement, provided that all such
information has previously been provided to Parent or is provided to Parent
prior to or substantially concurrent with the time it is provided to such
person, and (y) participate in discussions or negotiations with the person
making such Takeover Proposal (and its Representatives) regarding such Takeover
Proposal.
The term "Takeover Proposal" means any inquiry, proposal or offer from
any person relating to, or that would reasonably be expected to lead to, any
direct or indirect acquisition or purchase, in one transaction or a series of
transactions, of assets or businesses that constitute 15% or more of the
revenues, net income or the assets of the Company and its Subsidiaries, taken as
a whole, or 15% or more of any class of equity securities of the Company or any
of its Subsidiaries, any tender offer or exchange offer that if consummated
would result in any person beneficially owning 15% or more of any class of
equity securities of the Company or any of its Subsidiaries, or any merger,
consolidation, business combination, recapitalization, liquidation, dissolution,
joint venture, binding share exchange or similar transaction involving the
Company or any of its Subsidiaries pursuant to which any person or the
shareholders of any person would own 15% or more of any class of equity
securities of the Company or any of its Subsidiaries or of any resulting parent
company of the Company, other than the transactions contemplated by this
Agreement and the Stockholder Agreement.
The term "Superior Proposal" means any bona fide offer made by a third
party that if consummated would result in such person (or its stockholders)
owning, directly or indirectly, all or substantially all of the shares of
Company Common Stock then outstanding (or of the surviving entity in a merger or
the direct or indirect parent of the surviving entity in a merger) or all or
substantially all the assets of the Company, which the Board of Directors of the
Company determines in good faith (after consultation with a financial advisor of
nationally recognized reputation) to be (i) more favorable to the stockholders
of the Company from a financial point of view than the Merger (taking into
account all the terms and conditions of such proposal and this Agreement
(including any changes to the financial terms of this Agreement proposed by
Parent in response to such offer or otherwise)) and (ii) reasonably
55
capable of being completed, taking into account all financial, legal, regulatory
and other aspects of such proposal.
(b) Neither the Board of Directors of the Company nor any
committee thereof shall (i) (A) withdraw (or modify in a manner adverse to
Parent), or publicly propose to withdraw (or modify in a manner adverse to
Parent), the approval, recommendation or declaration of advisability by such
Board of Directors or any such committee thereof of this Agreement, the Merger
or the other transactions contemplated by this Agreement or (B) recommend, adopt
or approve, or propose publicly to recommend, adopt or approve, any Takeover
Proposal (any action described in this clause (i) being referred to as a
"Company Adverse Recommendation Change") or (ii) approve or recommend, or
propose to approve or recommend, or allow the Company or any of its Subsidiaries
to execute or enter into, any letter of intent, memorandum of understanding,
agreement in principle, merger agreement, acquisition agreement, option
agreement, joint venture agreement, partnership agreement or other similar
agreement constituting or related to, or that is intended to or would reasonably
be expected to lead to, any Takeover Proposal (other than a confidentiality
agreement referred to in Section 4.02(a)) (an "Acquisition Agreement").
Notwithstanding the foregoing, at any time prior to obtaining the Stockholder
Approval, the Board of Directors of the Company may make a Company Adverse
Recommendation Change if such Board of Directors determines in good faith (after
consultation with outside counsel) that it is required to do so in order to
comply with its fiduciary duties to the stockholders of the Company under
applicable law; provided, however, that no Company Adverse Recommendation Change
may be made until after the fourth business day following Parent's receipt of
written notice (a "Notice of Adverse Recommendation") from the Company advising
Parent that the Board of Directors of the Company intends to take such action
and specifying the reasons therefor, including the terms and conditions of any
Superior Proposal that is the basis of the proposed action by the Board of
Directors (it being understood and agreed that any amendment to the financial
terms or any other material term of such Superior Proposal shall require a new
Notice of Adverse Recommendation and a new four business day period). In
determining whether to make a Company Adverse Recommendation Change, the Board
of Directors of the Company shall take into account any changes to the financial
terms
56
of this Agreement proposed by Parent in response to a Notice of Adverse
Recommendation or otherwise.
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 4.02, the Company shall promptly advise
Parent orally and in writing of any Takeover Proposal, the material terms and
conditions of any such Takeover Proposal or inquiry (including any changes
thereto) and the identity of the person making any such Takeover Proposal or
inquiry. The Company shall (i) keep Parent fully informed of the status and
details (including any change to any material term thereof) of any such Takeover
Proposal or inquiry and (ii) provide to Parent as soon as practicable after
receipt or delivery thereof with copies of all correspondence and other written
material sent or provided to the Company or any of its Subsidiaries from any
person that describes any of the terms or conditions of any Takeover Proposal.
(d) Nothing contained in this Section 4.02 shall prohibit the
Company from (x) taking and disclosing to its stockholders a position
contemplated by Rule 14e-2(a) promulgated under the Exchange Act or (y) making
any disclosure to the stockholders of the Company if, in the good faith judgment
of the Board of Directors of the Company (after consultation with outside
counsel) failure to so disclose would be inconsistent with its obligations under
applicable law, including the Board of Directors' duty of candor to the
stockholders of the Company; provided, however, that in no event shall the
Company or its Board of Directors or any committee thereof take, or agree or
resolve to take, any action prohibited by Section 4.02(b).
ARTICLE V
Additional Agreements
SECTION 5.01. Preparation of the Proxy Statement; Stockholders'
Meeting. (a) As promptly as practicable following the date of this Agreement,
the Company and Parent shall prepare and the Company shall file with the SEC the
Proxy Statement and the Company shall use its commercially reasonable efforts to
respond as promptly as practicable to any comments of the SEC with respect
thereto and to cause the Proxy Statement to be mailed to the stockholders of the
Company as promptly as practicable following the date of
57
this Agreement. The Company shall promptly notify Parent upon the receipt of any
comments from the SEC or the staff of the SEC or any request from the SEC or the
staff of the SEC for amendments or supplements to the Proxy Statement and shall
provide Parent with copies of all correspondence between the Company and its
Representatives, on the one hand, and the SEC and the staff of the SEC, on the
other hand. Notwithstanding the foregoing, prior to filing or mailing the Proxy
Statement (or any amendment or supplement thereto) or responding to any comments
of the SEC or the staff of the SEC with respect thereto, the Company (i) shall
provide Parent an opportunity to review and comment on such document or response
and (ii) shall include in such document or response all comments reasonably
proposed by Parent; provided, that Parent shall use commercially reasonable
efforts to provide or cause to be provided its comments to the Company as
promptly as reasonably practicable after the Proxy Statement is transmitted to
Parent for its review.
