Exhibit 3
MUTUAL TERMINATION AND RELEASE AGREEMENT
This MUTUAL TERMINATION AND RELEASE AGREEMENT (this "Agreement") is
made and entered into as of June 4, 2003 (the "Effective Date"), by and among
NPS Pharmaceuticals, Inc., a Delaware corporation ("NPS"), Enzon
Pharmaceuticals, Inc., a Delaware corporation ("Enzon"), Momentum Merger
Corporation, a Delaware corporation ("Momentum"), Xxxxxx Acquisition Corporation
a Delaware corporation ("Xxxxxx"), and Einstein Acquisition Corporation, a
Delaware corporation ("Einstein"). NPS, Enzon, Momentum, Xxxxxx, and Xxxxxxxx
are collectively referred to herein as the "Parties" and each individually as a
"Party." Unless otherwise defined herein, capitalized terms used herein shall
have the meaning given them in the Merger Agreement (as defined below).
RECITALS
A. NPS, Enzon, Momentum, Xxxxxx and Einstein are Parties to that
certain Agreement and Plan of Reorganization dated as of February 19, 2003, as
amended (the "Merger Agreement").
B. Contemporaneously with the execution of the Merger Agreement,
NPS, Enzon, Momentum, certain officers and directors of NPS and Enzon entered
into (i) those certain NPS Voting Agreements, (ii) those certain Enzon Voting
Agreements, (iii) those certain NPS Affiliate Agreements, and (iv) those certain
Enzon Affiliate Agreements (collectively, the "Ancillary Agreements").
C. Pursuant to the Merger Agreement, Enzon entered into that
certain Amended and Restated Employment Agreement with Xxxxxx X. Xxxxxxx, as
amended (the "Xxxxxxx Employment Agreement").
D. NPS and Enzon in connection with the execution of this
Agreement shall enter into that certain Restricted Stock Purchase Agreement of
even date herewith and attached hereto as Exhibit A (the "Stock Purchase
Agreement") and the Registration Rights Agreement as described in the Stock
Purchase Agreement (the "Registration Rights Agreement").
E. The Board of Directors of each of NPS, Enzon, Momentum, Xxxxxx
and Xxxxxxxx has determined to terminate the Merger Agreement and each of the
Ancillary Agreements and to effect certain other matters as provided herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties, intending
to be legally bound, agree as follows:
1. Termination of Merger Agreement. The Parties agree that,
effective at 5:30 p.m., Eastern Standard Time, on the Effective Date, and
subject to the terms and conditions of this Agreement, the Stock Purchase
Agreement and the Registration Rights Agreement, (i) the Merger Agreement is
hereby terminated and of no further force or effect pursuant to Section 7.1(a)
therein, and (ii) each of the Ancillary Agreements is each hereby terminated and
of no further force or effect. For the avoidance of doubt, it is the intention
of the Parties that no provision of the Merger Agreement, including without
limitation Section 7.2 (Notice of Termination; Effect of Termination) and 7.3
thereof (Fees and Expenses), shall survive the termination of the Merger
Agreement pursuant to the terms of this Agreement.
2. Issuance of NPS Shares. Subject to the terms and conditions of
this Agreement, the Stock Purchase Agreement and the Registration Rights
Agreement, NPS agrees to issue to Enzon, and Enzon agrees to purchase from NPS,
One Million Five Hundred Thousand (1,500,000) shares of NPS common stock, $0.001
par value per share (the "Shares").
