EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
DURA PHARMACEUTICALS, INC.,
STARFISH ACQUISITION CORP., INC.
AND
XXXXXX DEVELOPMENT CORPORATION II, INC.
DATED AS OF
MARCH 20, 2000
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND INTERPRETATION . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Interpretation.. . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.2 Directors and Officers of the Surviving Corporation. . . . 7
Section 2.3 Effective Time . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.4 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.5 Subsequent Actions.. . . . . . . . . . . . . . . . . . . . 7
ARTICLE III CONVERSION OF SECURITIES . . . . . . . . . . . . . . . . . . . . . 7
Section 3.1 Conversion of Capital Stock. . . . . . . . . . . . . . . . 7
Section 3.2 Exchange of Certificates . . . . . . . . . . . . . . . . . 8
Section 3.3 Dissenting Shares. . . . . . . . . . . . . . . . . . . . . 9
Section 3.4 Company Stock Option Plans.. . . . . . . . . . . . . . . .10
Section 3.5 Certain Adjustments. . . . . . . . . . . . . . . . . . . .10
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . .10
Section 4.1 Organization; Qualification. . . . . . . . . . . . . . . .10
Section 4.2 Capitalization . . . . . . . . . . . . . . . . . . . . . .11
Section 4.3 Authorization, Validity of Agreement, Company Action . . .11
Section 4.4 Board Approvals Regarding Transactions . . . . . . . . . .12
Section 4.5 Vote Required. . . . . . . . . . . . . . . . . . . . . . .12
Section 4.6 Consents and Approvals, No Violations. . . . . . . . . . .12
Section 4.7 Reports and Financial Statements . . . . . . . . . . . . .12
Section 4.8 No Undisclosed Liabilities . . . . . . . . . . . . . . . .13
Section 4.9 Litigation . . . . . . . . . . . . . . . . . . . . . . . .13
Section 4.10 Information Supplied . . . . . . . . . . . . . . . . . . .13
Section 4.11 Opinion of Financial Advisor . . . . . . . . . . . . . . .14
Section 4.12 Insider Interests. . . . . . . . . . . . . . . . . . . . .14
Section 4.13 Brokers or Finders . . . . . . . . . . . . . . . . . . . .14
ARTICLE V REPRESENTATIONS AND WARRANTIES OF the Parent AND Merger Sub. . . . .14
Section 5.1 Organization; Qualification. . . . . . . . . . . . . . . .14
Section 5.2 Capitalization.. . . . . . . . . . . . . . . . . . . . . .15
Section 5.3 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . .15
Section 5.4 Authorization, Validity of Agreement, Necessary Action . .16
Section 5.5 Warrant Shares . . . . . . . . . . . . . . . . . . . . . .16
Section 5.6 Consents and Approvals, No Violations. . . . . . . . . . .16
Section 5.7 Reports and Financial Statements . . . . . . . . . . . . .16
Section 5.8 Information Supplied . . . . . . . . . . . . . . . . . . .17
Section 5.9 Sufficient Funds . . . . . . . . . . . . . . . . . . . . .18
Section 5.10 Share Ownership. . . . . . . . . . . . . . . . . . . . . .18
Section 5.11 Merger Sub's Operations. . . . . . . . . . . . . . . . . .18
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Section 5.12 Brokers or Finders . . . . . . . . . . . . . . . . . . . .18
Section 5.13 Litigation.. . . . . . . . . . . . . . . . . . . . . . . .18
ARTICLE VI COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Section 6.1 Interim Operations of the Company. . . . . . . . . . . . .18
Section 6.2 Access . . . . . . . . . . . . . . . . . . . . . . . . . .20
Section 6.3 Reasonable Efforts . . . . . . . . . . . . . . . . . . . .20
Section 6.4 No Solicitation of Competing Transaction . . . . . . . . .22
Section 6.5 Publicity. . . . . . . . . . . . . . . . . . . . . . . . .23
Section 6.6 Notification of Certain Matters. . . . . . . . . . . . . .23
Section 6.7 Directors' and Officers' Insurance and Indemnification . .24
Section 6.8 State Takeover Laws. . . . . . . . . . . . . . . . . . . .24
Section 6.9 Merger Sub Compliance. . . . . . . . . . . . . . . . . . .25
Section 6.10 Preparation of Proxy Statement; The Special Meeting. . . .25
ARTICLE VII CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
Section 7.1 Conditions to Each Party's Obligation to Effect . . . . .26
the Merger . . . . . . . . . . . . . . . . . . . . .
Section 7.2 Company's Obligations to Effect the Merger . . . . . . . .26
Section 7.3 Conditions to the Parent's and Merger Sub's Obligations
to Effect the Merger . . . . . . . . . . . . . . . . . . .27
ARTICLE VIII TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . .27
Section 8.1 Termination. . . . . . . . . . . . . . . . . . . . . . . .27
Section 8.2 Effect of Termination. . . . . . . . . . . . . . . . . . .28
ARTICLE IX MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . .29
Section 9.1 Fees and Expenses. . . . . . . . . . . . . . . . . . . . .29
Section 9.2 Amendment and Modification . . . . . . . . . . . . . . . .29
Section 9.3 Nonsurvival of Representations and Warranties. . . . . . .29
Section 9.4 Notices. . . . . . . . . . . . . . . . . . . . . . . . . .29
Section 9.5 Counterparts . . . . . . . . . . . . . . . . . . . . . . .30
Section 9.6 Entire Agreement; No Third Party Beneficiaries . . . . . .30
Section 9.7 Severability . . . . . . . . . . . . . . . . . . . . . . .30
Section 9.8 Governing Law. . . . . . . . . . . . . . . . . . . . . . .31
Section 9.9 Enforcement. . . . . . . . . . . . . . . . . . . . . . . .31
Section 9.10 Extension, Waiver. . . . . . . . . . . . . . . . . . . . .31
Section 9.11 Assignment . . . . . . . . . . . . . . . . . . . . . . . .31
Exhibit A - Form of Parent Warrant Agreement
Exhibit B - Terms of the Parent Warrants
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of March 20, 2000 (this
"Agreement"), by and among Dura Pharmaceuticals, Inc., a Delaware corporation
(the "Parent"), Starfish Acquisition Corp., Inc., a Delaware corporation and
a wholly owned subsidiary of the Parent ("Merger Sub"), and Xxxxxx
Development Corporation II, Inc., a Delaware corporation (the "Company").
Certain capitalized terms used without definition in this Agreement have the
respective meanings ascribed to them in Article I.
WHEREAS, the board of directors of each of the Parent, Merger Sub
and the Company has approved, and deems it fair to, advisable and in the best
interests of its respective stockholders to consummate the acquisition of the
Company by the Parent upon the terms and subject to the conditions set forth
herein; and
WHEREAS, in furtherance of such acquisition, the board of
directors of each of the Parent, Merger Sub and the Company has approved this
Agreement and the Merger in accordance with the DGCL and upon the terms of and
subject to the conditions in this Agreement; and
WHEREAS, a committee of the board of directors of the Company
comprised exclusively of directors not affiliated with the Parent or Merger Sub
has determined that the terms and conditions set forth in this Agreement and the
consideration paid to the holders of shares of Callable Common Stock, par value
$0.001 per share, of the Company (other than the Parent and Merger Sub), are
fair to such holders and recommended this Agreement as fair to, advisable and in
the best interests of such stockholders; and
WHEREAS, the board of directors of the Company has determined that
the consideration to be paid for each Share (other than Shares owned by the
Parent and Merger Sub) pursuant to this Agreement is fair to the holders of such
Shares and has resolved to recommend that the holders of such Shares adopt this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements in this Agreement, the
parties hereto, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 DEFINITIONS. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context clearly requires
otherwise:
"Acquisition Proposal" shall mean any proposal or offer (a) to
acquire (i) all or a substantial part of the business or properties of such
Person or any capital stock of such Person, whether by merger, tender offer,
exchange offer, sale of assets, consolidation, other business combination,
recapitalization, reorganization, liquidation, dissolution or other transactions
involving such Person, any division or operating or principal business unit of
such Person or
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(ii) ten percent or more of the capital stock or other equity interests in
such Person or (b) of one or more transactions which could reasonably be
expected, individually or in the aggregate, to frustrate, prevent or delay
the Merger or any of the other Transactions.
"Actions" means any action, suit, proceeding, arbitration,
investigation, mediation or other dispute resolution forum before any Government
Entity (including any court or administrative law judge), arbitrator, mediator
or any other Person acting with the power of any of the foregoing.
"Affiliate" shall have the meaning set forth in Rule l2b-2 of the
Exchange Act.
"Associate" shall have the meaning set forth in Rule l2b-2 of the
Exchange Act.
"Balance Sheet" shall mean the most recent audited consolidated
balance sheet of the Company included in the Company Financial Statements.
"Balance Sheet Date" shall mean the date of the Balance Sheet.
"Business Day" means any day other than a Saturday, a Sunday or a
day on which commercial banks in The City of New York are permitted by law, rule
or regulation to be closed.
"Certificate of Merger" shall mean the certificate of merger to be
filed with the Secretary of State of the State of Delaware pursuant to Section
2.3.
"Closing" shall mean the closing referred to in Section 2.4.
"Closing Date" shall mean the date and time at which the Closing
occurs.
"Company Agreement" shall mean any note, bond, mortgage,
indenture, or material lease, license, contract, agreement or other instrument
or obligation to which the Company is a party or by which it or any of its
properties or assets may be bound.
"Company Callable Common Stock" shall mean the Callable Common
Stock, $0.001 par value per share, of the Company.
"Company Financial Statements" shall mean each of the audited
financial statements and unaudited condensed interim financial statements
(including any related notes and schedules) included (or incorporated by
reference) in the Company SEC Documents.
"Company Material Adverse Effect" shall mean a material adverse
effect on or development with respect to (a) the business, condition (financial
or otherwise), assets or results of operations of the Company or (b) the ability
of the Company to timely consummate any of the Transactions.
"Company SEC Documents" shall mean each form, report, schedule,
statement and other document required to be filed by the Company through the
date of this Agreement under the Exchange Act or the Securities Act, including
any amendment to such document through the date of this Agreement, whether or
not such amendment is required to be so filed.
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"Company Special Common Stock" shall mean the Special Common
Stock, par value $1.00 per share, of the Company.
"Company Stock Option" shall mean an option to purchase Shares
which has been granted by the Company and which is outstanding at the Effective
Time.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"DGCL" shall mean the General Corporation Law of the State of
Delaware.
"Dissenting Shares" shall mean any Shares as to which the holder
thereof has demanded appraisal with respect to the Merger in accordance with
Section 262 of the DGCL and as of the Effective Time has neither effectively
withdrawn nor lost the right to such appraisal.
"Effective Time" shall mean the date and time at which the
Certificate of Merger is duly filed with the Secretary of State of the State of
Delaware or such other date and time as is agreed upon by the parties and
specified in the Certificate of Merger.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Agent" shall mean the bank or trust company designated
by the Parent to act as agent for the holders of the Shares pursuant to
Section 3.2(a).
"GAAP" shall mean United States generally accepted accounting
principles.
"Governmental Entity" shall mean a federal, state, local or
foreign court, arbitral tribunal, administrative agency or commission or other
governmental or other regulatory authority or agency or any Person exercising
the authority of any of the foregoing.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
"IRS" shall mean the United States Internal Revenue Service or any
successor agency performing similar functions under the Code.
"Indemnified Party" shall mean each present and former officer and
director of the Company and each Person who becomes one of the foregoing prior
to the Effective Time.
"Knowledge of the Special Committee" shall mean the actual
knowledge of the members of the Special Committee without any obligation to
conduct any investigation or inquiry.
"Merger" shall mean the merger of Merger Sub into the Company
referred to in Section 2.4.
"Merger Consideration" shall mean (a) an amount of cash equal to
$13.25, which amount shall not include interest, regardless of when paid, and
(b) the right to receive one Parent Warrant.
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"Merger Sub Common Stock" shall mean common stock, par value
$0.001 per share, of Merger Sub.
"NMS" shall mean the Nasdaq National Market of The Nasdaq Stock
Market.
"Parent Common Stock" shall mean shares of Common Stock, par value
$0.001 per share, of the Parent.
"Parent Convertible Notes" shall mean the 31/2% Convertible
Subordinated Notes due July 15, 2002 issued by the Parent.
"Parent Financial Statements" shall mean each of the audited
consolidated financial statements and unaudited condensed consolidated interim
financial statements (including any related notes and schedules) included (or
incorporated by reference) in the Parent SEC Documents.
"Parent Material Adverse Effect" shall mean a material adverse
effect on or development with respect to (a) the business, condition (financial
or otherwise), assets or results of operations of the Parent and its
Subsidiaries, taken as a whole, or (b) the ability of the Parent and Merger Sub
to timely consummate any of the Transactions.
"Parent SEC Documents" shall mean each form, report, schedule,
statement and other document required to be filed by the Parent through the date
of this Agreement under the Exchange Act or the Securities Act, including any
amendment to such document through the date of this Agreement, whether or not
such amendment is required to be so filed.
"Parent Warrant" shall mean a warrant to purchase a fraction of a
share of Parent Common Stock issued pursuant to the Parent Warrant Agreement
whose form and terms are set forth in Exhibit A and Exhibit B, respectively,
attached hereto.
"Parent Warrant Agreement" shall mean the warrant agreement,
substantially in the form attached to this Agreement as Exhibit A, by and
between the Parent and ChaseMellon Shareholder Services, L.L.C., as warrant
agent.
"Parent Warrant Value" shall mean the average of closing price of
the Parent Warrants as reported on the NMS for the ten consecutive trading days
following the date during which the Closing Date occurs; PROVIDED that in no
event shall the Parent Warrant Value exceed $3.22.
"Person" shall mean a natural Person, partnership (general or
limited), corporation, limited liability company, business trust, joint stock
company, trust, unincorporated association, joint venture, Governmental Entity
or other entity or organization.
"Registration Statement" shall mean the registration statement on
Form S-4 to be filed by the Parent relating to the offer and sale of the Parent
Warrants to be issued pursuant to this Agreement.
"SEC" shall mean the United States Securities and Exchange
Commission.
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"Schedule 13E-3" shall mean the transaction statement on Schedule
13E-3 to be filed by the Company, the Parent and Merger Sub with the SEC in
connection with the Transactions.
"Share(s)" shall mean outstanding share(s) of Company Callable
Common Stock.
"Special Committee" means the Special Committee of the board of
directors of the Company formed on December 13, 1999.
"Special Meeting" shall mean the special meeting of stockholders
of the Company convened for the purpose of voting on the adoption of this
Agreement.
"Spread" shall mean, with respect to each Company Stock Option,
the positive difference, if any, between (a) $13.25 plus the Parent Warrant
Value and (b) the exercise price per share of Company Callable Common Stock for
such Company Stock Option.
"Subsidiary" shall mean, with respect to any party, any
corporation or other organization, whether incorporated or unincorporated, of
which (a) at least a majority of the securities or other interests having by
their terms ordinary voting power to elect a majority of the board of directors
or others performing similar functions with respect to such corporation or other
organization is, directly or indirectly, owned or controlled by such party or by
any one or more of its Subsidiaries, or by such party and one or more of its
Subsidiaries or (b) such party or any other Subsidiary of such party is a
general partner (excluding any such partnership where such party or any
Subsidiary of such party does not have a majority of the voting interest in such
partnership).