(b) The Company shall, as soon as practicable following the date
of this Agreement, establish a record date for, duly call, give notice of,
convene and hold a meeting of its stockholders (the "Stockholders' Meeting")
solely for the purpose of obtaining the Stockholder Approval. Subject to
Sections 4.02(b) and 4.02(d), the Company shall, through its Board of Directors,
recommend to its stockholders adoption of this Agreement and shall include such
recommendation in the Proxy Statement. Without limiting the generality of the
foregoing, the Company's obligations pursuant to the first sentence of this
Section 5.01(b) shall not be affected by (i) the commencement, public proposal,
public disclosure or communication to the Company of any Takeover Proposal or
(ii) the withdrawal or modification by the Board of Directors of the Company or
any committee thereof of such Board of Directors' or such committee's approval
or recommendation of this Agreement, the Merger or the other transactions
contemplated by this Agreement; provided, however, that no breach of this
Section 5.01(b) shall be deemed to have occurred if the Company adjourns or
postpones the Stockholders' Meeting for a reasonable period of time, each such
period of time not to exceed ten business days, provided that (x) at the time of
such adjournment or postponement the Board of Directors shall be prohibited by
the terms of this Agreement from making a Company Adverse Recommendation Change,
and the Stockholders' Meeting is then scheduled to occur within four business
days of the time of
58
such adjournment or postponement or (y) at the time the Board of Directors
announces a Company Adverse Recommendation Change, the Stockholders' Meeting is
then scheduled to occur no later than ten business days from the date of such
Company Adverse Recommendation Change; provided that the Company may not adjourn
or postpone the Stockholders' Meeting pursuant to this clause (ii) more than two
times or for more than fifteen business days in the aggregate.
SECTION 5.02. Access to Information; Confidentiality. The Company
shall afford to Parent, and to Parent's officers, employees, accountants,
counsel, financial advisors and other Representatives, reasonable access
(including for the purpose of coordinating integration activities and transition
planning with the employees of the Company and its Subsidiaries) during normal
business hours and upon reasonable prior notice to the Company during the period
prior to the Effective Time or the termination of this Agreement to all its and
its Subsidiaries' properties, books, contracts, commitments, personnel and
records and, during such period, the Company shall furnish promptly to Parent
(a) a copy of each report, schedule, registration statement and other document
filed by it during such period pursuant to the requirements of Federal or state
securities laws and (b) all other information concerning its and its
Subsidiaries' business, properties and personnel as Parent may reasonably
request. Except for disclosures expressly permitted by the terms of the
Confidentiality Agreement dated as of October 16, 2002, as amended December 19,
2002, between Parent and the Company (as it may be amended from time to time,
the "Confidentiality Agreement"), Parent shall hold, and shall cause its
officers, employees, accountants, counsel, financial advisors and other
Representatives to hold, all information received from the Company, directly or
indirectly, in confidence in accordance with the Confidentiality Agreement. No
investigation pursuant to this Section 5.02 or information provided or received
by any party hereto pursuant to this Agreement will affect any of the
representations or warranties of the parties hereto contained in this Agreement
or the conditions hereunder to the obligations of the parties hereto.
SECTION 5.03. Commercially Reasonable Efforts. Upon the terms and
subject to the conditions set forth in this Agreement, each of the parties
agrees to use its
59
commercially reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, and to assist and cooperate with the other parties
in doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Merger and the other
transactions contemplated by this Agreement and the Stockholder Agreement,
including using commercially reasonable efforts to accomplish the following: (i)
the taking of all acts necessary to cause the conditions to Closing to be
satisfied as promptly as practicable, (ii) the obtaining of all necessary
actions or nonactions, waivers, consents and approvals from Governmental
Entities and the making of all necessary registrations and filings (including
filings with Governmental Entities) and the taking of all steps as may be
necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by, any Governmental Entity and (iii) the obtaining of all necessary
consents, approvals or waivers from third parties; provided that none of the
Company, Parent or Sub shall be required to make any payment to any such third
parties or concede anything of value to obtain such consents. In connection with
and without limiting the foregoing, the Company and Parent shall duly file with
the U.S. Federal Trade Commission and the Antitrust Division of the Department
of Justice the notification and report form (the "HSR Filing") required under
the HSR Act with respect to the transactions contemplated by this Agreement as
promptly as practicable. The HSR Filing shall be in substantial compliance with
the requirements of the HSR Act. Each party shall cooperate with the other party
to the extent necessary to assist the other party in the preparation of its HSR
Filing, to request early termination of the waiting period required by the HSR
Act and, if requested, to promptly amend or furnish additional information
thereunder. The Company and its Board of Directors shall (1) take all action
necessary to ensure that no state takeover statute or similar statute or
regulation is or becomes applicable to this Agreement, the Stockholder
Agreement, the Merger or any of the other transactions contemplated by this
Agreement or the Stockholder Agreement and (2) if any state takeover statute or
similar statute becomes applicable to this Agreement, the Stockholder Agreement,
the Merger or any of the other transactions contemplated by this Agreement or
the Stockholder Agreement, take all action necessary to ensure that the Merger
and the other transactions contemplated by this Agreement and the Stockholder
Agreement may be consummated as promptly as practicable on the terms
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contemplated by this Agreement and the Stockholder Agreement and otherwise to
minimize the effect of such statute or regulation on this Agreement, the
Stockholder Agreement, the Merger and the other transactions contemplated by
this Agreement and the Stockholder Agreement. Nothing in this Agreement shall be
deemed to require Parent to agree to, or proffer to, divest or hold separate any
assets or any portion of any business of Parent, the Company or any of their
respective Subsidiaries.
