EXHIBIT 2.2
EXECUTION COPY
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of June 15, 1999 (the
"Agreement"), between Pharmacia & Upjohn, Inc., a Delaware corporation (the
"Grantee"), and SUGEN, Inc., a Delaware corporation (the "Grantor").
WHEREAS, the Grantee, University Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of the Grantee ("Merger Sub"), and the
Grantor are entering into an Agreement and Plan of Merger, dated as of the date
hereof (the "Merger Agreement"), which provides, among other things, for the
merger of Merger Sub with and into Grantor (the "Merger");
WHEREAS, the Grantee and Merger Sub have requested that the
Grantor grant to the Grantee an option to purchase up to 3,372,255 shares of
Common Stock, par value $0.01 per share, of the Grantor (the "Common Stock"), on
the terms and subject to the conditions hereof; and
WHEREAS, the Grantor is willing to grant the Grantee the
requested option.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements set forth herein, the parties hereto agree as
follows:
1. The Option; Exercise; Adjustments; Payment of Spread;
Repurchase Right. (a) Contemporaneously herewith the Grantee, Merger Sub and the
Grantor are entering into the Merger Agreement. Subject to the other terms and
conditions set forth herein, the Grantor hereby grants to the Grantee an
irrevocable option (the "Option") to purchase up to 3,372,255 shares of Common
Stock (the "Shares") at a cash purchase price equal to $31.00 per share (the
"Purchase Price"). The Option may be exercised by the Grantee, in whole or in
part, at any time, or from time to time, following (but not prior to) the
occurrence of the events set forth in any of clauses (i), (ii), (iii) or (iv) of
Section 2(d) hereof, and prior to the Termination Date (as defined herein).
(b) In the event the Grantee wishes to exercise the Option,
the Grantee shall send a written notice to the Grantor (the "Stock Exercise
Notice") specifying the total number of Shares it wishes to purchase and a date
(subject
to the expiration or termination of any applicable waiting period under the HSR
Act (as defined below)) not later than 10 business days and not earlier than
three business days following the date such notice is given for the closing of
such purchase. In the event of any change in the number of issued and
outstanding shares of capital stock of the Company (by reason of any stock
dividend, stock split, split-up, recapitalization, merger, issuance of capital
stock upon exercise of warrants or options or any other event), the number of
Shares subject to this Option and the purchase price per Share shall be
appropriately adjusted to restore the Grantee to its rights hereunder, including
its right to purchase Shares representing 19.9% of the capital stock of the
Grantor entitled to vote generally for the election of the directors of the
Grantor which is issued and outstanding immediately prior to the exercise of the
Option.
(c) If at any time the Option is then exercisable pursuant to
the terms of Section 1(a) hereof and at or prior to such time the termination
fee referred to in Section 8.5(b) of the Merger Agreement shall have become
payable, the Grantee may from time to time elect, in lieu of exercising the
Option to purchase Shares provided in Section 1(a) hereof, to send a written
notice to the Grantor (a "Cash Exercise Notice") specifying a date not later
than 20 business days and not earlier than 10 business days following the date
such notice is given on which date the Grantor shall pay to the Grantee an
amount in cash (the "Cancellation Amount") equal to the Spread (as hereinafter
defined) multiplied by all or such portion of the Shares subject to the Option
as Grantee shall specify. As used herein "Spread" shall mean the excess, if any,
over the Purchase Price of the higher of (x) if applicable, the highest price
per share of Common Stock (including any brokerage commissions, transfer taxes
and soliciting dealers' fees) paid or proposed to be paid by any person pursuant
to any Acquisition Proposal (as defined in the Merger Agreement) occurring after
the date of this Agreement and prior to the Termination Date (the "Alternative
Purchase Price") or (y) the average of the closing bid and asked prices of the
Common Stock on the Nasdaq National Market ("Nasdaq") or on such other national
securities on which the shares of the Grantor's common stock are then listed on
the last trading day immediately prior to the date of the Cash Exercise Notice
(the "Closing Price"). If the Alternative Purchase Price includes any property
other than cash, the Alternative Purchase Price shall be the sum of (i) the
fixed cash
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amount, if any, included in the Alternative Purchase Price plus (ii) the fair
market value of such other property. If such other property consists of
securities with an existing public trading market, the average of the closing
prices (or the average of the closing bid and asked prices if closing prices are
unavailable) for such securities in their principal public trading market on the
five trading days ending five days prior to the date of the Cash Exercise Notice
shall be deemed to equal the fair market value of such property. If such other
property consists of something other than cash or securities with an existing
public trading market and, as of the payment date for the Spread, agreement on
the value of such other property has not been reached, the Alternative Purchase
Price shall be deemed to equal the Closing Price. Upon exercise of its right to
receive cash pursuant to this Section 1(c), the obligations of the Grantor to
deliver Shares pursuant to Section 3 shall be terminated with respect to such
number of Shares for which the Grantee shall have elected to be paid the Spread.