"Superior Proposal" shall mean an unsolicited Acquisition Proposal
(but changing the ten percent amount in clause (a)(ii) of the definition of
Acquisition Proposal to fifty percent) not resulting from, arising out of or
otherwise by virtue of any breach of Section 6.4(a) which satisfies both
subsection (x) and subsection (y) of Section 6.4(a).
"Transactions" shall mean the transactions provided for or
contemplated by this Agreement.
"Voting Debt" shall mean indebtedness having general voting rights
and debt convertible into securities having such rights.
Section 1.2 INTERPRETATION.
(a) When a reference is made in this Agreement to a Section or
Article, such reference shall be to a section or article of this Agreement
unless otherwise clearly indicated to the contrary.
(b) Whenever the words "include," "includes" or "including" are
used in this Agreement they shall be deemed to be followed by the words "without
limitation."
(c) The words "hereof," "herein" and "herewith" and words of
similar import shall, unless otherwise stated, be construed to refer to this
Agreement as a whole and not to any
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particular provision of this Agreement, and article, section, paragraph,
exhibit and schedule references are to the articles, sections, paragraphs,
appendix and schedules of this Agreement unless otherwise specified.
(d) The plural of any defined term shall have a meaning
correlative to such defined term, and words denoting any gender shall include
both genders and the neuter. Where a word or phrase is defined herein, each of
its other grammatical forms shall have a corresponding meaning.
(e) A reference to any party to this Agreement or any other
agreement or document shall include such party's successors and permitted
assigns.
(f) A reference to any legislation or to any provision of any
legislation shall include any modification, amendment or re-enactment thereof,
any legislative provision substituted therefor and all regulations and statutory
instruments issued thereunder or pursuant thereto.
(g) The parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties, and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement.
(h) No prior draft nor any course of performance or course of
dealing shall be used in the interpretation or construction this Agreement.
(i) The captions and headings of the Articles and Sections of
this Agreement are for reference purposes only and shall not be used in the
construction or interpretation of this Agreement.
ARTICLE II
THE MERGER
Section 2.1 THE MERGER. Subject to the satisfaction or waiver
of conditions in this Agreement, at the Effective Time, the Company and Merger
Sub shall consummate a merger pursuant to which (a) Merger Sub shall be merged
with and into the Company and the separate corporate existence of Merger Sub
shall thereupon cease, (b) the Company shall be the surviving corporation in the
Merger (sometimes referred to as the "Surviving Corporation") and shall continue
to be governed by the laws of the State of Delaware and (c) the separate
corporate existence of the Company with all its rights, privileges, immunities,
powers and franchises shall continue unaffected by the Merger. Pursuant to the
Merger, (x) the certificate of incorporation of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the certificate of
incorporation of the Surviving Corporation until thereafter amended as
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provided by law and such certificate of incorporation and (y) the by-laws of
Merger Sub, as in effect immediately prior to the Effective Time, shall be
the by-laws of the Surviving Corporation until thereafter amended as provided
by law, by such certificate of incorporation or by such by-laws. The Merger
shall have the effects specified in the DGCL.
Section 2.2 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION.
The directors of Merger Sub and the officers of the Company at the Effective
Time shall, from and after the Effective Time, be the directors and officers,
respectively, of the Surviving Corporation until their successors shall have
been duly elected or appointed or qualified or until their earlier death,
resignation or removal in accordance with the certificate of incorporation and
the by-laws of the Surviving Corporation. If, at the Effective Time, a vacancy
shall exist on the board of directors of the Company or in any office of the
Surviving Corporation, such vacancy may thereafter be filled in the manner
provided by law.
Section 2.3 EFFECTIVE TIME. The Parent, Merger Sub and the
Company will cause the Certificate of Merger to be executed and filed on the
Closing Date (or on such other date as the Parent and the Company may agree)
with the Secretary of State of the State of Delaware as provided in the DGCL.
The Merger shall become effective on the date and at the time the Certificate of
Merger is duly filed with the Secretary of State of the State of Delaware or
such other time as is agreed upon by the parties and specified in the
Certificate of Merger.
Section 2.4 CLOSING. The closing of the Merger shall take place
at 10:00 a.m., on a date to be agreed upon by the parties, and if such date is
not agreed upon by the parties, the Closing shall occur on the third Business
Day after satisfaction or waiver of all of the conditions set forth in
Article VII, but in no event earlier than June 18, 2000, at the offices of
Xxxxxxx, Xxxxxxx & Xxxxxxxx, LLP, 00000 Xx Xxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx
00000.
Section 2.5 SUBSEQUENT ACTIONS. If at any time after the
Effective Time, the Surviving Corporation will consider or be advised that any
deeds, bills of sale, assignments, assurances or any other actions or things are
necessary or desirable to vest, perfect or confirm of record or otherwise in the
Surviving Corporation its right, title or interest in, to or under any of the
rights, properties or assets of either of the Company or Merger Sub acquired or
to be acquired by the Surviving Corporation as a result of, or in connection
with, the Merger or otherwise to carry out this Agreement, the officers and
directors of the Surviving Corporation shall be authorized to execute and
deliver, in the name and on behalf of either the Company or Merger Sub, all such
deeds, bills of sale, instruments of conveyance, assignments and assurances and
to take and do, in the name and on behalf of each of such corporations or
otherwise, all such other actions and things as may be necessary or desirable to
vest, perfect or confirm any and all right, title and interest in, to and under
such rights, properties or assets in the Surviving Corporation or otherwise to
carry out this Agreement.
ARTICLE III
CONVERSION OF SECURITIES
Section 3.1 CONVERSION OF CAPITAL STOCK. As of the Effective
Time, by virtue of the Merger and without any further action on the part of the
holders of any Shares or holders of Merger Sub Common Stock:
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(a) MERGER SUB COMMON STOCK. Each issued and outstanding share
of Merger Sub Common Stock shall be converted into and become one fully paid and
nonassessable share of common stock, par value $0.001 per share, of the
Surviving Corporation.
(b) CANCELLATION OF TREASURY STOCK AND THE PARENT-OWNED STOCK.
(i) Each Share owned by the Company as treasury stock or by any
Company Subsidiary and each Share owned by the Parent, Merger Sub or any
other wholly owned Subsidiary of the Parent (other than Shares in trust
accounts, managed accounts, custodial accounts and the like that are
beneficially owned by third parties) shall be cancelled and retired and
shall cease to exist, and no consideration shall be delivered in exchange
therefor.
(ii) Each share of Company Special Common Stock owned by the
Parent, the Company, Merger Sub or any other wholly owned Subsidiary of
the Parent shall be cancelled and retired and shall cease to exist and no
consideration shall be delivered in exchange therefor.
(c) CONVERSION OF SHARES. Each issued and outstanding Share
(other than Shares to be cancelled in accordance with Section 3.1(b) and other
than any Dissenting Shares) shall be converted into the right to receive Merger
Consideration, payable to the holder thereof, without interest, upon surrender
of the certificate formerly representing such Share (each a "Certificate") in
the manner provided in Section 3.2. From and after the Effective Time, all such
converted Shares shall no longer be outstanding and shall be deemed to be
cancelled and retired and shall cease to exist, and each holder of any such
converted Shares shall cease to have any rights with respect to any Certificate
except the right to receive the Merger Consideration therefor, without interest,
upon the surrender of such Certificate in accordance with Section 3.2 or the
right, if any, to receive payment from the Surviving Corporation of the "fair
value" of such Shares as determined in accordance with Section 262 of the DGCL.
Section 3.2 EXCHANGE OF CERTIFICATES.
(a) The Parent shall designate a bank or trust company to
act as agent for the holders of the Shares in connection with the Merger to
receive in trust the funds and Parent Warrants to which holders of the Shares
shall become entitled pursuant to Section 3.1(c). At the Effective Time, the
Parent or Merger Sub shall deposit, or cause to be deposited, with the
Exchange Agent for the benefit of holders of Shares the aggregate Merger
Consideration to which such holders shall be entitled at the Effective Time
pursuant to Section 3.1(c). Such funds shall be invested as directed by the
Parent or the Surviving Corporation pending payment thereof by the Exchange
Agent to holders of the Shares. Earnings from such investments shall be the
sole and exclusive property of Merger Sub or the Surviving Corporation, as
applicable, and no part of such earnings shall accrue to the benefit of
holders of Shares.
(b) As soon as reasonably practicable after the Effective Time,
the Parent shall cause the Exchange Agent to mail to each holder of record of
one or more Certificates, (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon delivery of the Certificates to the Exchange and shall be
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in such form and have such other provisions not inconsistent with this
Agreement as the Parent may reasonably specify) and (ii) instructions for use
in effecting the surrender of Certificates in exchange for payment of Merger
Consideration. Upon surrender of a Certificate for cancellation to the
Exchange Agent or to such other agent or agents as may be appointed by the
Parent, together with such letter of transmittal, duly executed, the holder
of such Certificate shall be entitled to receive in exchange therefor the
Merger Consideration for each Share formerly represented by such Certificate,
and the Certificate so surrendered shall be cancelled. If payment of the
Merger Consideration is to be made to a Person other than the Person in whose
name the surrendered Certificate is registered, it shall be a condition of
payment that the Certificate so surrendered shall be properly indorsed or
shall be otherwise in proper form for transfer and that the Person requesting
such payment shall have paid any transfer and other taxes required by reason
of the payment of the Merger Consideration to a Person other than the
registered holder of the Certificate surrendered or shall have established to
the satisfaction of the Surviving Corporation that such tax either has been
paid or is not applicable.
(c) At the Effective Time, the stock transfer books of the
Company shall be closed, and thereafter there shall be no further registration
of transfers of the Shares on the records of the Company.
(d) At any time following six months after the Effective Time,
the Surviving Corporation shall be entitled to require the Exchange Agent to
deliver to it any portion of the aggregate Merger Consideration (including any
earnings with respect thereto) which had been made available to the Exchange
Agent and which has not been disbursed to holders of Certificates, and
thereafter such holders shall be entitled to look only to the Surviving
Corporation (subject to abandoned property, escheat or other similar laws) and
only as general creditors thereof with respect to the Merger Consideration
payable upon due surrender of their Certificates, without any interest thereon.
Notwithstanding the foregoing, neither the Parent, the Surviving Corporation nor
the Exchange Agent shall be liable to any holder of a Certificate for any Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
Section 3.3 DISSENTING SHARES.
(a) Notwithstanding any provision of this Agreement to the
contrary, Dissenting Shares shall not be converted into or represent a right to
receive Merger Consideration, but the holder thereof shall be entitled to only
such rights as are granted by the DGCL.
(b) Notwithstanding the provisions of Section 3.3(a), if any
holder of Shares who demands appraisal of Shares under the DGCL effectively
withdraws or loses (through failure to perfect or otherwise) the right to
appraisal, then as of the Effective Time or the occurrence of such event,
whichever later occurs, such holder's Shares shall automatically be converted
into and represent only the right to receive the Merger Consideration as
provided in Section 3.1(c), without interest, upon surrender of the Certificates
representing such Shares pursuant to Section 3.2.
9
(c) The Company shall give the Parent (i) prompt notice of any
written demands for appraisal or payment of the fair value of any Shares,
withdrawals of such demands, and any other instruments served on the Company
pursuant to the DGCL received by the Company and (ii) the opportunity to direct
all negotiations and proceedings with respect to demands for appraisal under the
DGCL. Except with the prior written consent of the Parent, which consent shall
not be unreasonably withheld, the Company shall not voluntarily make any
payment, admissions or statements against interest with respect to any demands
for appraisal, settle or offer to settle any such demands.
Section 3.4 COMPANY STOCK OPTION PLANS.
(a) Except as provided in Section 3.4(b), each Company Stock
Option shall, at the Effective Time, be converted into the right to receive an
amount in cash equal to the Spread, without interest. The Surviving Corporation
shall, promptly after the Effective Time, mail a check to each registered holder
of a Company Stock Option in an amount equal to the Spread.
(b) Each Company Stock Option beneficially owned by any member
of the Special Committee shall, at the Effective Time, be converted into the
right to receive upon exercise, until the expiration of their term, the Merger
Consideration that would be issuable with respect to the number of shares of
Company Callable Common Stock for which such Company Stock Option may be
exercised, with the other terms of such Company Stock Option remaining
unchanged.
(c) If and to the extent necessary or required by the terms of
the plans governing Company Stock Options or pursuant to the terms of any
Company Stock Option granted thereunder, each of the Parent and the Company
shall obtain the consent of each holder of outstanding Company Stock Options to
the foregoing treatment of such Company Options.
Section 3.5 CERTAIN ADJUSTMENTS. If between the date of this
Agreement and the Effective Time, the outstanding shares of Parent Common Stock
shall have been changed into or exchanged for a different number of shares or
different class, in each case, by reason of any reclassification,
recapitalization, stock split, split-up, combination, exchange of shares or a
stock dividend or dividend payable in any other securities shall be declared
with a record dated within such period or any similar event shall have occurred,
the number of shares of Parent Common Stock purchaseable and the exercise price
payable under each Parent Warrant shall be appropriately adjusted to provide the
same economic effect as contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
Except as set forth in the Company Disclosure Letter, the Company
represents and warrants to the Parent and Merger Sub as follows:
Section 4.1 ORGANIZATION; QUALIFICATION. The Company (a) is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware;
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(b) has full corporate power and authority to carry on its business as it is
now being conducted and to own the properties and assets it now owns; and (c)
is duly qualified or licensed to do business as a foreign corporation in good
standing in every jurisdiction in which such qualification is required except
for such failures to be so qualified or licensed and in good standing as
could not, individually or in the aggregate, reasonably be expect to have a
Company Material Adverse Effect.
Section 4.2 CAPITALIZATION
(a) The authorized capital stock of the Company consists of
6,500,000 shares of Company Callable Common Stock and 1,000 shares of Company
Special Common Stock. As of the date of this Agreement, (i) 6,325,000 Shares
are issued and outstanding, (ii) zero Shares are issued and held in the treasury
of the Company, (iii) 1,000 shares of Company Special Common Stock are issued
and outstanding and (iv) 948,750 Shares are reserved for issuance upon exercise
of Company Options under the Company's 1997 Stock Option Plan. All the
outstanding shares of the Company's capital stock are, and all Shares which may
be issued pursuant to the exercise of outstanding Company Options will be, when
issued in accordance with the respective terms thereof, duly authorized, validly
issued, fully paid, nonassessable and not issued in violation of any preemptive
rights. Except as set forth above and except for the Transactions, (i) there
are no shares of capital stock of the Company authorized, issued or outstanding;
(ii) there are no existing options, warrants, calls, pre-emptive rights,
subscriptions or other rights, agreements, arrangements, understandings or
commitments of any character, relating to the issued or unissued capital stock
of the Company, obligating the Company to issue, transfer or sell or cause to be
issued, transferred or sold any shares of capital stock of, or other equity
interest in, the Company or securities convertible into or exchangeable for such
shares, equity interests, or obligating the Company to grant, extend or enter
into any such option, warrant, call, subscription or other right, agreement,
arrangement or commitment; and (iii) there are no outstanding contractual
obligations of the Company to repurchase, redeem or otherwise acquire any
Shares, or the capital stock of the Company or to provide funds to make any
investment (in the form of a loan, capital contribution or otherwise) in any
other entity or Person.
(b) There are no voting trusts or other agreements or
understandings to which the Company is a party with respect to the voting of the
capital stock of the Company.
(c) Following the Effective Time, no holder of Company Options
will have any right to receive shares of common stock of the Surviving
Corporation upon exercise of Company Options.
