EXHIBIT 1
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
AMONG:
EXELIXIS, INC.,
A DELAWARE CORPORATION;
BLUEGREEN ACQUISITION SUB, INC.,
A DELAWARE CORPORATION; AND
GENOMICA CORPORATION,
A DELAWARE CORPORATION
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DATED AS OF NOVEMBER 19, 2001
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TABLE OF CONTENTS
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1. Description of Transaction........................................ 1
1.1 The Offer................................................... 1
1.2 Company Action.............................................. 3
1.3 Directors................................................... 4
2. The Merger........................................................ 4
2.1 Merger of Merger Sub into the Company....................... 4
2.2 Effect of the Merger........................................ 5
2.3 Closing; Effective Time..................................... 5
Certificate of Incorporation and Bylaws; Directors and
2.4 Officers.................................................... 5
2.5 Conversion of Shares in the Merger.......................... 5
2.6 Closing of the Company's Transfer Books..................... 6
2.7 Exchange of Certificates.................................... 6
2.8 Appraisal Rights............................................ 7
2.9 Tax Consequences............................................ 7
2.10 Further Action.............................................. 7
3. Representations and Warranties of the Company..................... 8
3.1 Due Organization; Subsidiaries; Etc......................... 8
3.2 Certificate of Incorporation and Bylaws..................... 8
3.3 Capitalization, Etc......................................... 8
3.4 SEC Filings; Financial Statements........................... 9
3.5 Absence of Changes.......................................... 9
3.6 Real Property; Equipment; Leasehold......................... 9
3.7 Proprietary Assets.......................................... 10
3.8 Contracts................................................... 10
3.9 Liabilities................................................. 10
3.10 Compliance with Legal Requirements.......................... 11
3.11 Certain Business Practices.................................. 11
3.12 Governmental Authorizations................................. 11
3.13 Tax Matters................................................. 11
3.14 Employee and Labor Matters; Benefit Plans................... 12
3.15 Environmental Matters....................................... 14
3.16 Transactions with Affiliates................................ 14
3.17 Legal Proceedings; Orders................................... 14
3.18 Authority; Binding Nature of Agreement...................... 15
3.19 Vote Required............................................... 15
3.20 Non-Contravention; Consents................................. 15
3.21 Opinion of Financial Advisor................................ 16
3.22 Financial Advisor........................................... 16
3.23 Takeover Statutes; No Discussions........................... 16
3.24 Amendment to Rights Agreement............................... 16
3.25 Full Disclosure............................................. 16
(i)
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4. Representations and Warranties of Parent and Merger Sub........... 16
4.1 Due Organization; Subsidiaries; Etc......................... 16
4.2 Certificate of Incorporation and Bylaws..................... 16
4.3 Capitalization, Etc......................................... 16
4.4 SEC Filings; Financial Statements........................... 17
4.5 Absence of Certain Changes or Events........................ 17
4.6 Proprietary Assets.......................................... 18
4.7 Contracts................................................... 18
4.8 Liabilities................................................. 18
4.9 Compliance with Legal Requirements.......................... 18
4.10 Certain Business Practices.................................. 19
4.11 Governmental Authorizations................................. 19
4.12 Tax Matters................................................. 19
4.13 Environmental Matters....................................... 19
4.14 Transactions with Affiliates................................ 20
4.15 Legal Proceedings........................................... 20
4.16 Authority; Binding Nature of Agreement...................... 20
4.17 Non-Contravention; Consents................................. 20
4.18 Interim Operations of Merger Sub............................ 20
4.19 Parent Stockholder Approval................................. 20
4.20 Full Disclosure............................................. 20
4.21 Valid Issuance.............................................. 21
5. Certain Covenants of the Company and Parent....................... 21
5.1 Access and Investigation.................................... 21
5.2 Operation of the Company's Business......................... 21
5.3 Operation of Parent's Business.............................. 24
5.4 No Solicitation............................................. 24
6. Additional Covenants of the Parties............................... 26
Registration Statement and Proxy Statement for Stockholder
6.1 Approval.................................................... 26
6.2 Company Stockholders' Meeting............................... 26
6.3 Regulatory Approvals........................................ 27
6.4 Assumption of Company Warrants.............................. 28
6.5 No Assumption of Stock Options.............................. 28
6.6 Employee Benefits........................................... 28
6.7 Indemnification of Officers and Directors................... 29
6.8 Additional Agreements....................................... 30
6.9 Disclosure.................................................. 30
6.10 Tax Matters................................................. 30
6.11 Resignation of Officers and Directors....................... 31
6.12 Listing..................................................... 31
6.13 Takeover Laws; Advice of Changes............................ 31
6.14 Affiliates.................................................. 31
(ii)
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6.15 Rights Agreement............................................ 31
6.16 No Distributions or Dividends............................... 31
6.17 Market Stand-Off............................................ 31
7. Conditions to the Merger.......................................... 32
7.1 Each Party's Obligations.................................... 32
8. Termination....................................................... 32
8.1 Termination................................................. 32
8.2 Effect of Termination....................................... 33
8.3 Expenses.................................................... 33
9. Miscellaneous Provisions.......................................... 33
9.1 Amendment................................................... 33
9.2 Waiver...................................................... 34
9.3 No Survival of Representations and Warranties............... 34
9.4 Entire Agreement; Counterparts.............................. 34
9.5 Applicable Law; Enforcement................................. 34
9.6 Disclosure Schedule......................................... 34
9.7 Attorneys' Fees............................................. 35
9.8 Assignability; Third-Party Beneficiaries.................... 35
9.9 Notices..................................................... 35
9.10 Severability................................................ 36
9.11 Construction................................................ 36
(iii)
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
This Agreement and Plan of Merger and Reorganization ("AGREEMENT") is made
and entered into as of November 19, 2001, by and among: Exelixis, Inc., a
Delaware corporation ("PARENT"); Bluegreen Acquisition Sub, Inc., a
Delaware
corporation and a wholly owned subsidiary of Parent ("MERGER SUB"); and Genomica
Corporation, a
Delaware corporation (the "COMPANY"). Certain capitalized terms
used in this Agreement are defined in Exhibit A.
RECITALS
A. Parent, Merger Sub and the Company intend that Merger Sub make the
Offer to exchange shares of Parent Common Stock for all of the Shares.
B. Following the Offer, Parent, Merger Sub and the Company intend to
effect the Merger in accordance with this Agreement and the DGCL. Upon
consummation of the Merger, Merger Sub will cease to exist, and the Company will
become a wholly owned subsidiary of Parent.
C. It is intended that the Transaction shall be treated as an integrated
transaction and qualify as a tax-free reorganization within the meaning of
Section 368(a) of the Code.
D. The Board of Directors of the Company has determined that the Offer and
the Merger together are advisable, fair to, and in the best interests of, the
Company and its stockholders, and has accordingly approved this Agreement, the
Offer, the Merger and the other transactions contemplated by this Agreement.
E. The respective Boards of Directors of Parent and Merger Sub have
approved this Agreement, the Offer, the Merger and the other transactions
contemplated by this Agreement.
F. Concurrently with the execution and delivery of this Agreement and as a
condition and inducement to the willingness of Parent and Merger Sub to enter
into this Agreement, Parent and the Stockholders are entering into the
Stockholder Tender Agreements.
AGREEMENT
The parties to this Agreement, intending to be legally bound, agree as
follows:
1. DESCRIPTION OF TRANSACTION.
1.1 The Offer.
(a) Provided that (i) this Agreement shall not have been terminated in
accordance with Section 8.1 hereof, and (ii) none of the events set forth in
Annex I hereto shall have occurred or be existing, Merger Sub shall, as promptly
as practicable after the date hereof, but no later than December 4, 2001,
commence the Offer. Each Share accepted by Merger Sub pursuant to the Offer
shall be exchanged for the right to receive that number of fully paid and
nonassessable shares of Parent Common Stock equal to the Exchange Ratio, plus
the right to receive cash in lieu of fractional Shares, if any. For purposes of
this Agreement, the term "EXCHANGE RATIO" shall mean the quotient obtained by
dividing the Company Stock Value by the Average Parent Post-Signing Trading
Price; provided that, if the quotient obtained by dividing the Company Stock
Value by the Average Parent Post-Signing Trading Price is greater than the
quotient obtained by dividing the Company Stock Value by the Adjusted Average
Parent Pre-Signing Trading Price, then the term "EXCHANGE RATIO" shall mean the
quotient obtained by dividing the Company Stock Value by the Adjusted Average
Parent Pre-Signing Trading Price. The initial expiration date of the Offer shall
be the twentieth business day following commencement of the Offer. The Offer
shall be subject to (A) the condition that there shall be validly tendered in
accordance with the terms of the Offer prior to the expiration date of the Offer
(as it may be extended in accordance with the requirements of this Section
1.1(a)) and not withdrawn a number of Shares which, together with the Shares
then owned by Parent and Merger Sub (if any), represents a number equal to at
least the sum of (x) a majority of the total number of Shares and (y) the total
number of shares of Company Common Stock issuable upon exercise of Company
Options, each as outstanding immediately prior
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to the expiration of the Offer (as it may be extended in accordance with the
requirements of this Section 1.1(a)) (the condition referred to in this sentence
being referred to as the "MINIMUM CONDITION"); for the avoidance of doubt, it
being understood that Shares tendered into the Offer pursuant to a Notice of
Guaranteed Delivery shall be counted in the computation of the Minimum Condition
only to the extent the stock certificates for such Shares are actually delivered
to the Exchange Agent (or, if the Shares are delivered to the Exchange Agent via
book-entry, credited to the Exchange Agent's account with The Depository Trust
Company) prior to computing the Minimum Condition at the expiration of the Offer
(as it may be extended in accordance with the requirements of this Section
1.1(a)), and (B) each of the other conditions set forth in Annex I hereto.
Parent and Merger Sub expressly reserve the right to waive one or more
conditions to the Offer and to make any change in the terms or conditions of the
Offer; provided, however, that without the prior written consent of the Company,
no change may be made which (i) decreases the number of Shares sought in the
Offer, (ii) changes the form or amount of consideration to be paid, (iii)
imposes conditions to the Offer in addition to those set forth in Annex I, (iv)
changes or waives the Minimum Condition or any of the conditions set forth in
Annex I in any manner which is adverse to the holders of Shares, (v) extends the
Offer (except as set forth in the following two sentences), or (vi) makes any
other change to any of the terms and conditions to the Offer which is adverse to
the holders of Shares. Subject to the terms of the Offer and this Agreement and
the satisfaction (or waiver by Parent to the extent permitted by this Agreement)
of the conditions set forth in Annex I to the Offer, Merger Sub shall accept for
payment all Shares validly tendered and not withdrawn pursuant to the Offer as
soon as practicable after the applicable expiration date of the Offer (as it may
be extended in accordance with the requirements of this Section 1.1(a)) and
shall pay for all such Shares promptly after acceptance; provided, however, that
(A) Merger Sub shall extend the Offer for successive extension periods (up to
the Termination Date) not in excess of ten business days per extension period
if, at the scheduled expiration date of the Offer or any extension thereof, any
of the conditions to the Offer shall not have been satisfied or waived, until
such time as such conditions are satisfied or waived, and (B) Merger Sub may
extend the Offer if and to the extent required by the applicable rules and
regulations of the SEC or NASD. In addition, Merger Sub may extend the Offer
after the acceptance of Shares thereunder for a further period of time by means
of a subsequent offering period under Rule 14d-11 promulgated under the Exchange
Act.
(b) No fraction of a share of Parent Common Stock will be issued in
connection with the exchange of Parent Common Stock for Shares upon consummation
of the Offer, but in lieu thereof each tendering stockholder who would otherwise
be entitled to receive a fraction of a share of Parent Common Stock (after
aggregating all fractional shares of Parent Common Stock that otherwise would be
received by such stockholder) in the Offer (including any tendering stockholder
during any subsequent offering period under Rule 14d-11) shall receive from
Parent an amount of cash (rounded to the nearest whole cent), without interest,
equal to the product obtained by multiplying (A) that fraction of a share of
Parent Common Stock to which such stockholder is entitled (after aggregating all
fractional shares of Parent Common Stock that otherwise would be received by
such stockholder) by (B) the closing sales price of one share of Parent Common
Stock on the Nasdaq National Market (as reported in The Wall Street Journal or,
if not reported therein, any other authoritative source) on the date Merger Sub
first accepts Shares for exchange in the Offer, and if such date is not a
trading day, on the immediately preceding trading day.
(c) As soon as practicable after the date of this Agreement, Parent shall
prepare and file with the SEC a registration statement on Form S-4 to register
the offer and sale of Parent Common Stock pursuant to the Offer (the
"REGISTRATION STATEMENT"). The Registration Statement will include a preliminary
prospectus containing the information required under Rule 14d-4(b) promulgated
under the Exchange Act (the "PRELIMINARY PROSPECTUS"). As soon as practicable on
the date of commencement of the Offer, Parent and Merger Sub shall (i) file with
the SEC a Tender Offer Statement on Schedule TO with respect to the Offer which
will contain or incorporate by reference all or part of the Preliminary
Prospectus and form of the related letter of transmittal and summary
advertisement, if any (together with any supplements or amendments thereto,
collectively the "OFFER DOCUMENTS") and (ii) cause the Offer Documents to be
disseminated to holders of Shares. The Company shall promptly furnish to Parent
and Merger Sub all information concerning the Company, the Company's
Subsidiaries and the Company's stockholders that may be required or reasonably
requested in connection with any action contemplated by this Section 1.1.
Parent, Merger Sub and
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the Company each agree promptly to correct any information provided by it for
use in the Registration Statement or the Offer Documents if and to the extent
that such information shall have become false or misleading in any material
respect. Parent and Merger Sub agree to take all steps necessary to cause the
Offer Documents as so corrected to be filed with the SEC and to be disseminated
to holders of Shares, in each case as and to the extent required by applicable
federal securities laws. The Company and its counsel shall be given a reasonable
opportunity to review and comment on the Offer Documents and the Registration
Statement, prior to filing with the SEC. Parent agrees to provide the Company
and its counsel with any comments Parent, Merger Sub or their counsel may
receive from the SEC or its staff with respect to the Offer Documents and the
Registration Statement as soon as practicable after receipt of such comments.
(d) None of the information supplied by or on behalf of the Company for
inclusion or incorporation by reference in the Registration Statement, the Offer
Documents or the Schedule 14D-9 will, at the time the Registration Statement,
the Offer Documents or the Schedule 14D-9 are filed with the SEC or at the time
the Registration Statement becomes effective under the Securities Act, 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 the light of the circumstances under which they are made, not
misleading. None of the information supplied by or on behalf of the Company for
inclusion or incorporation by reference in the Proxy Statement will, at the time
the Proxy Statement is mailed to the stockholders of the Company or at the time
of the Company 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 the light of the
circumstances under which they are made, not misleading. The Proxy Statement
will comply as to form in all material respects with the provisions of the
Exchange Act and the rules and regulations promulgated by the SEC thereunder.
Notwithstanding the foregoing, the Company makes no representation or warranty
with respect to any information supplied by Parent or Merger Sub that is
contained in the foregoing documents.
1.2 Company Action.
(a) As soon as practicable on the day that the Offer is commenced, the
Company will file with the SEC and disseminate to holders of Shares a
Solicitation/Recommendation Statement on Schedule 14D-9 (the "SCHEDULE 14D-9")
which shall include the opinion of CIBC World Markets referred to in Section
3.21 and, subject to Section 5.4(c), shall include the Recommendations (as
defined in Section 3.18). Parent shall promptly furnish to the Company all
information concerning Parent, Parent's Subsidiaries and Parent's stockholders
that may be required or reasonably requested in connection with any action
contemplated by this Section 1.2(a). Subject to Section 5.4(c), the Company
hereby consents to the inclusion of the Recommendations in the Offer Documents
and agrees that none of the Recommendations shall be withdrawn, modified or
changed in the Offer Documents or the Schedule 14D-9 in a manner adverse to
Parent or Merger Sub, and no resolution by the Board of Directors of the Company
or any committee thereof to withdraw, modify or change any of the
Recommendations in a manner adverse to Parent or Merger Sub shall be adopted or
proposed it being understood that, for purposes of this Agreement, a
Recommendation shall be deemed to be withdrawn, modified or changed in a manner
adverse to Parent and Merger Sub if such Recommendation ceases to be unanimous.
Notwithstanding the foregoing, the Board of Directors of the Company may
withhold, withdraw or modify in a manner adverse to Parent its Recommendations
in accordance with the terms of Section 5.4(c) hereof. Each of the Company,
Parent and Merger Sub agrees to correct promptly any information provided by it
for use in the Schedule 14D-9 if and to the extent that such information shall
have become false or misleading in any material respect. The Company agrees to
take all steps necessary to cause the Schedule 14D-9 as so corrected to be filed
with the SEC and to be disseminated to holders of Shares, in each case as and to
the extent required by applicable federal securities laws. Parent and its
counsel shall be given a reasonable opportunity to review and comment on the
Schedule 14D-9 prior to its being filed with the SEC. The Company agrees to
provide Parent and its counsel with any comments the Company or its counsel
receives from the SEC or its staff with respect to the Schedule 14D-9 as soon as
practicable after receipt of such comments.
(b) The Company will promptly furnish Parent and Merger Sub with a list of
its stockholders, mailing labels and any available listing or computer file
containing the names and addresses of all record holders of Shares and lists of
securities positions of Shares held in stock depositories, in each case as of
the most recent
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practicable date, and will provide to Parent and Merger Sub such additional
information (including, without limitation, updated lists of stockholders,
mailing labels and lists of securities positions) and such other assistance as
Parent or Merger Sub may reasonably request in connection with the Offer.
Subject to the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Offer, Parent and Merger Sub shall hold in confidence the
information contained in any such labels, listings and files, shall use such
information only in connection with the Offer and the Merger and, if this
Agreement shall be terminated, shall, upon request, deliver to the Company all
copies of such information then in their possession.
(c) None of the information supplied by or on behalf of Parent for
inclusion or incorporation by reference in the Registration Statement, the Offer
Documents or the Schedule 14D-9 will, at the time the Registration Statement,
the Offer Documents or the Schedule 14D-9 are filed with the SEC or at the time
the Registration Statement becomes effective under the Securities Act, 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 the light of the circumstances under which they are made, not
misleading. None of the information supplied by or on behalf of Parent for
inclusion or incorporation by reference in the Proxy Statement will, at the time
the Proxy Statement is mailed to the stockholders of the Company or at the time
of the Company 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 the light of the
circumstances under which they are made, not misleading. Notwithstanding the
foregoing, Parent makes no representation or warranty with respect to any
information supplied by the Company that is contained in the foregoing
documents.
1.3 Directors.
(a) Effective upon the acceptance for payment by Merger Sub of Shares
pursuant to the Offer (the "OFFER ACCEPTANCE TIME"), Parent shall be entitled to
designate four directors on the Company's Board of Directors; provided, however,
that prior to the Effective Time, the Company's Board of Directors shall always
have at least three members who were directors of the Company prior to
consummation of the Offer (each, a "CONTINUING DIRECTOR"); provided, however,
that if Merger Sub purchases 85% or more of the Shares in the Offer, the number
of Continuing Directors shall be one. If the number of Continuing Directors is
reduced to fewer than three for any reason prior to the Effective Time, the
remaining and departing Continuing Directors, with the consent of Parent which
such consent shall not be unreasonably withheld, shall be entitled to designate
a Person or Persons to fill the vacancy and Parent shall take all such actions
as are necessary to cause the Person or Persons so designated to be so
appointed. Notwithstanding anything in this Agreement to the contrary, the
Company shall not take any of the following actions without the affirmative vote
of a majority of the Continuing Directors: (a) amend or terminate this Agreement
or agree or consent to any amendment or termination of this Agreement, (b) waive
any of the Company's rights, benefits or remedies hereunder, (c) extend the time
for performance of Parent's and Merger Sub's respective obligations hereunder,
or (d) approve any other action by the Company which is reasonably likely to
adversely affect the interests of the stockholders of the Company (other than
Parent, Merger Sub and their affiliates (other than the Company and its
Subsidiaries)) with respect to the transactions contemplated by this Agreement.
(b) The Company's obligations to appoint designees to its Board of
Directors shall be subject to Section 14(f) of the Exchange Act and Rule 14f-l
promulgated thereunder. The Company shall promptly take all actions required
pursuant to this Section 1.3 and Rule 14f-l in order to fulfill its obligations
under this Section 1.3 and shall include in the Schedule 14D-9 such information
with respect to the Company and its officers and directors as is required under
Section 14(f) and Rule 14f-l. Parent will supply to the Company in writing and
be solely responsible for any information with respect to itself and its
nominees, officers, directors and affiliates required by Section 14(f) and Rule
14f-1.
2. THE MERGER.
2.1 Merger of Merger Sub into the Company. Upon the terms and subject to
the conditions set forth in this Agreement and the DGCL, at the Effective Time
(as defined in Section 2.3), Merger Sub shall be merged with and into the
Company, and the separate existence of Merger Sub shall cease. The Company will
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continue as the surviving corporation in the Merger (sometimes referred to
herein as the "SURVIVING CORPORATION").