SECTION 5.04. Company Stock Options; Warrants. (a) As soon as
practicable following the date of this Agreement, the Board of Directors of the
Company (or, if appropriate, any committee thereof administering the Company
Stock Plans) shall adopt such resolutions or take such other actions as may be
required to effect the following:
(i) adjust the terms of all outstanding Company Stock Options and
Company Restricted Stock, whether vested or unvested, as necessary to
provide that the restrictions on outstanding Company Restricted Stock shall
lapse, so that the Company Restricted Stock shall become fully vested,
before the Effective Time, the Company Stock Options will become fully
exercisable and may be exercised before the Effective Time, and, at the
Effective Time, each Company Stock Option outstanding immediately prior to
the Effective Time shall be canceled and the holder thereof shall then
become entitled to receive, as soon as practicable following the Effective
Time, a single lump sum cash payment equal to the product of (1) the number
of shares of Company Common Stock for which such Company Stock Option shall
not theretofore have been exercised and (2) the excess, if any, of the
Merger Consideration over the exercise price per share of such Company
Stock Option; and
(ii) make such other changes to the Company Stock Plans as the
Company and Parent may agree are appropriate to give effect to the Merger.
(b) As soon as practicable following the date of this Agreement,
the Board of Directors of the Company shall adopt such resolutions or take such
other actions (if any) as may be required to provide that each Warrant
outstanding immediately prior to the Effective Time shall be canceled in
exchange for a lump sum cash payment equal to (i) the
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product of (A) the number of shares of Company Common Stock subject to such
Warrant and (B) the Merger Consideration, minus (ii) the product of (A) the
number of shares of Company Common Stock subject to such Warrant and (B) the per
share exercise price of such Warrant (provided that if such calculation results
in a negative number, the lump sum cash payment shall be deemed to be $0). Such
payment shall be made promptly following the Effective Time. All amounts payable
pursuant to this Section 5.04(b) shall be subject to any required withholding of
taxes and shall be paid without interest. The Company has obtained all consents
of the holders of the Warrants necessary to effectuate the foregoing.
(c) All amounts payable to holders of the Company Stock Options
pursuant to Section 5.04(a) shall be subject to any required withholding of
Taxes and shall be paid without interest as soon as practicable following the
Effective Time.
(d) The Company shall ensure that following the Effective Time,
no holder of a Company Stock Option (or former holder of a Company Stock Option)
or any participant in any Company Stock Plan, Company Benefit Plan or Company
Benefit Agreement shall have any right thereunder to acquire any capital stock
of the Company or the Surviving Corporation or any other equity interest therein
(including "phantom" stock or stock appreciation rights).
SECTION 5.05. Indemnification, Advancement of Expenses, Exculpation
and Insurance. (a) Parent shall cause the Surviving Corporation to assume the
obligations with respect to all rights to indemnification, advancement of
expenses and exculpation from liabilities for acts or omissions occurring at or
prior to the Effective Time now existing in favor of the current or former
directors or officers of the Company as provided in the Company Certificate, the
Company By-laws or any indemnification agreement between such directors or
officers and the Company (in each case, as in effect on the date hereof),
without further action, as of the Effective Time and such obligations shall
survive the Merger and shall continue in full force and effect in accordance
with their terms.
(b) In the event that the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other person and
is not the continuing or
62
surviving corporation or entity of such consolidation or merger or (ii)
transfers or conveys all or substantially all of its properties and other assets
to any person, then, and in each such case, Parent shall cause proper provision
to be made so that the successors and assigns of the Surviving Corporation shall
expressly assume the obligations set forth in this Section 5.05.
(c) For six years after the Effective Time, Parent shall
maintain (directly or indirectly through the Company's existing insurance
programs) in effect the Company's current directors' and officers' liability
insurance in respect of acts or omissions occurring at or prior to the Effective
Time, covering each person currently covered by the Company's directors' and
officers' liability insurance policy (a complete and accurate copy of which has
been heretofore delivered to Parent), on terms with respect to such coverage and
amounts no less favorable than those of such policy in effect on the date
hereof; provided, however, that Parent may (i) substitute therefor policies of
Parent containing terms with respect to coverage (including as coverage relates
to deductibles and exclusions) and amount no less favorable to such directors
and officers or (ii) request that the Company obtain such extended reporting
period coverage under its existing insurance programs (to be effective as of the
Effective Time); provided further, however, that in satisfying its obligation
under this Section 5.05(c), neither the Company nor Parent shall be obligated to
pay more than $3,000,000 in the aggregate to obtain such coverage. It is
understood and agreed that in the event such coverage cannot be obtained for
$3,000,000 or less in the aggregate, Parent shall be obligated to provide such
coverage as may be obtained for such $3,000,000 aggregate amount.
(d) The provisions of this Section 5.05 (i) are intended to be
for the benefit of, and will be enforceable by, each indemnified party, his or
her heirs and his or her representatives and (ii) are in addition to, and not in
substitution for, any other rights to indemnification or contribution that any
such person may have by contract or otherwise.
SECTION 5.06. Fees and Expenses. (a) Except as provided in paragraph
(b) of this Section 5.06, all fees and expenses incurred in connection with this
Agreement, the Merger and the other transactions contemplated by this
63
Agreement shall be paid by the party incurring such fees or expenses, whether or
not the Merger is consummated.