(d) At the request of the Grantor at any time during the
180-day period commencing on each date on which the Option is exercised (the
"Call Period"), the Grantor may repurchase from the Grantee, and the Grantee
shall sell to the Grantor, any or all of the Shares acquired by the Grantee
pursuant hereto as a result of such exercise and with respect to which the
Grantee has beneficial ownership at the time of such repurchase at a price per
share equal to the Repurchase Price (defined below) per share in respect of the
Shares so acquired (such price per share multiplied by the number of Shares to
be repurchased pursuant to this Section 1(d) being herein called the "Repurchase
Consideration"). Each date on which the Grantor exercises its rights under this
Section 1(d) by delivering its request to the Grantee is referred to as a
"Grantor Request Date." "Repurchase Price" per share shall be the greater of (i)
the Purchase Price, and (ii) the average (rounded to the nearest cent, or if
there shall not be a nearest cent, to the next highest cent) of the volume
weighted averages (rounded to the nearest cent, or if there shall not be a
nearest cent, to the next highest cent) of the closing ask prices of one share
of Common Stock on Nasdaq as reported by Bloomberg Financial Markets (or such
other source as the parties shall agree in writing) for each of the Trading
Days. "Trading Days" means the Nasdaq trading days during the Call Period and
prior to the applicable Grantor Request Date. If the Grantor exercises its
rights under this Section 1(d), the
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Grantor shall, within five business days after the applicable Grantor Request
Date, pay the applicable Repurchase Consideration in immediately available
funds, and the Grantee shall surrender to the Grantor certificates evidencing
the Shares purchased hereunder, and the Grantee shall warrant to the Grantor
that, immediately prior to the repurchase thereof pursuant to this Section 1(d),
the Grantee had sole record and beneficial ownership of such Shares and that
such Shares were then held free and clear of all encumbrances.
2. Conditions to Delivery of Shares. The Grantor's obligation
to deliver Shares upon exercise of the Option is subject only to the conditions
that:
(a) No preliminary or permanent injunction or other order
issued by any federal or state court of competent jurisdiction
prohibiting the delivery of the Shares shall be in effect; and
(b) Any applicable waiting periods under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 0000 (xxx "XXX Xxx") shall have expired
or been terminated; and
(c) the representations and warranties of the Grantee made in
Section 5 of this Agreement shall be true and correct in all material
respects as of the date of the closing of the issuance of the Shares;
and
(d) (i) in the event that (A) a bona fide Acquisition Proposal
(as defined in the Merger Agreement) shall have been made to the
Company or any of its subsidiaries or any of its stockholders or any
person or entity shall have announced an intention (whether or not
conditional) to make an Acquisition Proposal with respect to the
Company or any of its subsidiaries, and on or following the date of the
Merger Agreement but prior to the date of the Stockholders Meeting (as
defined in the Merger Agreement) such Acquisition Proposal,
announcement or intention is or becomes publicly known, and (B) on or
following the date of the Merger Agreement but prior to the time such
Acquisition Proposal, announcement or intention is or becomes publicly
known, the occurrence of a
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Parent Material Adverse Effect (as defined in the Merger Agreement)
shall not have become publicly known, and (C) on or following the date
on which such Acquisition Proposal, announcement or intention is or
becomes publicly known, the Merger Agreement is terminated by either
the Grantee or the Grantor pursuant to Section 8.2(ii) of the Merger
Agreement, or (ii) the Merger Agreement is terminated by the Grantor
pursuant to Section 8.3(a) of the Merger Agreement; or (iii) the
Merger Agreement is terminated by the Grantee pursuant to Section
8.4(a) of the Merger Agreement; or (iv) the Grantor shall have
delivered to Grantee the written notification pursuant to Section
8.3(a)(ii) of the Merger Agreement and the Grantee shall have notified
the Grantor in writing that the Grantee does not intend to match the
Superior Proposal (as defined in the Merger Agreement) referred to in
such notification. As used in this Agreement, "person" shall have the
meaning specified in Sections 3(a)(9) and 13(d)(3) of the Exchange Act.