2.2 Effect of the Merger. The Merger shall have the effects set forth in
this Agreement and in the applicable provisions of the DGCL. Without limiting
the generality of the foregoing and subject thereto, from and after the
Effective Time, the Surviving Corporation shall possess all rights, privileges,
immunities, powers and franchises and be subject to all of the obligations,
restrictions, disabilities, liabilities, debts and duties of the Company and
Merger Sub.
2.3 Closing; Effective Time. The consummation of the transactions
contemplated by this Agreement (the "CLOSING") shall take place at the offices
of Xxxxxx Xxxxxx White & XxXxxxxxx LLP, 000 Xxxxxxxxxxx Xxxx, Xxxxx Xxxx,
Xxxxxxxxxx, at 10:00 a.m. on a date to be designated by the parties (the
"CLOSING DATE"), which shall be no later than the second business day after the
satisfaction or waiver of the last to be satisfied or waived of the conditions
set forth in Section 7 (other than those conditions that by their nature are to
be satisfied at the Closing, but subject to the satisfaction or waiver of such
conditions) and which the parties shall exercise all reasonable efforts to have
occur no later than 40 days after the Offer Acceptance Time, unless another date
or place is agreed to in writing by the parties hereto. Subject to the
provisions of this Agreement, a certificate of merger, or if the merger is to be
consummated pursuant to Section 253 of the DGCL, a certificate of ownership and
merger (either being the "CERTIFICATE OF MERGER") satisfying the applicable
requirements of the DGCL shall be duly executed by the Company and concurrently
with or as soon as practicable following the Closing delivered to the Secretary
of State of the State of
Delaware for filing. The Merger shall become effective
upon the filing of the Certificate of Merger (or such later time as may be
agreed in writing by the Company and Parent and specified in such Certificate of
Merger) with the Secretary of State of the State of
Delaware (the "EFFECTIVE
TIME").
2.4 Certificate of Incorporation and Bylaws; Directors and Officers.
(a) the Certificate of Incorporation of the Surviving Corporation shall be
amended and restated in the Merger to conform to Exhibit B, which shall conform
to the requirements of Section 6.7;
(b) the Bylaws of the Surviving Corporation shall be amended and restated
as of the Effective Time to conform to the Bylaws of Merger Sub as in effect
immediately prior to the Effective Time, which shall conform to the requirements
of Section 6.7; and
(c) the directors and officers of the Surviving Corporation immediately
after the Effective Time shall be the respective individuals who are directors
and officers of Merger Sub immediately prior to the Effective Time.
2.5 Conversion of Shares in the Merger.
(a) At the Effective Time, by virtue of the Merger and without any further
action on the part of Parent, Merger Sub, the Company or any stockholder of the
Company:
(i) all Excluded Shares shall be canceled and retired and shall cease
to exist, and no consideration shall be delivered in exchange therefor;
(ii) subject to Sections 2.5(b), 2.5(c) and 2.5(d), each share of
Company Common Stock then issued and outstanding, other than Excluded
Shares and Dissenting Shares (as defined in Section 2.8), if any, shall be
converted into the right to receive that number of shares of Parent Common
Stock equal to the Exchange Ratio, plus cash in lieu of fractional shares
of Parent Common Stock as set forth in Section 2.5(d). The number of shares
of Parent Common Stock equal to the Exchange Ratio and the cash payable in
lieu of fractional shares as specified in Section 2.5(d) with respect to
each share of Company Common Stock are referred to as the "MERGER
CONSIDERATION"; and
(iii) each share of the common stock, $0.001 par value per share, of
Merger Sub then outstanding shall be converted into one share of common
stock of the Surviving Corporation.
(b) If, between the date of this Agreement and the Effective Time, the
outstanding shares of Company Common Stock or Parent Common Stock are affected
by reason of any stock split, division or subdivision of
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shares, stock dividend (including any dividend or distribution of securities
convertible into or exercisable or exchangeable for Parent Common Stock or
Company Common Stock), reverse stock split, consolidation of shares,
reclassification, recapitalization or other similar transaction, then the
Exchange Ratio, the Merger Consideration and any other amounts payable pursuant
to the Offer or the Merger shall be appropriately adjusted to the extent the
record date for, or the date of occurrence of, any such event is between the
date of this Agreement and the effective time.
(c) No fractional shares of Parent Common Stock shall be issued in
connection with the Merger, and no certificates or scrip for any such fractional
shares shall be issued. Any holder of Company Common Stock who would otherwise
be entitled to receive a fraction of a share of Parent Common Stock (after
aggregating all fractional shares of Parent Common Stock issuable to such
holder) shall, in lieu of such fraction of a share and, upon surrender of such
holder's Company Stock Certificate(s) (as defined in Section 2.6), be paid in
cash the dollar amount (rounded to the nearest whole cent), without interest,
equal to the product obtained by multiplying (A) that fraction of a share of
Parent Common Stock to which such stockholder is entitled (after aggregating all
fractional shares of Parent Common Stock that otherwise would be received by
such stockholder) by (B) the closing sales price of one share of Parent Common
Stock on the Nasdaq National Market (as reported in The Wall Street Journal or,
if not reported therein, any other authoritative source) on the date the Merger
becomes effective.
2.6 Closing of the Company's Transfer Books. At the Effective Time: (a)
all Shares outstanding immediately prior to the Effective Time shall
automatically be canceled and retired and shall cease to exist, and all holders
of certificates representing Shares that were outstanding immediately prior to
the Effective Time shall cease to have any rights as stockholders of the
Company; and (b) the stock transfer books of the Company shall be closed with
respect to all Shares outstanding immediately prior to the Effective Time. No
further transfer of any such Shares shall be made on such stock transfer books
after the Effective Time. If, after the Effective Time, a valid certificate
previously representing any Shares (a "COMPANY STOCK CERTIFICATE") is presented
to the Exchange Agent (as defined in Section 2.7) or to the Surviving
Corporation or Parent, such Company Stock Certificate shall be canceled and
shall be exchanged as provided in Section 2.7.
2.7 Exchange of Certificates.
(a) On or prior to the Closing Date, Parent shall select a reputable bank
or trust company reasonably acceptable to the Company to act as exchange agent
in the Merger (the "EXCHANGE AGENT"). As soon as practicable after the Effective
Time, Parent shall deposit with the Exchange Agent (i) certificates representing
the shares of Parent Common Stock issuable pursuant to this Section 2 and (ii)
cash sufficient to make payments in lieu of fractional shares in accordance with
Section 2.5(d). The shares of Parent Common Stock and cash amounts so deposited
with the Exchange Agent, together with any dividends or distributions received
by the Exchange Agent with respect to such shares, are referred to collectively
as the "EXCHANGE FUND".
(b) As soon as reasonably practicable after the Effective Time, the
Exchange Agent will mail to the record holders of Company Stock Certificates (i)
a letter of transmittal in customary form and containing such provisions as
Parent may reasonably specify (including a provision confirming that delivery of
Company Stock Certificates shall be effected, and risk of loss and title to
Company Stock Certificates shall pass, only upon delivery of such Company Stock
Certificates to the Exchange Agent), and (ii) instructions for use in effecting
the surrender of Company Stock Certificates in exchange for certificates
representing Parent Common Stock (plus cash in lieu of fractional shares, if
any, of Parent Common Stock). Upon surrender of a Company Stock Certificate to
the Exchange Agent for exchange, together with a duly executed letter of
transmittal and such other documents as may be reasonably required by the
Exchange Agent or Parent, (1) the holder of such Company Stock Certificate shall
be entitled to receive in exchange therefor a certificate representing the
number of whole shares of Parent Common Stock that such holder has the right to
receive pursuant to the provisions of Section 2.5 (and cash in lieu of any
fractional share of Parent Common Stock), and (2) the Company Stock Certificate
so surrendered shall be canceled. Until surrendered as contemplated by this
Section 2.7(b), each Company Stock Certificate shall be deemed, from and after
the Effective Time, to represent only the right to receive shares of Parent
Common Stock (and cash in lieu of any fractional share
6
of Parent Common Stock) as contemplated by this Section 2. If any Company Stock
Certificate shall have been lost, stolen or destroyed, Parent may, in its
discretion and as a condition to the issuance of any certificate representing
Parent Common Stock, require the owner of such lost, stolen or destroyed Company
Stock Certificate to provide an appropriate affidavit and to deliver a bond (in
such sum as Parent may reasonably direct) as indemnity against any claim that
may be made against the Exchange Agent, Parent or the Surviving Corporation with
respect to such Company Stock Certificate.
(c) No dividends or other distributions declared or made with respect to
Parent Common Stock with a record date after the Effective Time shall be paid to
the holder of any unsurrendered Company Stock Certificate with respect to the
shares of Parent Common Stock that such holder has the right to receive in the
Merger until such holder surrenders such Company Stock Certificate in accordance
with this Section 2.7 (at which time such holder shall be entitled, subject to
the effect of applicable escheat or similar laws, to receive all such dividends
and distributions, without interest).
(d) Any portion of the Exchange Fund that remains undistributed to holders
of Company Stock Certificates as of the date 180 days after the date on which
the Merger becomes effective shall be delivered to Parent upon demand, and any
holders of Company Stock Certificates who have not theretofore surrendered their
Company Stock Certificates in accordance with this Section 2.7 shall thereafter
look only to Parent for satisfaction of their claims for Parent Common Stock and
cash in lieu of fractional shares of Parent Common Stock and any dividends or
distributions with respect to Parent Common Stock.
(e) Each of the Exchange Agent, Parent and the Surviving Corporation shall
be entitled to deduct and withhold from any consideration payable or otherwise
deliverable pursuant to this Agreement to any holder or former holder of Company
Common Stock such amounts as may be required to be deducted or withheld
therefrom under the Code or any provision of state, local or foreign tax law or
under any other applicable Legal Requirement. To the extent such amounts are so
deducted or withheld, such amounts shall be treated for all purposes under this
Agreement as having been paid to the Person to whom such amounts would otherwise
have been paid.
(f) Neither Parent nor the Surviving Corporation shall be liable to any
holder or former holder of Company Common Stock or to any other Person with
respect to any shares of Parent Common Stock (or dividends or distributions with
respect thereto), or for any cash amounts, delivered to any public official
pursuant to any applicable abandoned property law, escheat law or similar Legal
Requirement.
2.8 Appraisal Rights. If the Merger is effectuated pursuant to Section 253
of the DGCL, shares of Company Common Stock outstanding immediately prior to the
Effective Time and held by a holder who is entitled to demand and properly
demands appraisal for such shares of Company Common Stock in accordance with the
DGCL (the "DISSENTING SHARES") shall not be converted into the right to receive
Parent Common Stock, unless such holder fails to perfect or withdraws or
otherwise loses his or her right to appraisal. If after the Effective Time such
holder fails to perfect or withdraws or loses his or her right to appraisal,
each such share of Company Common Stock shall be treated as if it had been
converted as of the Effective Time into a right to receive the Merger
Consideration without any interest thereon. The Company shall give Parent prompt
notice of any demands received by the Company for appraisal of shares of Company
Common Stock, and Parent shall have the right to participate in all negotiations
and proceedings with respect to such demands. The Company shall not, without the
prior written consent of Parent, make any payment with respect to, or settle or
offer to settle, any such demands. Any amounts paid to a holder pursuant to a
right of appraisal will be paid by the Company out of its own funds and will not
be reimbursed by Parent or any affiliate of Parent.
2.9 Tax Consequences. For federal income tax purposes, the Merger is
intended to constitute a reorganization within the meaning of Section 368(a) of
the Code. The parties to this Agreement hereby adopt this Agreement as a "plan
of reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of
the United States Treasury Regulations.
2.10 Further Action. If, at any time after the Effective Time, any further
action is determined by Parent to be necessary or desirable to carry out the
purposes of this Agreement or to vest the Surviving Corporation with full right,
title and possession of and to all rights and property of Merger Sub and the
Company, the
7
officers and directors of the Surviving Corporation and Parent shall be fully
authorized (in the name of Merger Sub, in the name of the Company and otherwise)
to take such action.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set forth on the
Company Disclosure Schedule, and, other than with regard to the representations
and warranties concerning Tax Matters set forth in Section 3.13, except as set
forth in the Company SEC Documents (as defined in Section 3.4), with specific
reference to the Sections so qualified, the Company represents and warrants to
Parent and Merger Sub as follows:
3.1 Due Organization; Subsidiaries; Etc. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all necessary power and authority: (i) to conduct its business
in the manner in which its business is currently being conducted; (ii) to own
and use its assets in the manner in which its assets are currently owned and
used; and (iii) to perform its obligations under all Contracts by which it is
bound. The Company is qualified to do business as a foreign corporation, and is
in good standing, under the laws of all jurisdictions where the nature of its
business requires such qualification, except where failure to do so would not
have a Material Adverse Effect. Except as set forth in Part 3.1 of the Company
Disclosure Schedule, the Company has no subsidiaries.
3.2 Certificate of Incorporation and Bylaws. The Company has delivered or
made available to Parent accurate and complete copies of the certificate of
incorporation, bylaws and other charter and organizational documents of the
Company, including all amendments thereto.
3.3 Capitalization, Etc.
(a) The authorized capital stock of the Company consists of: (i) 50,000,000
shares of Company Common Stock, of which 23,001,126 shares have been issued and
are outstanding as of the date of this Agreement; and (ii) 5,000,000 shares of
Company Preferred Stock, of which no shares are outstanding. Except as set forth
in Part 3.3(a) of the Company Disclosure Schedule, the Company does not hold any
shares of its capital stock in its treasury. All of the outstanding shares of
Company Common Stock have been duly authorized and validly issued, and are fully
paid and nonassessable. Except as set forth in Part 3.3(a) of the Company
Disclosure Schedule: (i) none of the outstanding shares of Company Common Stock
is entitled or subject to any preemptive right, right of participation, right of
maintenance or any similar right; (ii) none of the outstanding shares of Company
Common Stock is subject to any right of first refusal in favor of the Company;
and (iii) there is no Company Contract relating to the voting or registration
of, or restricting any Person from purchasing, selling, pledging or otherwise
disposing of (or granting any option or similar right with respect to), any
shares of Company Common Stock. The Company is not under any obligation, nor is
it bound by any Contract pursuant to which it may become obligated, to
repurchase, redeem or otherwise acquire any outstanding shares of Company Common
Stock.
(b) As of the date of this Agreement: (i) 500,000 shares of Company
Preferred Stock, designated Series A Junior Participating Preferred Stock, are
reserved for future issuance upon exercise of the rights (the "COMPANY RIGHTS")
issued pursuant to the Rights Agreement; and (ii) 3,711,751 shares of Company
Common Stock are reserved for future issuance pursuant to stock options granted
and outstanding under the Company's 2000 Equity Incentive Plan (options to
purchase shares of Company Common Stock are referred to in this Agreement as
"COMPANY OPTIONS"); and (iii) 52,534 shares of Company Common Stock are reserved
for future issuance pursuant to outstanding warrants (the "COMPANY WARRANTS").
Part 3.3(b) of the Company Disclosure Schedule sets forth the following
information with respect to each Company Option and Company Warrant outstanding
as of the date of this Agreement: (i) the particular plan (if any) pursuant to
which such Company Option was granted; (ii) the name of the optionee or
warrantholder; (iii) the number of shares of Company Common Stock subject to
such Company Option or Company Warrant; (iv) the exercise price of such Company
Option or Company Warrant; (v) the date on which such Company Option or Company
Warrant was granted; (vi) the applicable vesting schedule, and the extent to
which such Company Option or Company Warrant is vested and exercisable as of the
date of this Agreement; and (vii) the date on which such Company Option or
Company Warrant expires.
8
(c) Except as set forth in Part 3.3(c) of the Company Disclosure Schedule
there is no: (i) outstanding subscription, option, call, warrant or right
(whether or not currently exercisable) to acquire any shares of the capital
stock or other securities of the Company; (ii) outstanding security, instrument
or obligation that is or may become convertible into or exchangeable for any
shares of the capital stock or other securities of the Company; (iii)
stockholder rights plan (or similar plan commonly referred to as a "poison
pill") or Contract under which the Company is or may become obligated to sell or
otherwise issue any shares of its capital stock or any other securities; or (iv)
condition or circumstance that may give rise to or provide a basis for the
assertion of a claim by any Person to the effect that such Person is entitled to
acquire or receive any shares of capital stock or other securities of the
Company.
(d) All outstanding capital stock, options and other securities of the
Company have been issued and granted in compliance with (i) all applicable
securities laws and other applicable Legal Requirements, and (ii) all
requirements set forth in applicable Contracts.
(e) All of the outstanding shares of capital stock of the corporations, if
any, identified in Part 3.1(a) of the Company Disclosure Schedule have been duly
authorized and are validly issued, are fully paid and nonassessable and free of
preemptive rights, with no personal liability attaching to the ownership
thereof, and are owned beneficially and of record by the Company, free and clear
of any Encumbrances.
3.4 SEC Filings; Financial Statements.
(a) The Company has delivered or made available to Parent accurate and
complete copies of all registration statements, proxy statements and other
statements, reports, schedules, forms and other documents filed by the Company
with the SEC since October 4, 2000, and all amendments thereto (the "COMPANY SEC
DOCUMENTS"). All statements, reports, schedules, forms and other documents
required to have been filed by the Company with the SEC have been so filed on a
timely basis. None of the Company's Subsidiaries, if any, is required to file
any documents with the SEC. As of the time it was filed with the SEC (or, if
amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing): (i) each of the Company SEC Documents complied in all
material respects with the applicable requirements of the Securities Act or the
Exchange Act (as the case may be); and (ii) 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 the light of the circumstances under which they were made, not
misleading.
(b) The financial statements (including any related notes) contained in the
Company SEC Documents: (i) complied as to form in all material respects with the
published rules and regulations of the SEC applicable thereto; (ii) were
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods covered (except as may be indicated in
the notes to such financial statements and, in the case of unaudited statements,
as permitted by Form 10-Q of the SEC, and except that the unaudited financial
statements may not contain footnotes and are subject to normal and recurring
year-end adjustments that will not, individually or in the aggregate, be
material in amount), and (iii) fairly present the financial position of the
Company as of the respective dates thereof and the results of operations and
cash flows of the Company for the periods covered thereby.
3.5 Absence of Changes. Except as set forth in Part 3.5 of the Company
Disclosure Schedule, between December 31, 2000 and the date of this Agreement
there has not occurred (i) any Material Adverse Effect on the Company, (ii) any
material change by the Company in its accounting methods, principles or
practices except as required by concurrent changes in U.S. generally accepted
accounting principles, (iii) any material reevaluation by the Company of any of
its assets, including, without limitation, writing down the value of capitalized
inventory or writing off notes or accounts receivable other than in the ordinary
course, or (iv) any declaration, setting aside or payment of any dividend or
other distribution (whether in cash, stock or property) with respect to any of
the Company's capital stock.
3.6 Real Property; Equipment; Leasehold. All material items of equipment
and other tangible assets owned by or leased to the Company are adequate for the
uses to which they are being put, are in good and safe condition and repair
(ordinary wear and tear excepted) and are adequate for the conduct of the
business of the
9
Company in the manner in which such business is currently being conducted.
Except as set forth in Part 3.7 of the Company Disclosure Schedule, the Company
does not own any real property or any interest in real property. Part 3.7 of the
Company Disclosure Schedule contains an accurate and complete list of all the
Company's real property leases.
3.7 Proprietary Assets.
(a) The Company has good and valid title to all of the Company Proprietary
Assets owned by the Company that are material to the business of the Company,
free and clear of all Encumbrances, except for (i) any lien for current taxes
not yet due and payable, and (ii) minor liens that have arisen in the ordinary
course of business and that do not (individually or in the aggregate) materially
detract from the value of the assets subject thereto or materially impair the
operations of the Company.
(b) To the best of the knowledge of the Company: (i) all patents,
trademarks, service marks and copyrights held by the Company are valid,
enforceable and subsisting; (ii) none of the Company Proprietary Assets and no
Proprietary Asset that is currently being developed by the Company (either by
itself or with any other Person) infringes, misappropriates or conflicts with
any Proprietary Asset owned or used by any other Person; (iii) none of the
products that are or have been designed, created, developed, assembled,
manufactured or sold by the Company is infringing, misappropriating or making
any unlawful or unauthorized use of any Proprietary Asset owned or used by any
other Person, and, except as set forth in Part 3.8(b) of the Company Disclosure
Schedule, since December 31, 1999, the Company has not received any notice or
other communication (in writing or otherwise) of any actual, alleged, possible
or potential infringement, misappropriation or unlawful or unauthorized use of,
any Proprietary Asset owned or used by any other Person that has or would
reasonably be expected to have a Material Adverse Effect on the Company; (iv)
except as set forth in Part 3.8(b) of the Company Disclosure Schedule, no other
Person is infringing, misappropriating or making any unlawful or unauthorized
use of, and no Proprietary Asset owned or used by any other Person infringes or
conflicts with, any material Company Proprietary Asset.