3. Releases.
(a) Each of the Parties on its behalf and on behalf of
its parents, affiliates, subsidiaries, segments or divisions, successors and
assigns, present and former stockholders, officers, directors, employees,
insurers, administrators, agents, representatives, attorneys and any persons
acting by, through, under or in concert with each of them or any of them, hereby
completely releases and forever discharges the other Parties, their parents,
affiliates, subsidiaries, segments or divisions, successors and assigns, present
and former stockholders, officers, directors, employees, insurers,
administrators, agents, representatives and attorneys (collectively, the
"Releasees") from any and all claims, rights, demands, actions, obligations,
liabilities and causes of action of any and every kind, nature and character
whatsoever, known or unknown, which such Party may now have, could have had or
may in the future have against the other Parties and the other Parties'
Releasees for or on account of any acts, omissions, events or matters relating
to or arising out of the Merger Agreement, the Ancillary Agreements, the Xxxxxxx
Employment Agreement and the transactions contemplated by any of such
agreements, including without limitation, claims of fraud, claims of willful or
intentional breach, or otherwise based on the termination thereof, and whether
based on tort, contract (express or implied), or any federal, state or local
law, statute or regulation (hereinafter, the "Released Matters"); provided,
however, that notwithstanding the foregoing, no Party releases any other Party
from any obligations, liabilities or claims arising under or in connection with
the performance of this Agreement, the Stock Purchase Agreement, the
Registration Rights Agreement or, after the date of this Agreement, the
Confidentiality Agreement. Each of the Parties shall refrain from asserting any
matter released or purported to be released hereby against the other Parties and
the other Parties' Releasees in any manner, including without limitation by way
of counterclaim, offset or defense.
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(b) It is understood and agreed that the preceding
paragraph is a full and final release covering all known as well as unknown or
unanticipated debts, claims or damages of the Parties relating to or arising out
of the Merger Agreement, the Ancillary Agreements, the Xxxxxxx Employment
Agreement and the transactions contemplated by any of such agreements.
Therefore, each of the Parties expressly waives any rights it may have under
statute or common law principle under which a general release does not extend to
claims which such Party does not know or suspect to exist in its favor at the
time of executing the release, which if known by such Party must have affected
such Party's settlement with the other. In connection with such waiver and
relinquishment, the Parties acknowledge that they or their attorneys or agents
may hereafter discover claims or facts in addition to or different from those
which they now know or believe to exist with respect to the Released Matters,
but that it is their intention hereby fully, finally and forever to settle and
release all of the Released Matters. In furtherance of this intention, the
releases herein given shall be and remain in effect as full and complete mutual
releases with regard to the Released Matters notwithstanding the discovery or
existence of any such additional or different claim or fact.
4. Fees and Expenses. As was provided in Section 7.3(a) of the
Merger Agreement, NPS and Enzon shall share equally (i) all fees and expenses,
excluding attorneys' fees and expenses, which shall be paid for by the Party
incurring such expense but including accountants' fees and expenses, incurred in
relation to the printing and filing (with the SEC) of the Joint Proxy
Statement/Prospectus (including any preliminary materials related thereto) and
the Registration Statement (including financial statements and exhibits) and any
amendments or supplements thereto, (ii) the filing fee for the Notification and
Report Forms filed with the FTC and DOJ under the HSR Act, and pre-merger
notification and reports forms under similar applicable laws of other
jurisdictions, and (iii) reasonable attorneys' fees and expenses incurred in
connection with any foreign pre-merger filings. The Parties further acknowledge
that NPS and Enzon have each incurred additional expenses, including without
limitation attorneys' and accountants' fees and expenses, and fees and expenses
payable to their respective investment banks, which shall be paid for by the
Party incurring such expenses, in connection with the consummation of the
transactions contemplated by the Merger Agreement. In furtherance of the
foregoing with respect to fees and expenses that NPS and Enzon have agreed to
share, each of NPS and Enzon agree that (i) they shall accurately and completely
account to the other for all expenses that each of them has incurred for which
responsibility is to be shared pursuant to this Section 4 (a "Shared Expense"),
(ii) if either has paid or at any time pays more than fifty percent (50%) of any
Shared Expense, then such Party shall notify the other Party of such payment and
(iii) such other Party shall, within fifteen (15) days of its receipt of such
notice, reimburse to the notifying Party the appropriate amount so that both
Parties will have paid their share of each Shared Expense.