Section 4.3 AUTHORIZATION, VALIDITY OF AGREEMENT, COMPANY
ACTION. The Company has full corporate power and authority to execute and
deliver this Agreement, to perform its obligations under this Agreement and to
consummate the Transactions. The execution, delivery and the performance by the
Company of its obligations under this Agreement and the consummation by it of
the Transactions, have been duly authorized by the Company's board of directors
and, except for obtaining the approval specified in Section 4.6 at the Special
Meeting, no other corporate action on the part of the Company or its
stockholders is necessary to authorize the execution and delivery by the Company
of this Agreement or the consummation by it of the Transactions. This Agreement
has been duly executed and delivered by the Company
11
and, assuming due and valid authorization, execution and delivery thereof by
each of the Parent and Merger Sub, this Agreement is a valid and binding
obligation of the Company enforceable against the Company in accordance with
its terms.
Section 4.4 BOARD APPROVALS REGARDING TRANSACTIONS. The
Company's board of directors, at a meeting duly called and held, has
(a) unanimously (with two directors abstaining) determined that the Agreement
and the Merger are fair to, advisable and in the best interests of the Company
and the stockholders of the Company (other than the Parent and Merger Sub) and
(b) approved the Transactions and none of the aforesaid actions by the Company's
board of directors has been amended, rescinded or modified. The action taken by
the Company's board of directors constitutes approval of the Merger and the
other Transactions by the Company's board of directors under the provisions of
Section 203 of the DGCL such that Section 203 of the DGCL does not apply to this
Agreement or the Transactions. No other state takeover, antitakeover,
moratorium, fair price, interested stockholder, business combination or similar
statute or rule is applicable to the Merger or the other Transactions.
Section 4.5 VOTE REQUIRED. The affirmative vote of (a) the
Parent as the sole holder of shares of Company Special Common Stock and (b) the
holders of at least fifty percent of the outstanding Shares are the only vote of
the holders of any class or series of the Company's capital stock necessary to
approve the Merger or adopt this Agreement. No other vote of any class or
series of the Company's capital stock is necessary to approve any of the
Transactions.
Section 4.6 CONSENTS AND APPROVALS, NO VIOLATIONS. To the
knowledge of the Special Committee, except for the filings, permits,
authorizations, consents and approvals as may be required under, and other
applicable requirements of, the Exchange Act, the HSR Act, state securities
or blue sky laws, and the filing of the Certificate of Merger, none of the
execution, delivery or performance of this Agreement by the Company, the
consummation by the Company of the Transactions or compliance by the Company
with any of the provisions of this Agreement will (a) conflict with or result
in any breach of any provision of the certificate of incorporation or the
by-laws of the Company, (b) require any filing with, or permit,
authorization, consent or approval of, any Governmental Entity, (c) result in
a violation or breach of, or constitute (with or without due notice or the
passage of time or both) a default (or give rise to any right of termination,
amendment, cancellation or acceleration or loss of any rights) under, any of
the terms, conditions or provisions of any Company Agreement or (d) violate
any order, writ, injunction, decree, statute, rule or regulation applicable
to the Company or any of its properties or assets, excluding from the
foregoing clauses (b), (c) and (d) such filings, permits, authorizations,
consents, approvals, violations, breaches or defaults which could not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. Except as set forth in Section 4.7 of the Company
Disclosure Letter, there are no third party non-governmental consents,
notices or approvals related to the Company or any of its respective assets
or properties required to be obtained prior to the consummation of any of the
Transactions.
Section 4.7 REPORTS AND FINANCIAL STATEMENTS
(a) To the knowledge of the Special Committee, the Company has
filed, with the SEC, the Company SEC Documents. To the knowledge of the Special
Committee, as of their respective dates or, if amended, as of the date of the
last such amendment filed prior to the date
12
of this Agreement, the Company SEC Documents, including any financial
statements or schedules included therein (a) did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading and
(b) complied in all material respects with the applicable requirements of the
Exchange Act and the Securities Act, as the case may be, and the applicable
rules and regulations of the SEC thereunder.
(b) To the knowledge of the Special Committee, each of the
Company Financial Statements have been prepared from, and are in accordance
with, the books and records of the Company. The Company Financial Statements
complied, as of their respective dates, in all material respects with applicable
accounting requirements and rules and regulations of the SEC. To the knowledge
of the Special Committee, the Company Financial Statements have been prepared in
accordance with GAAP applied on a consistent basis (except as may be indicated
in the notes thereto and subject, in the case of condensed unaudited interim
financial statements, to normal, recurring and immaterial year-end adjustments
and the absence of certain notes) and fairly present, in all material respects,
(i) the financial position of the Company as of the dates thereof and (ii) the
results of operations, changes in stockholders' equity and cash flows of the
Company for the periods presented therein.
Section 4.8 NO UNDISCLOSED LIABILITIES. To the knowledge of the
Special Committee, except (a) as disclosed in the Financial Statements and (b)
for liabilities and obligations incurred in the ordinary course of business and
consistent with past practice since the Balance Sheet Date, the Company has no
liabilities or obligations of any nature, whether or not accrued, contingent or
otherwise.
Section 4.9 LITIGATION. To the knowledge of the Special
Committee, there is no action, suit, inquiry, proceeding or investigation by or
before any Governmental Entity or threatened against or involving the Company,
or which questions or challenges the validity of this Agreement or any action
taken or to be taken by the Company pursuant to this Agreement or in connection
with the Transactions. To the knowledge of the Special Committee, there is no
and the Company does not know or have any reason to know of any valid basis for
any such action, proceeding or investigation. To the knowledge of the Special
Committee, the Company is not in default under or in violation of, nor to the
Company's knowledge is there any valid basis for any claim of default under or
violation of, any Company Contract or commitment or restriction to which the
Company is a party or by which it or any of its assets is bound. To the
knowledge of the Special Committee, the Company is not subject to any judgment,
order or decree which may have an adverse effect on its business practices or on
its ability to acquire any property or conduct its business in any area.
Section 4.10 INFORMATION SUPPLIED. None of the information
supplied or to be supplied by the Special Committee for inclusion or
incorporation by reference in (a) the Registration Statement at the time the
Registration Statement is filed with the SEC, at any time it is amended or at
the time it becomes effective under the Securities Act, contains or will contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (b) the Schedule 13E-3 at the time the Schedule 13E-3 is filed with
the SEC, at any time it is amended or at the date and time
13
of commencement of the Special Meeting, contains or will contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading and (c) the Proxy
Statement/Prospectus will, on the date it is first mailed to the Company's
stockholders or at the time of the Special Meeting contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Schedule 13E-3
and Proxy Statement/Prospectus will in all material respects comply as to
form with the requirements of the Securities Act, the Exchange Act and the
rules and regulations promulgated by the SEC thereunder. Notwithstanding the
foregoing, no representation or warranty is made by the Company with respect
to statements or omissions made or incorporated by reference in the
Registration Statement, the Schedule 13E-3 or the Proxy Statement/Prospectus
based on information supplied by the Parent or the Company (excluding
information provided by the Special Committee) for inclusion or incorporation
by reference therein.
Section 4.11 OPINION OF FINANCIAL ADVISOR. The Company has
received the opinion of XX Xxxxx Securities Corporation (the "Financial
Advisor"), dated the date of this Agreement, to the effect that, as of such
date, the Merger Consideration is fair from a financial point of view to holders
of Shares (other than the Parent and Merger Sub) and the copy of such opinion
included in the Company Disclosure Letter is manually signed, accurate and
complete. The Company has been authorized by the Financial Advisor to permit
the inclusion of such opinion in its entirety in the Proxy Statement/Prospectus,
so long as such inclusion is in form and substance reasonably satisfactory to
the Financial Advisor and its counsel.
Section 4.12 INSIDER INTERESTS. To the knowledge of the Special
Committee, no officer or director of the Company has any material interest in
any property, real or personal, tangible or intangible, including inventions,
patents, trademarks or trade names, used in or pertaining to the business of the
Company.
Section 4.13 BROKERS OR FINDERS. To the knowledge of the Special
Committee, no agent, broker, investment banker, financial advisor or other firm
or Person is or will be entitled to any brokers' or finder's fee or any other
commission or similar fee in connection with any of the Transactions except for
the Financial Advisor. True and correct copies of all agreements between the
Company and the Financial Advisor including any fee arrangements, a copy of
which has been made available to the Parent.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE PARENT AND MERGER SUB
The Parent and Merger Sub represent and warrant to the Company
that:
Section 5.1 ORGANIZATION; QUALIFICATION. Each of the Parent and
Merger Sub (a) is a corporation duly organized, validly existing and in good
standing under the laws of the
14
State of Delaware; (b) has full corporate power and authority to carry on its
business as now being conducted and to own the properties and assets it now
owns; and (c) is duly qualified or licensed to do business as a foreign
corporation in good standing in every jurisdiction in which such
qualification is required, except for such failures to be so qualified or
licensed or in good standing as would not, individually or in the aggregate,
reasonably be expected to have a Parent Material Adverse Effect.
Section 5.2 CAPITALIZATION.
(a) The authorized capital stock of the Parent consists of
200,000,000 shares of Parent Common Stock and 5,000,000 shares of Preferred
Stock, par value $.01 per share. As of March 14, 2000, (i) 44,333,113 shares of
Parent Common Stock are issued and outstanding, (ii) 2,402,500 shares of Parent
Common Stock are issued and held in the treasury of the Parent, (iii) no shares
of Parent Preferred Stock are issued and outstanding, (iv) 2,400,000 shares of
Parent Preferred Stock have been designated as Series A Junior Participating
Preferred Stock and are reserved for issuance under the Parent's Rights
Agreement, dated as of May 21, 1998, by and between the Parent and ChaseMellon
Shareholder Services, LLC., (v) 10,855,224 shares of Parent Common Stock are
reserved for issuance upon exercise of existing options and warrants to purchase
shares of Parent Common Stock and (vi) 5,677,891 shares of Parent Common Stock
are reserved for issuance upon conversion of the Parent Convertible Notes. All
the outstanding shares of the Parent's capital stock are, and all shares which
may be issued pursuant to the exercise of outstanding options and warrants
issued by the Parent and the Parent Convertible Notes will be, when issued in
accordance with the respective terms thereof, duly authorized, validly issued,
fully paid, nonassessable and not issued in violation of any preemptive rights.
Other than the Parent Convertible Notes, there is no Voting Debt of the Company
issued and outstanding. Except as set forth above and except for the
Transactions, as of the date of this Agreement, (i) there are no shares of
capital stock of the Parent authorized, issued or outstanding; (ii) there are no
existing options, warrants, calls, pre-emptive rights, subscriptions or other
rights, agreements, arrangements, understandings or commitments of any
character, relating to the issued or unissued capital stock of the Parent,
obligating the Parent to issue, transfer or sell or cause to be issued,
transferred or sold any shares of capital stock or Voting Debt of, or other
equity interest in, the Parent or securities convertible into or exchangeable
for such shares, equity interests or Voting Debt, or obligating the Parent to
grant, extend or enter into any such option, warrant, call, subscription or
other right, agreement, arrangement or commitment; and (iii) there are no
outstanding contractual obligations of the Parent to repurchase, redeem or
otherwise acquire any capital stock of the Parent or Affiliate of the Parent.
(b) There are no voting trusts or other agreements or
understandings to which the Parent is a party with respect to the voting of the
capital stock of the Parent.
Section 5.3 SUBSIDIARIES. The Parent SEC Documents include a
list of all Subsidiaries of the Parent which as of the date of this Agreement
are Significant Subsidiaries (as defined in Rule 1-02 of Regulation S-X
promulgated by the SEC). All of the outstanding shares of capital stock of, or
other equity interests in, such Significant Subsidiaries of the Parent have been
validly issued are fully paid and nonassessable and, except as set forth in the
Parent SEC Documents, are owned, directly or indirectly, by the Parent free and
clear of all liens, pledges, claims, encumbrances, security interests of any
kind or nature whatsoever and free of any other
15
restrictions (including any restriction on the right to vote, sell or
otherwise dispose of such capital stock or other ownership interest), other
than restrictions on transfer arising under applicable securities laws.
Section 5.4 AUTHORIZATION, VALIDITY OF AGREEMENT, NECESSARY
ACTION. Each of the Parent and Merger Sub, as applicable, has full corporate
power and authority to execute and deliver this Agreement, the Parent Warrant
Agreement and the Parent Warrants, to perform its obligations under this
Agreement, the Parent Warrant Agreement and the Parent Warrants and to
consummate the Transactions. The execution, delivery by the Parent and Merger
Sub, as applicable, and performance of its obligations under this Agreement, the
Parent Warrant Agreement and the Parent Warrants and the consummation of the
Transactions have been duly authorized by the boards of directors of each of the
Parent and Merger Sub and by the Parent as the sole stockholder of Merger Sub,
and no other corporate action on the part of the Parent or Merger Sub is
necessary to authorize the execution and delivery by the Parent and Merger Sub
of this Agreement, the Parent Warrant Agreement and the Parent Warrants or the
consummation of the Transactions. This Agreement has been duly executed and
delivered by the Parent and Merger Sub, as applicable, and, assuming due and
valid authorization, execution and delivery by each of the other parties
thereto, is a valid and binding obligation of each of the Parent and Merger Sub,
enforceable against each of them in accordance with its terms.
Section 5.5 WARRANT SHARES. The Parent has taken all necessary
corporate action to reserve for issuance the number of shares of Parent Common
Stock issuable under the Parent Warrants. The shares of Parent Common Stock to
be issued under the Parent Warrants have been duly authorized and when issued in
accordance with the terms of the Parent Warrant Agreement will be validly
issued, fully paid, nonassessable and not issued in violation of any preemptive
rights.
Section 5.6 CONSENTS AND APPROVALS, NO VIOLATIONS. Except for
the filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Securities Act, the Exchange
Act, the HSR Act, state securities or blue sky laws and the DGCL, none of the
execution, delivery of this Agreement, the Parent Warrant Agreement or the
Parent Warrants or performance of obligations hereunder or thereunder by the
Parent or Merger Sub, the consummation by the Parent or Merger Sub of the
Transactions or compliance by the Parent or Merger Sub with any of the
provisions of this Agreement, the Parent Warrant Agreement or the Parent
Warrants will (a) conflict with or result in any breach of any provision of the
respective certificate of incorporation or by-laws of the Parent or Merger Sub;
(b) require any filing with, or permit, authorization, consent or approval of,
any Governmental Entity; (c) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any Parent Agreement; or (d) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to the Parent,
any of its Subsidiaries or any of their properties or assets, excluding from the
foregoing clauses (b), (c) and (d) such violations, breaches or defaults which
would not, individually or in the aggregate, be reasonably expected to have a
Parent Material Adverse Effect.
Section 5.7 REPORTS AND FINANCIAL STATEMENTS
16
(a) The Parent has filed with the SEC the Parent SEC
Documents. As of their respective dates or, if amended, as of the date of the
last such amendment filed prior to the date of this Agreement, the Parent SEC
Documents, including any financial statements or schedules included therein
(a) did not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in order to make
the statements made therein, in the light of the circumstances under which
they were made, not misleading and (b) complied in all material respects with
the applicable requirements of the Exchange Act and the Securities Act, as
the case may be, and the applicable rules and regulations of the SEC
thereunder.