(c) To the best of the knowledge of the Company, the Company Proprietary
Assets, together with any Proprietary Assets currently being licensed to the
Company by third parties, constitute all the Proprietary Assets necessary to
enable the Company to conduct its business in the manner in which such business
is being conducted.
3.8 Contracts. The Company (i) has not violated or breached, or committed
any default under, any material Contract to which the Company is a party, except
for violations, breaches and defaults that have not had and would not reasonably
be expected to have a Material Adverse Effect on the Company; and, to the best
of the knowledge of the Company, no other Person has violated or breached, or
committed any default under, any material Contract to which the Company is a
party, except for violations, breaches and defaults that have not had and would
not reasonably be expected to have a Material Adverse Effect on the Company;
(ii) to the best of the knowledge of the Company, no event has occurred, and no
circumstance or condition exists, that (with or without notice or lapse of time)
will or would reasonably be expected to, (A) result in a violation or breach of
any of the provisions of any material Contract to which the Company is a party,
(B) give any Person the right to declare a default or exercise any remedy under
any material Contract to which the Company is a party, (C) give any Person the
right to receive or require a rebate, chargeback, penalty or change in delivery
schedule under any material Contract to which the Company is a party, (D) give
any Person the right to accelerate the maturity or performance of any material
Contract to which the Company is a party, or give any Person the right to
cancel, terminate or modify any material Contract, except in each such case for
defaults, acceleration rights, termination rights and other rights that have not
had and would not reasonably be expected to have a Material Adverse Effect on
the Company; and (iii) since December 31, 1999, the Company has not received any
notice or other communication regarding any actual or possible violation or
breach of, or default under, any material Contract, except in each such case for
defaults, acceleration rights, termination rights and other rights that have not
had and would not reasonably be expected to have a Material Adverse Effect on
the Company.
3.9 Liabilities. As of the date of this Agreement, the Company has no
accrued, contingent or other liabilities of any nature, either matured or
unmatured, except for: (a) liabilities identified as such in the
10
Company Unaudited Interim Balance Sheet; (b) liabilities that have been incurred
by the Company since September 30, 2001 in the ordinary course of business and
consistent with past practices that, individually or in the aggregate, are not
material in nature; and (c) liabilities incurred under this Agreement and the
other agreements contemplated hereby.
3.10 Compliance with Legal Requirements. The Company is in compliance in
all material respects with all applicable Legal Requirements except where the
failure to comply with such Legal Requirements, individually or in the
aggregate, has not had and could not reasonably be expected to have a Material
Adverse Effect on the Company. Since December 31, 1999, the Company has not
received any notice or other communication from any Governmental Body regarding
any actual or possible violation of, or failure to comply with, any Legal
Requirement, except where said violation or noncompliance could not reasonably
be expected to have a Material Adverse Effect on the Company.
3.11 Certain Business Practices. Neither the Company nor any director,
officer, agent or employee of the Company has (i) used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns or violated any provision of the Foreign Corrupt Practices Act of
1977, as amended, or (iii) made any other unlawful payment.
3.12 Governmental Authorizations. The Company holds all Governmental
Authorizations necessary to enable the Company to conduct its business in the
manner in which such business is currently being conducted. All such
Governmental Authorizations are valid and in full force and effect. The Company
is in substantial compliance with the terms and requirements of such
Governmental Authorizations, except where the failure to be in compliance with
the terms and requirements of such Governmental Authorizations have not had and
would not reasonably be expected to have a Material Adverse Effect on the
Company. Since December 31, 1999, the Company has not received any notice or
other communication from any Governmental Body regarding (a) any actual or
possible violation of or failure to comply with any term or requirement of any
material Governmental Authorization, or (b) any actual or possible revocation,
withdrawal, suspension, cancellation, termination or modification of any
material Governmental Authorization.
3.13 Tax Matters.
(a) Each of the Tax Returns required to be filed by or on behalf of the
Company on or before the Offer Acceptance Time (the "COMPANY RETURNS") (i) has
been or will be filed on or before the applicable due date (including any
extensions of such due date), and (ii) has been, or will be when filed, true,
correct and complete in all respects, except as to immaterial items that were
believed to be correct or supported by substantial authority when such Tax
Returns were or will be filed, and prepared in all material respects in
compliance with all applicable Legal Requirements. All amounts shown on the
Company Returns to be due on or before the Offer Acceptance Time have been or
will be paid on or before the Offer Acceptance Time.
(b) The Company Unaudited Interim Balance Sheet fully accrues all actual
and contingent liabilities for Taxes with respect to all periods through the
date thereof in accordance with generally accepted accounting principles.
(c) No extension or waiver of the limitation period applicable to any of
the Company Returns has been granted and is currently in effect (by the Company
or any other Person), and no such extension or waiver has been requested from
the Company. No claim or Legal Proceeding is pending or, to the best of the
knowledge of the Company, has been threatened against or with respect to the
Company in respect of any material Tax. There are no unsatisfied liabilities for
Taxes (including liabilities for interest, additions to tax and penalties
thereon and related expenses) with respect to any notice of deficiency or
similar document received by the Company with respect to any Tax. Any unpaid
Taxes asserted under any notice of deficiency or similar document are being
contested in good faith by the Company and adequate reserves for payment have
been established on the Company Unaudited Interim Balance Sheet for any
threatened Tax). The Company has not received any request for a Tax Return or
inquiry as to whether a Tax Return has been filed from any jurisdiction where it
does not file Tax Returns. There are no liens for material Taxes upon any of the
assets of the Company except liens for current Taxes not yet due and payable.
11
(d) The Company has not entered into or become bound by any agreement or
consent pursuant to Section 341(f) of the Code (or any comparable provision of
state or foreign Tax laws). The Company has not been, and will not be, required
to include any adjustment in taxable income for any tax period (or portion
thereof) pursuant to Section 481 or 263A of the Code (or any comparable
provision under state or foreign Tax laws) as a result of transactions or events
occurring, or accounting methods employed, prior to the Offer Acceptance Time.
(e) There is no agreement, plan, arrangement or other Contract covering any
employee or independent contractor or former employee or independent contractor
of the Company that, considered individually or considered collectively with any
other such Contracts, will, or could reasonably be expected to, give rise
directly or indirectly to the payment of any amount that would not be deductible
pursuant to Section 280G or Section 162(m) of the Code (or any comparable
provision of state or foreign Tax laws). The Company has properly withheld on
all amounts paid to consultants or employees and to persons located outside of
the United States. The Company is not, and has never been, a party to or bound
by any tax indemnity agreement, tax sharing agreement, tax allocation agreement
or similar Contract.
(f) The Company has never requested or received a ruling with respect to
Taxes and has (and will have at Offer Acceptance Time) no outstanding power of
attorney with respect to the Taxes. The Company has not been a party to a
transaction intended to qualify under Section 355 of the Code (whether as
distributing or distributed company) within the last five years.
(g) Neither the Company nor any of its affiliates has taken, failed to take
or agreed to take any action or knows of any fact, circumstance, plan or
intention that is or would be reasonably likely to prevent the Transaction from
qualifying as a "reorganization" within the meaning of Section 368(a) of the
Code.
3.14 Employee and Labor Matters; Benefit Plans.
(a) Part 3.14(a) of the Company Disclosure Schedule identifies each salary,
bonus, vacation, deferred compensation, incentive compensation, stock purchase,
stock option, severance pay, termination pay, death and disability benefits,
hospitalization, medical, life or other insurance, flexible benefits,
supplemental unemployment benefits, profit-sharing, pension or retirement plan,
program or agreement and each other employee benefit plan or arrangement
(collectively, the "EMPLOYEE PLANS") sponsored, maintained, contributed to or
required to be contributed to by the Company for the benefit of any current or
former employee. Part 3.14(a) also identifies each Legal Requirement pursuant to
which the Company is required to establish any reserve or make any contribution
for the benefit of any current or former employee located in any foreign
jurisdiction.
(b) Except as set forth in Part 3.14(a) of the Company Disclosure Schedule,
the Company does not maintain, sponsor or contribute to, and the Company has not
at any time in the past maintained, sponsored or contributed to, any employee
pension benefit plan (as defined in Section 3(2) of ERISA), or any similar
pension benefit plan under the laws of any foreign jurisdiction, whether or not
excluded from coverage under specific Titles or Subtitles of ERISA for the
benefit of employees or former employees of the Company (a "PENSION PLAN").
(c) Except as set forth in Part 3.14(a) of the Company Disclosure Schedule,
the Company does not maintain, sponsor or contribute to any employee welfare
benefit plan (as defined in Section 3(1) of ERISA) or any similar welfare
benefit plan under the laws of any foreign jurisdiction, whether or not excluded
from coverage under specific Titles or Subtitles of ERISA, for the benefit of
any current or former employees or directors of the Company (a "WELFARE PLAN").
(d) With respect to each Employee Plan, the Company has delivered or made
available to Parent: (i) an accurate and complete copy of such Employee Plan
(including all amendments thereto); (ii) an accurate and complete copy of the
annual report, if required under ERISA, with respect to such Employee Plan for
the last two years; (iii) an accurate and complete copy of the most recent
summary plan description, together with each summary of material modifications,
if required under ERISA, with respect to such Employee Plan, (iv) if such
Employee Plan is funded through a trust or any third party funding vehicle, an
accurate and complete copy of the trust or other funding agreement (including
all amendments thereto) and accurate and
12
complete copies the most recent financial statements thereof; (v) accurate and
complete copies of all Contracts relating to such Employee Plan, including
service provider agreements, insurance contracts, minimum premium contracts,
stop-loss agreements, investment management agreements, subscription and
participation agreements and recordkeeping agreements; and (vi) an accurate and
complete copy of the most recent determination letter received from the Internal
Revenue Service with respect to such Employee Plan (if such Employee Plan is
intended to be qualified under Section 401(a) of the Code).
(e) The Company is not, nor has it ever been, required to be treated as a
single employer with any other Person under Section 4001(b)(1) of ERISA or
Section 414(b), (c), (m) or (o) of the Code. The Company has never been a member
of an "affiliated service group" within the meaning of Section 414(m) of the
Code. None of the Employee Plans identified in the Company Disclosure Schedule
is a multiemployer plan (within the meaning of Section 3(37) of ERISA). The
Company has never made a complete or partial withdrawal from a multiemployer
plan, as such term is defined in Section 3(37) of ERISA, resulting in
"withdrawal liability", as such term is defined in Section 4201 of ERISA
(without regard to subsequent reduction or waiver of such liability under either
Section 4207 or 4208 of ERISA).
(f) The Company does not have any plan or commitment to create any Welfare
Plan or any Pension Plan, or to modify or change any existing Welfare Plan or
Pension Plan (other than to comply with applicable law) in a manner that would
affect any current or former employee or director of the Company, and that would
have a Material Adverse Effect on the Company.
(g) No Employee Plan provides death, medical or health benefits (whether or
not insured) with respect to any current or former employee or director of any
of the Company after any termination of service of such employee or director
(other than benefit coverage mandated by applicable law, including coverage
provided pursuant to Section 4980B of the Code or coverage extended through the
month in which such termination of service occurs).
(h) With respect to any Employee Plan constituting a group health plan
within the meaning of Section 4980B(g)(2) of the Code, the provisions of COBRA
have been complied with in all material respects. Part 3.14(h) of the Company
Disclosure Schedule describes all obligations of the Company as of the date of
this Agreement to pay premiums for coverage of a former employee under any of
the provisions of COBRA.
(i) There are no Legal Proceedings pending or, to the knowledge of the
Company, threatened in respect of or relating to any Company Employee Plan.
There are no facts or circumstances of which the Company is aware which could
reasonably be expected to give rise to any such Legal Proceeding (other than
routine, uncontested benefit claims) in respect of or relating to any Company
Employee Plan.
(j) Each of the Employee Plans has been operated and administered in all
material respects in accordance with its terms and with applicable Legal
Requirements, including ERISA, the Code and applicable foreign Legal
Requirements. The Company has materially performed all of its obligations under
the Employee Plans.
(k) Each of the Employee Plans intended to be qualified under Section
401(a) of the Code has received a favorable determination letter from the
Internal Revenue Service, and nothing has occurred that would adversely affect
such determination.
(l) Except as set forth in Part 3.14(l) of the Company Disclosure Schedule,
neither the execution, delivery or performance of this Agreement, nor the
consummation of the Offer or the Merger or any of the other transactions
contemplated by this Agreement, will result in any bonus, golden parachute,
severance or other payment or obligation to any current or former employee or
director of the Company (whether or not under any Employee Plan), or materially
increase the benefits payable or provided under any Employee Plan (except as
contemplated in this Agreement), or result in any acceleration of the time of
payment or vesting of any such benefits. Without limiting the generality of the
foregoing (and except as set forth in Part 3.14(l) of the Company Disclosure
Schedule), the consummation of the Offer and the Merger will not result in the
acceleration of vesting of any unvested Company Options.
13
(m) Part 3.14(m) of the Company Disclosure Schedule contains a list of all
salaried employees of the Company as of the date of this Agreement, and
correctly reflects, in all material respects, their salaries, any other
compensation payable to them (including compensation payable pursuant to bonus,
deferred compensation or commission arrangements), their dates of employment and
their positions. The Company is not a party to any collective bargaining
contract or other Contract with a labor union involving any of its employees.
All of the employees of the Company are "at will" employees.
(n) Part 3.14(n) of the Company Disclosure Schedule identifies each
employee of any of the Company who is not fully available to perform work
because of disability or other leave and sets forth the basis of such disability
or leave and the anticipated date of return to full service.
(o) Except as set forth in Part 3.14(o) of the Company Disclosure Schedule,
the Company is in compliance in all material respects with all applicable Legal
Requirements and Contracts relating to employment, employment practices, wages,
bonuses and terms and conditions of employment, including employee compensation
matters.
(p) The Company has performed and undertaken all necessary acts to comply
with the applicable provisions of the Worker Adjustment and Retraining
Notification Act and the regulations thereunder, as well as any other Legal
Requirements, including foreign Legal Requirements, in connection with the
termination of any of its employees.
(q) The Company has no knowledge of any facts indicating that (i) the
consummation of the Offer or the Merger or any of the other transactions
contemplated by this Agreement will have a material adverse effect on the labor
relations of the Company, or (ii) any of the employees of the Company intends to
terminate his or her employment with the Company with which such employee is
employed.
3.15 Environmental Matters. The Company (i) is in compliance in all
material respects with all applicable Environmental Laws, and (ii) possesses all
permits and other Governmental Authorizations required under applicable
Environmental Laws, and compliance with the terms and conditions thereof. The
Company has not received any notice or other communication (in writing or
otherwise), whether from a Governmental Body, citizens group, employee or
otherwise, that alleges that the Company is not in compliance with any
Environmental Law, and, to the best of the knowledge of the Company, there are
no circumstances that may prevent or interfere with the compliance by the
Company with any Environmental Law in the future. To the best of the knowledge
of the Company, (a) all property that is leased to, controlled by or used by the
Company, and all surface water, groundwater and soil associated with or adjacent
to such property, is free of any material environmental contamination of any
nature, (b) none of the property leased to, controlled by or used by the Company
contains any underground storage tanks, asbestos, equipment using PCBs,
underground injection xxxxx, and (c) none of the property leased to, controlled
by or used by the Company contains any septic tanks in which process wastewater
or any Materials of Environmental Concern have been disposed. The Company has
never sent or transported, or arranged to send or transport, any Materials of
Environmental Concern to a site that, pursuant to any applicable Environmental
Law (i) has been placed on the "National Priorities List" of hazardous waste
sites or any similar state list, (ii) is otherwise designated or identified as a
potential site for remediation, cleanup, closure or other environmental remedial
activity, or (iii) is subject to a Legal Requirement to take "removal" or
"remedial" action as detailed in any applicable Environmental Law or to make
payment for the cost of cleaning up the site.
3.16 Transactions with Affiliates. Except as set forth in the Company SEC
Documents filed prior to the date of this Agreement, between December 31, 2000
and the date of this Agreement, no event has occurred that would be required to
be reported by the Company pursuant to Item 404 of Regulation S-K promulgated by
the SEC. Part 3.16 of the Company Disclosure Schedule identifies each Person who
is (or who may be deemed to be) an "affiliate" (as that term is used in Rule 145
under the Securities Act) of the Company as of the date of this Agreement.
3.17 Legal Proceedings; Orders.
(a) As of the date of this Agreement, there is no pending Legal Proceeding,
and (to the best of the knowledge of the Company) no Person has threatened to
commence any Legal Proceeding: (i) that involves
14
the Company or any of the assets owned or used by the Company; or (ii) that
challenges, or that may have the effect of preventing, delaying, making illegal
or otherwise interfering with, the Offer or the Merger or any of the other
transactions contemplated by this Agreement. To the best of the knowledge of the
Company, as of the date of this Agreement, no event has occurred, and no claim,
dispute or other condition or circumstance exists, that could reasonably be
expected to, give rise to or serve as a basis for the commencement of any such
Legal Proceeding.
(b) There is no Order to which the Company, or any of the material assets
owned or used by the Company, is subject. To the best of the knowledge of the
Company, no officer or key employee of the Company is subject to any Order that
prohibits such officer or other employee from engaging in or continuing any
conduct, activity or practice relating to the business of the Company.
3.18 Authority; Binding Nature of Agreement. The Company has the requisite
corporate power and authority to enter into and to perform its obligations under
this Agreement. The Board of Directors of the Company (at a meeting duly called
and held) has (a) unanimously determined that this Agreement and the
transactions contemplated hereby, including the Offer and the Merger, are
advisable and fair to and in the best interests of the Company and its
stockholders, (b) unanimously authorized and approved the execution, delivery
and performance of this Agreement and the transactions contemplated hereby,
including the Offer and the Merger and the Stockholder Tender Agreements and the
transactions contemplated thereby, which approval constitutes approval under
Section 203 of the DGCL such that the Offer, the Merger, this Agreement and the
other transactions contemplated hereby, and the Stockholder Tender Agreements
and the transactions contemplated thereby, are not and shall not be subject to
any of the restrictions on "business combinations" set forth in Section 203 of
the DGCL, subject to the accuracy of Parent's representation set forth in the
third sentence of Section 4.16 hereof, and (c) unanimously recommended
acceptance of the Offer by the holders of the Company Common Stock and the
adoption of this Agreement by the holders of Company Common Stock (the unanimous
recommendations referred to in this clause (c) are collectively referred to in
this Agreement as the "RECOMMENDATIONS"). This Agreement constitutes the legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject to (i) laws of general application relating
to bankruptcy, insolvency and the relief of debtors, and (ii) rules of law
governing specific performance, injunctive relief and other equitable remedies.
3.19 Vote Required. The affirmative vote of the holders of a majority of
the shares of Company Common Stock outstanding on the record date for the
Company Stockholders' Meeting (the "REQUIRED COMPANY STOCKHOLDER VOTE") is the
only vote of the holders of any class or series of the Company's capital stock
necessary to adopt this Agreement and approve the Merger.
3.20 Non-Contravention; Consents. Neither the execution and delivery of
this Agreement by the Company nor the consummation by the Company of the Offer
or the Merger, or any of the other transactions contemplated by this Agreement,
will (a) contravene, conflict with or result in any breach of any provision of
the certificate of incorporation or bylaws of the Company or of any resolution
adopted by the stockholders, the Board of Directors or any committee of the
Board of Directors of the Company; (b) contravene, conflict with or result in a
violation of, or give any Governmental Body or other Person the right to
challenge the Offer or the Merger or any of the other transactions contemplated
by this Agreement or to exercise any remedy or obtain any relief under, any
Legal Requirement or any Order to which the Company, or any of the assets owned
or used by the Company, is subject; (c) contravene, conflict with or result in a
violation or breach of, or result in a default under, any provision of any
material Contract to which the Company is a party, or give any Person the right
to (i) declare a default or exercise any remedy under any such Contract to which
the Company is a party, (ii) a rebate, chargeback, penalty or change in delivery
schedule under any material Contract of Company, (iii) accelerate the maturity
or performance of any material Contract of Company, or (iv) cancel, terminate or
modify any term of any material Contract of Company; or (d) result in a
violation by the Company of any Order to which the Company is subject. Except as
may be required by the Securities Act, the Exchange Act, state securities or
"blue sky" laws, the DGCL, the HSR Act, any foreign antitrust law or regulation
and the NASD Bylaws, the Company is not and will not be required to make any
filing with or give any notice to, or to obtain any Consent from, any Person in
connection with the execution, delivery or performance of this Agreement by the
Company or the consummation of the Offer or the Merger.
15
3.21 Opinion of Financial Advisor. The Company's Board of Directors has
received the opinion of CIBC World Markets, financial advisor to the Company,
and will receive such opinion in writing dated the date of this Agreement, to
the effect that, as of such date, the Exchange Ratio is fair from a financial
point of view to the holders of the Company Common Stock (other than Parent and
its affiliates). The Company will furnish an accurate and complete copy of said
opinion to the Parent solely for informational purposes after receipt thereof.