5. Confidentiality. The Parties acknowledge that Enzon and NPS
have previously executed a letter agreement effective December 18, 2002 (the
"Confidentiality Agreement"), which Confidentiality Agreement, including the
"Standstill" provisions in paragraph 7 therein (the "Standstill Provision"),
will continue in full force and effect in accordance with its terms and each of
NPS and Enzon will hold, and will cause its respective directors, officers,
Employees, agents and advisors (including attorneys, accountants, consultants,
bankers and financial advisors) to hold, any Evaluation Material (as defined in
the Confidentiality Agreement) confidential in accordance with the terms of the
Confidentiality Agreement. Notwithstanding the Standstill Provision, Enzon and
NPS acknowledge and agree that the negotiation and execution of this Agreement,
the Stock Purchase Agreement and the Registration Rights Agreement and NPS'
issuance of the Shares to Enzon pursuant to the Stock Purchase Agreement and the
completion of any other transactions contemplated by the Stock Purchase
Agreement and the Registration Rights Agreement and any transactions in which
Enzon may engage to hedge its position in the Shares it receives pursuant to the
Stock Purchase Agreement do not and will not cause a breach or violation of the
Standstill Provision by Enzon. In addition, as soon as practicable, but in no
event later than thirty (30) days from the date hereof, each of NPS and Enzon
shall (i) return to the other Party all copies of all Evaluation Material
received from such other Party and (ii) destroy all analyses, compilations,
summaries, studies and other materials prepared by it based in whole or in part
on, or otherwise containing or reflecting any of, the Evaluation Material
received from such other Party.
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6. Publicity. NPS and Enzon will issue a joint press release in
the form attached hereto as Exhibit B (the "Initial Release") upon the signing
of this Agreement with respect to this Agreement and the termination of the
Merger Agreement and the Ancillary Agreements. Except as required by law or
applicable listing agreement, no Party shall issue any other press release or
make any public announcement or statement relating to the termination of the
Merger Agreement or execution of this Agreement prior to the issuance of the
Initial Release or at any time thereafter that is inconsistent with the Initial
Release.
7. Further Assurances. Each Party agrees to cooperate fully with
the other Parties and to execute such further instruments, documents and
agreements and to give such further written assurances as may be reasonably
requested by any other Party to evidence and reflect the transactions described
in this Agreement and to carry into effect the intents and purposes of this
Agreement. Without limiting the foregoing, the Parties shall (a) cooperate with
each other and promptly prepare and file all necessary documentation to withdraw
all applications, including without limitation Momentum's listing application
with The NASDAQ National Market, notices, petitions and filings made with, and
shall use their reasonable efforts to terminate any proceedings before, any
Governmental Authority, including without limitation the SEC, in connection with
the Merger Agreement and (b) cooperate with each other to promptly wind up the
affairs of, and to dissolve under the laws of the State of Delaware, Momentum,
Einstein and Xxxxxx.
8. Representations and Warranties. Each of the Parties represents
and warrants to the other Parties that (a) such Party has all requisite legal
and corporate power and authority to execute, deliver and perform its
obligations under this Agreement; (b) all corporate action on the part of such
Party, its directors, officers and stockholders necessary for the authorization,
execution, delivery and performance of this Agreement by such Party has been
taken; and (c) this Agreement constitutes a valid and binding obligation of such
Party, enforceable against such Party in accordance with its terms, subject to
laws of general application relating to bankruptcy, insolvency and the relief of
debtors and rules of law governing specific performance, injunctive relief or
other equitable remedies.
9. Miscellaneous.
(a) No Assignment; Binding Effect. Neither this Agreement
nor any right, interest or obligation hereunder may be assigned by any Party
hereto without the prior written consent of the other Parties hereto and any
attempt to do so shall be void, except for assignments and transfers by
operation of law. Subject to the preceding sentence, this Agreement is binding
upon, inures to the benefit of and is enforceable by and upon the Parties and
their respective successors and assigns.
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(b) Amendment. This Agreement may be amended,
supplemented or modified by a written instrument duly executed by NPS and Enzon.
Any such amendment, supplement, or modification shall be binding upon all of the
Parties.