(b) In the event that (i) this Agreement is terminated by Parent
pursuant to Section 7.01(e) or (ii) (A) prior to the obtaining of the
Stockholder Approval, a Takeover Proposal shall have been made to the Company or
shall have been made directly to the stockholders of the Company generally or
shall have otherwise become publicly known or any person shall have publicly
announced an intention (whether or not conditional) to make a Takeover Proposal,
(B) thereafter this Agreement is terminated by either Parent or the Company
pursuant to Section 7.01(b)(i) (but only if a vote to obtain the Stockholder
Approval or the Stockholders' Meeting has not been held) or Section 7.01(b)(iii)
and (C) within 12 months after such termination, the Company enters into a
definitive agreement to consummate, or consummates, the transactions
contemplated by any Takeover Proposal, then the Company shall pay Parent a fee
equal to $5,480,000 (the "Termination Fee") by wire transfer of same-day funds
on the first business day following (x) in the case of a payment required by
clause (i) above, the date of termination of this Agreement and (y) in the case
of a payment required by clause (ii) above, the date of the first to occur of
the events referred to in clause (ii)(C).
(c) The Company and Parent acknowledge and agree that the
agreements contained in Section 5.06(b) are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, Parent would
not enter into this Agreement; accordingly, if the Company fails promptly to pay
the amount due pursuant to Section 5.06(b), and, in order to obtain such
payment, Parent commences a suit that results in a judgment against the Company
for the Termination Fee, the Company shall pay to Parent its costs and expenses
(including attorneys' fees and expenses) in connection with such suit, together
with interest on the amount of the Termination Fee from the date such payment
was required to be made until the date of payment at the prime rate of Citibank,
N.A. in effect on the date such payment was required to be made.
SECTION 5.07. Public Announcements. Except with respect to any Company
Adverse Recommendation Change, Parent and the Company shall consult with each
other before issuing, and give each other the opportunity to review and
64
comment upon, any press release or other public statements with respect to the
transactions contemplated by this Agreement, including the Merger, and shall not
issue any such press release or make any such public statement prior to such
consultation, except as such party may reasonably conclude may be required by
applicable law, court process or by obligations pursuant to any listing
agreement with any national securities exchange or national securities quotation
system. The parties agree that all formal Company employee communication
programs or announcements with respect to the transactions contemplated by this
Agreement shall be in the forms mutually agreed to by the parties (such
agreement not to be unreasonably withheld or delayed). The parties agree that
the initial press release to be issued with respect to the transactions
contemplated by this Agreement shall be in the form heretofore agreed to by the
parties.
SECTION 5.08. Stockholder Litigation. The Company shall give Parent
the opportunity to participate in the defense or settlement of any stockholder
litigation against the Company and/or its directors relating to the transactions
contemplated by this Agreement or the Stockholder Agreement, and no such
settlement shall be agreed to without Parent's prior written consent.
SECTION 5.09. Employee Matters. (a) Subject to applicable collective
bargaining agreements, for a period of not less than twelve months following the
Effective Time, the employees of the Company who remain in the employment of the
Surviving Corporation and its Subsidiaries (the "Continuing Employees") shall
receive employee benefits that are substantially comparable in the aggregate to
the employee benefits provided to the employees of the Company immediately prior
to the Effective Time; provided that neither Parent nor the Surviving
Corporation nor any of their Subsidiaries shall have any obligation to issue, or
adopt any plans or arrangements providing for the issuance of shares of capital
stock, warrants, options, stock appreciation rights or other rights in respect
of any shares of capital stock of any entity or any securities convertible or
exchangeable into such shares pursuant to any such plans or arrangements;
provided, further, that no plans or arrangements of the Company or any of its
Subsidiaries providing for such issuance shall be taken into account in
determining whether employee benefits are substantially comparable in the
aggregate.
65
(b) For a period of not less than twelve months following the
Effective Time, the Continuing Employees shall receive immigration benefits that
are generally comparable to the immigration benefits currently provided to the
employees of the Company pursuant to the program set forth on Section 5.09(b) of
the Company Disclosure Schedule.
(c) Nothing contained herein shall be construed as requiring
Parent or the Surviving Corporation to continue any specific plans or to
continue the employment of any specific person.
(d) Parent shall cause the Surviving Corporation to recognize
the service of each Continuing Employee as if such service had been performed
with Parent (i) for purposes of vesting (but not benefit accrual) under Parent's
defined benefit pension plan, (ii) for purposes of eligibility for vacation
under Parent's vacation program, (iii) for purposes of eligibility and
participation under any health or welfare plan maintained by Parent (other than
any post-employment health or post-employment welfare plan) and (iv) unless
covered under another arrangement with or of the Company, for benefit accrual
purposes under Parent's severance plan (in the case of each of clauses (i),
(ii), (iii) and (iv), solely to the extent that Parent makes such plan or
program available to employees of the Surviving Corporation), but not for
purposes of any other employee benefit plan of Parent.
(e) Subject to applicable collective bargaining agreements,
with respect to any welfare plan maintained by Parent in which Continuing
Employees are eligible to participate after the Effective Time, Parent shall,
and shall cause the Surviving Corporation to, (i) waive all limitations as to
preexisting conditions and exclusions with respect to participation and coverage
requirements applicable to such employees to the extent such conditions and
exclusions were satisfied or did not apply to such employees under the welfare
plans of the Company and its Subsidiaries prior to the Effective Time and (ii)
provide each Continuing Employee with credit for any co-payments and deductibles
paid prior to the Effective Time in satisfying any analogous deductible or
out-of-pocket requirements to the extent applicable under any such plan.
SECTION 5.10. Stockholder Agreement Legend. The Company will inscribe
upon any Certificate representing
66
Subject Shares that may be tendered by a Stockholder (as such terms are defined
in the Stockholder Agreement) to the Company for such purpose the following
legend: "THE SHARES OF COMMON STOCK, PAR VALUE $.001 PER SHARE, OF 3-DIMENSIONAL
PHARMACEUTICALS, INC. REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
STOCKHOLDER AGREEMENT DATED AS OF JANUARY 15, 2003, AND ARE SUBJECT TO THE TERMS
THEREOF. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT THE PRINCIPAL EXECUTIVE
OFFICES OF 3-DIMENSIONAL PHARMACEUTICALS, INC.".
SECTION 5.11. Consents and Other Action. The Company agrees to use its
commercially reasonable efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things necessary, proper or advisable to
accomplish the items set forth on Section 5.11 of the Company Disclosure
Schedule.