3. The Closing. (a) Any closing hereunder shall take place on
the date specified by the Grantee in its Stock Exercise Notice or Cash Exercise
Notice or as specified in Section 1(d), as the case may be, at 10:00 A.M., local
time, at the offices of Xxxxxxxx & Xxxxxxxx, 125 Broad Street, New York, New
York, or, if the conditions set forth in Section 2(a), (b) or (c) have not then
been satisfied, on the second business day following the satisfaction of such
conditions, or at such other time and place as the parties hereto may agree (the
"Closing Date"). On the Closing Date, (i) in the event of a closing pursuant to
Section 1(b) hereof, the Grantor will deliver to the Grantee a certificate or
certificates, representing the Shares in the denominations designated by the
Grantee in its Stock Exercise Notice and the Grantee will purchase such Shares
from the Grantor at the price per Share equal to the Purchase Price, (ii) in the
event of a closing pursuant to Section 1(c) hereof, the Grantor will deliver to
the Grantee cash in an amount determined pursuant to Section 1(c) hereof; or
(iii) in the event of a closing pursuant to Section 1(d) hereof, the Grantor
will deliver to the Grantee cash in an amount determined pursuant to Section
1(d) hereof. Any payment made by the Grantee to the Grantor, or by the Grantor
to the Grantee, pursuant to this Agreement shall be made by
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certified or official bank check or by wire transfer of federal funds to a bank
designated by the party receiving such funds.
(b) The Grantee agrees not to transfer or otherwise dispose of
the Option or the Shares, or any interest therein, except in compliance with the
Securities Act of 1933, as amended (the "Securities Act") and any applicable
state securities law. The Grantee further agrees that the certificates
representing the Shares shall bear an appropriate legend relating to the fact
that such Shares have not been registered under the Securities Act.
4. Representations and Warranties of the Grantor. The Grantor
represents and warrants to the Grantee that (a) the Grantor is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has the requisite corporate power and authority to enter
into and perform this Agreement; (b) the execution and delivery of this
Agreement by the Grantor and the consummation by it of the transactions
contemplated hereby have been duly authorized by the Board of Directors of the
Grantor and this Agreement has been duly executed and delivered by a duly
authorized officer of the Grantor and constitutes a valid and binding obligation
of the Grantor, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles; (c) the Grantor has taken all necessary corporate action to
authorize and reserve the Shares issuable upon exercise of the Option and the
Shares, when issued and delivered by the Grantor upon exercise of the Option and
paid for by the Grantee as contemplated hereby, will be duly authorized, validly
issued, fully paid and non-assessable and free of preemptive rights; (d) except
as otherwise required by the HSR Act or the rules and regulations of Nasdaq, the
execution and delivery of this Agreement by the Grantor and the consummation by
it of the transactions contemplated hereby do not require the consent, waiver,
approval or authorization of or any filing with any person or public authority
and will not violate, result in a breach of or the acceleration of any
obligation under, or constitute a default under, any provision of the Grantor's
certificate of incorporation or bylaws, or any indenture, mortgage, lien, lease,
agreement, contract, instrument, order, rule, regulation, judgment, ordinance,
or decree, or
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restriction by which the Grantor or any of its subsidiaries or any of their
respective properties or assets is bound; (e) no "fair price", "moratorium",
"control share acquisition," "interested shareholder" or other form of
antitakeover statute or regulation (including but not limited to Section 203 of
the Delaware General Corporation Law) is or shall be applicable to the
acquisition of Shares pursuant to this Agreement; and (f) the Grantor has taken
all corporate action necessary so that any Shares acquired pursuant to this
Agreement shall not be counted for purposes of determining the number of shares
of Common Stock beneficially owned by the Grantee or any of its Affiliates or
Associates pursuant to the Rights Agreement (as defined in the Merger Agreement,
the terms "Affiliate" and "Associate" having the respective meanings ascribed to
them in the Rights Agreement).
5. Representations and Warranties of the Grantee. The Grantee
represents and warrants to the Grantor that (a) the Grantee is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has the requisite corporate power and authority to enter
into and perform this Agreement, (b) the execution and delivery of this
Agreement by the Grantee and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Grantee and this Agreement has been duly executed and
delivered by a duly authorized officer of the Grantee and constitutes a valid
and binding obligation of the Grantee, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles; and (c) the Grantee is
acquiring the Option and, if and when it exercises the Option, will be acquiring
the Shares issuable upon the exercise thereof for its own account and not with a
view to distribution or resale in any manner which would be in violation of the
Securities Act.