3.22 Financial Advisor. Except for CIBC World Markets, no broker, finder
or investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the Offer or the Merger or any of the other
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of any of the Company. The Company has furnished to Parent accurate
and complete copies of all agreements under which any fees, commissions or other
amounts have been paid to or may become payable to CIBC World Markets and all
indemnification and other agreements related to the engagement of CIBC World
Markets.
3.23 Takeover Statutes; No Discussions. To the knowledge of the Company,
no Takeover Laws are applicable to the Offer, the Merger, this Agreement and the
transactions contemplated hereby other than Section 203 of the DGCL. As of the
date of this Agreement, the Company is not engaged, directly or indirectly, in
any discussions or negotiations with any other Person relating to any
Acquisition Proposal.
3.24 Amendment to Rights Agreement. As of the date of this Agreement, the
Company has taken all action necessary to amend the Rights Agreement to provide
that neither Parent nor Merger Sub nor any of their respective affiliates shall
be deemed to be an Acquiring Person (as such term is defined in the Rights
Agreement), that neither a Distribution Date nor Shares Acquisition Date (as
each such term is defined in the Rights Agreement) shall be deemed to occur and
the Rights will not separate from the Shares, in each case as a result of the
execution, delivery or performance of this Agreement, the Stockholder Tender
Agreements or the public announcement or consummation of the Offer, the Merger,
or the other transactions contemplated by this Agreement or by the Stockholder
Tender Agreements.
3.25 Full Disclosure. This Agreement (including the Company Disclosure
Schedule) does not (i) contain any representation, warranty or information that
is false or misleading with respect to any material fact, or (ii) omit to state
any material fact necessary in order to make the representations, warranties and
information contained and to be contained herein and therein (in the light of
the circumstances under which such representations, warranties and information
were or will be made or provided) not false or misleading.
4. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB. Except as set
forth on the Parent Disclosure Schedule, and except as set forth in the Parent
SEC Documents (as defined in Section 4.4), or in the exhibits thereto, Parent
and Merger Sub represent and warrant to the Company as follows:
4.1 Due Organization; Subsidiaries; Etc. Each of Parent and Merger Sub is
a corporation duly organized, validly existing and in good standing under the
laws of the State of
Delaware and has all necessary power and authority: (a) to
conduct its business in the manner in which its business is currently being
conducted; (b) to own and use its assets in the manner in which its assets are
currently owned and used; and (c) to perform its obligations under all Contracts
by which it is bound. Each of Parent and Merger Sub is duly qualified to do
business as a foreign corporation, and is in good standing, under the laws of
all jurisdictions where the nature of its business requires such qualification,
except where failure to does so would not have a Material Adverse Effect on
Parent or Merger Sub. Except as set forth in Part 4.1 of the Parent Disclosure
Schedule, Parent has no subsidiaries except for Merger Sub.
4.2 Certificate of Incorporation and Bylaws. Parent has delivered to the
Company accurate and complete copies of the certificate of incorporation, bylaws
and other charter and organizational documents of Parent and Merger Sub,
including all amendments thereto.
4.3 Capitalization, Etc.
(a) The authorized capital stock of Parent consists of: (i) 100,000,000
shares of Parent Common Stock, of which 49,511,273 shares have been issued and
are outstanding as of October 31, 2001; and (ii) 10,000,000
16
shares of Parent Preferred Stock, of which no shares are outstanding. Parent
does not hold any shares of its capital stock in its treasury. All of the
outstanding shares of Parent Common Stock have been duly authorized and validly
issued, and are fully paid and nonassessable. As of the date of this Agreement,
there are no shares of Parent Common Stock held by any Subsidiary of Parent.
(b) As of October 31, 2001: (i) 1,017,799 shares of Parent Common Stock
reserved for future issuance pursuant to stock options granted and outstanding
under Parents' 1997 Equity Incentive Plan; (ii) 4,258,580 shares of Parent
Common Stock are reserved for future issuance pursuant to stock options granted
and outstanding under Parent's 2000 Equity Incentive Plan; (iii) 295,000 shares
of Parent Common Stock are reserved for future issuance pursuant to stock
options granted and outstanding under Parent's 2000 Non-Employee Director's
Stock Option Plan; (iv) 376,303 shares of Parent Common Stock are reserved for
future issuance pursuant to Parent's 2000 Employee Stock Purchase Plan; (v)
581,793 shares of Parent Common Stock are reserved for future issuance pursuant
to stock options granted and outstanding under the Agritope, Inc. 1997 Stock
Award Plan; (vi) 461,265 shares of Parent Common Stock are reserved for future
issuance upon the exercise of put or call options arising out of the acquisition
of Artemis Pharmaceuticals GmbH.
(c) All outstanding capital stock, options and other securities of Parent
have been issued and granted in compliance with (i) all applicable securities
laws and other applicable Legal Requirements, and (ii) all requirements set
forth in applicable Contracts.
(d) All of the outstanding shares of capital stock of the corporations
identified in Part 4.1 of the Parent Disclosure Schedule have been duly
authorized and are validly issued, are fully paid and nonassessable and free of
preemptive rights, with no personal liability attaching to the ownership
thereof, and are owned beneficially and of record by Parent, free and clear of
any Encumbrances.
4.4 SEC Filings; Financial Statements.
(a) Parent has delivered or made available to the Company accurate and
complete copies (excluding copies of exhibits) of each report, registration
statement and definitive proxy statement filed by Parent with the SEC since
February 1, 2000 (the "PARENT SEC DOCUMENTS"). All statements, reports,
schedules, forms and other documents required to have been filed by Parent with
the SEC have been so filed on a timely basis. As of the time it was filed with
the SEC (or, if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing): (i) each of the Parent SEC
Documents complied in all material respects with the applicable requirements of
the Securities Act or the Exchange Act (as the case may be); and (ii) none of
the Parent 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 the light of the circumstances under
which they were made, not misleading.
(b) The consolidated financial statements (including any related notes)
contained in the Parent SEC Documents: (i) complied as to form in all material
respects with the published rules and regulations of the SEC applicable thereto;
(ii) were prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods covered (except as may be
indicated in the notes to such financial statements and, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC, and except that
unaudited financial statements may not contain footnotes and are subject to
normal and recurring year-end audit adjustments which will not, individually or
in the aggregate, be material in amount); and (iii) fairly present the
consolidated financial position of Parent and its subsidiaries as of the
respective dates thereof and the consolidated results of operations of Parent
and its subsidiaries for the periods covered thereby.
4.5 Absence of Certain Changes or Events. Except as set forth in Part 4.5
of the Parent Disclosure Schedule, between September 30, 2001 and the date of
this Agreement there has not occurred (i) any Material Adverse Effect on Parent,
(ii) any material change by Parent in its accounting methods, principles or
practices except as required by concurrent changes in U.S. generally accepted
accounting principles, (iii) any material reevaluation by Parent of any of its
assets, including, without limitation, writing down the value of capitalized
inventory or writing off notes or accounts receivable other than in the ordinary
course, or (iv) any declaration, setting aside or payment of any dividend or
other distribution (whether in cash, stock or property) with respect to any of
Parent's capital stock.
17
4.6 Proprietary Assets.
(a) Parent has good and valid title to all of the Parent Proprietary Assets
owned by Parent that are material to the business of the Parent, free and clear
of all Encumbrances, except for (i) any lien for current taxes not yet due and
payable, and (ii) minor liens that have arisen in the ordinary course of
business and that do not (individually or in the aggregate) materially detract
from the value of the assets subject thereto or materially impair the operations
of Parent.
(b) To the best of the knowledge of Parent: (i) all patents, trademarks,
service marks and copyrights held by Parent are valid, enforceable and
subsisting; (ii) none of the Parent Proprietary Assets and no Proprietary Asset
that is currently being developed by Parent (either by itself or with any other
Person) infringes, misappropriates or conflicts with any Proprietary Asset owned
or used by any other Person; (iii) none of the products that are or have been
designed, created, developed, assembled, manufactured or sold by Parent is
infringing, misappropriating or making any unlawful or unauthorized use of any
Proprietary Asset owned or used by any other Person, and, except as set forth in
Part 4.6(b) of the Parent Disclosure Schedule, since December 31, 2000, Parent
has not received any notice or other communication (in writing or otherwise) of
any actual, alleged, possible or potential infringement, misappropriation or
unlawful or unauthorized use of, any Proprietary Asset owned or used by any
other Person, that has or would reasonably be expected to have a Material
Adverse Effect on Parent; (iv) except as set forth in Part 4.6(b) of the Parent
Disclosure Schedule, no other Person is infringing, misappropriating or making
any unlawful or unauthorized use of, and no Proprietary Asset owned or used by
any other Person infringes or conflicts with, any material Parent Proprietary
Asset.
(c) To the best of the knowledge of Parent, the Parent Proprietary Assets,
together with any Proprietary Assets currently being licensed to Parent by third
parties, constitute all the Proprietary Assets necessary to enable the Parent to
conduct its business in the manner in which such business is being conducted.
4.7 Contracts. Parent (i) has not violated or breached, or committed any
default under, any material Contract to which Parent is a party, except for
violations, breaches and defaults that have not had and would not reasonably be
expected to have a Material Adverse Effect on Parent; and, to the best of the
knowledge of Parent, no other Person has violated or breached, or committed any
default under, any material Contract to which Parent is a party, except for
violations, breaches and defaults that have not had and would not reasonably be
expected to have a Material Adverse Effect on Parent; (ii) to the best of the
knowledge of Parent, no event has occurred, and no circumstance or condition
exists, that (with or without notice or lapse of time) will or would reasonably
be expected to, (A) result in a violation or breach of any of the provisions of
any material Contract to which Parent is a party, (B) give any Person the right
to declare a default or exercise any remedy under any material Contract to which
Parent is a party, (C) give any Person the right to receive or require a rebate,
chargeback, penalty or change in delivery schedule under any material Contract
to which Parent is a party, (D) give any Person the right to accelerate the
maturity or performance of any material Contract to which Parent is a party, or
give any Person the right to cancel, terminate or modify any material Contract,
except in each such case for defaults, acceleration rights, termination rights
and other rights that have not had and would not reasonably be expected to have
a Material Adverse Effect on Parent; and (iii) since December 31, 2000, Parent
has not received any notice or other communication regarding any actual or
possible violation or breach of, or default under, any material Contract, except
in each such case for defaults, acceleration rights, termination rights and
other rights that have not had and would not reasonably be expected to have a
Material Adverse Effect on Parent.
4.8 Liabilities. As of the date of this Agreement, Parent has no accrued,
contingent or other liabilities of any nature, either matured or unmatured,
except for: (a) liabilities identified as such in the Parent Unaudited Interim
Balance Sheet; (b) liabilities that have been incurred by Parent since September
30, 2001 in the ordinary course of business and consistent with past practices
that, individually or in the aggregate, are not material in nature; and (c)
liabilities incurred under this Agreement and the other agreements contemplated
hereby.
4.9 Compliance with Legal Requirements. Parent is in compliance in all
material respects with all applicable Legal Requirements except where the
failure to comply with such Legal Requirements, individu-
18
ally or in the aggregate, has not had and could not reasonably be expected to
have a Material Adverse Effect on Parent. Since December 31, 2000, Parent has
not received any notice or other communication from any Governmental Body
regarding any actual or possible violation of, or failure to comply with, any
Legal Requirement, except where said violation or noncompliance could not
reasonably be expected to have a Material Adverse Effect on Parent.
4.10 Certain Business Practices. Neither Parent nor any director, officer,
agent or employee of Parent has (i) used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political activity,
(ii) made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns or violated
any provision of the Foreign Corrupt Practices Act of 1977, as amended, or (iii)
made any other unlawful payment.
4.11 Governmental Authorizations. Parent holds all Governmental
Authorizations necessary to enable Parent to conduct its business in the manner
in which such business is currently being conducted. All such Governmental
Authorizations are valid and in full force and effect. Parent is in substantial
compliance with the terms and requirements of such Governmental Authorizations,
except where the failure to be in compliance with the terms and requirements of
such Governmental Authorizations have not had and would not reasonably be
expected to have a Material Adverse Effect on Parent. Since December 31, 2000,
Parent has not received any notice or other communication from any Governmental
Body regarding (a) any actual or possible violation of or failure to comply with
any term or requirement of any material Governmental Authorization, or (b) any
actual or possible revocation, withdrawal, suspension, cancellation, termination
or modification of any material Governmental Authorization.
4.12 Tax Matters.
(a) Each of the Tax Returns required to be filed by or on behalf of Parent
with any Governmental Body with respect to any taxable period ending on or
before the Closing Date (the "PARENT RETURNS") (i) has been or will be filed on
or before the applicable due date (including any extensions of such due date),
and (ii) has been, or will be when filed, prepared in all material respects in
compliance with all applicable Legal Requirements. All amounts shown on Parent
Returns to be due on or before the Closing Date have been or will be paid on or
before the Closing Date. (b) The Parent Unaudited Interim Balance Sheet fully
accrues all actual and contingent liabilities for Taxes through the date thereof
in accordance with generally accepted accounting principles. The Parent SEC
Documents fully accrue all actual and contingent liabilities for Taxes through
the respective dates thereof.
(c) Neither Parent nor any of its affiliates has taken, failed to take or
agreed to take any action or knows of any fact, circumstance, plan or intention
that is or would be reasonably likely to prevent the Transaction from qualifying
as a "reorganization" within the meaning of Section 368(a) of the Code.
4.13 Environmental Matters. Parent (i) is in compliance in all material
respects with all applicable Environmental Laws, and (ii) possesses all permits
and other Governmental Authorizations required under applicable Environmental
Laws, and compliance with the terms and conditions thereof. Parent has not
received any notice or other communication (in writing or otherwise), whether
from a Governmental Body, citizens group, employee or otherwise, that alleges
that Parent is not in compliance with any Environmental Law, and, to the best of
the knowledge of Parent, there are no circumstances that may prevent or
interfere with the compliance by Parent with any Environmental Law in the
future. To the best of the knowledge of Parent, (a) all property that is leased
to, controlled by or used by Parent, and all surface water, groundwater and soil
associated with or adjacent to such property, is free of any material
environmental contamination of any nature, (b) none of the property leased to,
controlled by or used by Parent contains any underground storage tanks,
asbestos, equipment using PCBs, underground injection xxxxx, and (c) none of the
property leased to, controlled by or used by Parent contains any septic tanks in
which process wastewater or any Materials of Environmental Concern have been
disposed. Parent has never sent or transported, or arranged to send or
transport, any Materials of Environmental Concern to a site that, pursuant to
any applicable Environmental Law (i) has been placed on the "National Priorities
List" of hazardous waste sites or any similar state list, (ii) is otherwise
designated or identified as a potential site for remediation, cleanup, closure
or other environmental remedial activity, or (iii) is subject to a Legal
Requirement to take "removal" or
19
"remedial" action as detailed in any applicable Environmental Law or to make
payment for the cost of cleaning up the site.
4.14 Transactions with Affiliates. Except as set forth in the Parent SEC
Documents filed prior to the date of this Agreement, between December 31, 2000
and the date of this Agreement, no event has occurred that would be required to
be reported by Parent pursuant to Item 404 of Regulation S-K promulgated by the
SEC.
4.15 Legal Proceedings. As of the date of this Agreement, there is no
pending Legal Proceeding, and (to the best of the knowledge of Parent) no Person
has threatened to commence any Legal Proceeding that challenges, or that may
have the effect of preventing, delaying, making illegal or otherwise interfering
with, the Offer, the Merger or any of the other transactions contemplated by
this Agreement. To the best of the knowledge of Parent, as of the date of this
Agreement, no event has occurred, and no claim, dispute or other condition or
circumstance exists, that could reasonably be expected to, give rise to or serve
as a basis for the commencement of any such Legal Proceeding.
4.16 Authority; Binding Nature of Agreement. Parent and Merger Sub have
the requisite corporate power and authority to enter into and to perform their
obligations under this Agreement. The Boards of Directors of Parent and Merger
Sub (at a meeting duly called and held) has unanimously authorized and approved
the execution, delivery and performance of this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, by Parent and Merger
Sub. Parent is not and has not been at any time during the past three years an
"interested stockholder" of the Company as defined by Section 203 of the DGCL.
This Agreement constitutes the legal, valid and binding obligation of Parent and
Merger Sub, enforceable against them in accordance with its terms, subject to
(i) laws of general application relating to bankruptcy, insolvency and the
relief of debtors, and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies.
4.17 Non-Contravention; Consents. Neither the execution and delivery of
this Agreement by Parent and Merger Sub nor the consummation by Merger Sub of
the Offer or the Merger or any of the other transactions contemplated by this
Agreement will (a) contravene, conflict with or result in any breach of any
provision of the certificate of incorporation or bylaws of Parent or the
certificate of incorporation or bylaws of Merger Sub or of any resolution
adopted by the stockholders, the Board of Directors or any committee of the
Board of Directors of Parent or Merger Sub; (b) contravene, conflict with or
result in a violation of, or give any Governmental Body or other Person the
right to challenge the Offer or the Merger or any of the other transactions
contemplated by this Agreement or to exercise any remedy or obtain any relief
under, any Legal Requirement or any Order to which Parent or Merger Sub, or any
of the assets owned or used by Parent or Merger Sub, is subject; (c) contravene,
conflict with or result in a violation or breach of, or result in a default
under, any provision of any material Contract to which Parent or Merger Sub is a
party, or give any Person the right to declare a default or exercise any remedy
under any such Contract to which Parent or Merger Sub is a party; or (d) result
in a violation by Parent or Merger Sub of any Order to which Parent or Merger
Sub is subject. Except as may be required by the Securities Act, the Exchange
Act, state securities or "blue sky" laws, the DGCL, the HSR Act, any foreign
antitrust law or regulation and the NASD Bylaws, neither Parent nor Merger Sub
is and will not be required to make any filing with or give any notice to, or to
obtain any Consent from, any Person in connection with the execution, delivery
or performance of this Agreement by Parent or Merger Sub or the consummation by
Merger Sub of the Offer or the Merger.
4.18 Interim Operations of Merger Sub. Merger Sub was formed solely for
the purpose of engaging in the transactions contemplated by this Agreement, has
engaged in no other business activities and has conducted its operations only as
contemplated by this Agreement.
4.19 Parent Stockholder Approval. This Agreement and the transactions
contemplated hereby, including the issuance of shares of Parent Common Stock
pursuant to the Offer and the Merger, do not require the approval of the holders
of any class of shares of capital stock of Parent.
4.20 Full Disclosure. This Agreement (including the Parent Disclosure
Schedule) does not (i) contain any representation, warranty or information that
is false or misleading with respect to any material fact, or
20
(ii) omit to state any material fact necessary in order to make the
representations, warranties and information contained and to be contained herein
and therein (in the light of the circumstances under which such representations,
warranties and information were or will be made or provided) not false or
misleading.
4.21 Valid Issuance. The Parent Common Stock to be issued in connection
with the Offer and the Merger has been duly authorized by all necessary
corporate action, and when issued in accordance with this Agreement, will be
validly issued, fully paid and nonassessable and not subject to preemptive
rights, and will be freely tradable. Without limiting the generality of the
foregoing and subject to the provisions of Rule 145 under the Securities Act,
none of the shares of Parent Common Stock to be issued in connection with the
Offer and the Merger will constitute "restricted securities" within the meaning
of Rule 144 under the Securities Act.
5. CERTAIN COVENANTS OF THE COMPANY AND PARENT.
5.1 Access and Investigation.
(a) During the period from the date of this Agreement through the
Effective Time (the "PRE-CLOSING PERIOD"), the Company shall, and shall cause
the Representatives of the Company to: (i) provide Parent and Parent's
Representatives with reasonable access to the Company's Representatives,
personnel and assets and to all existing books, records, Tax Returns, work
papers and other documents and information relating to the Company; and (ii)
provide Parent and Parent's Representatives with such copies of the existing
books, records, Tax Returns, work papers and other documents and information
relating to the Company, and with such additional financial, operating and other
data and information regarding the Company, as Parent may reasonably request
provided, however, that (i) Parent shall not contact, and Parent shall ensure
that none of Parents' Representatives contacts, any employee of the Company or
any of its subsidiaries without the prior authorization of the Company's Chief
Executive Officer or Chief Financial Officer and (ii) Parent will hold, and will
cause its Representatives and affiliates to hold, any and all information
received from the other party, directly or indirectly, in confidence, in
accordance with the respective Confidentiality Agreements dated as of September
17, 2001.
(b) During the Pre-Closing Period, Parent shall, and shall cause the
Representatives of Parent to: (i) provide the Company and the Company's
Representatives with reasonable access to Parent's Representatives, personnel
and assets and to all existing books, records, Tax Returns, work papers and
other documents and information relating to Parent; and (ii) provide the Company
and the Company's Representatives with such copies of the existing books,
records, Tax Returns, work papers and other documents and information relating
to Parent, and with such additional financial, operating and other data and
information regarding Parent, as the Company may reasonably request provided,
however, that (i) the Company shall not contact, and the Company shall ensure
that none of Company's Representatives contacts, any employee of Parent or any
of its subsidiaries without the prior authorization of Parent's Chief Executive
Officer, Chief Operating Officer or Chief Financial Officer, (ii) the Company
shall ensure that none of its Representatives interferes with or otherwise
disrupts the business or operations of Parent while exercising the rights
provided under this Section 5.1(b) and (iii) the Company will hold, and will
cause its Representatives and affiliates to hold, any and all information
received from the other party, directly or indirectly, in confidence, in
accordance with the respective Confidentiality Agreements dated as of September
17, 2001.