(b) Each of the Parent Financial Statements have been
prepared from, and are in accordance with, the books and records of the
Parent. The Parent Financial Statements complied, as of their respective
dates, in all material respects with applicable accounting requirements and
rules and regulations of the SEC. The Parent Financial Statements have been
prepared in accordance with GAAP applied on a consistent basis (except as may
be indicated in the notes thereto and subject, in the case of unaudited,
condensed consolidated interim financial statements, to normal, recurring and
immaterial year-end adjustments and the absence of certain notes) and fairly
present, in all material respects, (i) the consolidated financial position of
the Parent as of the dates thereof and (ii) the consolidated results of
operations, consolidated changes in stockholders' equity and consolidated
cash flows of the Parent and its consolidated Subsidiaries for the periods
presented therein.
(c) Except as disclosed in the Parent SEC Documents, the
Parent and its Subsidiaries have not incurred any liabilities that are of a
nature that would be required to be disclosed on a balance sheet of the
Parent and its Subsidiaries prepared in conformity with GAAP, other than (i)
liabilities incurred in the ordinary course of business, (ii) liabilities
incurred in connection with the Transactions, (iii) liabilities for Taxes or
(iv) liabilities that, individually or in the aggregate, would not reasonably
be expected to have a Parent Material Adverse Effect.
Section 5.8 INFORMATION SUPPLIED. None of the information
supplied or to be supplied by the Parent, Merger Sub or the Company
(excluding information provided by the Special Committee) for inclusion or
incorporation by reference in (a) the Registration Statement at the time the
Registration Statement is filed with the SEC, at any time it is amended or at
the time it becomes effective under the Securities Act, contains or will
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, (b) the Schedule 13E-3 at the time the Schedule 13E-3
is filed with the SEC, at any time it is amended or at the date and time of
commencement of the Special Meeting, contains or will contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading and (c) the Proxy
Statement/Prospectus, the Schedule 13E-3 and the Registration Statement, on
the date it is first mailed to the Company's stockholders or at the time of
the Special Meeting, contains or will contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. The Proxy Statement/Prospectus,
the Schedule 13E-3 and the Registration Statement will in all material
respects comply as to form with the requirements of the Securities Act, the
Exchange Act and the rules and regulations promulgated
17
by the SEC thereunder. Notwithstanding the foregoing, no representation or
warranty is made by the Parent or Merger Sub with respect to statements or
omissions made or incorporated by reference in the Registration Statement or
the Proxy Statement/Prospectus based on information supplied by the Special
Committee for inclusion or incorporation by reference therein.
Section 5.9 SUFFICIENT FUNDS. Either the Parent or Merger
Sub has available sufficient funds to pay the cash portion of the Merger
Consideration and to pay all fees and expenses of the Parent and Merger Sub
related to the Transactions.
Section 5.10 SHARE OWNERSHIP. None of the Parent or Merger
Sub beneficially owns any Shares.
Section 5.11 MERGER SUB'S OPERATIONS. Merger Sub was formed
solely for the purpose of engaging in the Transactions and has not engaged in
any business activities or conducted any operations other than in connection
with the Transactions.
Section 5.12 BROKERS OR FINDERS. Neither the Parent nor any
of its Subsidiaries or their respective Affiliates has entered into any
agreement or arrangement entitling any agent, broker, investment banker,
financial advisor or other firm or Person to any brokers' or finders' fee or
any other commission or similar fee in connection with any of the
Transactions, except Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated,
whose fees and expenses will be paid by the Parent in accordance with the
Parent's agreement with such firm.
Section 5.13 LITIGATION. As of the date of this Agreement, there
are no Actions pending or, to the knowledge of the Parent, threatened, against
or affecting the Parent or any of its Subsidiaries or any property or asset of
the Parent or any of its Subsidiaries which, individually or in the aggregate,
if adversely determined, would reasonably be expected to have a Company Material
Adverse Effect. As of the date of this Agreement, there are no judgments,
decrees, injunctions, rules or orders of any Governmental Authority or
arbitrator outstanding against the Parent or any of its Subsidiaries which,
individually or in the aggregate, would reasonably be expected to have a Parent
Material Adverse Effect.
ARTICLE VI
COVENANTS
Section 6.1 INTERIM OPERATIONS OF THE COMPANY. The Company
covenants and agrees that prior to the Effective Time, except (i) as expressly
contemplated by this Agreement, (ii) as set forth in Section 6.1 of the Company
Disclosure Letter or (iii) as agreed in writing by the Parent after the date
hereof or (iv) for any actions taken by the Company without the approval of the
Special Committee or the Company's Board of Directors:
(a) the Company shall not take any actions that would cause
it not to conduct its business in the usual, regular and ordinary course and
substantially in the same manner as heretofore conducted, and the Company
shall preserve its business organization intact and keep available the
services of its current officers and employees and maintain its existing
business relationships;
18
(b) the Company shall not: (i) amend its certificate of
incorporation or by-laws or similar organizational documents, (ii) issue,
sell, transfer, pledge, dispose of or encumber any shares of any class or
series of its capital stock, or securities convertible into or exchangeable
for, or options, warrants, calls, commitments or rights of any kind to
acquire, any shares of any class or series of its capital stock other than
Shares reserved for issuance on the date of this Agreement pursuant to the
exercise of Company Options outstanding on the date of this Agreement, (iii)
declare, set aside or pay any dividend or other distribution payable in cash,
stock or property with respect to any shares of any class or series of its
capital stock, (iv) split, combine or reclassify any shares of any class or
series of its stock or (v) redeem, purchase or otherwise acquire directly or
indirectly any shares of any class or series of its capital stock, or any
instrument or security which consists of or includes a right to acquire such
shares;
(c) the Company shall not: (i) incur or modify any
indebtedness or other liability, other than in the ordinary and usual course
of business and consistent with past practice or (ii) modify, amend or
terminate any of its material contracts or waive, release or assign any
material rights or claims, except in the ordinary course of business and
consistent with past practice;
(d) the Company shall not: (i) incur or assume any debt or
obligations under capital leases; (ii) modify the terms of any liability;
(iii) assume, guarantee, endorse or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the obligations of any
other Person, except as described in Section 6.1(d) of the Company Disclosure
Letter as being in the ordinary course of business and consistent with past
practice; (iv) make any loans, advances or capital contributions to, or
investments in, any other Person; or (v) enter into any material commitment
or transaction (including any capital expenditure or purchase, sale or lease
of assets or real estate);
(e) the Company shall not transfer, lease, license, sell,
mortgage, pledge, dispose of, or encumber any assets other than in the
ordinary and usual course of business and consistent with past practice; or
(f) the Company shall not make or offer to make any change in
the compensation payable or to become payable to any of its officers, directors,
employees, agents or consultants (other than normal recurring increases in wages
to employees who are not officers or directors or Affiliates in the ordinary
course of business and consistent with past practice) or to Persons providing
management services, or enter into or amend any employment, severance,
consulting, termination or other agreement or employee benefit plan or make any
loans to any of its officers, directors, employees, Affiliates, agents or
consultants or make any change in its existing borrowing or lending arrangements
for or on behalf of any of such Persons pursuant to an employee benefit plan or
otherwise;
(g) the Company shall not permit any insurance policy naming it
as a beneficiary or a loss payable payee to be cancelled or terminated without
notice to and the prior written consent of the Parent;
19
(h) the Company shall not enter into any contract or
transaction relating to the purchase of assets other than in the ordinary
course of business and consistent with prior practices;
(i) the Company shall not pay, purchase, discharge or
satisfy any of its claims, liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction in the ordinary course of business and consistent
with past practice, of claims, liabilities or obligations reflected or
reserved against in, or contemplated by, the Company Financial Statements;
(j) the Company shall not adopt a plan of complete or
partial liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of the Company (other than the
Merger);
(k) the Company shall not: (i) change any of the accounting
methods used by it unless required by GAAP or (ii) make any material election
relating to Taxes, change any material election relating to Taxes already
made, adopt any material accounting method relating to Taxes, change any
material accounting method relating to Taxes unless required by GAAP or
change in the Code or the regulations under the Code, enter into any closing
agreement relating to Taxes, settle any claim or assessment relating to Taxes
or consent to any claim or assessment relating to Taxes or any waiver of the
statute of limitations for any such claim or assessment;
(l) the Company shall not take, or agree to commit to take,
any action that could or would be reasonably likely to result in any of the
conditions set forth in Article VII not being satisfied, or would make any
representation or warranty of the Company contained in this Agreement
inaccurate in any respect at, or as of any time prior to, the Effective Time,
or that could be reasonably be expected to materially impair the ability of
the Company, the Parent, Merger Sub or the holders of Shares to consummate
the Merger in accordance with the terms hereof or materially delay such
consummation; and
(m) the Company shall not enter into any agreement,
contract, commitment, understanding or arrangement to do any of the
foregoing, or to authorize, recommend, propose or announce an intention to do
any of the foregoing.
Section 6.2 ACCESS. The Company shall (and shall cause each
Company Subsidiary to) afford to the officers, employees, accountants, counsel,
financing sources and other representatives of the Parent, full access during
the period prior to the Closing Date, to all its properties, books, contracts,
commitments and records and, during such period, the Company shall furnish
promptly to the Parent (a) a copy of each report, schedule, registration
statement and other document filed or received by it during such period pursuant
to the requirements of federal securities laws and (b) all other information
concerning its business, properties and personnel as the Parent may reasonably
request. After the Appointment Date, the Company shall provide the Parent and
such Persons as the Parent shall designate with all such information, at anytime
as the Parent shall reasonably request.
Section 6.3 REASONABLE EFFORTS.
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(a) Prior to the Closing, upon the terms and subject to the
conditions of this Agreement, the Parent, Merger Sub and the Company agree to
use commercially reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or
advisable (subject to any applicable laws) to consummate the Merger and make
effective the Merger and the other Transactions as promptly as practicable
but in no event earlier than June 18, 2000, including, (i) the preparation
and filing of all forms, registrations and notices required to be filed to
consummate the Merger and the other Transactions and the taking of such
actions as are necessary to obtain any requisite approvals, consents, orders,
exemptions or waivers by any third party or Governmental Entity, and (ii) the
satisfaction of the other parties' conditions to Closing. In addition, no
party hereto shall take any action after the date of this Agreement to
materially delay the obtaining of, or result in not obtaining, any
permission, approval or consent from any Governmental Entity necessary to be
obtained prior to Closing. Notwithstanding the foregoing, or any other
covenant herein contained, in connection with the receipt of any necessary
approvals under the HSR Act, the Company shall not be entitled to divest or
hold separate or otherwise take or commit to take any action that limits the
Parent's or Merger Sub's freedom of action with respect of, or their ability
to retain, the Company or any material portions thereof or any of the
businesses, product lines, properties or assets of the Company, without the
Parent's prior written consent (which may be withheld in the Parent's sole
and absolute discretion).
(b) Prior to the Closing, each party shall promptly consult
with the other parties hereto with respect to, provide any necessary
information with respect to, and provide the other parties (or their
respective counsel) with copies of, all filings made by such party with any
Governmental Entity or any other information supplied by such party to a
Governmental Entity in connection with this Agreement, the Merger and the
other Transactions. Each party hereto shall promptly inform the other of any
communication from any Governmental Entity regarding any of the Transactions.
If any party hereto or Affiliate thereof receives a request for additional
information or documentary material from any such Governmental Entity with
respect to any of the Transactions, then such party shall endeavor in good
faith to make, or cause to be made, as soon as reasonably practicable and
after consultation with the other parties, an appropriate response in
compliance with such request. To the extent that transfers, amendments or
modifications of permits (including environmental permits) are required as a
result of the execution of this Agreement or consummation of any of the
Transactions, the Company shall use best efforts to effect such transfers,
amendments or modifications.
(c) The Company and the Parent shall file as soon as
practicable notifications under the HSR Act and respond as promptly as
practicable to any inquiries received from the Federal Trade Commission and
the Antitrust Division of the Department of Justice for additional
information or documentation and respond as promptly as practicable to all
inquiries and requests received from any state Attorney General or other
Governmental Entity in connection with antitrust matters. Concurrently with
the filing of notifications under the HSR Act or as soon thereafter as
practicable, the Company and the Parent shall each request early termination
of the HSR Act waiting period.
(d) Notwithstanding the foregoing, nothing in this Agreement
shall be deemed to require the Parent or Merger Sub to commence any
litigation against any entity in order to
21
facilitate the consummation of any of the Transactions or to defend against
any litigation brought by any Governmental Entity seeking to prevent the
consummation of any of the Transactions.
Section 6.4 NO SOLICITATION OF COMPETING TRANSACTION.
(a) Neither the Company nor any Affiliate of the Company
shall (and the Company shall cause the officers, directors, employees,
representatives and agents of the Company and each Affiliate of the Company,
including investment bankers, attorneys and accountants, not to), directly or
indirectly, encourage, solicit, participate in or initiate or resume
(including by way of furnishing or disclosing non-public information) or
take any action designed to facilitate any discussions, inquiries,
negotiations or the making of any proposals with respect to or concerning any
Acquisition Proposal. Nothing contained in this Section 6.4 or any other
provision of this Agreement shall prohibit the Company or the Company's board
of directors from (i) taking and disclosing to the Company's stockholders a
position with respect to a tender or exchange offer by a third party not
solicited, encouraged, discussed, continued or failed to be ceased or
terminated in contravention of this Agreement pursuant to Rules 14d-9 and
l4e-2 under the Exchange Act, or (ii) making such disclosure to the Company's
stockholders as, in the good faith judgment of the board of directors of the
Company, pursuant to advice from outside counsel, is reasonably expected to
be required under applicable law, PROVIDED that the Company may not, except
as permitted by Section 6.4(b), withdraw or modify, or propose to withdraw or
modify, its position with respect to the Merger or approve or recommend, or
propose to approve or recommend any Acquisition Proposal, or enter into any
agreement with respect to any Acquisition Proposal. Upon execution of this
Agreement, the Company will immediately cease any existing activities,
discussions or negotiations with any parties conducted heretofore with
respect to any of the foregoing. Notwithstanding the foregoing, prior to the
Closing, the Company may furnish information concerning its business,
properties or assets to any corporation, partnership, Person or other entity
or group pursuant to appropriate confidentiality agreements (which shall
permit the disclosure contemplated by this Section 6.4(a)), and may negotiate
and participate in discussions and negotiations with such entity or group
concerning an Acquisition Proposal if:
(x) such entity or group has, on an unsolicited basis,
submitted a bona fide written proposal to the board of directors of the
Company relating to any such transaction which the board determines in
good faith, consistent with advice of an independent investment banker,
(i) is reasonably capable of being and likely to be funded on the
disclosed terms and (ii) is reasonably likely to be consummated in
accordance with its terms; and
(y) in the opinion of the Special Committee such action
is reasonably expected to be required in order to discharge the board of
directors of the Company's fiduciary duties to the Company's stockholders
under applicable law, determined only after the Special Committee
concludes in good faith that the Acquisition Proposal could reasonably be
expected to constitute a proposal that is superior, from a financial
point of view, to the Merger.
The Company will promptly notify the Parent of the existence of any proposal,
discussion, negotiation or inquiry received by the Company or any of its
representatives, and the Company
22
will promptly communicate to the Parent the terms of any proposal,
discussion, negotiation or inquiry which it or any of its representatives may
receive (and will promptly provide to the Parent copies of any written
materials received by the Company or its representatives in connection with
such proposal, discussion, negotiation or inquiry) and the identity of the
party making such proposal or inquiry or engaging in such discussion or
negotiation. The Company will promptly provide to the Parent any non-public
information concerning the Company provided to any other party which was not
previously provided to the Parent.