ARTICLE VI
Conditions Precedent
SECTION 6.01. Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger is subject
to the satisfaction or (to the extent permitted by law) waiver on or prior to
the Closing Date of the following conditions:
(a) Stockholder Approval. The Stockholder Approval shall have
been obtained.
(b) HSR Act. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or
shall have expired.
(c) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other judgment or order
issued by any court of competent jurisdiction or other statute, law, rule,
legal restraint or prohibition (collectively, "Restraints") shall be in
effect (i) preventing the consummation of the Merger or (ii) which
otherwise has had or would reasonably be expected to have a Material
Adverse Effect.
SECTION 6.02. Conditions to Obligations of Parent and Sub. The
obligations of Parent and Sub to effect the
67
Merger are further subject to the satisfaction or (to the extent permitted by
law) waiver on or prior to the Closing Date of the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company contained in this Agreement that are qualified as
to materiality shall be true and correct, and the representations and
warranties of the Company contained in this Agreement that are not so
qualified shall be true and correct in all material respects, in each case
as of the date of this Agreement and as of the Closing Date as though made
on the Closing Date, except to the extent such representations and
warranties expressly relate to an earlier date, in which case as of such
earlier date. Parent shall have received a certificate signed on behalf of
the Company by the chief executive officer and the chief financial officer
of the Company to such effect.
(b) Performance of Obligations of the Company. The Company shall
have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date, and
Parent shall have received a certificate signed on behalf of the Company by
the chief executive officer and the chief financial officer of the Company
to such effect.
(c) No Litigation. There shall not be pending or threatened any
suit, action or proceeding by any Governmental Entity, or by any other
person having a reasonable likelihood of prevailing in a manner
contemplated in clauses (i), (ii) or (iii) below, (i) challenging the
acquisition by Parent or Sub of any shares of Company Common Stock, seeking
to restrain or prohibit the consummation of the Merger, or seeking to place
limitations on the ownership of shares of Company Common Stock (or shares
of common stock of the Surviving Corporation) by Parent or Sub or seeking
to obtain from the Company, Parent or Sub any damages that are material in
relation to the Company, (ii) seeking to prohibit or materially limit the
ownership or operation by the Company, Parent or any of their respective
Subsidiaries of any portion of any business or of any assets of the
Company, Parent or any of their respective Subsidiaries, or to compel the
Company,
68
Parent or any of their respective Subsidiaries to divest or hold separate
any portion of any business or of any assets of the Company, Parent or any
of their respective Subsidiaries, as a result of the Merger, (iii) seeking
to prohibit Parent or any of its Subsidiaries from effectively controlling
in any material respect the business or operations of the Company or any of
its Subsidiaries or (iv) otherwise having, or being reasonably expected to
have, a Material Adverse Effect.
(d) Restraints. No Restraint that would reasonably be expected to
result, directly or indirectly, in any of the effects referred to in
clauses (i) through (iv) of paragraph (c) of this Section 6.02 shall be in
effect.
(e) Certain Employees. No fewer than 80% of the employees of the
Company listed in Section 6.02(e) of the Company Disclosure Schedule shall
be actively employed in scientific and/or technical capacities by the
Company on the Closing Date.
(f) Consents. Parent shall have received evidence, in form and
substance reasonably satisfactory to it, that Parent or the Company shall
have obtained all consents, approvals, authorizations, qualifications and
orders of third parties required in connection with this Agreement and the
transactions contemplated by this Agreement including (i) those consents
specifically identified on Section 6.02(f) of the Company Disclosure
Schedule and (ii) those consents to assignments of material Contracts and
material Intellectual Property Rights except for those the failure of which
to be obtained individually or in the aggregate would not reasonably be
expected to (A) restrain or prohibit the consummation of the Merger or (B)
prohibit or limit in any material respect the ownership or operation or
effective control by Parent of any portion of the business or assets of the
Company and its Subsidiaries, taken as a whole.
SECTION 6.03. Conditions to Obligation of the Company. The obligation
of the Company to effect the Merger
69
is further subject to the satisfaction or (to the extent permitted by law)
waiver on or prior to the Closing Date of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Parent and Sub contained in this Agreement that are qualified
as to materiality shall be true and correct, and the representations and
warranties of Parent and Sub contained in this Agreement that are not so
qualified shall be true and correct in all material respects, in each case
as of the date of this Agreement and as of the Closing Date as though made
on the Closing Date, except to the extent such representations and
warranties expressly relate to an earlier date, in which case as of such
earlier date. The Company shall have received a certificate signed on
behalf of Parent by an executive officer of Parent to such effect.
(b) Performance of Obligations of Parent and Sub. Parent and Sub
shall have performed in all material respects all obligations required to
be performed by them under this Agreement at or prior to the Closing Date,
and the Company shall have received a certificate signed on behalf of
Parent by an executive officer of Parent to such effect.
SECTION 6.04. Frustration of Closing Conditions. None of the Company,
Parent or Sub may rely on the failure of any condition set forth in Section
6.01, 6.02 or 6.03, as the case may be, to be satisfied if such failure was
caused by such party's failure to act in good faith or to use its commercially
reasonable efforts to consummate the Merger and the other transactions
contemplated by this Agreement, as required by and subject to Section 5.03.