6. Listing of Shares; Filings; Governmental Consents. Subject
to applicable law and the rules and regulations of Nasdaq or such other national
securities exchange on which the shares of the Grantor's common stock are then
listed, after the Option becomes exercisable hereunder, the Grantor will
promptly file an application to list the Shares on Nasdaq or on such other
national securi-
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ties exchange on which the shares of the Grantor's common stock are then listed
and will use its reasonable best efforts to obtain approval of such listing and
to effect all necessary filings by the Grantor under the HSR Act; provided,
however, that if the Grantor is unable to effect such listing on Nasdaq by the
Closing Date, the Grantor will nevertheless be obligated to deliver the Shares
upon the Closing Date. Each of the parties hereto will use its reasonable best
efforts to obtain consents of all third parties and governmental authorities, if
any, necessary to the consummation of the transactions contemplated by this
Agreement.
7. Registration Rights. (a) In the event that the Grantee
shall desire to sell any of the Shares within two years after the purchase of
such Shares pursuant to this Agreement, and such sale requires, in the opinion
of counsel to the Grantee, which opinion shall be reasonably satisfactory to the
Grantor and its counsel, registration of such Shares under the Securities Act,
the Grantor will cooperate with the Grantee and any underwriters (which
underwriters must be reasonably satisfactory to the Grantor) in registering such
Shares for resale, including, without limitation, promptly filing a registration
statement which complies with the requirements of applicable federal and state
securities laws, and entering into an underwriting agreement with such
underwriters upon such terms and conditions as are customarily contained in
underwriting agreements with respect to secondary distributions; provided that
the Grantor shall not be required to have declared effective more than two
registration statements hereunder and shall be entitled to delay the filing or
effectiveness of any registration statement and may suspend the use of any
registration statement (and related prospectus) for one or more periods of time
not exceeding an aggregate of 60 days in any one year period if the offering
would, in the judgment of the board of directors of the Grantor, require
premature disclosure of any material corporate development or material
transaction involving the Grantor or interfere with any previously planned
securities offering by the Grantor. In addition, upon receipt of notice of the
happening of any event as a result of which any registration statement,
prospectus or prospectus supplement, contains any untrue statements of material
fact or fails or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading the Grantee shall
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forthwith discontinue the disposition of any Shares under such registration
statement, prospectus or prospectus supplement until the Grantee receives from
the Grantor copies (which subject to the limitations on suspension set forth
above shall promptly be made available by the Grantor) of an amended or
supplemented registration statement, prospectus or supplement so that, as
thereafter delivered to purchasers of such Shares, such registration statement,
prospectus or prospectus supplement shall not contain any untrue statement of
material fact or fail or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading.
(b) If the Common Stock is registered pursuant to the
provisions of this Section 7, the Grantor agrees (i) to furnish copies of the
registration statement and the prospectus relating to the Shares covered thereby
in such numbers as the Grantee may from time to time reasonably request and (ii)
if any event shall occur as a result of which it becomes necessary to amend or
supplement any registration statement or prospectus, to prepare and file under
the applicable securities laws such amendments and supplements as may be
necessary to keep available for at least 45 days a prospectus covering the
Shares meeting the requirements of such securities laws, and to furnish the
Grantee such numbers of copies of the registration statement and prospectus as
amended or supplemented as may reasonably be requested. The Grantor shall bear
the cost of the registration, including, but not limited to, all registration
and filing fees, printing expenses, and fees and disbursements of counsel and
accountants for the Grantor, except that the Grantee shall pay the fees and
disbursements of its counsel, and the underwriting fees and selling commissions
applicable to the shares of Common Stock sold by the Grantee. The Grantor shall
indemnify and hold harmless (i) the Grantee, its affiliates and its officers and
directors and (ii) each underwriter and each person who controls any underwriter
within the meaning of the Securities Act or the Securities Exchange Act of 1934,
as amended (collectively, the "Underwriters") ((i) and (ii) being referred to as
"Indemnified Parties") against any losses, claims, damages, liabilities or
expenses, to which the Indemnified Parties may become subject, insofar as such
losses, claims, damages, liabilities (or actions in respect thereof) and
expenses arise out of or are based upon any untrue statement or alleged untrue
statement of any material
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fact contained or incorporated by reference in any registration statement filed
pursuant to this paragraph, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading; provided, however,
that the Grantor will not be liable in any such case to the extent that any such
loss, liability, claim, damage or expense arises out of or is based upon (A) an
untrue statement or alleged untrue statement in or omission or alleged omission
from any such documents in reliance upon and in conformity with written
information furnished to the Grantor by the Indemnified Parties expressly for
use or incorporation by reference therein, or (B) the fact that the person
asserting any such loss, liability, claim, damage or expense did not receive a
copy of an amended preliminary prospectus or the final prospectus (or the final
prospectus as amended or supplemented) at or prior to the written confirmation
of the sale of the Shares to such person because of the failure of the Grantee
to so provide such amended preliminary or final prospectus.