(b) Except as set forth below in this Section 6.4(b),
neither the Company's board of directors nor any committee thereof shall (i)
withdraw or modify, or propose to withdraw or modify, or take any action in
furtherance of the withdrawal or modification, in a manner adverse to the
Parent or Merger Sub, the approval or recommendation by such board of
directors or any such committee of this Agreement or the Merger, (ii) approve
or recommend or propose to approve or recommend or take any action in
furtherance of approval of recommendation of, any Acquisition Proposal or
(iii) enter into any agreement with respect to any Acquisition Proposal.
Notwithstanding the foregoing, prior to the date of the Special Meeting, the
Company's board of directors may withdraw or modify its approval or
recommendation of this Agreement or the Merger, approve or recommend a
Superior Proposal, or enter into an agreement with respect to a Superior
Proposal, in each case at any time after the third Business Day following the
Parent's receipt of written notice from the Company advising the Parent that
the board of directors of the Company has received a Superior Proposal which
it intends to accept, specifying the terms and conditions of such Superior
Proposal, identifying the Person making such Superior Proposal, but only if
the Company shall, upon the request of Parent, have caused its financial and
legal advisors to negotiate in good faith with the Parent to make such
adjustments in the terms and conditions of this Agreement as would enable the
Company to proceed with the transactions contemplated herein on such adjusted
terms. Nothing in this Agreement shall permit the Company to enter into any
agreement, arrangement or understanding with any third party providing for
the payment of fees or reimbursement of expenses in the event the Parent
makes a proposal in response to such Superior Proposal.
Section 6.5 PUBLICITY. The initial press release with
respect to the execution of this Agreement shall be a joint press release
reasonably acceptable to the Parent and the Company. Thereafter, until the
Appointment Date, or the date this Agreement is terminated pursuant to
Article VIII (whichever occurs first), neither the Company, the Parent nor
any of their respective Affiliates shall issue or cause the publication of
any press release or other announcement with respect to the Merger, this
Agreement or the other Transactions without prior consultation with the other
party, except as may be required by law or by any listing agreement with a
national securities exchange or trading market.
Section 6.6 NOTIFICATION OF CERTAIN MATTERS. The Company
shall give prompt written notice to the Parent, of (i) the occurrence or
non-occurrence of any event the occurrence or non-occurrence of which caused
or would reasonably be expected to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material
respect at or prior to the Effective Time and (ii) any material failure of
the Company, to comply with or satisfy any covenant, condition or agreement
to be complied with or satisfied by it hereunder, PROVIDED, HOWEVER, that the
delivery of any notice pursuant to this Section 6.6 shall not limit or
otherwise affect the remedies available hereunder to the Parent.
23
Section 6.7 DIRECTORS' AND OFFICERS' INSURANCE AND
INDEMNIFICATION.
(a) The Parent shall, and shall cause the Surviving
Corporation (or any successor to the Surviving Corporation) to indemnify,
defend and hold harmless each Indemnified Party against all losses, claims,
damages, liabilities, costs, fees and expenses, including fees and
disbursements of counsel and judgments, fines, losses, claims, liabilities
and amounts paid in settlement (PROVIDED that any such settlement is effected
with the written consent of the Parent or the Surviving Corporation) arising
out of actions or omissions occurring at or prior to the Effective Time to
the full extent permitted under applicable Delaware law, the terms of the
Company's certificate of incorporation or the by-laws, as in effect at the
date hereof, PROVIDED that, in the event any claim, demand or claims are
asserted or made, all rights to indemnification in respect of any such
demand, claim or claims shall continue until disposition of any and all such
claims.
(b) The Parent shall, and shall cause the Surviving
Corporation to maintain in effect the Company's existing officers' and
directors' liability insurance for a period of not less than six years after
the Effective Date covering those persons who are currently covered by the
Company's officers' and directors' insurance, PROVIDED, that the Parent may
substitute therefor policies of at least the same coverage and amounts
containing terms no less advantageous to such former directors or officers.
(c) The certificate of incorporation and the bylaws of the
Surviving Corporation shall contain provisions with respect to
indemnification identical to those contained in the certificate of
incorporation and bylaws of the Company, each as in effect on the date of
this Agreement. The Parent and the Surviving Corporation shall not take any
action to amend, repeal, supplement or modify such provisions in a manner
adverse to any Indemnified Party.
(d) In the event Parent or the Surviving Corporation or any
of their respective successors or assigns (i) consolidates with or merges
into any other Person and shall not be the continuing or surviving
corporation or entity of such consolidation or merger, or (ii) transfers or
conveys all or substantially all of its properties and assets to any Person,
then, and in each such case, to the extent necessary to effectuate the
purposes of this Section 6.7, proper provision shall be made so that the
successors and assigns of Parent or Surviving Corporation assume the
obligations set forth in this Section 6.7, and none of the actions described
in clause (i) or (ii) shall be taken until such provision is made.
(e) The provisions of this Section 6.7 are intended to be
for the benefit of, and shall be enforceable by, each of the Indemnified
Parties, their heirs and their representatives.
Section 6.8 STATE TAKEOVER LAWS. Notwithstanding any other
provision in this Agreement, in no event shall the approval of the
Transactions under Section 203 of the DGCL be withdrawn, revoked or modified
by the board of directors of the Company. If any state takeover statute
other than Section 203 of the DGCL becomes or is deemed to become applicable
to the Agreement, the Merger or the other Transactions, the Company shall
take all action necessary to render such statute inapplicable to all of the
foregoing.
24
Section 6.9 MERGER SUB COMPLIANCE. The Parent shall cause
Merger Sub to, and unconditionally guarantees that the Merger Sub will,
comply with all of its obligations under or related to this Agreement.
Section 6.10 PREPARATION OF PROXY STATEMENT; THE SPECIAL MEETING
(a) As promptly as reasonably practicable following the date
hereof, the Company and the Parent shall cooperate in preparing and the
Parent shall cause to be filed with the SEC a mutually acceptable form of the
Registration Statement and the Schedule 13E-3. The Proxy
Statement/Prospectus will be included as a prospectus in and will constitute
a part of the Registration Statement. Each of the Company and the Parent
shall use commercially reasonable efforts to have the Proxy
Statement/Prospectus and the Schedule 13E-3 cleared by the SEC and the
Registration Statement declared effective by the SEC and to keep the
Registration Statement effective as long as is necessary to consummate the
Merger and the Transactions. The Company and the Parent shall, as promptly
as practicable after receipt thereof, provide the other party copies of any
written comments and advise the other party of any oral comments, with
respect to the Proxy Statement/Prospectus, the Schedule 13E-3 or the
Registration Statement received from the SEC. The parties shall cooperate
and provide the other with a reasonable opportunity to review and comment on
any amendment or supplement to the Proxy Statement/Prospectus, the Schedule
13E-3 and the Registration Statement prior to filing with the SEC, and will
provide each other with a copy of all such filings made with the SEC.
Notwithstanding any other provision herein to the contrary, no amendment or
supplement (including by incorporation by reference) to the Proxy
Statement/Prospectus, the Schedule 13E-3 or the Registration Statement shall
be made without the approval of both parties, which approval shall not be
unreasonably withheld or delayed; PROVIDED that with respect to documents
filed by a party which are incorporated by reference in the Registration
Statement, the Schedule 13E-3 or Proxy Statement/Prospectus, the right of
approval shall apply only with respect to information relating to the other
party or its business, financial condition or results of operations. The
Parent shall also take any action (other than qualifying to do business in
any jurisdiction or delivering a general consent to service of process) in
which it is not now so qualified required to be taken under any applicable
state securities laws in connection with the Merger and the Company shall
furnish all information concerning it and the holders of its capital stock as
may be reasonably requested in connection with any such action. Each party
will advise the other party, promptly after it receives notice thereof, of
the time when the Registration Statement has become effective, the issuance
of any stop order, the suspension of the qualification of the Parent Warrants
issuable in connection with the Merger for offering or sale in any
jurisdiction, or any request by the SEC for amendment of or supplement to the
Proxy Statement/Prospectus, the Schedule 13E-3 or the Registration Statement.
(b) The Company shall duly take all lawful action to call,
give notice of, and convene the Special Meeting for the purpose of adopting
this Agreement and shall take all lawful action to solicit the adoption of
this Agreement, and the board of directors of the Company shall recommend
adoption of this Agreement by the stockholders of the Company to the effect
as set forth in Section 4.5., and shall not (x) withdraw, modify or qualify
(or propose to withdraw, modify or qualify) in any manner adverse to the
Parent such recommendation or (y) take any action or make any statement in
connection with the Special Meeting inconsistent with such recommendation;
PROVIDED, HOWEVER, that the board of directors of the Company may make a
25
change in such recommendation pursuant to Section 6.4 hereof. Notwithstanding
any change in Company's recommendation of adoption of this Agreement, this
Agreement shall be submitted to the stockholders of the Company at the
Special Meeting for the purpose of adopting this Agreement and nothing
contained herein shall be deemed to relieve the Company of such obligation.
ARTICLE VII
CONDITIONS
Section 7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT
THE MERGER. The respective obligation of each party to effect the Merger
shall be subject to the satisfaction at or prior to the Effective Time of
each of the following conditions, any and all of which may be waived in whole
or in part by the Company, the Parent or Merger Sub, as the case may be, to
the extent permitted by applicable law:
(a) STOCKHOLDER APPROVAL. This Agreement shall have been
adopted by the requisite vote of the holders of the Shares and the Special
Common Stock in order to consummate the Merger.
(b) STATUTES; COURT ORDERS. No statute, rule or regulation
shall have been enacted or promulgated by any governmental authority which
prohibits the consummation of the Merger, and there shall be no order or
injunction of a court of competent jurisdiction in effect precluding
consummation of the Merger.
(c) HSR APPROVAL. The applicable waiting period under the HSR
Act shall have expired or been terminated.
(d) REGISTRATION STATEMENT. The Registration Statement shall
have been declared effective by the SEC under the Securities Act and no stop
order suspending the effectiveness of the Registration Statement shall have been
issued by the SEC and no proceedings for that purpose shall have been initiated
or threatened by the SEC.
Section 7.2 COMPANY'S OBLIGATIONS TO EFFECT THE MERGER. The
obligations of the Company to consummate the Merger shall be subject to the
satisfaction on or prior to the Closing Date of each of the following
conditions, any and all of which may be waived in whole or in part by the
Company, to the extent permitted by applicable law.
(a) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties of the Parent and Merger Sub set forth in this
Agreement shall be true and correct in all material respects as of the Closing
Date as though made on and as of the Closing Date (except to the extent that
such representations and warranties speak as of another date, in which case such
representations and warranties shall be true and correct in all material
respects as of such other date), and the Company shall have received a
certificate of a senior executive officer and a senior financial officer of the
Parent to such effect.
26
(b) PERFORMANCE OF OBLIGATIONS OF THE PARENT. The Parent and
Merger Sub shall each have performed or complied with all agreements and
covenants required to be performed by it under this Agreement at or prior to the
Closing Date in all material respects and the Company shall have received a
certificate of a senior executive officer and a senior financial officer of the
Parent to such effect.
(c) LISTING OF WARRANTS AND WARRANT SHARES. The Warrants and
the Warrant Shares shall have been approved for listing on the Nasdaq National
Market, subject to official notice of issuance.
(d) NO ACQUISITION PROPOSALS. There shall not have been
publicly announced any Acquisition Proposal with respect to the Parent.
Section 7.3 CONDITIONS TO THE PARENT'S AND MERGER SUB'S
OBLIGATIONS TO EFFECT THE MERGER. The obligations of the Parent and Merger Sub
to consummate the Merger shall be subject to the satisfaction on or prior to the
Closing Date of each of the following conditions, any and all of which may be
waived in whole or in part by the Parent and Merger Sub, to the extent permitted
by applicable law.
(a) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties of the Company set forth in this Agreement shall
be true and correct in all material respects as of the Closing Date as though
made on and as of the Closing Date (except to the extent that such
representations and warranties speak as of another date, in which case such
representations and warranties shall be true and correct all material respects
as of such other date), and the Parent shall have received a certificate of a
senior executive officer and a senior financial officer of the Company to such
effect.
(b) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company
shall have performed or complied with all agreements and covenants required to
be performed by it under this Agreement at or prior to the Closing Date in all
material respects, and the Parent shall have received a certificate of a senior
executive officer and a senior financial officer of the Company to such effect.
ARTICLE VIII
TERMINATION
Section 8.1 TERMINATION. The Transactions may be terminated or
abandoned at any time prior to the Effective Time, whether before or after
stockholder approval thereof:
(a) By the mutual written consent of the Parent and the
Company.
(b) By either of the Company or the Parent:
(i) if the Effective Time shall not have occurred on or
before 5:00 p.m. Pacific Daylight Savings Time on September 30,
2000; PROVIDED, HOWEVER, that the right to terminate this
Agreement under this Section 8.1(b)(i) shall not be
27
available to any party whose failure to fulfill any obligation
under this Agreement has been the cause of, or resulted in, the
failure of Effective Time to occur on or prior to such date; or
(ii) if any Governmental Entity shall have issued an
order, decree or ruling or taken any other action (which order,
decree, ruling or other action the parties hereto shall use
their reasonable efforts to lift), which permanently restrains,
enjoins or otherwise prohibits the acceptance for payment of,
or payment for, Shares pursuant to the Merger and such order,
decree, ruling or other action shall have become final and
non-appealable.
(c) By the Company:
(i) in connection with entering into a definitive
agreement as permitted by Section 6.4(b);
(ii) if the Parent or Merger Sub shall have breached
in any material respect any of their respective
representations, warranties, covenants or other agreements
contained in this Agreement, which breach cannot be or has not
been cured within thirty days after the giving of written
notice by the Company to the Parent or Merger Sub, as
applicable.
(d) By the Parent (on behalf of itself and Merger Sub):
(i) if the Company's board of directors shall have
withdrawn, modified or changed in a manner adverse to the
Parent or Merger Sub its approval or recommendation of this
Agreement or the Merger or shall have recommended an
Acquisition Proposal or shall have executed an agreement in
principle or definitive agreement relating to an Acquisition
Proposal or similar business combination with a Person or
entity (other than the Parent, Merger Sub or their Affiliates);
or
(ii) if the Company shall have breached in any
material respect any of its representations, warranties,
covenants or other agreements contained in this Agreement which
breach cannot be or has not been cured within thirty days after
the giving of written notice by the Parent to the Company.
Section 8.2 EFFECT OF TERMINATION. In the event of the
termination or abandonment of the Transactions by any party hereto pursuant to
the terms of this Agreement, written notice thereof shall forthwith be given to
the other party or parties specifying the provision hereof pursuant to which
such termination or abandonment of the Transactions is made, and there shall be
no liability on the part of the Parent or the Company except (a) for fraud or
for willful material breach of this Agreement prior to such termination or
abandonment of the Transactions and (b) as set forth in Section 9.1.
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ARTICLE IX
MISCELLANEOUS
Section 9.1 FEES AND EXPENSES. Except as specifically provided
to the contrary in this Agreement, all costs and expenses incurred in connection
with this Agreement and the consummation of the Transactions shall be paid by
the party incurring such expenses.
Section 9.2 AMENDMENT AND MODIFICATION. Subject to applicable
law, this Agreement may be amended, modified and supplemented in any and all
respects, whether before or after any vote of the stockholders of the Company
contemplated hereby, by written agreement of the parties hereto, by action taken
by their respective boards of directors at any time prior to the Closing Date
with respect to any of the terms contained herein; PROVIDED, HOWEVER, that after
the approval of this Agreement by the stockholders of the Company, no such
amendment, modification or supplement shall reduce the amount or change the form
of the Merger Consideration.