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01. Termination. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after receipt of the
Stockholder Approval:
(a) by mutual written consent of Parent, Sub and the Company;
70
(b) by either Parent or the Company:
(i) if the Merger shall not have been consummated on or
before June 15, 2003; provided, however, that the right to
terminate this Agreement under this Section 7.01(b)(i) shall not be
available to any party whose breach of a representation or warranty
in this Agreement or whose action or failure to act has been a
principal cause of or resulted in the failure of the Merger to be
consummated on or before such date;
(ii) if any Restraint having any of the effects set
forth in Section 6.01(c) shall be in effect and shall have become
final and nonappealable; or
(iii) if the Stockholder Approval shall not have been
obtained at the Stockholders' Meeting duly convened therefor or at
any adjournment or postponement thereof;
(c) by Parent (i) if the Company shall have breached or failed to
perform any of its representations, warranties, covenants or agreements set
forth in this Agreement, which breach or failure to perform (A) would give
rise to the failure of a condition set forth in Section 6.02(a) or 6.02(b)
and (B) is incapable of being cured by the Company within 30 calendar days
following receipt of written notice of such breach or failure to perform
from Parent or (ii) if any Restraint having the effects referred to in
clauses (i) through (iv) of Section 6.02(c) shall be in effect and shall
have become final and nonappealable;
(d) by the Company, if Parent shall have breached or failed to
perform any of its representations, warranties, covenants or agreements set
forth in this Agreement, which breach or failure to perform (A) would give
rise to the failure of a condition set forth in Section 6.03(a) or 6.03(b)
and (B) is incapable of being cured by Parent within 30 calendar days
following receipt of written notice of such breach or failure to perform
from the Company; or
71
(e) by Parent, in the event that prior to the obtaining of the
Stockholder Approval (i) a Company Adverse Recommendation Change shall have
occurred or (ii) the Board of Directors of the Company fails publicly to
reaffirm its recommendation of this Agreement, the Merger or the other
transactions contemplated by this Agreement within ten business days of
receipt of a written request by Parent to provide such reaffirmation
following a Takeover Proposal.
SECTION 7.02. Effect of Termination. In the event of termination of
this Agreement by either the Company or Parent as provided in Section 7.01, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Parent, Sub or the Company, other than the
provisions of Section 3.01(s), the penultimate sentence of Section 5.02, Section
5.06, this Section 7.02 and Article VIII, which provisions shall survive such
termination, and except to the extent that such termination results from the
willful and material breach by a party of any of its representations,
warranties, covenants or agreements set forth in this Agreement.
SECTION 7.03. Amendment. This Agreement may be amended by the parties
hereto at any time before or after receipt of the Stockholder Approval;
provided, however, that after such approval has been obtained, there shall be
made no amendment that by law requires further approval by the stockholders of
the Company without such approval having been obtained. This Agreement may not
be amended except by an instrument in writing signed on behalf of each of the
parties hereto.
SECTION 7.04. Extension; Waiver. At any time prior to the Effective
Time, the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) to the extent permitted by
law, waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto or (c) subject to the
proviso to the first sentence of Section 7.03 and to the extent permitted by
law, waive compliance with any of the agreements or conditions contained herein.
Any agreement on the part of a party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party. The failure of any party to this Agreement to assert
72
any of its rights under this Agreement or otherwise shall not constitute a
waiver of such rights.
SECTION 7.05. Procedure for Termination or Amendment. A termination of
this Agreement pursuant to Section 7.01 or an amendment of this Agreement
pursuant to Section 7.03 shall, in order to be effective, require, in the case
of Parent or the Company, action by its Board of Directors or, with respect to
any amendment of this Agreement pursuant to Section 7.03, the duly authorized
committee of its Board of Directors to the extent permitted by law.
ARTICLE VIII
General Provisions
SECTION 8.01. Nonsurvival of Representations and Warranties. None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time. This
Section 8.01 shall not limit any covenant or agreement of the parties which by
its terms contemplates performance after the Effective Time.
SECTION 8.02. Notices. Except for notices that are specifically
required by the terms of this Agreement to be delivered orally, all notices,
requests, claims, demands and other communications hereunder shall be in writing
and shall be deemed given if delivered personally, telecopied (which is
confirmed) or sent by overnight courier (providing proof of delivery) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
if to Parent or Sub, to:
Xxxxxxx & Xxxxxxx
Xxx Xxxxxxx & Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xxxx X. Xxxxxx
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with a copy to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, III, Esq.
if to the Company, to:
3-Dimensional Pharmaceuticals, Inc.
Three Lower Makefield Corporate Center
0000 Xxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. U'Xxxxxxxx
Xxxxxxx Xxxxxxx
with a copy to:
Xxxxxx, Xxxxx & Xxxxxxx LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
SECTION 8.03. Definitions. For purposes of this Agreement:
(a) an "Affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first person;
(b) "Knowledge" of any person that is not an individual means,
with respect to any matter in question, the actual knowledge of such
person's executive officers (which in the case of the Company shall be
deemed to include, for purposes of this definition, solely those persons
listed in
74
Section 8.03(b) of the Company Disclosure Schedule) after making due
inquiry of the other executives and managers having primary responsibility
for such matter;
(c) "Material Adverse Change" or "Material Adverse Effect" means
any (i) change, (ii) effect, (iii) event, (iv) occurrence, (v) state of
facts or (vi) development or developments which individually or in the
aggregate would reasonably be expected to result in any change or effect,
that (A) is materially adverse to the business, financial condition,
properties, assets, liabilities (contingent or otherwise) or results of
operations of the Company and its Subsidiaries, taken as a whole, or (B)
would reasonably be expected to prevent or materially impede, interfere
with, hinder or delay the consummation by the Company of the Merger or the
other transactions contemplated by this Agreement; provided, that for
purposes of analyzing whether any change, effect, event, occurrence, state
of facts or development constitutes a "Material Adverse Change" or
"Material Adverse Effect" under this definition, the parties agree that (x)
materiality shall be analyzed from the viewpoint of whether there is a
significant likelihood that the disclosure of such state of facts, change,
development, effect, condition or occurrence would be viewed by a
reasonable investor as having significantly altered the total mix of
information about the Company and its Subsidiaries available to such
investor if the total mix of such information consisted solely of (I) the
representations and warranties of the Company contained in this Agreement,
(II) the Filed Company SEC Documents and (III) the Company Disclosure
Schedule to the extent readily apparent on its face to be applicable to the
analysis of whether a Material Adverse Change or a Material Adverse Effect
has occurred or would reasonably be expected to occur, and (y) the analysis
of materiality shall not be limited solely to the standpoint of a long-term
investor; provided, further, that none of the following shall be deemed,
either alone or in combination, to constitute, and none of the following
shall be taken into account in determining whether there has been or will
be, a Material Adverse Effect or a Material Adverse Change: (a) any change
relating to the United States economy or securities markets in general, (b)
any failure, in and of its itself, by the Company to meet any internal or
published projections,
75
forecasts, or revenue or earnings predictions for any period ending on or
after the date of this Agreement (it being understood that the facts or
occurrences giving rise or contributing to such failure may be deemed to
constitute, or be taken into account in determining whether there has been
or will be, a Material Adverse Effect or a Material Adverse Change) and (c)
any adverse change, effect, event, occurrence, state of facts or
development reasonably attributable to conditions affecting the industry in
which the Company participates (other than as may arise or result from
regulatory action by a Governmental Entity), so long as the effects do not
disproportionately impact the Company;
(d) "person" means an individual, corporation, partnership,
limited liability company, joint venture, association, trust,
unincorporated organization or other entity; and
(e) a "Subsidiary" of any person means another person, an amount
of the voting securities, other voting rights or voting partnership
interests of which is sufficient to elect at least a majority of its board
of directors or other governing body (or, if there are no such voting
interests, 50% or more of the equity interests of which) is owned directly
or indirectly by such first person.