5.2 Operation of the Company's Business.
(a) During the Pre-Closing Period: (i) the Company shall conduct its
business and operations (A) in the ordinary course and in accordance with
current practices and (B) in compliance with all applicable Legal Requirements
and the requirements of all Company Contracts that constitute material
Contracts; (ii) the Company shall use all reasonable efforts to ensure that it
preserves intact its current business organization, keeps available the services
of its current officers and employees and maintains its relations and goodwill
with all suppliers, customers, landlords, creditors, licensors, licensees,
employees and other Persons having business relationships with the Company;
(iii) the Company shall keep in full force and effect (with the same scope and
limits of coverage) all insurance policies in effect as of the date of this
Agreement covering all material assets of the Company; (iv) the Company shall
cause to be provided all notices, assurances and support
21
required by any Company Contract relating to any Proprietary Asset in order to
ensure that no condition under such Company Contract occurs that could result
in, or could increase the likelihood of, (A) any transfer or disclosure by the
Company of any Company Source Code, or (B) a release from any escrow of any
Company Source Code that has been deposited or is required to be deposited in
escrow under the terms of such Company Contract; (v) the Company shall promptly
notify Parent of (A) any notice or other communication from any Person alleging
that the Consent of such Person is or may be required in connection with any of
the transactions contemplated by this Agreement, and (B) any Legal Proceeding
commenced or, to the best of its knowledge threatened against, relating to or
involving or otherwise affecting the Company that relates to the consummation of
the transactions contemplated by this Agreement; and (vi) the Company shall (to
the extent requested by Parent) cause its officers to report regularly to Parent
concerning the status of the Company's business.
(b) Except as required by this Agreement, during the Pre-Closing Period,
the Company shall not (without the prior written consent of Parent):
(i) declare, accrue, set aside or pay any dividend or make any other
distribution in respect of any shares of capital stock, or repurchase,
redeem or otherwise reacquire any shares of capital stock or other
securities;
(ii) sell, issue, grant or authorize the issuance or grant of (A) any
capital stock or other security, (B) any option, call, warrant or right to
acquire any capital stock or other security, or (C) any instrument
convertible into or exchangeable for any capital stock or other security
(except that the Company may issue Company Common Stock upon the valid
exercise of Company Options and Company Warrants outstanding as of the date
of this Agreement);
(iii) amend or waive any of its rights under, or accelerate the
vesting under, any provision of any of the Company's stock option plans,
any provision of any agreement evidencing any outstanding stock option or
any restricted stock purchase agreement, or otherwise modify any of the
terms of any outstanding option, warrant or other security or any related
Contract;
(iv) amend or permit the adoption of any amendment to its certificate
of incorporation or bylaws or other charter or organizational documents, or
effect or become a party to any merger, consolidation, share exchange,
business combination, amalgamation, recapitalization, reclassification of
shares, stock split, reverse stock split, division or subdivision of
shares, consolidation of shares or similar transaction;
(v) change the number of directors on the Company's Board of
Directors;
(vi) form any Subsidiary or acquire any equity interest or other
interest in any other Entity;
(vii) make any capital expenditure (except that the Company may make
capital expenditures that, when added to all other capital expenditures
made during the Pre-Closing Period, do not exceed $5,000 in the aggregate);
(viii) enter into or become bound by, or permit any of the assets
owned or used by it to become bound by, any material Contract, or amend or
terminate, or waive or exercise any material right or remedy under, any
material Contract;
(ix) acquire, lease or license any right or other asset from any other
Person or sell or otherwise dispose of, or lease or license, any right or
other asset to any other Person (except in each case for immaterial assets
acquired, leased, licensed or disposed of by the Company in the ordinary
course of business and consistent with past practices), or waive or
relinquish any material right;
(x) lend money to any Person, or incur or guarantee any indebtedness;
(xi) establish, adopt or amend any employee benefit plan, pay any
bonus or make any profit-sharing or similar payment to, or increase the
amount of the wages, salary, commissions, fringe benefits or other
compensation or remuneration payable to, any of its directors, officers or
employees (except that the Company (A) may make routine, reasonable salary
increases in connection with the Company's customary employee review
process, and (B) may pay customary bonus payments and profit sharing
22
payments consistent with past practices and otherwise payable in accordance
with existing bonus and profit sharing plans referred to in Part 2.14(a) of
the Company Disclosure Schedule);
(xii) hire any new employee, promote any employee, engage any
consultant or independent contractor for a period exceeding 30 days, or
fire any employee except in the ordinary course of business;
(xiii) change any of its pricing policies, product return policies,
product maintenance polices, service policies, product modification or
upgrade policies, personnel policies or other business policies, or any of
its methods of accounting or accounting practices in any respect;
(xiv) make or change any Tax election;
(xv) file any Tax Return without providing a copy of such Tax Return
to Parent for comment at least five business days before the filing date;
(xvi) commence or settle any Legal Proceeding;
(xvii) enter into any material transaction or take any other material
action outside the ordinary course of business or inconsistent with past
practices; or
(xviii) take, or permit the taking of any action, which could
reasonably be expected to cause the vesting of any Company Options to be
accelerated in accordance with the terms of any of the Company Stock Option
Plans;
(xix) take, agree to take, or omit to take any action which would (A)
make any of the representations and warranties of the Company contained in
this Agreement untrue or incorrect, (B) prevent the Company from performing
or cause the Company not to perform its covenants hereunder, or (C) cause
any of the conditions set forth in Section 7 or Annex I not to be able to
be satisfied prior to the Termination Date;
(xx) enter into any cash settlement of any litigation against the
Company and/or its directors relating to the transactions contemplated by
this Agreement and the Stockholder Tender Agreements absent the prior
written consent of Parent; or
(xxi) agree or commit to take any of the actions described in clauses
(i) through (xx) of this Section 5.2(b).
(c) During the Pre-Closing Period, the Company shall promptly notify Parent
in writing of: (i) the discovery by the Company of any event, condition, fact or
circumstance that occurred or existed on or prior to the date of this Agreement
and that caused or constitutes a material inaccuracy in any representation or
warranty made by the Company in this Agreement; (ii) any event, condition, fact
or circumstance that occurs, arises or exists after the date of this Agreement
and that would cause or constitute a material inaccuracy in any representation
or warranty made by the Company in this Agreement if (A) such representation or
warranty had been made as of the time of the occurrence, existence or discovery
of such event, condition, fact or circumstance, or (B) such event, condition,
fact or circumstance had occurred, arisen or existed on or prior to the date of
this Agreement; (iii) any material breach of any covenant or obligation of the
Company; and (iv) any event, condition, fact or circumstance that would give
rise to a breach described in clause (iii) of Section 5.2(b) or make the timely
satisfaction of any of the conditions set forth in Section 7 or Annex I
impossible or unlikely or that has had or could reasonably be expected to have a
Material Adverse Effect on the Company. Without limiting the generality of and
in addition to the foregoing, the Company shall promptly advise Parent in
writing of any Legal Proceeding or material claim threatened, commenced or
asserted against or with respect to the Company, and any Legal Proceeding or
claim, demand, notice of action or other written assertion of any claim related
to employment matters or the breach by Company of any Company Contract with a
customer of Company. No notification given to Parent pursuant to this Section
5.2 shall limit or otherwise affect any of the representations, warranties,
covenants or obligations of the Company contained in this Agreement.
23
5.3 Operation of Parent's Business.
(a) During the Pre-Closing Period: (i) Parent shall conduct its business
and operations (A) in the ordinary course and in accordance with current
practices and (B) in compliance with all applicable Legal Requirements and the
requirements of all Parent Contracts that constitute material Contracts; (ii)
Parent shall use all reasonable efforts to ensure that it preserves intact its
current business organization, keeps available the services of its current
officers and employees and maintains its relations and goodwill with all
suppliers, customers, landlords, creditors, licensors, licensees, employees and
other Persons having business relationships with Parent; and (iii) Parent shall
promptly notify the Company of (A) any notice or other communication from any
Person alleging that the Consent of such Person is or may be required in
connection with any of the transactions contemplated by this Agreement, and (B)
any Legal Proceeding commenced or, to the best of its knowledge threatened
against, relating to or involving or otherwise affecting Parent that relates to
the consummation of the transactions contemplated by this Agreement.
(b) During the Pre-Closing Period, Parent shall not (without the prior
written consent of the Company):
(i) declare, accrue, set aside or pay any dividend or make any other
distribution in respect of any shares of capital stock, or repurchase,
redeem or otherwise reacquire any shares of capital stock or other
securities;
(ii) amend or permit the adoption of any amendment to its certificate
of incorporation or bylaws or other charter or organizational documents, or
effect or become a party to any merger, consolidation, share exchange,
business combination, amalgamation, recapitalization, reclassification of
shares, stock split, reverse stock split, division or subdivision of
shares, consolidation of shares or similar transaction; or
(iii) agree or commit to take any of the actions described in clauses
(i) through (ii) of this Section 5.3(b).
(c) During the Pre-Closing Period, Parent shall promptly notify the Company
in writing of: (i) the discovery by Parent of any event, condition, fact or
circumstance that occurred or existed on or prior to the date of this Agreement
and that caused or constitutes a material inaccuracy in any representation or
warranty made by Parent in this Agreement; (ii) any event, condition, fact or
circumstance that occurs, arises or exists after the date of this Agreement and
that would cause or constitute a material inaccuracy in any representation or
warranty made by Parent in this Agreement if (A) such representation or warranty
had been made as of the time of the occurrence, existence or discovery of such
event, condition, fact or circumstance, or (B) such event, condition, fact or
circumstance had occurred, arisen or existed on or prior to the date of this
Agreement; (iii) any material breach of any covenant or obligation of Parent;
and (iv) any event, condition, fact or circumstance that would make the timely
satisfaction of any of the conditions set forth in Section 7 or Annex I
impossible or unlikely or that has had or could reasonably be expected to have a
Material Adverse Effect on Parent. Without limiting the generality of the
foregoing, Parent shall promptly advise the Company in writing of any Legal
Proceeding or material claim threatened, commenced or asserted against or with
respect to Parent. No notification given to the Company pursuant to this Section
5.3 shall limit or otherwise affect any of the representations, warranties,
covenants or obligations of Parent contained in this Agreement.
5.4 No Solicitation.
(a) The Company shall not directly or indirectly (i) solicit, initiate, or
knowingly take any action to encourage, induce or facilitate the making,
submission or announcement of any Acquisition Proposal (including by amending,
or granting any waiver under, the Rights Agreement), (ii) knowingly furnish any
information to any Person in connection with or in response to an Acquisition
Proposal or an inquiry or indication of interest that could lead to an
Acquisition Proposal, (iii) engage in discussions or negotiations with any
Person with respect to any Acquisition Proposal, (iv) approve, endorse or
recommend any Acquisition Proposal or (v) enter into any letter of intent or
similar document or any Contract contemplating or otherwise relating to any
Acquisition Transaction; provided, however, that this Section 5.4(a) shall not
prohibit (A) the Company directly or indirectly from furnishing nonpublic
information to, or entering into discussions or negotiations with, any Person in
response to an Acquisition Proposal that is submitted to the Company by such
Person (and not withdrawn) if (1) neither the Company nor any Representative of
the
24
Company shall have breached or taken any action inconsistent with any of the
provisions set forth in this Section 5.4, (2) the Board of Directors of the
Company concludes in good faith, after consultation with its outside legal
counsel, that such Acquisition Proposal is reasonably likely to result in a
Company Superior Offer and that such action is required for the Board of
Directors of the Company to comply with its fiduciary duties to the Company's
stockholders under applicable law, (3) at least two business days prior to
furnishing any such nonpublic information to, or entering into discussions with,
such Person, the Company gives Parent written notice of the identity of such
Person and of the Company's intention to furnish nonpublic information to, or
enter into discussions with, such Person, and the Company receives from such
Person an executed confidentiality agreement containing customary limitations on
the use and disclosure of all nonpublic written and oral information furnished
to such Person or any of such Person's Representatives by or on behalf of the
Company, and (4) at least two business days prior to furnishing any such
nonpublic information to such Person, the Company furnishes such nonpublic
information to Parent (to the extent such nonpublic information has not been
previously furnished by the Company to Parent); or (B) the Company from
complying with Rule 14e-2 or Rule 14d-9 promulgated under the Exchange Act with
regard to an Acquisition Proposal. Without limiting the generality of the
foregoing, the Company acknowledges and agrees that any violation of any of the
restrictions set forth in the preceding sentence by any Company Representative,
whether or not such Representative is purporting to act on behalf of the
Company, shall be deemed to constitute a breach of this Section 5.4(a) by the
Company. Notwithstanding anything to the contrary contained in this Section
5.4(a) or elsewhere in this Agreement, at any time after the date hereof, the
Company may file with the SEC a report on Form 8-K (or such other forms as are
required) with respect to this Agreement and may file a copy of this Agreement
and any related agreements as an exhibit to such report.
(b) The Company shall promptly (and in no event later than 24 hours after
receipt of any Acquisition Proposal, any inquiry or indication of interest that
the Company reasonably believes could lead to an Acquisition Proposal or any
request for nonpublic information) advise Parent orally and in writing of any
Acquisition Proposal, any inquiry or indication of interest that the Company
reasonably believes could lead to an Acquisition Proposal or any request for
nonpublic information relating to the Company (including the identity of the
Person making or submitting such Acquisition Proposal, inquiry, indication of
interest or request, and the terms thereof) that is made or submitted by any
Person during the Pre-Closing Period. The Company shall keep Parent fully
informed with respect to the status of any such Acquisition Proposal, inquiry,
indication of interest or request and any modification or proposed modification
thereto.
(c) Notwithstanding anything in this Agreement to the contrary, the
Recommendations may be withheld, withdrawn or modified in a manner adverse to
Parent if: (i) (A) a bona fide written offer, not solicited in violation of this
Section 5.4 of the Agreement, is made to the Company by a third party for a
merger, consolidation, business combination, sale of substantial assets, sale of
shares of capital stock (including without limitation by way of a tender offer)
or similar transaction, and such offer is not withdrawn; (B) the Company's Board
of Directors determines in good faith (after consultation with a nationally
recognized independent banking firm) that such offer constitutes a Company
Superior Offer; (C) the Company's Board of Directors determines in good faith,
based upon the advice of the Company's outside legal counsel, that, in light of
such Company Superior Offer, the withdrawal or modification of the
Recommendations is required in order for the Company's Board of Directors to
comply with its fiduciary obligations to the Company's stockholders under
applicable Legal Requirements; (D) the Recommendations are not withdrawn or
modified in a manner adverse to Parent at any time prior to two business days
after Parent receives written notice from the Company confirming that the
Company's Board of Directors has determined that such offer is a Company
Superior Offer and providing to Parent a copy of any such Company Superior
Offer, and (E) neither the Company nor any of its Representatives shall have
violated any of the restrictions set forth in Section 5.4(a); or (ii) other than
with respect to an unsolicited, bona fide written offer made to the Company by a
third party as contemplated by Section 5.4(c)(i)(A) (in which case the Company
shall comply with the provisions of Section 5.4(c)(i)), the Board of Directors
of the Company determines in good faith, after consultation with its outside
legal counsel, that withholding, withdrawing or modifying the Recommendations is
required in order for the Board of Directors of the Company to comply with its
fiduciary obligations to the Company's stockholders under applicable Legal
Requirements.
25
6. ADDITIONAL COVENANTS OF THE PARTIES.
6.1 Registration Statement and Proxy Statement for Stockholder
Approval. If approval of the Company's stockholders is required by applicable
Legal Requirements in order to consummate the Merger other than pursuant to
Section 253 of the DGCL, Parent and the Company shall, as soon as practicable
following the Offer Acceptance Time, prepare and the Company shall file with the
SEC a proxy statement of the Company in connection with the Merger complying
with applicable Legal Requirements (the "PROXY STATEMENT"), and Parent and the
Company shall prepare and Parent shall file with the SEC a post-effective
amendment to the Registration Statement (the "POST-EFFECTIVE AMENDMENT") for the
offer and sale of Parent Common Stock pursuant to the Merger and in which the
Proxy Statement will be included as a prospectus. Each of the Company and Parent
shall use commercially reasonable efforts to have the Post-Effective Amendment
declared effective under the Securities Act as promptly as practicable after
such filing. The Company will use reasonable efforts to cause the Proxy
Statement to be mailed to the Company's stockholders as promptly as practicable
after the Post-Effective Amendment is declared effective under the Securities
Act. Parent shall also take any action (other than qualifying to do business in
any jurisdiction in which it is not now so qualified or filing a general consent
to service of process) required to be taken under any applicable state
securities laws in connection with the issuance of Parent Common Stock in the
Merger and the Company shall furnish all information concerning the Company and
the holders of capital stock of the Company as may be reasonably requested in
connection with any such action and the preparation, filing and distribution of
the Proxy Statement. No filing of, or amendment or supplement to, or
correspondence to the SEC or its staff with respect to, the Post-Effective
Amendment will be made by Parent, or with respect to the Proxy Statement will be
made by the Company, without providing the other party a reasonable opportunity
to review and comment thereon. Parent will advise the Company, promptly after it
receives notice thereof, of the time when the Post-Effective Amendment has
become effective or any supplement or amendment has been filed, the issuance of
any stop order, the suspension of the qualification of the Parent Common Stock
issuable in connection with the Merger for offering or sale in any jurisdiction,
or any request by the SEC for amendment of the Post-Effective Amendment or
comments thereon and responses thereto or requests by the SEC for additional
information. The Company will advise Parent, promptly after it receives notice
thereof, of any request by the SEC for the amendment of the Proxy Statement or
comments thereon and responses thereto or requests by the SEC for additional
information. If at any time prior to the Effective Time any information relating
to the Company or Parent, or any of their respective affiliates, officers or
directors, should be discovered by the Company or Parent which should be set
forth in an amendment or supplement to either the Post-Effective Amendment or
the Proxy Statement, so that any of such documents would not include any
misstatement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, the party which discovers such information shall promptly
notify the other parties hereto and an appropriate amendment or supplement
describing such information shall be promptly filed with the SEC and, to the
extent required by applicable Legal Requirements, disseminated to the
stockholders of the Company.
6.2 Company Stockholders' Meeting.
(a) If approval of the Company's stockholders is required by applicable
Legal Requirements in order to consummate the Merger other than pursuant to
Section 253 of the DGCL, after acceptance for exchange of Shares pursuant to the
Offer, Parent and the Company shall take all action necessary under all
applicable Legal Requirements to call, give notice of and hold a meeting of the
holders of Company Common Stock to vote on a proposal to adopt this Agreement
(the "COMPANY STOCKHOLDERS' MEETING"). The Company Stockholders' Meeting shall
be held as soon as reasonably practicable after the Post-Effective Amendment is
declared effective under the Securities Act. The Company shall use reasonable
efforts to take all actions necessary or advisable to solicit proxies in favor
of the Merger and shall ensure that all proxies solicited in connection with the
Company Stockholders' Meeting are solicited in compliance with all applicable
Legal Requirements. Once the Company Stockholders' Meeting has been called and
noticed, the Company shall not postpone or adjourn the Company Stockholders'
Meeting (other than for the absence of a quorum or pursuant to a Legal
Requirement) without the consent of Parent. The Proxy Statement shall include
the opinion of CIBC World Markets referred to in Section 3.21 as appropriate.
26
(b) Subject to Section 5.4(c), the Proxy Statement shall include the
Recommendations and the Recommendations shall not be withdrawn or modified in a
manner adverse to Parent, and no resolution by the Board of Directors of the
Company or any committee thereof to withdraw or modify the Recommendations in a
manner adverse to Parent shall be adopted or proposed.
(c) The Company's obligation to call, give notice of and hold the Company
Stockholders' Meeting in accordance with Section 6.2(a) shall not be limited or
otherwise affected by the commencement, disclosure, announcement or submission
of any Company Superior Offer or other Acquisition Proposal, or by any
withdrawal or modification of the Recommendations.
(d) The Company and Parent shall cooperate with one another (i) in
connection with the preparation of the Proxy Statement and the Post-Effective
Amendment, (ii) in determining whether any action by or in respect of, or filing
with, any Governmental Entity is required, or any actions, consents, approvals
or waivers are required to be obtained from parties to any material contracts,
in connection with the consummation of the transactions contemplated by this
Agreement and (iii) in seeking any such actions, consents, approvals or waivers
or making any such filings, furnishing information required in connection
therewith or with the Proxy Statement and the Post-Effective Amendment and
seeking timely to obtain any such actions, consents, approvals or waivers.