Section 9.3 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. None
of the representations and warranties in this Agreement or in any schedule,
instrument or other document delivered pursuant to this Agreement shall survive
the Effective Time. The foregoing sentence shall not limit any covenant or
agreement of the parties which by its terms contemplates performance after the
Effective Time.
Section 9.4 NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered Personally,
telecopied (which is confirmed) or sent by an internationally recognized
overnight courier service, such as Federal Express, to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) if to the Parent or Merger Sub, to:
Dura Pharmaceuticals, Inc.
0000 Xxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Office of the General Counsel
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxx, Phleger & Xxxxxxxx LLP
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
and
29
if to the Company, to:
Xxxxxx Development Corporation II, Inc.
0000 Xxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Chairman of the Special
Committee
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
and
Xxxx X. Xxxx, Vice President, Chief Financial Officer
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Section 9.5 COUNTERPARTS. This Agreement may be executed in one
or more counterparts (whether delivered by facsimile or otherwise), each of
which shall be considered one and the same agreement and shall become effective
when two or more counterparts have been signed by each of the parties and
delivered to the other parties.
Section 9.6 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES.
This Agreement (including the documents and the instruments referred to herein
and therein): (a) constitute the entire agreement and supersede all prior
agreements, negotiations, arrangements and understandings, both written and
oral, among the parties with respect to the subject matter hereof and thereof,
and (b) except as provided in Section 6.7 are not intended to confer upon any
Person, other than the parties hereto, any rights or remedies hereunder.
Section 9.7 SEVERABILITY. Any term or provision of this
Agreement that is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable in any situation in any jurisdiction shall
not affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the invalid, void or unenforceable
term or provision in any other situation or in any other jurisdiction. If the
final judgment of a court of competent jurisdiction or other authority declares
that any term or provision hereof is invalid, void or unenforceable, the parties
agree that the court making such determination shall have the power to and
shall, subject to the discretion of such court, reduce the scope, duration, area
or applicability of the term or provision, to delete specific words or phrases,
or to replace any invalid, void or unenforceable term or provision with a term
or provision that is valid and enforceable and that comes closest to expressing
the intention of the invalid or unenforceable term or provision.
30
Section 9.8 GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware without
giving effect to the principles of conflicts of law thereof.
Section 9.9 ENFORCEMENT. 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 their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any court of the
United States located in the State of Delaware or in 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 (a) consents to submit itself to the
personal jurisdiction of any Federal court located in the State of Delaware or
any Delaware state court in the event any dispute arises out of this Agreement
or any of the Transactions, (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, (c) agrees that it will not bring any action relating to this
Agreement or any of the Transactions in any court other than a Federal court
sitting in the State of Delaware or a Delaware state court and (d) irrevocably
waives any right it may have in any such proceeding to a trial by jury.
Section 9.10 EXTENSION, WAIVER. At any time prior to the
Effective Time, the parties may (a) extend the time for the performance of any
of the obligations or other acts of the other parties, (b) waive any
inaccuracies in the representations and warranties of the other parties
contained in this Agreement or in any document delivered pursuant to this
Agreement or (c) subject to the proviso of Section 8.2, waive compliance by the
other parties with any of the agreements or conditions contained in this
Agreement. Any agreement on the part of a party to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
such party. The failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a waiver of those
rights.
Section 9.11 ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties (whether by operation of law or otherwise) without the prior written
content of the other parties, except that Merger Sub may assign, in its sole
discretion, any or all of its rights, interests and obligations hereunder to the
Parent or to any direct or indirect wholly owned Subsidiary of the Parent and
such assignment shall not relieve Merger Sub of any obligation under this
Agreement. 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.
31
IN WITNESS WHEREOF, the Parent, Merger Sub and the Company have
caused this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
DURA PHARMACEUTICALS, INC.
By /s/ Xxxxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President and Chief Financial
Officer
STARFISH ACQUISITION CORP., INC.
By /s/ Xxxxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Financial Officer and Treasurer
XXXXXX DEVELOPMENT CORPORATION II,
INC.
By /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Chairman, President and Chief Executive Officer
------------------------------------------------------------------------------
------------------------------------------------------------------------------
WARRANT AGREEMENT
BY AND BETWEEN
DURA PHARMACEUTICALS, INC.
AND
XXXXX XXXXXX SHAREHOLDER SERVICES, L.L.C.
DATED AS OF
_______, 2000
------------------------------------------------------------------------------
------------------------------------------------------------------------------
EXHIBIT A
WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of _________, 2000, by and between Dura
Pharmaceuticals, Inc., a Delaware corporation ("Dura"), and ChaseMellon
Shareholder Services, L.L.C., as warrant agent (the "Warrant Agent"), in favor
of each person who acquires from time to time warrants (the "Warrants") to
purchase shares of Dura's Common Stock, $.001 par value per share (the "Warrant
Shares").
Section 1. APPOINTMENT OF WARRANT AGENT. Dura hereby appoints the
Warrant Agent to act as agent for Dura in accordance with the instructions set
forth herein, and the Warrant Agent hereby accepts such appointment, upon the
terms and conditions hereinafter set forth.
Section 2. CERTAIN DEFINITIONS. As used herein, the following terms
shall have the following meanings:
"CLOSING PRICE" means the closing price per share of Common Stock on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading or, if not listed or traded on any such exchange, on the
Nasdaq National Market or if not listed or traded on any such exchange or the
Nasdaq National Market, the average of the last bid and asked prices per share
on the Nasdaq over-the-counter system or, if such quotations are not available,
the fair market value as reasonably determined by the board of directors of Dura
or any committee of such board.
"COMMISSION" means the Securities and Exchange Commission or any
successor governmental organization or entity responsible for administration of
the Securities Act.
"COMMON STOCK" means (i) the class of stock designated as the Common
Stock, $.001 par value per share, of Dura, on the date hereof or (ii) any other
class of stock resulting from successive changes or reclassifications of such
shares consisting solely of changes in par value, or from par value to no par
value, or from no par value to par value. Unless the context requires
otherwise, all references to Common Stock and Warrant Shares in this Agreement
and in the Warrant Certificates shall, in the event of an adjustment pursuant to
Section 12 hereof, be deemed to refer also to any other securities or property
then issuable upon exercise of the Warrants as a result of such adjustment.
"ELIGIBLE INSTITUTION" shall have the meaning set forth in Section 8(b)
hereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXERCISE PRICE" shall have the meaning set forth in Section 5(b) hereof.
"EXERCISE PERIOD" means the period during which the Warrants may be
exercised as set forth in Section 5(a) hereof.
"EXPIRATION DATE" shall have the meaning set forth in Section 5(a)
hereof.
"HOLDERS" shall have the meaning set forth in Section 4(b) hereof.
"NASD" means the National Association of Securities Dealers, Inc.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"WARRANT CERTIFICATE" shall have the meaning set forth in Section 3(a)
hereof.
"WARRANT REGISTER" means the books and records kept by the Warrant Agent
for the registration, and the registration of transfer, of the Warrant
Certificates in which shall be registered the names and addresses of Holders of
Warrants evidenced by Warrant Certificates in registered form and the
certificate numbers and denominations of such Warrant Certificates.
Section 3. FORM OF WARRANT CERTIFICATE.
(a) The certificates evidencing the Warrants (the "Warrant
Certificates"), and the forms of election to purchase Warrant Shares and of
assignment to be printed on the reverse thereof, shall be substantially in the
form set forth in EXHIBIT A hereto and may have such letters, numbers or other
marks of identification or designation and such legends, summaries or
endorsements printed, lithographed or engraved thereon as Dura reasonably deems
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any law, any rule or regulation related
thereto, or with any rule or regulation of the NASD, the Nasdaq National Market
or any securities exchange on which the Warrants may from time to time be
listed.
(b) Each Warrant shall entitle the Holder thereof to purchase
____________ of a Warrant Share upon the exercise thereof at the applicable
Exercise Price, subject to adjustment as provided in Section 12 hereof, during
the Exercise Period; PROVIDED, HOWEVER, that the Warrants are exercisable only
for whole shares; cash will be paid in lieu of fractional shares in accordance
with Section 5(e) hereof. Each Warrant Certificate shall be executed on behalf
of Dura by the manual or facsimile signature of the present or any future
President or any officer of Dura, under its corporate seal, affixed or in
facsimile, attested by the manual or facsimile signature of the present or any
future Secretary or Assistant Secretary of Dura. Warrants shall be dated as of
the date of their initial issue.
Section 4. REGISTRATION AND COUNTERSIGNATURE.
(a) The Warrant Agent shall maintain the Warrant Register. The
Warrant Certificates shall be countersigned by the Warrant Agent and shall not
be valid for any purpose unless so countersigned. The Warrant Certificates
shall be so countersigned, however, by the Warrant Agent and shall be delivered
by the Warrant Agent, notwithstanding whether the persons whose manual or
facsimile signatures appear thereon as proper officers of Dura shall have ceased
to be such officers at the time of such countersignature or delivery.
(b) Prior to due presentment for registration or transfer of
the Warrant Certificates, Dura and the Warrant Agent may deem and treat the
registered holder (a "Holder")
2
thereof as the absolute owner of the Warrant Certificates (notwithstanding
any notation of ownership or other writing made thereon by anyone other than
Dura or the Warrant Agent), for the purpose of any exercise thereof and for
all other purposes, and neither Dura nor the Warrant Agent shall be affected
by any notice to the contrary.
Section 5. DURATION AND EXERCISE OF WARRANTS.
(a) Warrants may be exercised at any time or from time to time
on or after the date hereof and will expire at 5:00 p.m., New York City time, on
______, 2005, (the "Expiration Date"). Upon the Expiration Date, all rights
evidenced by the Warrants shall cease and the Warrants shall become void.
(b) Subject to the provisions of this Agreement, the Holder of
each Warrant shall have the right to purchase from Dura (and Dura shall issue
and sell to such Holder) the number of fully paid and nonassessable Warrant
Shares set forth on such Holder's Warrant Certificate (or such number of Warrant
Shares as may result from adjustments made from time to time as provided in this
Agreement) at the price of $________ per Warrant Share in lawful money of the
United States of America (such exercise price per Warrant Share, as adjusted
from time to time as provided herein, being referred to herein as the "Exercise
Price"), upon (i) surrender of the Warrant Certificates to Dura at the office of
the Warrant Agent designated by the Warrant Agent for such purpose with the
exercise form on the reverse thereof duly completed and signed by the Holder or
Holders thereof or by a duly appointed legal representative thereof or by a duly
authorized attorney, such signature to be guaranteed by an Eligible Institution
(as defined in Section 8(b) hereof) if such guarantee is required by the terms
of the Warrant Certificate, and (ii) payment, in lawful money of the United
States of America, of the Exercise Price for the Warrant Share or Warrant Shares
in respect of which such Warrant is then exercised. The Exercise Price payable
upon exercise of any Warrant may be paid only by certified or, at the option of
the Holder, official bank check payable to the order of Dura. Upon surrender of
the Warrant Certificate, and payment of the Exercise Price, Dura shall issue and
cause to be delivered with all reasonable dispatch to or upon the written order
of the Holder of such Warrant and in such name or names as such Holder may
designate, a certificate or certificates for the number of Warrant Shares so
purchased upon the exercise of such Warrants, together with cash or check, at
Dura's option, in respect of any fraction of a Warrant Share issuable upon such
surrender pursuant to Section 5(e) hereof. The Warrant Agent shall deliver on a
weekly basis all funds received upon exercise of the Warrants to Dura, 0000 Xxxx
Xxxxxxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000, Attention: Senior Vice President and
Chief Financial Officer.
(c) Each person in whose name any certificate for Warrant
Shares is issued upon the exercise of Warrants shall for all purposes be deemed
to have become the holder of record of the Warrant Shares represented thereby,
and such certificate shall be dated the date upon which the Warrant Certificate
evidencing such Warrants was duly surrendered and payment of the Exercise Price
(and any applicable transfer taxes pursuant to Section 9 hereof) was made;
PROVIDED, HOWEVER, that if the date of such surrender and payment is a date upon
which the Common Stock transfer books of Dura are closed, such person shall be
deemed to have become the record holder of such Warrant Shares on, and such
certificate shall be dated, the next succeeding business day on which the Common
Stock transfer books of Dura are open.
3
(d) In the event that, during the Exercise Period, fewer than
all of the Warrants represented by a Warrant Certificate are exercised, a new
Warrant Certificate, duly executed by Dura, will be issued for the remaining
number of Warrants exercisable pursuant to the Warrant Certificate so
surrendered, and the Warrant Agent shall countersign and deliver such new
Warrant Certificate to the Holder of such unexercised Warrants pursuant to the
provisions of this Section 5 and of Section 4 hereof.
(e) No fractional shares of Common Stock or scrip shall be
issued to any Holder in connection with the exercise of a Warrant. Instead of
any fractional shares of Common Stock that would otherwise be issuable to such
Holder, Dura shall pay to such Holder a cash adjustment in respect of such
fractional interest in an amount equal to that fractional interest of the then
current Closing Price on the date of exercise per share of Common Stock.
(f) The number of Warrant Shares to be received upon the
exercise of a Warrant and the price to be paid for a Warrant Share are subject
to adjustment from time to time as hereinafter set forth.
(g) Warrants not exercised on or prior to the Expiration Date
shall become void and all rights in respect thereof shall cease as of such time.
Section 6. RESERVATION OF WARRANT SHARES; STOCK CERTIFICATES. Dura
shall at all times reserve, for issuance and delivery upon exercise of the
Warrants, such number of Warrant Shares or other shares of capital stock of Dura
as may be issuable from time to time upon exercise of the Warrants. All such
shares shall be duly authorized and, when issued upon such exercise and receipt
by Dura of payment in full of the Exercise Price, shall be validly issued, fully
paid and nonassessable, free and clear of all liens, security interests, charges
and other encumbrances or restrictions on sale and free and clear of all
preemptive rights. The Warrant Agent is hereby irrevocably authorized to
requisition, from time to time from the transfer agent for the Common Stock,
stock certificates issuable upon exercise of outstanding Warrants. Dura will
supply such transfer agent with duly executed stock certificates for such
purpose. All Warrant Certificates surrendered upon exercise shall be cancelled
by the Warrant Agent and shall thereafter be delivered to Dura or otherwise
disposed of in a manner satisfactory to Dura. Unless all Warrants shall have
been exercised prior to 5:00 p.m., New York City time, on the Expiration Date,
the Warrant Agent shall certify to Dura, as of the close of business on the
Expiration Date, the total aggregate number of Warrants then outstanding, and
thereafter no shares of Common Stock shall be subject to reservation in respect
of such Warrants. Dura shall keep a copy of this Agreement on file with its
transfer agent and with every transfer agent for any shares of Common Stock.
Section 7. TRANSFER AND REGISTRATION OF THE WARRANTS AND WARRANT
SHARES.
(a) The Warrants and the Warrant Shares, and any interest in
either, may be sold, assigned, pledged, encumbered or in any other manner
transferred or disposed of, in whole or in part, only in accordance with Section
8 hereof and in compliance with applicable United States federal and state
securities laws and the terms and conditions hereof.