(c) The Grantee and the Underwriters shall indemnify and hold
harmless the Grantor, its affiliates and its officers and directors against any
losses, claims, damages, liabilities or expenses to which the Grantor, its
affiliates and its officers and directors may become subject, insofar as such
losses, claims, damages, liabilities (or actions in respect thereof) and
expenses arise out of or are based upon (i) any untrue statement of any material
fact contained or incorporated by reference in any registration statement filed
pursuant to this paragraph, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Grantor by the Grantee or
the Underwriters, as applicable, specifically for use or incorporation by
reference therein, or (ii) the fact that the person asserting any such loss,
liability, claim, damage or expense did not receive a copy of an amended
preliminary prospectus or the final prospectus (or the final prospectus as
amended or supplemented) at or prior to the written confirmation of the sale of
the Shares to such person because of the failure of the
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Grantee to so provide such amended preliminary or final prospectus.
(d) Promptly after receipt by an indemnified party under
subsection (b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnified party shall settle any
action or claim without the consent of the indemnifying party, which consent
shall not be unreasonably withheld or delayed.
8. Expenses. Each party hereto shall pay its own expenses
incurred in connection with this Agreement, except as otherwise specifically
provided herein.
9. Modification or Amendment. Subject to the provisions of
applicable law, the parties hereto may modify or amend this Agreement, by
written agreement executed and delivered by duly authorized officers of the
respective parties.
10. Counterparts. This Agreement may be executed in any number
of counterparts, each such counterpart being deemed to be an original
instrument, and all such counterparts shall together constitute the same
agreement.
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11. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL. (a) THIS
AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE
INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF. The
parties hereby irrevocably submit to the jurisdiction of the courts of the State
of New York and the Federal courts of the United States of America located in
the Borough of Manhattan, The City of New York solely in respect of the
interpretation and enforcement of the provisions of this Agreement, the Merger
Agreement and of the other documents referred to in this Agreement and the
Merger Agreement, and in respect of the transactions contemplated hereby and
thereby, and hereby waive, and agree not to assert, as a defense in any action,
suit or proceeding for the interpretation or enforcement hereof or of any such
document, that it is not subject thereto or that such action, suit or proceeding
may not be brought or is not maintainable in said courts or that the venue
thereof may not be appropriate or that this Agreement, the Merger Agreement, or
any such document may not be enforced in or by such courts, and the parties
hereto irrevocably agree that all claims with respect to such action or
proceeding shall be heard and determined in such a New York State or Federal
court. The parties hereby consent to and grant any such court jurisdiction over
the person of such parties and over the subject matter of such dispute and agree
that mailing of process or other papers in connection with any such action or
proceeding in the manner provided in Section 12 or in such other manner as may
be permitted by law, shall be valid and sufficient service thereof.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT, THE COMPOUND AGREEMENT, THE STOCK OPTION
AGREEMENT OR THE VOTING AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT,
THE MERGER AGREEMENT, THE OTHER DOCUMENTS REFERRED TO IN THIS AGREEMENT AND THE
MERGER AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH
SUCH PARTY
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UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH SUCH PARTY HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 11.
12. Notices. Any notice, request, instruction or other
document to be given hereunder by any party to the others shall be in writing
and delivered personally or sent by registered or certified mail, postage
prepaid, or by facsimile:
if to the Grantee:
Xxxxxxx X. Xxxxxxx
Pharmacia & Upjohn, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
fax: (000) 000-0000
with copies to:
Xxxx X. Xxxxxxxx
Xxxxxxx X. Xxxx
Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
fax: (000) 000-0000
if to the Grantor:
Xxxxx X. XxxXxxxxx
SUGEN, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxx Xxx Xxxxxxxxx, XX 00000
fax: (000) 000-0000
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with copies to:
Xxxx X. Xxxxxxxxx
Xxxxxxx Xxxxxxxx Xxxxxx
Xxxxxx M. Xxxxx
Xxxxxx Godward LLP
5 Palo Alto Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
fax: (000) 000-0000
or to such other persons or addresses as may be designated in writing by the
party to receive such notice as provided above.