SECTION 8.04. Interpretation. When a reference is made in this
Agreement to an Article, a Section, Exhibit or Schedule, such reference shall be
to an Article of, a Section of, or an Exhibit or Schedule to, this Agreement
unless otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation". The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. References to "this Agreement" shall include the Company Disclosure
Schedule. All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise
76
defined therein. The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such term. Any agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented, including (in
the case of agreements or instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and references to all
attachments thereto and instruments incorporated therein. References to a person
are also to its permitted successors and assigns.
SECTION 8.05. Consents and Approvals. For any matter under this
Agreement requiring the consent or approval of any party to be valid and binding
on the parties hereto, such consent or approval must be in writing.
SECTION 8.06. Counterparts. This Agreement may be executed in one or
more counterparts (including by facsimile), 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.
SECTION 8.07. Entire Agreement; No Third-Party Beneficiaries. This
Agreement, the Stockholder Agreement and the Confidentiality Agreement (a)
constitute the entire agreement, and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter of this Agreement, the Stockholder Agreement and the
Confidentiality Agreement and (b) except for the provisions of Article II and
Section 5.05, are not intended to confer upon any person other than the parties
any legal or equitable rights or remedies.
SECTION 8.08. 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 8.09. Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder
77
shall be assigned, in whole or in part, by operation of law or otherwise by any
of the parties without the prior written consent of the other parties, and any
assignment without such consent shall be null and void, except that Sub, upon
prior written notice to the Company, may assign, in its sole discretion, any of
or all its rights, interests and obligations under this Agreement to Parent or
to any direct or indirect wholly owned Subsidiary of Parent, but no such
assignment shall relieve Parent or Sub of any of its obligations hereunder.
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of, and be enforceable by, the parties and their respective
successors and assigns.
SECTION 8.10. Specific Enforcement; Consent to Jurisdiction. The
parties agree that irreparable damage would occur and that the parties would not
have any adequate remedy at law in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement in any Federal
court located in the State of Delaware or in any state court in the State of
Delaware, this being in addition to any other remedy to which they are entitled
at law or in equity. In addition, each of the parties hereto (a) consents to
submit itself to the personal jurisdiction of any Federal court located in the
State of Delaware or of any state court located in the State of Delaware in the
event any dispute arises out of this Agreement or the transactions contemplated
by this Agreement, (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court
and (c) agrees that it will not bring any action relating to this Agreement or
the transactions contemplated by this Agreement in any court other than a
Federal court located in the State of Delaware or a state court located in the
State of Delaware.
SECTION 8.11. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto
78
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible to the fullest extent
permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
79
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers hereunto duly authorized,
all as of the date first written above.
XXXXXXX & XXXXXXX,
by
------------------------------------------------
Name:
Title:
LONGBOW MERGER SUB, INC.,
by
------------------------------------------------
Name:
Title:
3-DIMENSIONAL PHARMACEUTICALS, INC.,
by
------------------------------------------------
Name:
Title:
ANNEX I
TO THE MERGER AGREEMENT
Index of Defined Terms
Term
----
Acquisition Agreement............................................Section 4.02(b)
Actions..........................................................Section 4.01(d)
Affiliate........................................................Section 8.03(a)
Agreement...............................................................Preamble
Appraisal Shares.................................................Section 2.01(d)
Biologic......................................................Section 3.01(v)(i)
Certificate......................................................Section 2.01(c)
Certificate of Merger...............................................Section 1.03
Class Action Suit................................................Section 3.01(h)
Closing.............................................................Section 1.02
Closing Date........................................................Section 1.02
Code.............................................................Section 2.02(h)
Commonly Controlled Entity.......................................Section 3.01(k)
Company.................................................................Preamble
Company Adverse Recommendation Change............................Section 4.02(b)
Company Benefit Agreements.......................................Section 3.01(g)
Company Benefit Plans............................................Section 3.01(k)
Company By-laws..................................................Section 3.01(a)
Company Certificate..............................................Section 1.05(a)
Company Common Stock....................................................Preamble
Company Consolidated Group.......................................Section 3.01(n)
Company Disclosure Schedule.........................................Section 3.01
Company Pension Plan.............................................Section 3.01(l)
Company Preferred Stock..........................................Section 3.01(c)
Company Restricted Stock.........................................Section 3.01(c)
Company SEC Documents............................................Section 3.01(e)
Company Stock-Based Awards.......................................Section 3.01(c)
Company Stock Options............................................Section 3.01(c)
Company Stock Plans..............................................Section 3.01(c)
Confidentiality Agreement...........................................Section 5.02
Continuing Employees.............................................Section 5.09(a)
Contract.........................................................Section 3.01(d)
Covered Reports..................................................Section 3.01(e)
DGCL................................................................Section 1.01
Drug.............................................................Section 3.01(v)
Effective Time......................................................Section 1.03
Environmental Laws...............................................Section 3.01(j)
ERISA............................................................Section 3.01(j)
Exchange Act.....................................................Section 3.01(d)
Exchange Fund....................................................Section 2.02(a)
FDA..............................................................Section 3.01(j)
FDCA.............................................................Section 3.01(j)
Filed Company SEC Documents......................................Section 3.01(e)
GAAP.............................................................Section 3.01(e)
Governmental Entity..............................................Section 3.01(d)
Hazardous Materials..............................................Section 3.01(j)