4
(b) The Warrants and the Warrant Shares have been registered
under the Securities Act pursuant to a registration statement on Form S-4 (File
No. 333-_______) declared effective under the Securities Act (the "Registration
Statement"). Dura covenants and agrees:
(i) it will prepare and file with the Commission such
amendments and supplements to the Registration Statement and the prospectus used
in connection therewith as may be necessary to keep the Registration Statement
effective through the termination of the Exercise Period or until such earlier
time as no Warrants remain outstanding;
(ii) as expeditiously as possible, to register or qualify
the Warrants and the Warrant Shares under the securities or "Blue Sky" laws of
each jurisdiction in which such registration or qualification is necessary; and
(iii) to pay all expenses incurred by Dura in complying
with this Section 7(b), including, without limitation (A) all registration and
filing fees, (B) all printing expenses, (C) all fees and disbursements of
counsel and independent public accountants for Dura, (D) all NASD and "Blue Sky"
fees and expenses (including fees and expenses of counsel in connection with any
"Blue Sky" surveys) and (E) the entire expense of any special audits incident to
or required in connection with any such registration.
Section 8. EXCHANGE, TRANSFER OR ASSIGNMENT OF WARRANTS.
(a) Warrants may be exchanged, at the option of the Holder
thereof, upon presentation and surrender to the Warrant Agent of the Warrant
Certificate evidencing such Warrants, for other Warrant Certificates of
different denominations, entitling the Holder or Holders thereof to purchase in
the aggregate the same number of Warrant Shares as did such surrendered Warrant
Certificate. Subject to the preceding sentence, a Warrant Certificate may be
divided or combined with other Warrant Certificates that carry the same rights
upon presentation thereof at the office of the Warrant Agent, together with
written notice signed by the Holder or Holders thereof specifying the names and
denominations in which new Warrant Certificates are to be issued.
(b) Warrants may be assigned or transferred, at the option of
the Holder thereof, upon surrender of the Warrant Certificates evidencing such
Warrants to the Warrant Agent, accompanied (if so required by Dura or the
Warrant Agent) by a written instrument or instruments of transfer in form
satisfactory to Dura and the Warrant Agent, duly executed by such Holder or by a
duly authorized representative or attorney, such signature to be guaranteed by a
commercial bank or trust company having an office in the United States, by a
broker or a dealer that is a member of the NASD or by a member of a national
securities exchange (any such entity, an "Eligible Institution"). Upon any such
registration of transfer, a new Warrant Certificate shall be issued to the
transferee and the surrendered Warrant Certificate shall be cancelled by the
Warrant Agent. Warrant Certificates so cancelled shall be delivered by the
Warrant Agent to Dura from time to time or otherwise disposed of by the Warrant
Agent in a manner satisfactory to Dura.
(c) Any transfer, exchange or assignment of Warrants (including
any new Warrants issued pursuant to Section 10 hereof) shall be without charge
(other than the cost of
5
any transfer tax) to the Holder and any new Warrant or Warrants issued
pursuant to this Section 8 shall be dated the date hereof.
Section 9. PAYMENT OF TAXES. Dura shall pay all documentary stamp
taxes attributable to the original issuance of the Warrants and of Warrant
Shares; PROVIDED, HOWEVER, that Dura shall not be required to (a) pay any tax
which may be payable in respect of any transfer involving the transfer and
delivery of Warrant Certificates or the issuance or delivery of certificates for
Warrant Shares in a name other than that of the Holder of the Warrant
Certificate surrendered upon the exercise of a Warrant or (b) issue or deliver
any certificate for Warrant Shares upon the exercise of any Warrants until any
such tax required to be paid under clause (a) shall have been paid, all such tax
being payable by the Holder of such Warrant at the time of surrender.
Section 10. MUTILATED OR MISSING WARRANT CERTIFICATES. In the event
that any Warrant Certificate shall be mutilated, lost, stolen or destroyed, Dura
may in its discretion issue, and the Warrant Agent may countersign and deliver,
upon the request of the Holder of the Warrants evidenced by such Warrant
Certificate, in exchange for and upon cancellation of any such mutilated Warrant
Certificate, or in substitution for any such lost, stolen or destroyed Warrant
Certificate, a new Warrant Certificate of like tenor and evidencing the same
number of Warrant Shares as were evidenced by such mutilated, lost, stolen or
destroyed Warrant Certificate, but only upon receipt of evidence satisfactory to
the Warrant Agent of such loss, theft or destruction of such Warrant Certificate
and an indemnity, if requested, reasonably satisfactory to it. An applicant for
such substitute Warrant Certificate shall also comply with such other reasonable
regulations and pay such other reasonable charges as Dura or the Warrant Agent
may prescribe. Any such new Warrant Certificate shall constitute an original
contractual obligation of Dura, whether or not the allegedly mutilated, lost,
stolen or destroyed Warrant Certificate shall be enforceable by any person at
any time thereafter.
Section 11. NO STOCK RIGHTS: LIMITATION OF LIABILITY. No Holder of
any Warrant shall, by virtue thereof, be entitled to the rights of a stockholder
of Dura, unless and until exercise of such Warrant has occurred. No provisions
of any Warrant or of this Agreement, in the absence of affirmative action by the
Holder of any such Warrant to exercise such Warrant, and no mere enumeration
herein of the rights or privileges of such Holder, shall give rise to any
liability of such Holder for the Exercise Price or as a stockholder of Dura,
whether such liability is asserted by Dura or by its creditors.
Section 12. ANTIDILUTION PROVISIONS.
(a) The Exercise Price and the number of Warrant Shares that
may be purchased upon the exercise of a Warrant shall be subject to change or
adjustment from time to time as follows:
(i) STOCK DIVIDENDS AND STOCK SPLITS. If at any time
during the Exercise Period (A) Dura shall fix a record date for the issuance of
any dividend payable in shares of Common Stock or (B) the number of shares of
Common Stock shall have been increased by a subdivision or split-up of shares of
Common Stock, then, on the record date fixed for the determination of holders of
Common Stock entitled to receive such dividend or
6
immediately after the effective date of such subdivision or split-up, as the
case may be, the number of shares to be delivered upon exercise of any
Warrant will be appropriately increased so that each Holder thereafter will
be entitled to receive the number of shares of Common Stock that such Holder
would have owned immediately following such action had such Warrant been
exercised immediately prior thereto, and the Exercise Price will be
appropriately adjusted. The time of occurrence of an event giving rise to an
adjustment made pursuant to this Section 12(a)(i) shall, in the case of a
stock dividend, be deemed to be the record date thereof and shall, in the
case of a subdivision or split-up, be deemed to be the effective date thereof.
(ii) COMBINATION OF STOCK. If the number of shares of
Common Stock outstanding at any time during the Exercise Period is decreased by
a combination of the outstanding shares of Common Stock, then, immediately after
the effective date of such combination, the number of shares of Common Stock to
be delivered upon exercise of any Warrant shall be appropriately decreased so
that the Holder of such Warrant thereafter will be entitled to receive the
number of shares of Common Stock that such Holder would have owned immediately
following such action had such Warrant been exercised immediately prior thereto,
and the Exercise Price shall be appropriately adjusted.
(iii) REORGANIZATION. If, at any time during the Exercise
Period, any capital reorganization of Dura, or any reclassification of the
Common Stock, or any consolidation of Dura with, or merger of Dura with or into,
any other person or any sale, lease or other transfer of all or substantially
all of the assets of Dura to any other person (including any individual,
partnership, limited liability company, joint venture, corporation, trust or
group thereof) shall be effected in such a way that upon consummation of such
transaction the holders of the Common Stock shall be entitled to receive stock,
securities or assets with respect to or in exchange for Common Stock, then, upon
exercise of any Warrant in accordance with the terms of this Agreement and the
Warrant Certificate, the Holder of such Warrant shall have the right to receive
the kind and amount of stock, securities or assets receivable upon such
reorganization, reclassification, consolidation, merger or sale, lease or other
transfer by a holder of the number of shares of Common Stock that such Holder
would have been entitled to receive upon exercise of such Warrant pursuant to
Section 3 hereof had such Warrant been exercised immediately prior to such
reorganization, reclassification, consolidation, merger or sale, lease or other
transfer, subject to additional adjustments that shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Section
12(a)(iii).
(iv) SPECIAL DIVIDENDS. If, at any time during the
Exercise Period (other than in a dissolution or liquidation), Dura shall
distribute to holders of Common Stock evidences of indebtedness of Dura,
securities or other assets (other than cash dividends payable out of retained
earnings) by way of a dividend on outstanding shares of Common Stock, then the
Exercise Price shall be adjusted so that immediately after the date fixed by
Dura as the record date in respect of such distribution, such Exercise Price
shall equal the price determined by multiplying the Exercise Price in effect
immediately prior to the close of business on the record date for the
determination of the stockholders entitled to receive such distribution by a
fraction, (A) the numerator of which shall be the Closing Price on such record
date less the then fair market value as determined reasonably and in good faith
by the board of directors of Dura of the portion of the securities or other
assets distributed applicable to one share of Common Stock and (B) the
denominator of which shall be such Closing Price. Such adjustment shall become
7
effective on such record date. In such case, no adjustment shall be made to the
number of Warrant Shares to be received upon the exercise of a Warrant.
(v) RIGHTS OFFERING. If, at any time during the
Exercise Period, Dura shall issue or sell or fix a record date for the issuance
of rights, options, warrants or convertible or exchangeable securities to all
holders of Common Stock entitling the holders thereof to subscribe for or
purchase Common Stock (or securities convertible into or exchangeable for Common
Stock), in any such case, at a price per share (or having a conversion price per
share) that, together with the value (if for consideration other than cash, as
reasonably determined in good faith by the board of directors of Dura) of any
consideration paid for any such rights, options, warrants or convertible or
exchangeable securities, is greater than the Exercise Price and less than the
Closing Price on the date of such issuance or sale or on such record date, as
the case may be, then, immediately after the date of such issuance or sale or on
such record date, the number of shares to be delivered upon exercise of the
Warrants shall be appropriately increased so that the Holder, thereafter during
the Exercise Period, shall be entitled to receive the number of shares of Common
Stock determined by multiplying the number of shares such Holder would have been
entitled to receive immediately before the date of such issuance or sale or such
record date by a fraction, (A) the numerator of which shall be the number of
shares of Common Stock outstanding on such date plus the number of additional
shares of Common Stock offered for subscription or purchase (or into which the
convertible or exchangeable securities so offered are initially convertible or
exchangeable) and (B) the denominator of which shall be the number of shares of
Common Stock outstanding on such date plus the number of shares of Common Stock
that the aggregate offering price of the total number of shares so offered for
subscription or purchase (or the aggregate initial conversion price of the
convertible securities so offered) would purchase at such Closing Price, and the
Exercise Price shall be appropriately adjusted. The time of occurrence of an
event giving rise to an adjustment pursuant to this Section 12(a)(v) shall, in
the case of a dividend, be the record date and shall, in the case of an issuance
or sale, be the date of such issuance or sale.
(vi) NO ADJUSTMENTS TO EXERCISE PRICE. No adjustment of
the Exercise Price in accordance with the provisions of paragraph (i), (ii),
(iii), (iv) or (v) above shall be made in an amount of less than $0.01;
PROVIDED, HOWEVER, that the amount by which any adjustment is not made by reason
of the provisions of this Section shall be carried forward and taken into
account at the time of any subsequent adjustment in the Exercise Price.
(vii) READJUSTMENTS, ETC.. If an adjustment is made under
paragraph (i), (ii), (iii), (iv) or (v) above, and the event to which the
adjustment relates does not occur, then any adjustments in the Exercise Price or
Warrant Shares that were made in accordance with such paragraphs shall be
adjusted back to the Exercise Price and the number of Warrant Shares that were
in effect immediately prior to the record date for such event.
(b) NO IMPAIRMENT; CERTAIN EVENTS.
(i) Dura shall not, by amendment of its certificate of
incorporation or through any reorganization, reclassification, consolidation,
merger, sale, lease or transfer of assets, issuance or sale of securities or any
other action, avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed under this Section 12 by Dura, but
8
will at all times in good faith assist in the carrying out of all the
provisions of this Section 12 and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Holders
against impairment.
(ii) If any event occurs as to which the provisions of
paragraph (a) of this Section 12 are not strictly applicable but with respect to
which, in the reasonable, good faith opinion of Dura, an adjustment of the
Exercise Price, and the number of Warrant Shares issuable upon the exercise of a
Warrant, would fairly protect the exercise rights of the Holders in accordance
with the basic intent and principles of such provisions or as to which an
adjustment pursuant to such provisions, if strictly applied, would not fairly
protect the purchase rights of the Holders in accordance with the basic intent
and principles of such provisions, then Dura shall make any computation required
under this Section 12(b)(ii) with respect to any such adjustment on a basis
consistent with the basic intent and principles established by the provisions of
this Section 12, necessary to preserve, without dilution, the exercise rights of
the Holders. Dura shall appoint a firm of independent certified public
accountants (which may be the regular auditors of Dura) of recognized national
standing, which firm shall review the computation of Dura prepared pursuant to
this Section 12(b)(ii) and prepare a report signed by such firm, which shall be
provided to Dura and which shall acknowledge that the adjustment calculation
prepared by Dura is arithmetically correct. Such report shall be conclusive
evidence of the correctness of the computation made under this Section
12(b)(ii). Upon receipt of such report, Dura shall forthwith cause to be made,
or shall act to prevent, the adjustments described in such calculation.
Section 13. OFFICER'S CERTIFICATE. Whenever the number of Warrant
Shares that may be purchased upon exercise of the Warrant is adjusted as
required by the provisions of this Agreement, Dura shall file forthwith with the
Warrant Agent and with its Secretary or Assistant Secretary at its principal
office an officer's certificate indicating the adjusted number of Warrant Shares
that may be purchased upon exercise of a Warrant and the adjusted Exercise
Price, determined as herein provided, and setting forth in reasonable detail the
facts requiring such adjustment and the manner of computing such adjustment.
Each such officer's certificate shall be made available at all reasonable times
for inspection by the Holders. Dura shall, forthwith after each such
adjustment, cause a copy of such officer's certificate to be mailed to the
Holders. The Warrant Agent may rely on such certificate without further inquiry
and shall not be deemed to have knowledge of any adjustment unless and until it
shall have received such certificate.
Section 14. NOTICE OF CERTAIN EVENTS. In the event that, at any time
during the Exercise Period:
(a) Dura shall pay any dividend on Common Stock that is payable
in stock, or make any distribution (other than regular cash dividends) to the
holders of Common Stock;
(b) Dura authorizes the issuance to all holders of Common Stock
of rights or warrants to subscribe for or purchase shares of Common Stock or any
other subscription rights or warrants;
(c) Dura authorizes the distribution to all holders of Common
Stock of any of Dura's assets, including evidences of its indebtedness or assets
(other than cash dividends payable out of retained earnings);
9
(d) there shall be any capital reorganization or
reclassification of the capital stock of Dura or consolidation or merger of Dura
with another person (other than a consolidation or merger of Dura with a
subsidiary of Dura in which Dura is the surviving or continuing corporation and
there is no change with respect to the Common Stock), or sale, conveyance or
transfer of all or substantially all of Dura's property and assets (other than a
sale, conveyance or transfer of such assets to an Affiliate (within the meaning
of the Securities Act));
(e) there shall be a voluntary or involuntary dissolution,
liquidation, bankruptcy, assignment for the benefit of creditors or winding up
of Dura; or
(f) Dura shall propose to take any other action, or any other
event occurs, that would require an adjustment pursuant to Section 12 hereof of
the Exercise Price or the number of Warrant Shares that may be purchased upon
the exercise of a Warrant; then Dura will cause to be mailed to the Holder by
first-class mail addressed to such Holder at the address appearing in the
Warrant Register, at least twenty days (or ten days in any case specified in
clauses (a), (b) or (c) above) before the applicable record or effective date
hereinafter specified, a notice stating (A) the date as of which the holders of
Common Stock of record entitled to receive any such dividends, rights, warrants
or distributions are to be determined or (B) the date on which any such
consolidation, merger, conveyance, transfer, dissolution, liquidation or
winding-up is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record will be entitled to exchange
their shares of Common Stock for securities or other property, if any,
deliverable upon such reorganization, reclassification, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding-up.