(e) Notwithstanding clauses (a) and (b) above, if Merger Sub shall acquire
by virtue of the Offer at least 90% of the outstanding shares of Company Common
Stock, the parties hereto shall take all necessary actions (including actions
referred to in this Section 6.2, as applicable) to cause the Merger to become
effective, as soon as practicable after the expiration of the Offer, as it may
be extended in accordance with the requirements of Section 1.1(a) hereof,
without a meeting of stockholders of the Company, in accordance with Section 253
of the DGCL.
(f) Parent shall, and shall cause each of its Subsidiaries and affiliates
to, vote all shares of the Company Common Stock held by any of them to approve
the Merger.
6.3 Regulatory Approvals. Each party shall use all reasonable efforts to
file, as soon as practicable after the date of this Agreement, all notices,
reports and other documents required to be filed by such party with any
Governmental Body with respect to the Merger and the other transactions
contemplated by this Agreement, and to submit promptly any additional
information requested by any such Governmental Body. Without limiting the
generality of the foregoing, the Company and Parent shall, promptly after the
date of this Agreement, prepare and file the notifications required under the
HSR Act and any applicable foreign antitrust laws or regulations in connection
with the Merger. The Company and Parent shall respond as promptly as practicable
to (i) any inquiries or requests received from the Federal Trade Commission or
the Department of Justice for additional information or documentation and (ii)
any inquiries or requests received from any state attorney general, foreign
antitrust authority or other Governmental Body in connection with antitrust or
related matters. Each of the Company and Parent shall (1) give the other party
prompt notice of the commencement or threat of commencement of any Legal
Proceeding by or before any Governmental Body with respect to the Merger or any
of the other transactions contemplated by this Agreement, (2) keep the other
party informed as to the status of any such Legal Proceeding or threat, and (3)
promptly inform the other party of any communication to or from the Federal
Trade Commission, the Department of Justice or any other Governmental Body
regarding the Merger. Except as may be prohibited by any Governmental Body or by
any Legal Requirement, (a) the Company and Parent will consult and cooperate
with one another, and will consider in good faith the views of one another, in
connection with any analysis, appearance, presentation, memorandum, brief,
argument, opinion or proposal made or submitted in connection with any Legal
Proceeding under or relating to the HSR Act or any other foreign, federal or
state antitrust or fair trade law, and (b) in connection with any such Legal
Proceeding, each of the Company and Parent will permit authorized
Representatives of the other party to be present at each meeting or conference
relating to any such Legal Proceeding and to have access to and be consulted in
connection with any document, opinion or proposal made or submitted to any
Governmental Body in connection with any such Legal Proceeding. Notwithstanding
anything to the contrary in this Section 6.3, neither Parent nor the Company
shall be
27
required to take any action that could reasonably be expected to substantially
impair the overall benefits expected, as of the date hereof, to be realized from
the consummation of the Merger.
6.4 Assumption of Company Warrants.
(a) At the Offer Acceptance Time, to the extent provided for by their
terms, each Company Warrant then outstanding shall be converted into and become
rights with respect to Parent Common Stock, and Parent shall assume, to the
extent provided for by their terms, each such Company Warrant. From and after
the Offer Acceptance Time, (i) each Company Warrant assumed by Parent may be
exercised solely for shares of Parent Common Stock, (ii) the number of shares of
Parent Common Stock subject to each such Company Warrant shall be equal to the
number of shares of Company Common Stock subject to such Company Warrant
immediately prior to the Offer Acceptance Time multiplied by the Exchange Ratio,
rounding down to the nearest whole share, (iii) the per share exercise price
under each such Company Warrant shall be adjusted by dividing the per share
exercise price under such Company Warrant by the Exchange Ratio and rounding up
to the nearest cent, and (iv) any restriction on the exercise of any such
Company Warrant shall continue in full force and effect and the term,
exercisability, vesting schedule and other provisions of such Company Warrant
shall otherwise remain unchanged; provided, however, that each Company Warrant
assumed by Parent in accordance with this Section 6.4(a) shall, in accordance
with its terms, be subject to further adjustment as appropriate to reflect any
stock split, stock dividend, reverse stock split, reclassification,
recapitalization or other similar transaction effected subsequent to the Offer
Acceptance Time. Parent shall comply with the terms of all such Company
Warrants.
(b) Prior to the Offer Acceptance Time, the Company shall take all action
that may be reasonably necessary to effectuate the provisions of this Section
6.4 and to ensure that, from and after the Offer Acceptance Time, holders of
Company Warrants have no rights with respect thereto other than those
specifically provided in this Section 6.4.
(c) Parent shall take all corporate action necessary to reserve for
issuance a sufficient number of shares of Parent Common Stock for delivery under
the Company Warrants assumed in accordance with this Section 6.4.
6.5 No Assumption of Stock Options. Parent will not assume any Company
Options. Pursuant to the terms of the stock option plans under which Company
Options were issued, all such Company Options that are not exercised at the
Offer Acceptance Time will terminate at the Offer Acceptance Time. Any
repurchase option, risk of forfeiture or other similar condition under which the
Company has rights with regard to any exercised stock options shall also
terminate at the Offer Acceptance Time.
6.6 Employee Benefits
(a) From and for a period of one year following the date of Closing, Parent
shall, at its election, either (i) continue (or cause Parent's Subsidiaries to
continue) any Employee Plan of the Company as in effect on the date hereof (the
"COMPANY PLANS"), or (ii) arrange for each participant in any Company Plans who
become or continue as employees of Parent or any of its Subsidiaries ("COMPANY
PARTICIPANTS") to be eligible to participate in any similar plans or programs of
Parent on terms no less favorable than those offered to similarly situated newly
hired employees of Parent. On and after the date of Closing, employees of the
Company who become and remain employees of Parent or any of its Subsidiaries
shall be treated no less favorably than similarly situated newly hired employees
of Parent or any of its Subsidiaries with respect to compensation, employee
benefits and terms and conditions of employment. Notwithstanding anything
provided for otherwise in this Section 6.6(a), the medical insurance plan of
Company shall be continued for a period of time ending no earlier than 3 months
from the Offer Acceptance Time.
(b) No later than one year from the date of Closing, Parent shall, or shall
cause Parent's Subsidiaries to, arrange for all Company Participants not then
participating to become eligible to be participants in all employee benefit
plans of Parent on terms no less favorable than those offered to similarly
situated newly hired employees of Parent.
28
(c) In the event that, within one year following the Closing, the Surviving
Corporation terminates the employment of any employee currently employed at the
Company on the Offer Acceptance Time, other than Xxxxxx Xxxxx, Xxxxxx Xxxx, Xxx
Xxxxxxxx, Xxxxxxx Xxxx and Xxxxxxx Xxxxx, Parent shall cause the Surviving
Corporation to provide severance benefits to such employee equivalent to those
provided to the Company employees terminated in the Company's reduction in force
effected approximately October 4, 2001.
6.7 Indemnification of Officers and Directors.
(a) All rights to exculpation, indemnification and advancement of expenses
existing in favor of those Persons who are or were directors or officers of the
Company as of or prior to the Effective Time (the "INDEMNIFIED PERSONS") for
their acts and omissions occurring prior to the Effective Time, as provided in
the Company's Restated Certificate of Incorporation or Bylaws (as in effect as
of the date of this Agreement) and as provided in the indemnity agreements
between the Company and said Indemnified Persons (as in effect as of the date of
this Agreement) shall continue in effect after the consummation of the Offer and
survive the Merger and shall be observed by the Surviving Corporation to the
fullest extent permitted by Delaware law for a period of five years from the
Effective Time. The Certificate of Incorporation and Bylaws of the Surviving
Corporation shall contain the provisions with respect to indemnification and
exculpation from liability set forth in the Company's Restated Certificate of
Incorporation and Bylaws on the date of this Agreement, which provisions shall
not be amended, repealed or otherwise modified for a period of five years after
the Effective Time in any manner that would adversely affect the rights
thereunder of any Indemnified Party.
(b) Without limiting the provisions of Section 6.7(a), during the period
ending five years after the Effective Time, Parent will indemnify and hold
harmless each Indemnified Party against and from any costs or expenses
(including reasonable attorneys' fees), judgments, fines, losses, claims,
damages, liabilities and amounts paid in settlement in connection with any
claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, to the extent such claim, action, suit,
proceeding or investigation arises out of or pertains to (1) any action or
omission or alleged action or omission in his or her capacity as a director or
officer of the Company or any of its subsidiaries (regardless of whether such
action or omission, or alleged action or omission, occurred prior to, on or
after the Closing Date) or (2) any of the transactions contemplated by this
Agreement; provided, however, that if, at any time prior to the fifth
anniversary of the Effective Time, any Indemnified Party delivers to Parent a
written notice asserting a claim for indemnification under this Section 6.7(b),
then the claim asserted in such notice shall survive the fifth anniversary of
the Effective Time until such time as such claim is fully and finally resolved.
In the event of any such claim, action, suit, proceeding or investigation, (i)
Parent will have the right to control the defense thereof after the Effective
Time (it being understood that, by electing to control the defense thereof,
Parent will be deemed to have waived any right to object to the Indemnified
Parties' entitlement to indemnification hereunder with respect thereto), (ii)
any counsel retained by the Indemnified Parties with respect to the defense
thereof for any period after the Effective Time must be reasonably satisfactory
to Parent, and (iii) after the Effective Time, Parent will pay the reasonable
fees and expenses of such counsel, promptly after statements therefor are
received (provided that in the event that any Indemnified Party is not entitled
to indemnification hereunder, any amounts advanced on his or her behalf shall be
remitted to the Surviving Corporation). The Indemnified Parties as a group may
retain only one law firm (in addition to local counsel) to represent them with
respect to any single action unless counsel for any Indemnified Party determines
in good faith that, under applicable standards of professional conduct, a
conflict exists or is reasonably likely to arise on any material issue between
the positions of any two or more Indemnified Parties. Notwithstanding anything
to the contrary contained in this Section 6.7(b) or elsewhere in this Agreement,
Parent agrees that it will not settle or compromise or consent to the entry of
any judgment or otherwise seek termination with respect to any claim, action,
suit, proceeding or investigation for which indemnification may be sought under
this Agreement unless such settlement, compromise, consent or termination
includes an unconditional release of all Indemnified Parties from all liability
arising out of such claim, action, suit, proceeding or investigation.
(c) From the Effective Time until the fifth anniversary of the Effective
Time, the Surviving Corporation shall maintain in effect, for the benefit of the
Indemnified Persons with respect to their acts and omissions occurring prior to
the Effective Time, the existing policy of directors' and officers' liability
insurance maintained by the Company as of the date of this Agreement (the
"EXISTING POLICY"), to the extent directors'
29
and officers' liability insurance coverage is commercially available; provided,
however, that (i) the Surviving Corporation may substitute for the Existing
Policy a policy or policies of equal or greater coverage, and (ii) the Surviving
Corporation shall not be required to pay annual premiums for the Existing Policy
(or for any substitute policies) in excess of 150% of the current premium. In
the event any future annual premiums for the Existing Policy (or any substitute
policies) exceeds 150% of the current premium, the Surviving Corporation shall
be entitled to reduce the amount of coverage of the Existing Policy (or any
substitute policies) to the amount of coverage that can be obtained for a
premium equal to 150% of the current premium.
(d) Parent and the Surviving Corporation jointly and severally agree to pay
all expenses, including attorneys' fees, that may be incurred by the Indemnified
Parties in enforcing the indemnity and other obligations provided for in this
Section 6.7.
(e) This Section 6.7 shall survive the consummation of the Merger and the
Effective Time, is intended to benefit and may be enforced by the Company,
Parent, the Surviving Corporation and the Indemnified Parties, and shall be
binding on all successors and assigns of Parent and the Surviving Corporation.
6.8 Additional Agreements. Parent and the Company shall use all reasonable
efforts to take, or cause to be taken, all actions necessary to consummate the
Offer and the Merger and make effective the other transactions contemplated by
this Agreement. Without limiting the generality of the foregoing, each party to
this Agreement (i) shall make all filings (if any) and give all notices (if any)
required to be made and given by such party in connection with the Offer and the
Merger and the other transactions contemplated by this Agreement, (ii) shall use
all reasonable efforts to obtain each Consent (if any) required to be obtained
(pursuant to any applicable Legal Requirement or Contract, or otherwise) by such
party in connection with the Offer and the Merger or any of the other
transactions contemplated by this Agreement, and (iii) shall use all reasonable
efforts to lift any restraint, injunction or other legal bar to the Offer and
the Merger, provided, however, that a party is not obligated to pursue an appeal
of any such restraint, injunction or other legal bar if it determines, upon the
advice of legal counsel, that it is more than probable that such an appeal would
not be successful. Each party shall promptly deliver to the other a copy of each
such filing made, each such notice given and each such Consent obtained by such
party during the Pre-Closing Period.
6.9 Disclosure. Parent and Merger Sub, on the one hand, and the Company,
on the other hand, will consult with each other before issuing, and to the
extent reasonably practicable, give each other the opportunity to review and
comment upon, any press release or other public statements with respect to the
transactions contemplated by this Agreement, including the Offer and the Merger,
and shall not issue any such press release or make any such public statement
prior to such consultation, except as 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 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.
6.10 Tax Matters.
(a) At or prior to the closing of the Offer and the filing of the
Registration Statement, the Company and Parent shall execute and deliver to HEWM
and to Xxxxxx Godward LLP tax representation letters in customary form for
transactions similar to the Transaction (the "TAX REPRESENTATION LETTERS").
Parent, Merger Sub and the Company shall each confirm to HEWM and to Xxxxxx
Godward LLP the accuracy and completeness, as of such dates as shall reasonably
be requested by HEWM and Xxxxxx Godward LLP, of the Tax Representation Letters.
Parent and the Company shall use all reasonable efforts prior to the Effective
Time to cause the Transaction to qualify as a tax-free reorganization under
Section 368(a) of the Code. Following delivery or confirmation of the Tax
Representation Letters pursuant to the first sentence of this Section 6.10(a),
each of Parent and the Company shall use its reasonable efforts to cause HEWM
and Xxxxxx Godward LLP, respectively, to deliver to it a tax opinion satisfying
the requirements of Item 601 of Regulation S-K promulgated under the Securities
Act. In rendering such opinions, each of such counsel shall be entitled to rely
on the Tax Representation Letters and to make customary assumptions, including
the assumption that the Merger will be effected pursuant to this Agreement and
relevant state law.
30
(b) The Company will establish, in the ordinary course of business and
consistent with its past practices, reserves adequate for the payment of all
Taxes for the period from September 30, 2001 through the Offer Acceptance Time.
6.11 Resignation of Officers and Directors. The Company shall use all
reasonable efforts to obtain and deliver to Parent on or prior to the Closing
the resignation of each officer and director of the Company.
6.12 Listing. Parent shall use its best efforts to cause the shares of
Parent Common Stock being issued, and those required to be reserved for
issuance, in connection with the Offer and the Merger or upon exercise of
assumed Company Warrants to be approved for listing (subject to notice of
issuance) on the Nasdaq National Market prior to the Closing Date.
6.13 Takeover Laws; Advice of Changes.
(a) If any Takeover Law may become, or may purport to be, applicable to the
transactions contemplated in this Agreement, each of Parent and the Company and
the members of their respective Boards of Directors will grant such approvals
and take such actions as are necessary so that the transactions contemplated by
this Agreement may be consummated as promptly as practicable, and in any event
prior to the Termination Date, on the terms and conditions contemplated hereby
and thereby and otherwise act to eliminate the effect of any Takeover Law on any
of the transactions contemplated by this Agreement.
(b) Each of the Company and Parent will give prompt notice to the other
(and will subsequently keep the other informed on a current basis of any
developments related to such notice) upon its becoming aware of the occurrence
or existence of any fact, event or circumstance that (i) is reasonably likely to
result in any Material Adverse Effect with respect to it, (ii) would cause or
constitute a breach of any representations, warranties or covenants contained
herein or (iii) is reasonably likely to result in any of the conditions set
forth in Section 7 or in Annex I not being able to be satisfied prior to the
Termination Date.
6.14 Affiliates. Within ten days after the date of this Agreement, the
Company shall deliver to Parent a letter identifying all Persons who are, to the
Company's knowledge, affiliates of the Company for purposes of Rule 145 under
the Securities Act. Parent shall place the appropriate Rule 145 legend on the
stock certificates representing Parent Common Stock issued in the Transaction to
such affiliates. Parent shall use its reasonable efforts to remove such legends
promptly when such legends are no longer required by applicable Legal
Requirements.
6.15 Rights Agreement. Except as expressly required by this Agreement or
as determined by the Board of Directors of the Company in good faith after
consultation with legal counsel to be required in order to comply with its
fiduciary duties to the Company's stockholders under applicable law, the Company
shall not, without the prior written consent of Parent, amend the Rights
Agreement or take any other action with respect to, or make any determination
under, the Rights Agreement, including a redemption of the Rights or any action
to facilitate a Company Acquisition Proposal.
6.16 No Distributions or Dividends. Until the earlier of (i) the
Termination Date or (ii) one trading day after the Effective Time, Parent shall
not set a record date for any dividend or distribution of any assets to any of
its stockholders.
6.17 Market Stand-Off. The Company and Parent shall cause those Persons
set forth on Exhibit D to each enter into an agreement in the form attached as
Exhibit E that they will not sell or otherwise transfer or dispose of Parent
Common Stock for ninety days following the Offer Acceptance Time. In order to
enforce such agreements, Parent shall have the right to place restrictive
legends on the certificates representing the shares of such Persons and to
impose stop transfer instructions with respect to such shares until the end of
such period. Parent shall not waive this restriction without the consent of the
Company, such consent not to be unreasonably withheld.
31
7. CONDITIONS TO THE MERGER.
7.1 Each Party's Obligations. The respective obligations of the Company,
Parent and Merger Sub to effect the Merger are subject to the satisfaction or,
to the extent permitted by Legal Requirements, the waiver by each party on or
before the Effective Time, of each of the following conditions:
(a) If required by the DGCL, this Agreement shall have been adopted
and approved by the stockholders of the Company;
(b) Merger Sub shall have accepted for exchange and exchanged all of
the shares of Company Common Stock tendered pursuant to the Offer;
(c) No provision of any applicable Legal Requirements and no Order
shall prohibit the consummation of the Merger or the other transactions
contemplated by this Agreement; and
(d) The Registration Statement and Post-Effective Amendment shall have
become effective under the Securities Act and shall not be the subject of
any stop order or proceedings seeking a stop order, and any material "blue
sky" and other state securities laws applicable to the registration and
qualification of the Parent Common Stock shall have been complied with.
8. TERMINATION.
8.1 Termination. This Agreement may be terminated prior to the Effective
Time whether before or after adoption of this Agreement by the Company's
stockholders:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company if (i) the Offer shall not have
been consummated by March 1, 2002 (the "TERMINATION DATE") (unless the
failure to consummate the Offer is attributable to a failure on the part of
the party seeking to terminate this Agreement to perform any material
obligation required to be performed by such party at or prior to the
Termination Date); or (ii) the Offer shall have expired or been terminated
in accordance with the terms of this Agreement without Parent or Merger Sub
having accepted for exchange any Shares pursuant to the Offer (unless the
expiration or termination of the Offer is attributable to a failure on the
part of the party seeking to terminate this Agreement to perform any
material obligation required to be performed by such party at or prior to
the Effective Time);
(c) by either Parent or the Company if a court of competent
jurisdiction or other Governmental Body shall have issued a final and
nonappealable Order, or shall have taken any other action, having the
effect of permanently restraining, enjoining or otherwise prohibiting the
Offer or the Merger;
(d) by Parent, at any time prior to the Offer Acceptance Time, if a
Company Triggering Event shall have occurred;
(e) by Parent at any time prior to the Offer Acceptance Time, if (i)
any of the Company's representations and warranties contained in this
Agreement shall be inaccurate as of the date of this Agreement, or shall
have become inaccurate as of a date subsequent to the date of this
Agreement (as if made on such subsequent date), such that the condition set
forth in paragraph (d) of Annex I would not be satisfied, or (ii) any of
the Company's covenants contained in this Agreement shall have been
breached such that the condition set forth in paragraph (c) of Annex I
would not be satisfied; provided, however, that, in the case of (i) or (ii)
above, if an inaccuracy in the Company's representations and warranties or
a breach of a covenant by the Company is reasonably capable of being cured
by the Company prior to the Termination Date and the Company is continuing
to exercise its commercially reasonable efforts to cure such inaccuracy or
breach, then Parent may not terminate this Agreement under this Section
8.1(e) on account of such inaccuracy or breach until the 30th calendar day
from the date on which such inaccuracy or breach became known to Parent or
the Company;
(f) by the Company, prior to the Offer Acceptance Time, if (i) (A) any
of Parent's representations and warranties not qualified by any
"materiality" or "Material Adverse Effect" qualifiers contained in this
Agreement shall be inaccurate in any material respect, or (B) any of
Parent's representations and
32
warranties qualified by any "materiality" or "Material Adverse Effect"
qualifiers contained in this Agreement shall be inaccurate in any respect,
in the case of each of (A) and (B) as of the date of this Agreement or as
of the expiration of the Offer (as may be extended pursuant to Section
1.1(a)), or (ii) any of Parent's covenants contained in this Agreement
shall not have been performed in all material respects; provided, however,
that, in the case of (i) or (ii) above, if an inaccuracy in Parent's
representations and warranties or a breach of a covenant by Parent is
reasonably capable of being cured by Parent prior to the Termination Date
and Parent is continuing to exercise its commercially reasonable efforts to
cure such inaccuracy or breach, then the Company may not terminate this
Agreement under this Section 8.1(f) on account of such inaccuracy or breach
until the 30th calendar day from the date on which such inaccuracy or
breach became known to Parent or the Company;
(g) at any time prior to the Offer Acceptance Time, by the Company,
prior to acceptance for payment of Shares in the Offer, to enter into a
letter or intent or similar document or any agreement, contract, or
commitment with respect to an Acquisition Proposal, provided that, (i) the
Company is not in breach of its obligations under this Section 8.1(g) and
under Section 5.4 hereof and continues to comply with all such obligations
in all respects, (ii) the Board of Directors of the Company has authorized,
subject to complying with the terms of this Agreement, the Company to enter
into a definitive written agreement for a transaction that constitutes a
Company Superior Offer, (iii) the Company notifies Parent in writing that
the Company has received a Company Superior Offer and intends to enter into
a definitive agreement with respect to such Company Superior Offer,
attaching the most current version of such agreement to such notice, (iv)
Parent does not make, within five (5) business days after receipt of the
Company's written notice of its intention to enter into a definitive
agreement for a Company Superior Offer, any offer the that Board of
Directors of Company in good faith determines, after consultation with a
financial advisor of nationally recognized standing and its outside legal
counsel, is at least as favorable to Company's stockholders as such Company
Superior Offer, (v) during such period the Company has fully cooperated
with Parent, including, without limitation, informing Parent of the terms
and conditions of such Company Superior Offer, and the identity of the
person making such Company Superior Offer, with the intent of enabling both
parties to agree to a modification of the terms and conditions of this
Agreement so that the transactions contemplated hereby may be effected,
(vi) immediately following such termination the Company enters into a
definitive agreement to effect the Company Superior Offer.