HSR Act..........................................................Section 3.01(d)
HSR Filing..........................................................Section 5.03
Intellectual Property Rights.....................................Section 3.01(p)
IRS..............................................................Section 3.01(l)
Knowledge........................................................Section 8.03(b)
Lazard...........................................................Section 3.01(s)
Legal Provisions.................................................Section 3.01(j)
Liens............................................................Section 3.01(b)
3
ANNEX I
TO THE MERGER AGREEMENT
Term
----
Material Adverse Change .........................................Section 8.03(c)
Material Adverse Effect ........................................Section 8.03(c)
Medical Device...................................................Section 3.01(v)
Merger..................................................................Preamble
Merger Consideration.............................................Section 2.01(c)
Notice of Adverse Recommendation.................................Section 4.02(b)
Parachute Grass Up Payment.......................................Section 3.01(m)
Parent..................................................................Preamble
Paying Agent.....................................................Section 2.02(a)
Permits..........................................................Section 3.01(j)
person...........................................................Section 8.03(d)
Post-Signing Returns.............................................Section 4.01(d)
Primary Company Executives.......................................Section 3.01(m)
Principal Stockholders..................................................Preamble
Proxy Statement..................................................Section 3.01(d)
Representatives..................................................Section 4.02(a)
Release..........................................................Section 3.01(j)
Restraints.......................................................Section 6.01(c)
SEC..............................................................Section 3.01(d)
Section 203......................................................Section 3.01(r)
Section 262......................................................Section 2.01(d)
Securities Act...................................................Section 3.01(e)
Stockholder Agreement...................................................Preamble
Stockholder Approval.............................................Section 3.01(q)
Stockholders' Meeting............................................Section 5.01(b)
Sub.....................................................................Preamble
Subsidiary.......................................................Section 8.03(e)
Superior Proposal................................................Section 4.02(a)
Surviving Corporation...............................................Section 1.01
Takeover Proposal................................................Section 4.02(a)
taxes............................................................Section 3.01(n)
taxing authority.................................................Section 3.01(n)
tax returns......................................................Section 3.01(n)
Termination Fee..................................................Section 5.06(b)
Warrants.........................................................Section 3.01(c)
EXHIBIT A
TO THE MERGER AGREEMENT
Restated Certificate of Incorporation
of the Surviving Corporation
FIRST: The name of the corporation (hereinafter called the
"Corporation") is 3-Dimensional Pharmaceuticals, Inc.
SECOND: The address, including street, number, city, and county, of
the registered office of the Corporation in the State of Delaware is Corporate
Trust Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, County of New
Castle; and the name of the registered agent of the Corporation in the State of
Delaware at such address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
FOURTH: The aggregate number of shares which the Corporation shall
have authority to issue is 1,000 shares of Common Stock, par value $0.01 per
share.
FIFTH: In furtherance and not in limitation of the powers conferred
upon it by law, the Board of Directors of the Corporation is expressly
authorized to adopt, amend or repeal the By-laws of the Corporation.
SIXTH: To the fullest extent permitted by the General Corporation Law
of the State of Delaware as it now exists and as it may hereafter be amended, no
director or officer of the Corporation shall be personally liable to the
Corporation or any of its stockholders for monetary damages for breach of
fiduciary duty as a director or officer; provided, however, that nothing
contained in this Article SIXTH shall eliminate or limit the liability of a
director or officer (i) for any breach of the director's or officer's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) pursuant to Section 174 of the General Corporation Law of the State
of Delaware or (iv) for any transaction from which the director or officer
derived an improper personal benefit. No amendment to or repeal of this Article
SIXTH shall apply to or have any effect on the liability or alleged liability of
any director or officer of the
2
Corporation for or with respect to any acts or omissions of such director or
officer occurring prior to such amendment or repeal.
SEVENTH: The Corporation shall, to the fullest extent permitted by
Section 145 of the General Corporation Law of the State of Delaware, as the same
may be amended and supplemented, indemnify any and all persons whom it shall
have power to indemnify under said Section from and against any and all of the
expenses, liabilities, or other matters referred to in or covered by said
Section. Such indemnification shall be mandatory and not discretionary. The
indemnification provided for herein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any by-law, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in his or her official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be a
director, officer, employee, or agent and shall inure to the benefit of the
heirs, executors, and administrators of such a person. Any repeal or
modification of this Article SEVENTH shall not adversely affect any right to
indemnification of any persons existing at the time of such repeal or
modification with respect to any matter occurring prior to such repeal or
modification.
The Corporation shall to the fullest extent permitted by the General
Corporation Law of the State of Delaware advance all costs and expenses
(including, without limitation, attorneys' fees and expenses) incurred by any
director or officer within 15 days of the presentation of same to the
Corporation, with respect to any one or more actions, suits or proceedings,
whether civil, criminal, administrative or investigative, so long as the
Corporation receives from the director or officer an unsecured undertaking to
repay such expenses if it shall ultimately be determined that such director or
officer is not entitled to be indemnified by the Corporation under the General
Corporation Law of the State of Delaware. Such obligation to advance costs and
expenses shall be mandatory, and not discretionary, and shall include, without
limitation, costs and expenses incurred in asserting affirmative defenses,
counterclaims and cross claims. Such undertaking to repay may, if first
requested in writing by the applicable director or officer, be on behalf of
(rather than by) such director or officer, provided that in such case the
3
Corporation shall have the right to approve the party making such undertaking.
EIGHTH: Unless and except to the extent that the By-laws of the
Corporation shall so require, the election of directors of the Corporation need
not be by written ballot.