(c) Notices. All notices and other communications
required or permitted hereunder shall between Enzon and NPS be in writing and
shall be mailed by registered or certified mail, postage prepaid by hand, by
messenger or by overnight courier, addressed:
(i) if to Enzon, to:
Enzon Pharmaceuticals, Inc.
000 Xxxxx 000/000
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Chief Executive Officer
Or at such other address as Enzon shall have
furnished to NPS, with a copy to:
Xxxxxx & Whitney LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx
(ii) if to NPS, to:
NPS Pharmaceuticals, Inc.
000 Xxxxxxx Xxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: General Counsel
Or as such address as NPS shall have
furnished to Enzon, with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx,
Professional Corporation
0000 Xxxx Xxxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Xxxxxx X. X'Xxxxxx, Esq.
(iii) Each such notice or other communication
shall for all purposes of this Agreement be treated as effective or having been
given when actually delivered as provided above, if delivered personally or by
messenger, or, on the day shown on the return receipt, if sent by mail or other
delivery service.
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(d) Entire Agreement. This Agreement supercedes all prior
discussions, representations, warranties and agreements, both written and oral,
among the Parties with respect to the subject matter hereof, and contains the
sole and entire agreement among the Parties with respect to the subject matter
hereof, other than the Confidentiality Agreement.
(e) Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, regardless
of the laws that might otherwise govern under applicable principles of conflicts
of law thereof.
(f) Remedies. In the event of any breach or default of
this Agreement, the non-breaching Party shall have all rights and remedies
provided by law and equity to enforce this Agreement, including, without
limitation, an action for damages and to obtain specific performance of the
terms of this Agreement.
(g) Submission to Jurisdiction. Each of the Parties
irrevocably agrees that any legal action or proceeding with respect to this
Agreement or for recognition and enforcement of any judgment in respect hereof
brought by an other Party hereto or its successors or assigns may be brought and
determined in the Chancery or other Courts of the State of Delaware, and each of
the Parties hereby irrevocably submits with regard to any such action or
proceeding for itself and in respect to it property, generally and
unconditionally, to the nonexclusive jurisdiction of the aforesaid courts.
(h) Severability. In the event that any provision of this
Agreement or the application thereof, becomes or is declared by a court of
competent jurisdiction to be illegal, void or unenforceable, the remainder of
this Agreement will continue in full force and effect and the application of
such provision to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the Parties. The Parties further agree to
replace such void and unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the greatest extent possible, the
economic, business and other purposes of such void or unenforceable provision.
(i) Rules of Construction. The Parties agree that they
have been represented by counsel during the negotiation and execution of this
Agreement and, therefore, waive the application of any Legal Requirement or rule
of construction providing that ambiguities in an agreement or other document
will be construed against the Party drafting such agreement or document.
(j) Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE ACTIONS OF MOMENTUM, NPS, ENZON, XXXXXX, OR XXXXXXXX IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
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(k) Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the Parties and delivered to the other Parties, it being
understood that all Parties need not sign the same counterpart.
(l) Third Party Beneficiaries. There are no third Party
beneficiaries to this Agreement except for the Parties' Releasees and the
Parties to the Ancillary Agreements that are not Parties to this Agreement
[Signature page follows.]
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IN WITNESS WHEREOF, NPS, Enzon, Momentum, Xxxxxx and Einstein have
caused this Agreement to be duly executed as of the date first above written by
their respective officers duly authorized.
NPS PHARMACEUTICALS, INC.
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
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Its: President and CEO
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ENZON PHARMACEUTICALS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Its: Chairman, President and CEO
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MOMENTUM MERGER CORPORATION
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
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Its: Executive Chairman
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[Signature Page to Mutual Termination and Release Agreement]
XXXXXX ACQUISITION CORPORATION
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
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Its: President and CEO
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EINSTEIN ACQUISITION CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Its: President and CEO
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[Signature Page to Mutual Termination and Release Agreement]
EXHIBIT A
Restricted Stock Purchase Agreement
EXHIBIT B
Joint Press Release