13. Entire Agreement. This Agreement (including any exhibits
and schedules hereto), the Merger Agreement and the other documents referred to
in this Agreement and the Merger Agreement, constitute the entire agreement, and
supersede all other prior agreements, understandings, representations and
warranties both written and oral, among the parties, with respect to the subject
matter hereof.
14. No Third Party Beneficiaries. This Agreement is not
intended to confer upon any person or entity other than the parties hereto any
rights or remedies hereunder.
15. Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any person or entity
or any circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons or entities or circumstances shall not be affected by
such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
16. Specific Performance. The parties hereto each acknowledge
that, in view of the uniqueness of the subject matter hereof, the parties hereto
would not have an
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adequate remedy at law for money damages if this Agreement were not performed in
accordance with its terms, and therefore agree that the parties hereto shall be
entitled to specific enforcement of the terms hereof in addition to any other
remedy to which the parties hereto may be entitled at law or in equity.
17. Assignment. This Agreement shall not be assignable by
operation of law or otherwise; provided, however, that the Grantee may assign
its rights and obligations under this Agreement to any of its direct or indirect
wholly owned subsidiaries (including Merger Sub). Any purported assignment made
in contravention of this Agreement shall be null and void.
18. Captions. The Section captions herein are for convenience
of reference only and do not constitute part of this Agreement and shall not be
deemed to limit or otherwise affect any of the provisions hereof.
19. Termination. (a) The right to exercise the Option granted
pursuant to this Agreement shall terminate at (and the Option shall no longer be
exercisable after) the earliest of (i) the Effective Time (as defined in the
Merger Agreement), (ii) the first anniversary of the earliest to occur of the
events set forth in any of clauses (i), (ii), (iii) or (iv) of Section 2(d), and
(iii) the fifteenth day following the termination of the Merger Agreement if
prior to such fifteenth day the events set forth in any of clauses (i), (ii),
(iii) or (iv) of Section 2(d) shall not have occurred (such earliest date being
referred to in this Agreement as the "Termination Date"); provided that, if the
Option cannot be exercised or the Shares cannot be delivered to the Grantee upon
such exercise because one or more of the conditions set forth in Section 2(a) or
(b) hereof have not yet been satisfied, the Termination Date shall be extended
until thirty days after such impediment to exercise or delivery has been
removed.
(b) All representations and warranties contained in this
Agreement shall survive delivery of and payment for the Shares.
20. Profit Limitation. Notwithstanding any other provision of
this Agreement or the Merger Agreement, any Cancellation Amount shall be reduced
(but not below zero) to the extent necessary so that the sum of the portion of
any
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termination fee described in Section 8.5(b) of the Merger Agreement actually
paid to the Grantee (such portion actually paid, the "Termination Fee"), the
aggregate of all Cancellation Amounts paid to Grantee pursuant to this Agreement
and the cash proceeds actually received by the Grantee as the result of selling
Shares to a third party which acquires more than 50% of the Grantor's
outstanding voting securities (other than the Company or any of its affiliates)
shall not exceed $21,900,000. In no event shall (i) the sum of the aggregate
Cancellation Amounts paid to Grantee pursuant to this Agreement and the cash
proceeds actually received by the Grantee as the result of selling Shares to a
third party which acquires more than 50% of the Grantor's outstanding voting
securities (other than the Company or any of its affiliates) exceed $21,900,000,
or (ii) the sum of the Termination Fee, the aggregate Cancellation Amounts paid
to Grantee pursuant to this Agreement and the cash proceeds actually received by
the Grantee as the result of selling Shares to a third party which acquires more
than 50% of the Grantor's outstanding voting securities (other than the Company
or any of its affiliates) exceed $21,900,000.
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by duly authorized officers of the parties hereto as of the date
hereof.
SUGEN, INC.
By: /s/ Xxxxxxx Xxxxx-Freke
---------------------------------
Name: Xxxxxxx Xxxxx-Freke
Title: Chairman of the Board and
Chief Executive Officer
PHARMACIA & UPJOHN, INC.
By: /s/ Xxxxxxxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxxx
Title: Executive Vice President
UNIVERSITY ACQUISITION CORP.
By: /s/ Mats Xxxxxxxxx
---------------------------------
Name: Mats Xxxxxxxxx
Title: Senior Vice President
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