8.2 Effect of Termination. Any termination of this Agreement under Section
8.1 will be effective immediately upon (or in the case of termination pursuant
to Section 8.1(e) or 8.1(f), on the date specified therein) the delivery of
written notice thereof by the terminating party to the other parties hereto. In
the event of the termination of this Agreement as provided in Section 8.1, this
Agreement shall be of no further force or effect; provided, however, that (i)
this Section 8.2, Section 8.3 and Section 9 shall survive the termination of
this Agreement and shall remain in full force and effect, and (ii) nothing
herein shall relieve any party from liability for any intentional or willful
breach of this Agreement.
8.3 Expenses. Except as set forth in this Section 8.3, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses, whether or not the Merger is consummated; provided, however, that in
the event of a termination of this Agreement for any reason other than pursuant
to Section 8.1(f), within two business days after such termination, the Company
shall make a nonrefundable cash payment to Parent in the amount of $750,000 as a
liquidated amount for reimbursement of Parent's fees and expenses (including all
attorneys' fees, accountants' fees, financial advisory fees and filing fees)
that have been paid or that may become payable by parent in connection with the
preparation and negotiation of this Agreement and otherwise in connection the
Offer and the Merger.
9. MISCELLANEOUS PROVISIONS.
9.1 Amendment. Subject to Section 1.3(a), this Agreement may be amended
with the approval of the respective Boards of Directors of the Company and
Parent at any time (whether before or after adoption of this Agreement by the
Company's stockholders); provided, however, that after any such adoption of this
33
Agreement by the Company's stockholders, no amendment shall be made which by law
or NASD regulation requires further approval of the stockholders of the Company
without the further approval of such stockholders. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
9.2 Waiver.
(a) No failure on the part of any party to exercise any power, right,
privilege or remedy under this Agreement, and no delay on the part of any party
in exercising any power, right, privilege or remedy under this Agreement, shall
operate as a waiver of such power, right, privilege or remedy; and no single or
partial exercise of any such power, right, privilege or remedy shall preclude
any other or further exercise thereof or of any other power, right, privilege or
remedy.
(b) Subject to Section 1.3(a), at any time prior to the Effective Time, any
party may to the extent legally allowed (a) extend the time for the performance
of any of the obligations or other acts of the other parties, (b) waive any
inaccuracies in the representations and warranties made to such party pursuant
to this Agreement or in any document delivered pursuant hereto or (c) waive
compliance with any of the agreements or conditions for the benefit of such
party contained herein; provided that no party shall be deemed to have waived
any claim arising out of this Agreement, or any power, right, privilege or
remedy under this Agreement, unless the waiver of such claim, power, right,
privilege or remedy is expressly set forth in a written instrument duly executed
and delivered on behalf of such party; and any such waiver shall not be
applicable or have any effect except in the specific instance in which it is
given.
9.3 No Survival of Representations and Warranties. None of the
representations and warranties contained in this Agreement or in any certificate
or instrument delivered pursuant to this Agreement (other than the Tax
Representation Letters) shall survive the Merger. This Section 9.3 shall not
limit any covenant or agreement of the parties which by its terms contemplates
performance after the Effective Time.
9.4 Entire Agreement; Counterparts. This Agreement and the other
agreements referred to herein constitute the entire agreement and supersede all
other prior agreements and understandings, both written and oral, among or
between any of the parties with respect to the subject matter hereof and
thereof; provided, however, that those certain letter agreements dated September
17, 2001 between the Company and Parent (relating to the protection of
confidential information) shall not be superceded and shall remain in full force
and effect. This Agreement may be executed in several counterparts, each of
which shall be deemed an original and all of which shall constitute one and the
same instrument.
9.5 Applicable Law; Enforcement. 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. The parties agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance
with its 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 court of the United States located in the State of
Delaware or in any Delaware state court, 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
court of the United States located in the State of Delaware or of any Delaware
state court 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 court of the United States located in the State of
Delaware or a Delaware state court.
9.6 Disclosure Schedule. The Company Disclosure Schedule shall be arranged
in separate parts corresponding to the numbered and lettered sections contained
in Section 3, and the information disclosed in any numbered or lettered part
shall be deemed to relate to and to qualify only the particular representation
or warranty set forth in the corresponding numbered or lettered section in
Section 3, and shall not be deemed to relate to or to qualify any other
representation or warranty. The Parent Disclosure Schedule shall be arranged
34
in separate parts corresponding to the numbered and lettered sections contained
in Section 4, and the information disclosed in any numbered or lettered part
shall be deemed to relate to and to qualify only the particular representation
or warranty set forth in the corresponding numbered or lettered section in
Section 4, and shall not be deemed to relate to or to qualify any other
representation or warranty.
9.7 Attorneys' Fees. In any action at law or suit in equity to enforce
this Agreement or the rights of any of the parties hereunder, the prevailing
party in such action or suit shall be entitled to receive a reasonable sum for
its attorneys' fees and all other reasonable costs and expenses incurred in such
action or suit.
9.8 Assignability; Third-Party Beneficiaries. Neither this Agreement nor
any of the rights, interests or obligations hereunder 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, except that Merger Sub 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 Merger 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. Except as set forth in
Sections 2.5 through 2.7, Sections 6.4 through 6.7 and the third sentence of
Section 6.10(a) hereof, nothing in this Agreement, express or implied, is
intended to or shall confer upon any Person (other than the parties hereto) any
right, benefit or remedy of any nature whatsoever.
9.9 Notices. Any notice or other communication required or permitted to be
delivered to any party under this Agreement shall be in writing and shall be
deemed properly delivered, given and received (a) upon receipt when delivered by
hand, or (b) two business days after sent by registered mail or by courier or
express delivery service or by facsimile (receipt confirmed), provided that in
each case the notice or other communication is sent to the address or facsimile
telephone number set forth beneath the name of such party below (or to such
other address or facsimile telephone number as such party shall have specified
in a written notice given to the other parties hereto):
if to Parent or Merger Sub:
Exelixis, Inc.
000 Xxxxxx Xxx
X.X. Xxx 000
Xxxxx Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attn: General Counsel
with a copy to (which shall not constitute notice):
Xxxxxx Xxxxxx White & XxXxxxxxx LLP
000 Xxxxxxxxxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxx X. Xxxxxx
if to the Company:
Genomica Corporation
0000 00xx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attn: Chief Executive Officer
35
with a copy to (which shall not constitute notice):
Xxxxxx Godward LLP
000 Xxxxxxxxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attn: Xxxxx C.T. Linfield
9.10 Severability. In the event that any provision of this Agreement, or
the application of any such provision to any Person or set of circumstances,
shall be determined to be invalid, unlawful, void or unenforceable to any
extent, the remainder of this Agreement, and the application of such provision
to Persons or circumstances other than those as to which it is determined to be
invalid, unlawful, void or unenforceable, shall not be impaired or otherwise
affected and shall continue to be valid and enforceable to the fullest extent
permitted by law. Upon such determination that any term other provision is
invalid, illegal or incapable of being enforced, the parties hereto 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.
9.11 Construction.
(a) For purposes of this Agreement, whenever the context requires: the
singular number shall include the plural, and vice versa; the masculine gender
shall include the feminine and neuter genders; the feminine gender shall include
the masculine and neuter genders; and the neuter gender shall include masculine
and feminine genders.
(b) The parties hereto agree that any rule of construction to the effect
that ambiguities are to be resolved against the drafting party shall not be
applied in the construction or interpretation of this Agreement.
(c) As used in this Agreement, the words "include" and "including", and
variations thereof, shall not be deemed to be terms of limitation, but rather
shall be deemed to be followed by the words "without limitation".
(d) Except as otherwise indicated, all references in this Agreement to
"Sections", "Exhibits" and "Schedules" are intended to refer to Sections of this
Agreement and Exhibits or Schedules to this Agreement.
(e) The bold-faced headings contained in this Agreement are for convenience
of reference only, shall not be deemed to be a part of this Agreement and shall
not be referred to in connection with the construction or interpretation of this
Agreement.
36
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written.
EXELIXIS, INC.
By: /s/ XXXXXX XXXXXXX
------------------------------------
Name: Xxxxxx Xxxxxxx
Title: President and Chief Executive
Officer
BLUEGREEN ACQUISITION SUB, INC.
By: /s/ XXXX X. XXXX
------------------------------------
Name: Xxxx X. Xxxx
Title: Chief Financial Officer
GENOMICA CORPORATION
By: /s/ XXXXXX X. XXXXX
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
37
EXHIBITS
Exhibit A Certain Definitions
Exhibit B Certificate of Incorporation of Surviving Corporation
(intentionally omitted)
Exhibit C Form of Stockholder Tender Agreement (included as Exhibit 2 to the
Schedule)
Exhibit D Persons to Whom Market Stand-Off Applies (intentionally
omitted)
Exhibit E Form of Lock-Up Agreement (intentionally omitted)
Annex I Conditions to the Offer
38
EXHIBIT A TO
MERGER AGREEMENT
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
ACQUISITION PROPOSAL. "Acquisition Proposal" shall mean any offer or
proposal made by a third party (other than Parent, Merger Sub or any affiliate
of either such party) contemplating or otherwise relating to any Acquisition
Transaction.
ACQUISITION TRANSACTION. "Acquisition Transaction" shall mean any
transaction or series of transactions involving:
(a) any merger, consolidation, amalgamation, share exchange, business
combination, issuance of securities, acquisition of securities, tender
offer, exchange offer or other similar transaction (i) in which a Person or
"group" (as defined in the Exchange Act and the rules promulgated
thereunder) of Persons directly or indirectly acquires beneficial or record
ownership of securities representing more than 20% of the outstanding
securities of any class of voting securities of the Company, or (ii) in
which the Company issues securities representing more than 20% of the
outstanding securities of any class of voting securities of the Company;
(b) any sale, lease, exchange, transfer, license, acquisition or
disposition of any business or businesses or assets that constitute or
account for 20% or more of the consolidated assets of the Company; or
(c) any liquidation or dissolution of the Company.
ADJUSTED AVERAGE PARENT PRE-SIGNING TRADING PRICE. "Adjusted Average
Parent Pre-Signing Trading Price" shall mean $13.30285.
AGREEMENT. "Agreement" shall mean the Agreement and Plan of Merger and
Reorganization to which this Exhibit A is attached, as it may be amended from
time to time.
AVERAGE PARENT POST-SIGNING TRADING PRICE. "Average Parent Post-Signing
Trading Price" shall mean the average closing sales price on the Nasdaq National
Market (as reported in The Wall Street Journal or, if not reported therein, any
other authoritative source) for the eighteen trading-day period ending two
trading days before the expiration of the initial offering period.
CERTIFICATE OF MERGER. "Certificate of Merger" shall have the meaning set
forth in Section 2.3 of the Agreement.
CLOSING. "Closing" shall have the meaning set forth in Section 2.3 of the
Agreement.
CLOSING DATE. "Closing Date" shall have the meaning set forth in Section
2.3 of the Agreement.
COBRA. "COBRA" shall mean Section 4980B of the Code.
CODE. The Internal Revenue Code of 1986, as amended.
COMPANY. "Company" shall mean Genomica Corporation, a Delaware
corporation.
COMPANY COMMON STOCK. "Company Common Stock" shall mean the Common Stock,
$0.001 par value per share, of the Company.
COMPANY CONTRACT. "Company Contract" shall mean any Contract: (a) to which
the Company is a party; (b) by which the Company or any asset of the Company is
or may become bound or under which the Company has, or may become subject to,
any obligation; or (c) under which the Company has or may acquire any right or
interest.
COMPANY DISCLOSURE SCHEDULE. "Company Disclosure Schedule" shall mean the
disclosure schedule that has been prepared by the Company in accordance with the
requirements of Section 9.6 of the Agreement
39
and that has been delivered by the Company to Parent on the date of this
Agreement and signed by the Chief Executive Officer of the Company.
COMPANY OPTIONS. "Company Options" shall have the meaning set forth in
Section 3.3 of the Agreement.
COMPANY PARTICIPANT. "Company Participant" shall have the meaning set
forth in Section 6.6 of the Agreement.
COMPANY PLANS. "Company Plans" shall have the meaning set forth in Section
6.6 of the Agreement.
COMPANY PREFERRED STOCK. "Company Preferred Stock" shall mean the
Preferred Stock, $0.001 par value per share, of the Company.
COMPANY PROPRIETARY ASSET. "Company Proprietary Asset" shall mean any
Proprietary Asset owned by or licensed to the Company or otherwise used by the
Company.
COMPANY RETURNS. "Company Returns" shall have the meaning set forth in
Section 3.13 of the Agreement.
COMPANY RIGHTS. "Company Rights" shall have the meaning set forth in
Section 3.3 of the Agreement.
COMPANY SEC DOCUMENTS. "Company SEC Documents" shall have the meaning set
forth in Section 3.4 of the Agreement.
COMPANY SOURCE CODE. "Company Source Code" shall mean any source code, or
any portion, aspect or segment of any source code, relating to any Proprietary
Asset owned by or licensed to the Company or otherwise used by the Company.
COMPANY STOCK CERTIFICATE. "Company Stock Certificate" shall have the
meaning set forth in Section 2.6 of the Agreement.
COMPANY STOCKHOLDERS' MEETING. "Company Stockholders' Meeting" shall have
the meaning set forth in Section 6.2 of the Agreement.
COMPANY STOCK VALUE. "Company Stock Value" shall mean the result of
dividing $110,000,000 by the sum of (a) the number of shares of Company Common
Stock outstanding as of the Offer Acceptance Time, (b) the number of shares of
Company Preferred Stock outstanding as of the Offer Acceptance Time, and (c) the
number of shares of Company Common Stock which would be issuable with respect to
all Company Options and Company Warrants outstanding as of the Offer Acceptance
Time (which includes all Company Options accelerated at the Offer Acceptance
Time as a result of consummation of the Offer), with an exercise price of $5.00
per share or less, and with respect to any other rights to acquire shares of
Company Common Stock outstanding as of the Offer Acceptance Time.
COMPANY SUPERIOR OFFER. "Company Superior Offer" shall mean a bona fide
written offer, not solicited in violation of Section 5.4 of the Agreement, made
by a third party for a merger, consolidation, business combination, sale of
substantial assets, sale of shares of capital stock (including without
limitation by way of a tender offer) or similar transaction with respect to the
Company on terms that the Board of Directors of the Company determines, in good
faith, after consultation with a nationally recognized independent financial
advisor, if accepted, is reasonably likely to be consummated, taking into
account all legal, financial and regulatory aspects of the offer and the Person
making the offer, and would, if consummated, be more favorable to the Company's
stockholders than the Transaction; provided, however, that any such offer shall
not be deemed to be a "Company Superior Offer" if any financing required to
consummate the transaction contemplated by such offer is not committed.
COMPANY TRIGGERING EVENT. A "Company Triggering Event" shall be deemed to
have occurred if at any time after the date hereof: (i) the Board of Directors
of the Company shall have failed to recommend that the Company stockholders
accept the Offer, vote to adopt and approve this Agreement, or shall have
withdrawn or modified in a manner adverse to Parent the Recommendations; (ii)
the Company shall have failed to include the Recommendations in the Schedule
14D-9; (iii) the Board of Directors of the Company fails to reaffirm in
40
writing the Recommendations, or fails to reaffirm in writing its determination
that the Offer and the Merger are in the best interests of the Company's
stockholders, within 5 days after Parent requests in writing that such
recommendation or determination be reaffirmed; (iv) the Board of Directors of
the Company shall have approved or recommended to the Company's stockholders any
Acquisition Proposal; (v) the Company shall have entered into any letter of
intent or similar document or any Contract (other than a confidentiality
agreement permitted under Section 5.4(a) of the Agreement) accepting any
Acquisition Proposal; (vi) a tender or exchange offer (other than the Offer)
relating to securities of the Company shall have been commenced and the Company
shall have recommended such offer or shall not have sent to its securityholders,
within 5 days after the commencement of such tender or exchange offer, a
statement disclosing that the Company recommends rejection of such tender or
exchange offer it being understood that taking no position or indicating its
inability to take a position does not constitute recommending a rejection of
such tender or exchange offer or (vii) the Company breaches in any material
respect its obligations under Section 5.4 of this Agreement, except for any
inadvertent breach of any notice provision contained in Section 5.4 which breach
has been cured within 48 hours of its occurrence.
COMPANY UNAUDITED INTERIM BALANCE SHEET. "Company Unaudited Interim
Balance Sheet" shall mean the unaudited consolidated balance sheet of the
Company and its consolidated Subsidiaries as of September 30, 2001 included in
the Company SEC Documents.
COMPANY WARRANTS. "Company Warrants" shall have the meaning set forth in
Section 3.3 of the Agreement.
CONSENT. "Consent" shall mean any approval, consent, ratification,
permission, waiver or authorization (including any Governmental Authorization).
CONTINUING DIRECTOR. "Continuing Director" shall have the meaning set
forth in Section 1.3 of the Agreement.
CONTRACT. "Contract" shall mean any written, oral or other agreement,
contract, subcontract, lease, understanding, instrument, note, option, warranty,
purchase order, license, sublicense, insurance policy, benefit plan or legally
binding commitment or undertaking of any nature.
DGCL. "DGCL" shall mean the Delaware General Corporation Law.
DISSENTING SHARES. "Dissenting Shares" shall have the meaning set forth in
Section 2.8 of the Agreement.
EFFECTIVE TIME. "Effective Time" shall have the meaning set forth in
Section 2.3 of the Agreement.
EMPLOYEE PLANS. "Employee Plans" shall have the meaning set forth in
Section 3.14 of the Agreement.
ENCUMBRANCE. "Encumbrance" shall mean any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, claim, infringement,
interference, option, right of first refusal, preemptive right, community
property interest or restriction of any nature (including any restriction on the
voting of any security, any restriction on the transfer of any security or other
asset, any restriction on the receipt of any income derived from any asset, any
restriction on the use of any asset and any restriction on the possession,
exercise or transfer of any other attribute of ownership of any asset).
ENTITY. "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any company
limited by shares, limited liability company or joint stock company), firm,
society or other enterprise, association, organization or entity.
ENVIRONMENTAL LAW. "Environmental Law" shall mean any federal, state,
local or foreign Legal Requirement relating to pollution or protection of human
health from Materials of Environmental Concern or protection of the environment
(including ambient air, surface water, ground water, land surface or subsurface
strata), including any law or regulation relating to emissions, discharges,
releases or threatened releases of Materials of Environmental Concern, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Materials of Environmental Concern.
41
ERISA. "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
EXCHANGE ACT. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
EXCHANGE AGENT. "Exchange Agent" shall have the meaning set forth in
Section 2.7 of the Agreement.
EXCHANGE FUND. "Exchange Fund" shall have the meaning set forth in Section
2.7 of the Agreement.
EXCHANGE RATIO. "Exchange Ratio" shall have the meaning set forth in
Section 1.1 of the Agreement.
EXCLUDED SHARES. "Excluded Shares" shall mean any shares of Company Common
Stock held as of the Effective Time (A) by Parent or Merger Sub or any direct or
indirect Subsidiary of Parent or Merger Sub, (B) by the Company, or (C) by the
Company as treasury shares.
EXISTING POLICY. "Existing Policy" shall have the meaning set forth in
Section 6.7 of the Agreement.
GOVERNMENTAL AUTHORIZATION. "Governmental Authorization" shall mean any:
(a) permit, license, certificate, franchise, permission, variance, clearance,
registration, qualification or authorization issued, granted, given or otherwise
made available by or under the authority of any Governmental Body or pursuant to
any Legal Requirement; or (b) right under any Contract with any Governmental
Body.
GOVERNMENTAL BODY. "Governmental Body" shall mean any: (a) nation, state,
commonwealth, province, territory, county, municipality, district or other
jurisdiction of any nature; (b) federal, state, local, municipal, foreign or
other government; or (c) governmental or quasi-governmental authority of any
nature (including any governmental division, department, agency, commission,
instrumentality, official, ministry, fund, foundation, center, organization,
unit, body or Entity and any court or other tribunal).
HEWM. "HEWM" shall mean Xxxxxx Xxxxxx White & XxXxxxxxx LLP.
HSR ACT. "HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
INDEMNIFIED PERSONS. "Indemnified Persons" shall have the meaning set
forth in Section 6.7 of the Agreement.
LEGAL PROCEEDING. "Legal Proceeding" shall mean any action, suit,
litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, inquiry, audit,
examination or investigation commenced, brought, conducted or heard by or
before, or otherwise involving, any court or other Governmental Body or any
arbitrator or arbitration panel.
LEGAL REQUIREMENT. "Legal Requirement" shall mean any federal, state,
local, municipal, foreign or other law, statute, constitution, principle of
common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling
or requirement issued, enacted, adopted, promulgated, implemented or otherwise
put into effect by or under the authority of any Governmental Body (or under the
authority of the NASD or the Nasdaq National Market).
MATERIAL ADVERSE EFFECT. An event, violation, inaccuracy, circumstance or
other matter will be deemed to have a "Material Adverse Effect" on the Company
if such event, violation, inaccuracy, circumstance or other matter (considered
together with all other matters that constitute exceptions to the
representations and warranties of the Company set forth in the Agreement,
disregarding any "Material Adverse Effect" or other materiality qualifications,
or any similar qualifications, in such representations and warranties) had or
could reasonably be expected to have a material adverse effect on (i) the
capitalization, assets and liabilities taken as a whole, or cash balance of the
Company set forth in item (8)(f) of Annex I, (ii) the ability of the Company to
consummate the Offer or the Merger or any of the other transactions contemplated
by the Agreement or to perform any of its obligations under the Agreement before
the Termination Date, or (iii) Parent's ability to vote, receive dividends with
respect to or otherwise exercise ownership rights with respect to the stock of
the Surviving Corporation. An event, violation, inaccuracy, circumstance or
other matter will be deemed to have a "Material Adverse Effect" on Parent if
such event, violation, inaccuracy, circumstance or other matter (considered
together with all other matters that would constitute exceptions to the
representations and warranties of Parent set forth in the Agreement,
disregarding any "Material Adverse Effect" or other
42
materiality qualifications, or any similar qualifications, in such
representations and warranties) had or could reasonably be expected to have a
material adverse effect on (i) the business, condition, capitalization, assets,
liabilities, operations or financial performance of Parent and its Subsidiaries
taken as a whole, or (ii) the ability of Parent to consummate the Offer or the
Merger or any of the other transactions contemplated by the Agreement or to
perform any of its obligations under the Agreement before the Termination Date.
Notwithstanding the foregoing, with respect to items (i) above, 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 with respect to either the
Company or Parent, as the case may be: (a) any change in the market price or
trading volume of such company's stock, (b) any failure by such company to meet
internal projections or forecasts or published revenue or earnings predictions,
(c) any adverse change or effect (including any litigation, loss of employees,
cancellation of or delay in customer orders, reductions in revenues or income or
disruption of business relationships) arising from or attributable or relating
to (i) the announcement or pendency of the Offer or the Merger, (ii) conditions
affecting the industry or industry sector in which such company or any of its
subsidiaries participates, the U.S. economy as a whole or any foreign economy in
any location where such company or any of its subsidiaries has material
operations or sales, (iii) legal, accounting, investment banking or other fees
or expenses incurred in connection with the transactions contemplated by this
Agreement, (iv) the payment of any amounts due to, or the provision of any other
benefits to, any officers or employees under employment contracts,
non-competition agreements, employee benefit plans, severance arrangements or
other arrangements in existence as of the date of this Agreement, (v) compliance
with the terms of, or the taking of any action required by, this Agreement, (vi)
the taking of any action approved or consented to by Parent (vii) any change in
accounting requirements or principles or any change in applicable laws, rules or
regulations or the interpretation thereof, or (viii) any action required to be
taken under appli cable laws, rules, regulations or agreements.
MATERIALS OF ENVIRONMENTAL CONCERN. "Materials of Environmental Concern"
shall mean chemicals, pollutants, contaminants, wastes, toxic substances,
petroleum and petroleum products and any other substance that is regulated by
any Governmental Body with respect to the environment.
MERGER. "Merger" shall mean the merger of Merger Sub into the Company that
the parties intend to effect following the Offer.
MERGER CONSIDERATION. "Merger Consideration" shall have the meaning set
forth in Section 2.5 of the Agreement.
MERGER SUB. "Merger Sub" shall mean Bluegreen Acquisition Sub, Inc., a
Delaware corporation and a wholly owned subsidiary of Parent.
MINIMUM CONDITION. "Minimum Condition" shall have the meaning set forth in
Section 1.1 of the Agreement.
NASD. "NASD" shall mean the National Association of Securities Dealers,
Inc.
NOTICE OF GUARANTEED DELIVERY. "Notice of Guaranteed Delivery" shall mean
the form used to accept the Offer if (a) Company Stock Certificates are not
immediately available, (b) the procedure for book-entry transfer cannot be
completed before the Offer Acceptance Time or (c) time will not permit all
required documents necessary to accept the Offer to reach the Exchange Agent
before the Offer Acceptance Time.
OFFER. "Offer" shall mean the exchange offer being made by Merger Sub to
exchange shares of Parent Common Stock for all of the Shares.
OFFER ACCEPTANCE TIME. "Offer Acceptance Time" shall have the meaning set
forth in Section 1.3 of the Agreement.
ORDER. "Order" shall mean any: (a) order, judgment, injunction, edict,
decree, ruling, pronouncement, determination, decision, opinion, verdict,
sentence, subpoena, writ or award issued, made, entered, rendered or otherwise
put into effect by or under the authority of any court, administrative agency or
other Governmental Body or any arbitrator or arbitration panel; or (b) Contract
with any Governmental Body entered into in connection with any Legal Proceeding.
43
PARENT. "Parent" shall mean Exelixis, Inc., a Delaware corporation.
PARENT COMMON STOCK. "Parent Common Stock" shall mean the Common Stock,
$0.001 par value per share, of Parent.
PARENT CONTRACT. "Parent Contract" shall mean any Contract: (a) to which
Parent or any Subsidiary of Parent is a party; (b) by which Parent or any
Subsidiary of Parent or any asset of Parent or any Subsidiary of Parent is or
may become bound or under which Parent or any Subsidiary of Parent has, or may
become subject to, any obligation; or (c) under which Parent or any Subsidiary
of Parent has or may acquire any right or interest.
PARENT DISCLOSURE SCHEDULE. "Parent Disclosure Schedule" shall mean the
disclosure schedule that has been prepared by Parent in accordance with the
requirements of Section 9.6 of the Agreement and that has been delivered by
Parent to the Company on the date of this Agreement and signed by the President
of Parent.
PARENT PREFERRED STOCK. "Parent Preferred Stock" shall mean the Preferred
Stock, $0.001 par value, of the Company.
PARENT PROPRIETARY ASSET. "Parent Proprietary Asset" shall mean any
Proprietary Asset owned by or licensed to Parent or otherwise used by Parent.
PARENT RETURNS. "Parent Returns" shall have the meaning set forth in
Section 4.12 of the Agreement.
PARENT SEC DOCUMENTS. "Parent SEC Documents shall have the meaning set
forth in Section 4.4 of the Agreement.
PARENT UNAUDITED INTERIM BALANCE SHEET. "Parent Unaudited Interim Balance
Sheet" shall mean the unaudited consolidated balance sheet of Parent and its
consolidated Subsidiaries as of September 30, 2001 included in the Parent SEC
Documents.
PENSION PLAN. "Pension Plan" shall have the meaning set forth in Section
3.14 of the Agreement.
PERSON. "Person" shall mean any individual, Entity or Governmental Body.
POST-EFFECTIVE AMENDMENT. "Post-Effective Amendment" shall have the
meaning set forth in Section 6.1 of the Agreement.
PRE-CLOSING PERIOD. "Pre-Closing Period" shall have the meaning set forth
in Section 5.1 of the Agreement.
PRELIMINARY PROSPECTUS. "Preliminary Prospectus" shall have the meaning
set forth in Section 1.1 of the Agreement.
PROPRIETARY ASSET. "Proprietary Asset" shall mean any: (a) patent, patent
application, trademark (whether registered or unregistered), trademark
application, trade name, fictitious business name, service xxxx (whether
registered or unregistered), service xxxx application, copyright (whether
registered or unregistered), copyright application, maskwork, maskwork
application, trade secret, know-how, customer list, franchise, system, computer
software, computer program, source code, models, algorithm, formula, compound,
invention, design, blueprint, engineering drawing, proprietary product,
technology, proprietary right or other intellectual property right or intangible
asset; or (b) right to use or exploit any of the foregoing.
PROXY STATEMENT. "Proxy Statement" shall have the meaning set forth in
Section 6.1 of the Agreement.
RECOMMENDATIONS. "Recommendations" shall have the meaning set forth in
Section 3.18 of the Agreement.
REGISTRATION STATEMENT. "Registration Statement" shall have the meaning
set forth in Section 1.1 of the Agreement.
REPRESENTATIVES. "Representatives" shall mean officers, directors,
employees, agents, attorneys, accountants, advisors and representatives.
44
REQUIRED COMPANY STOCKHOLDER VOTE. "Required Company Stockholder Vote"
shall have the meaning set forth in Section 3.19 of the Agreement.
RIGHTS AGREEMENT. "Rights Agreement" shall mean the Rights Agreement,
dated October 2, 2001, by and between the Company and Computershare Trust
Company, Inc., as Rights Agent.
SCHEDULE 14D-9. "Schedule 14D-9" shall have the meaning set forth in
Section 1.2 of the Agreement.
SEC. "SEC" shall mean the United States Securities and Exchange
Commission.
SECURITIES ACT. "Securities Act" shall mean the Securities Act of 1933, as
amended.
SHARES. "Shares" shall mean the outstanding shares of Company Common
Stock, including the associated Company Rights.
STOCKHOLDER TENDER AGREEMENTS. "Stockholder Tender Agreements" are
agreements in the form of Exhibit C to the Agreement pursuant to which the
Stockholders have agreed to tender for exchange all of their shares of Company
Common Stock in the Offer and to take certain other actions in connection with
the transactions contemplated by this Agreement.
STOCKHOLDERS. "Stockholders" shall mean those certain stockholders of the
Company that are entering into Stockholder Tender Agreements.
SUBSIDIARY. An entity shall be deemed to be a "Subsidiary" of another
Person if such Person directly or indirectly owns, beneficially or of record,
(a) an amount of voting securities of or other interests in such Entity that is
sufficient to enable such Person to elect at least a majority of the members of
such Entity's board of directors or other governing body, or (b) at least 50% of
the outstanding equity or financial interests of such Entity.
SURVIVING CORPORATION. "Surviving Corporation" shall have the meaning set
forth in Section 2.1 of the Agreement.
TAKEOVER LAWS. "Takeover Laws" means (1) any "moratorium", "control share
acquisition", "fair price", "supermajority", "affiliate transactions", or
"business combination statute or regulation" or other similar state antitakeover
laws and regulations and (2) Section 203 of the DGCL.
TAX. "Tax" shall mean (a) any tax (including any income tax, franchise
tax, capital gains tax, gross receipts tax, value-added tax, surtax, estimated
tax, unemployment tax, national health insurance tax, excise tax, ad valorem
tax, transfer tax, stamp tax, sales tax, use tax, property tax, business tax,
withholding tax or payroll tax), levy, assessment, tariff, duty (including any
customs duty), deficiency or fee, and any related charge or amount (including
any fine, penalty or interest), imposed, assessed or collected by or under the
authority of any Governmental Body, and (b) any liability for amounts described
in clause (a) as a result of operation of law, including by reason of being a
successor to or transferee of any Person or a member of an affiliated,
consolidated or unitary group for any period (including pursuant to sec.1.1502-6
of the U.S. Treasury Regulations).
TAX REPRESENTATION LETTERS. "Tax Representation Letters" shall have the
meaning set forth in Section 6.10 of the Agreement.
TAX RETURN. "Tax Return" shall mean any return (including any information
return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection
or payment of any Tax or in connection with the administration, implementation
or enforcement of or compliance with any Legal Requirement relating to any Tax.
TERMINATION DATE. "Termination Date" shall have the meaning set forth in
Section 8.1 of the Agreement.
TRANSACTION. "Transaction" shall mean the Offer and the Merger together.
WELFARE PLAN. "Welfare Plan" shall have the meaning set forth in Section
3.14 of the Agreement.
45
ANNEX I TO
MERGER AGREEMENT
CONDITIONS TO THE OFFER
As a condition to acceptance of the Shares tendered, the Company shall
provide to Parent and Merger Sub on the Offer Acceptance Time dated as of such
date (as it may be extended in accordance with Section 1.1(a) of the Agreement)
a certificate signed on behalf of the Company by its Chief Executive Officer and
its Chief Financial Officer certifying as to the absence of the occurrence of
the conditions set forth in items (8)(c), (8)(d) and (8)(f) of this Annex I, and
.
Notwithstanding any other provision of the Offer, subject to the terms of
the Agreement and Plan of Reorganization to which this Annex I is attached (the
"AGREEMENT"), Merger Sub shall not be required to accept for exchange or
exchange or deliver any shares of Parent Common Stock for (subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) under the
Exchange Act (relating to Merger Sub's obligation to pay for or return tendered
shares of Company Common Stock after the termination or withdrawal of the
Offer)) any Shares tendered, if by the expiration of the Offer (as it may be
extended in accordance with Section 1.1(a) of the Agreement), (1) the Minimum
Condition shall not have been satisfied, (2) the applicable waiting period under
the HSR Act shall not have expired or been terminated, (3) any applicable
waiting periods, consents or clearances under foreign antitrust laws shall not
have expired, been terminated or been obtained, (4) the Registration Statement
shall not have become effective under the Securities Act or shall be the subject
of any stop order or proceedings seeking a stop order, (5) the shares of Parent
Common Stock to be issued in the Offer and the Merger shall not have been
approved for listing on the Nasdaq National Market, subject to official notice
of issuance, (6) Parent shall not have received (or Parent shall have received
and HEWM shall have subsequently rescinded) an opinion of HEWM, in form and
substance reasonably satisfactory to Parent, on the basis of the Tax
Representation Letters and on assumptions that are customary for transactions
such as the Transaction (including the assumption that the Merger will close
promptly after the Offer Acceptance Time, pursuant to the Agreement, and
pursuant to relevant state law) and that are set forth in such opinion, to the
effect that the Transaction will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code, provided,
however, that if HEWM does not render such opinion or withdraws or modifies such
opinion, this condition shall nonetheless be deemed satisfied if Cooley Godward
LLP renders such opinion to Parent, (7) the Company shall not have received (or
the Company shall have received, and Cooley Godward LLP shall have subsequently
rescinded) an opinion of Xxxxxx Godward LLP in form and substance reasonably
satisfactory to Parent and to the Company, on the basis of the Tax
Representation Letters and on assumptions that are customary for transactions
such as the Transaction (including the assumption that the Merger will close
will close promptly after the Offer Acceptance Time, pursuant to the Agreement,
and pursuant to relevant state law) and that are set forth in such opinion, to
the effect that the Transaction will be treated for federal income tax purposes
as a reorganization within the meaning of Section 368(a) of the Code; provided,
however, that if Xxxxxx Godward LLP does not render such opinion or withdraws or
modifies such opinion, this condition shall nonetheless be deemed satisfied if
HEWM renders such opinion to the Company, or (8) at any time on or after the
date of the Agreement and prior to the acceptance for exchange of Shares
pursuant to the Offer, any of the following conditions exist and are continuing:
(a) there shall have been action taken or be pending any Legal
Proceeding in which a Governmental Body is: (i) challenging or seeking to
restrain or prohibit the consummation of the Offer or the Merger or any of
the other transactions contemplated by this Agreement; (ii) seeking to
prohibit or limit in any material respect Merger Sub's or Parent's ability
to vote, receive dividends with respect to or otherwise exercise ownership
rights with respect to the shares of Company Common Stock to be acquired in
the Offer or with respect to the stock of the Surviving Corporation; (iii)
which would materially and adversely affect the right of Parent, the
Surviving Corporation or any Subsidiary of Parent to directly or indirectly
own the assets or operate the business of the Company; (iv) seeking to
compel Parent or the Company, or any Subsidiary of Parent, to dispose of or
hold separate any assets totaling $5,000,000 in value or more, as a result
of the Merger or any of the other transactions contemplated by this
Agreement; (v) obligating the Company, Parent or Parents' Subsidiaries to
pay material damages or otherwise
46
become subject to material adverse consequences in connection with any of
the transactions contemplated by the Agreement, or (vi) otherwise have or
reasonably be expected to have, a Material Adverse Effect on the Company
or, as a result of the transactions contemplated by the Agreement, a
Material Adverse Effect on Parent;
(b) any temporary restraining order, preliminary or permanent
injunction or other Order preventing the consummation of the Offer or the
Merger shall have been issued by any court of competent jurisdiction and
remain in effect, or there shall be any Legal Requirement enacted or deemed
applicable to the Offer or the Merger that makes consummation of the Offer
or the Merger illegal;
(c) the Company shall have materially breached any of its covenants,
obligations or agreements under the Agreement;
(d) (i)(A) the representations and warranties of the Company contained
in the Agreement not qualified with any "materiality" or "Material Adverse
Effect" qualifiers shall not have been accurate in all material respects as
of the date of the Agreement or (B) the representations and warranties of
the Company contained in the Agreement qualified with any "materiality" or
"Material Adverse Effect" qualifiers shall not have been accurate in all
respects as of the date of the Agreement, or (ii)(A) the representations
and warranties of the Company contained in the Agreement not qualified with
any "materiality" or "Material Adverse Effect" qualifiers shall not be
accurate in all material respects as of the date of the expiration of the
Offer (as it may be extended in accordance with Section 1.1(a) of the
Agreement) with the same force and effect as if made on such date or (B)
the representations and warranties of the Company contained in the
Agreement qualified with any "materiality" or "Material Adverse Effect"
qualifiers shall not have been accurate in all respects as of the date of
the expiration of the Offer (as it may be extended in accordance with
Section 1.1(a) of the Agreement) with the same force and effect as if made
on such date; except with respect to clause (ii)(A) and (ii)(B), (x) in
each case, or in the aggregate, as does not constitute a Material Adverse
Effect on the Company, (y) for changes contemplated by this Agreement, and
(z) for those representations and warranties which address matters only as
of a particular date (which representations shall have been true and
correct (subject to the Material Adverse Effect and materiality
qualifications and limitations set forth in the preceding clauses (ii)(A),
(ii)(B) and (x)) as of such particular date)(it being understood that any
update of or modification to the Company Disclosure Schedule made or
purported to have been made after the date of this Agreement shall be
disregarded);
(e) there shall have been (i) a Material Adverse Effect on the
Company, or (ii) the occurrence of any event or the existence of any
circumstance, including any Legal Proceeding, that could reasonably be
expected to have a Material Adverse Effect on the Company;
(f) the Company shall have cash, cash equivalents, short-term and
long-term investments and all other current assets including, but not
limited to, interest receivable on investments, trade receivables, and
other receivables, totaling less than $108,750,000 net of all current
liabilities of the Company, including (i) any fees, commissions and other
amounts that may become payable to any investment banker or financial
advisor by the Company if the Offer and Merger are consummated, (ii) any
fees and other amounts payable to Xxxxxx Xxxxxxxx LLP and Xxxxxx Godward
LLP, and (iii) all actual and contingent liabilities for Taxes that are
unpaid; for the purposes of this paragraph, current liabilities excludes
future minimum payment obligations related to all facility leases, deferred
revenue and severance obligations for employees;
(g) there shall have occurred and be continuing any general suspension
of or limitation on prices for trading in securities on the Nasdaq National
Market;
(h) the Agreement shall have been terminated in accordance with its
terms.
The foregoing conditions are for the sole benefit of Parent and Merger Sub
and may, subject to the terms of the Agreement, be waived by Parent and Merger
Sub, in whole or in part at any time and from time to time, in the sole
discretion of Parent and Merger Sub. The failure by Parent and Merger Sub at any
time to exercise any of the foregoing rights shall not be deemed a waiver of any
such right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
47