Section 15. LISTING ON SECURITIES EXCHANGES. Dura will list on each
national securities exchange or, if not so listed, will list for quotation on
the Nasdaq National Market, or such other over-the-counter quotation system on
which any Common Stock may at any time be listed, all shares of the Common Stock
from time to time issuable upon the exercise of the Warrants, and will maintain
such listing so long as any other shares of Common Stock are so listed; and Dura
shall so list on each national securities exchange or the Nasdaq National
Market, or such other over-the-counter quotation system, and shall maintain such
listing of, any other shares of capital stock of Dura issuable upon the exercise
of the Warrants if and so long as any shares of capital stock of the same class
are listed on such national securities exchange or are traded on the Nasdaq
National Market or such over-the-counter quotation system. Any such listing or
quotation will be at Dura's expense.
Section 16. AVAILABILITY OF INFORMATION. Dura will comply with all
applicable periodic public information reporting requirements of the Commission
to which it may from time to time be subject.
Section 17. WARRANT AGENT.
(a) MERGER, CONSOLIDATION OR CHANGE OF NAME OF WARRANT AGENT.
(i) Any corporation into which the Warrant Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Warrant Agent shall be a party, or any
corporation succeeding to the
10
corporate trust business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto; PROVIDED, HOWEVER, that
such successor corporation must be otherwise eligible for appointment as a
Warrant Agent hereunder. In the event that at the time such successor to the
Warrant Agent shall succeed to the agency created by this Agreement any of
the Warrant Certificates shall have been countersigned but not delivered, any
such successor to the Warrant Agent may adopt the countersignature of such
predecessor Warrant Agent and deliver such Warrant Certificates so
countersigned; and in the event that at the time of such succession any of
the Warrant Certificates shall not have been countersigned, any such
successor to the Warrant Agent may countersign such Warrant Certificates
either in the name of such predecessor Warrant Agent or in the name of such
successor Warrant Agent; and in any event, all such Warrant Certificates
shall have the full force and effect provided in such Warrant Certificates
and in this Agreement.
(ii) In the case that at any time the name of the Warrant
Agent shall be changed and at such time one or more of the Warrant Certificates
shall have been countersigned but not delivered, the Warrant Agent may adopt the
countersignature under its prior name and deliver Warrant Certificates so
countersigned; in the event that at that time one or more of the Warrant
Certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior name or in its changed
name; and in all such cases such Warrant Certificates shall have the full force
and effect provided in such Warrant Certificates and in this Agreement.
(b) DUTIES OF WARRANT AGENT. The Warrant Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by which the Holders, by their acceptance of Warrants, and Dura,
shall be bound:
(i) The Warrant Agent shall not be responsible for any
failure of Dura to comply with any of the covenants to be complied with by Dura
that are contained in this Agreement or in the Warrant Certificates.
(ii) The Warrant Agent may consult at any time with
counsel satisfactory thereto, and the Warrant Agent shall incur no liability or
responsibility to Dura or to any Holder in respect of any action taken, suffered
or omitted by the Warrant Agent hereunder in good faith and in accordance with
the opinion or the advice of such counsel, provided that the Warrant Agent shall
have exercised reasonable care in the selection and continued employment of such
counsel.
(iii) The Warrant Agent shall incur no liability or
responsibility to Dura or to any Holder for any action taken in reliance on any
notice, resolution, waiver, consent, order, certificate or other paper, document
or instrument believed by the Warrant Agent to be genuine and to have been
signed, sent or presented by the party or parties thereto.
(iv) Dura shall (A) pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the execution of
this Agreement, (B) reimburse the Warrant Agent for all expenses, taxes (other
than taxes based on such Warrant Agent's net income), governmental charges, and
other charges of any kind and nature, incurred by the
11
Warrant Agent in the performance of this Agreement, (C) advance to the
Warrant Agent, upon request, funds to pay cash in lieu of fractional shares
of Common Stock issuable upon exercise of Warrants and (D) indemnify the
Warrant Agent and save it harmless against any and all losses, expenses or
liabilities, including judgments, costs and counsel fees, arising out of or
in connection with its agency under this Agreement, except as a result of its
negligence or bad faith. In no case shall the Warrant Agent be liable for
special, indirect, incidental or consequential loss or damage of any kind
whatsoever (including, but not limited to, lost profits), unless such loss or
damages arise as a result of the Warrant Agent's gross negligence or
intentional misconduct.
(v) The Warrant Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take any other action
likely to involve the incurrence by the Warrant Agent of expenses unless Dura or
one or more Holders shall have furnished the Warrant Agent with reasonable
security and indemnity for any costs and expenses which may be incurred. All
rights of action under this Agreement or under any of the Warrants may be
enforced by the Warrant Agent without the possession of any of the Warrants or
the production thereof at any trial or other proceeding relative thereto, and
any such action, suit or proceeding instituted by the Warrant Agent shall be
brought in its name as Warrant Agent, and any recovery of judgment shall be for
the ratable benefit of the Holders, as their respective rights or interests may
appear.
(vi) The Warrant Agent and any stockholder, director,
officer or employee of the Warrant Agent may buy, sell or deal in any of the
Warrants or other securities of Dura, or become peculiarly interested in any
transaction in which Dura may be interested or contract with or lend money or
otherwise act as fully and freely as though it were not the Warrant Agent under
this Agreement. Nothing herein shall preclude the Warrant Agent from acting in
any other capacity for Dura or for any other legal entity.
(vii) The Warrant Agent shall act hereunder solely as
agent, and its duties shall be determined solely by the provisions hereof. The
Warrant Agent shall not be liable for any actions which it may take or refrain
from taking, in connection with this Agreement, except as result from its own
gross negligence or bad faith.
(viii) The Warrant Agent shall make copies of this
Agreement available for inspection at its principal offices at ____________
during normal business hours and shall provide copies to Holders upon their
written request.
(c) CHANGE OF WARRANT AGENT. The Warrant Agent may resign and
be discharged from its duties under this Agreement by providing both (i)
written notice to Dura and (ii) written notice, sent at the Company's expense by
first-class mail, postage prepaid, to each Holder at such Holder's address
appearing in the Warrant Register, which notice shall specify a date when such
resignation shall take effect and shall be sent at least two weeks prior to the
date so specified. If the Warrant Agent shall resign or otherwise become
incapable of acting, Dura shall appoint a successor thereto. If Dura shall fail
to make such appointment within a period of thirty days after receiving written
notification of such resignation or incapacity by the Warrant Agent or by any
Holder (which Holder shall, with such notice, submit Warrant Certificates held
thereby for inspection by Dura), then any Holder may apply to any court of
competent jurisdiction for the appointment of a successor to the Warrant Agent.
Pending appointment of a
12
successor to the Warrant Agent, either by Dura or by a court, the duties of
the Warrant Agent shall be carried out by Dura. After such appointment, the
successor Warrant Agent shall be vested with such powers, rights, duties and
responsibilities as such Warrant Agent would have been vested had such
Warrant Agent been named originally as Warrant Agent hereunder, without
further act or deed. The former Warrant Agent shall deliver and transfer to
the successor Warrant Agent any property at the time held by such former
Warrant Agent hereunder and shall execute and deliver any further assurance,
conveyance, act or deed necessary therefor. Failure to provide any notice
called for in this Section 17, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Warrant
Agent or the appointment of a successor Warrant Agent.
Section 18. IDENTITY OF TRANSFER AGENT. Forthwith upon the appointment
after the date hereof of any transfer agent for the Common Stock, or of any
subsequent transfer agent for shares of the Common Stock, Dura will file with
the Warrant Agent a statement setting forth the name and address of such
transfer agent.
Section 19. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of Dura, the Warrant Agent or any of the Holders
shall bind and inure to the benefit of their respective successors, assigns,
heirs and personal representatives.
Section 20. TERMINATION. This Agreement shall terminate at 5:00 p.m.,
New York City time, on the Expiration Date or upon such earlier date on which
all Warrants have been exercised or redeemed, except that the Warrant Agent
shall account to Dura for all cash held by it at 5:00 p.m., New York City time,
on such Expiration Date or such other date.
Section 21. HEADINGS. The headings of sections of this Agreement have
been inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
Section 22. AMENDMENTS. This Agreement may be amended only by both (i)
the written consent of Dura and (ii) the affirmative vote or the written consent
of Holders holding not less than two-thirds in interest of the then outstanding
Warrants; PROVIDED, HOWEVER, that, except as expressly provided herein, this
Agreement may not be amended to change (a) the Exercise Price, (b) the Exercise
Period, (c) the number or type of securities to be issued upon the exercise of
the Warrants or (d) the provisions of this Section 22, without the consent of
each Holder.
Section 23. COUNTERPARTS. This Agreement may be executed in any number
of counterparts each of which when so executed shall be deemed to be an
original, but all of which taken together shall constitute one and the same
agreement.
Section 24. NOTICES.
(a) Any notice required by the provisions of this Agreement to
be provided to Dura by the Warrant Agent or by any Holder shall be deemed given
if deposited in the United States mail, first class postage prepaid, addressed
(until another address is filed in writing by Dura with the Warrant Agent) as
follows:
13
\
Dura Pharmaceuticals Inc.
0000 Xxxx Xxxxxxxxx
Xxx Xxxxx, XX 00000
Attention: Corporate Secretary
(b) Any notice required by the provisions of this Agreement to
be provided to the Warrant Agent by Dura or by any Holder shall be deemed given
if deposited in the United States mail, first class postage prepaid, addressed
(until another address is filed in writing by the Warrant Agent with Dura or
notice of the address of a successor Warrant Agent is provided pursuant to this
Agreement) as follows:
ChaseMellon Shareholder Services, L.L.C.
0 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn:
(c) Any notice required by the provisions of this Agreement to
be provided to any Holder by Dura or by the Warrant Agent shall be deemed given
if deposited in the United States mail, first class postage prepaid, addressed
to such Holder at its address set forth in the Warrant Register. Any notice
given in conformity with this Section 24 shall be deemed effective three days
after mailing.
Section 25. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any person or corporation, other than Dura, the
Warrant Agent and the Holders, any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of Dura, the Warrant Agent and the Holders.
Section 26. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, including
Section 5-1402 of the New York General Obligations Law.
14
IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement to
be signed by its duly authorized officers.
DURA PHARMACEUTICALS, INC.
By:
------------------------
Name:
----------------------
Title:
---------------------
CHASEMELLON SHAREHOLDER SERVICES,
as Warrant Agent
By:
------------------------
Name:
----------------------
Title:
---------------------
EXHIBIT A
FORM OF WARRANT CERTIFICATE
VOID AFTER 5:00 P.M., Warrant No.
NEW YORK CITY TIME, ---------
ON , 2005 Warrants
------- --------
CUSIP
---------
DURA PHARMACEUTICALS, INC.
Warrants to Purchase Shares of Common Stock
THIS CERTIFIES THAT, FOR VALUE RECEIVED, ________, or registered assigns,
is the registered holder of the number of Warrants (the "Warrants") set forth
above. Each Warrant entitles the holder thereof to purchase from Dura
Pharmaceuticals, Inc., a Delaware corporation ("Dura"), subject to the terms and
conditions hereinafter set forth and in the Warrant Agreement hereinafter
referred to, ______________ of one fully paid and nonassessable share of Common
Stock, par value $.001 per share, of Dura (the "Common Stock"). The Warrants
may be exercised at any time or from time to time on or after the date hereof
and will expire at 5:00 p.m., New York City time, on ______, 2005 (the
"Expiration Date"). Upon the Expiration Date, all rights evidenced by the
Warrants shall cease and the Warrants shall become void. Subject to the
provisions of the Warrant Agreement, the holder of each Warrant shall have the
right to purchase from Dura until the Expiration Date (and Dura shall issue and
sell to such holder of a Warrant) ______________ of one fully paid and
nonassessable share of Common Stock (a "Warrant Share") at an exercise price
(the "Exercise Price") of $_______ per share upon surrender of this Warrant
Certificate to Dura at the office of the Warrant Agent (as defined in the
Warrant Agreement) designated by the Warrant Agent for such purpose with the
form of election to purchase appearing on this Warrant Certificate duly
completed and signed, together with payment of the Exercise Price by certified
or official bank check payable to the order of Dura.
The Exercise Price and the number of Warrant Shares that may be purchased
upon the exercise of the Warrants and the number of Warrants outstanding are
subject to change or adjustment upon the occurrence of certain events set forth
in the Warrant Agreement.
REFERENCE IS MADE TO THE PROVISIONS OF THIS WARRANT CERTIFICATE SET FORTH ON THE
REVERSE SIDE HEREOF, AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE
SAME EFFECT AS THOUGH FULLY SET FORTH ON THE FRONT OF THIS CERTIFICATE.
This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent.
This Warrant Certificate shall be governed by and construed in accordance
with the laws of the State of New York, including Section 5-1402 of the New York
General Obligations Law.
Exhibit A-2
IN WITNESS WHEREOF, Dura has caused this Warrant Certificate to be
executed by its duly authorized officers.
Dated: , DURA PHARMACEUTICALS, INC.
-------- ------
By:
----------------------
Title:
-------------------
ATTEST:
By:
----------------------
Title:
-------------------
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES,
as Warrant Agent
By:
----------------------
Authorized Signature
Exhibit A-3
[REVERSE SIDE]
DURA PHARMACEUTICALS, INC.
This Warrant Certificate is subject to all of the terms and conditions of
the Warrant Agreement, dated as of ________, 2000 (the "Warrant Agreement"), by
and between Dura and the Warrant Agent, to all of which terms and conditions the
registered holder of the Warrant consents by acceptance hereof. The Warrant
Agreement is incorporated herein by reference and made a part hereof and
reference is made to the Warrant Agreement for a full description of the rights,
limitations of rights, obligations, duties and immunities of the Warrant Agent,
Dura and the registered holders of Warrant Certificates. Copies of the Warrant
Agreement are available for inspection at the principal office of the Warrant
Agent or may be obtained upon written request addressed to the Warrant Agent at
its principal office in The City of New York
Dura shall not be required upon the exercise of the Warrants evidenced by
this Warrant Certificate to issue fractional shares, but shall make adjustment
therefore in cash on the basis of the current market value of any fractional
interest as provided in the Warrant Agreement.
Dura has agreed to cause a registration statement under the Securities
Act of 1933, as amended, covering the Warrants and Warrant Shares to be
effective through the termination of the Exercise Period (as defined in the
Warrant Agreement) or until such earlier time as no Warrants remain outstanding,
and to register or qualify the Warrants and the Warrant Shares to be delivered
upon exercise of the Warrants under the laws of each jurisdiction in which such
registration or qualification is necessary.
The Warrant Certificate may be exchanged, at the option of the holder
upon presentation and surrender hereof to the Warrant Agent, for other Warrant
Certificates of different denominations, entitling the holder hereof to purchase
in the aggregate the same number of Warrant Shares. The Warrants may be
assigned or transferred upon surrender of this Warrant Certificate to the
Warrant Agent, accompanied (if so required by Dura or the Warrant Agent) by the
form of assignment appearing on this Warrant Certificate duly completed and
signed, whereupon the Warrant Agent shall execute and deliver to the transferee
a new Warrant Certificate entitling the transferee to purchase the same number
of Warrant Shares. If the Warrants evidenced by this Warrant Certificate shall
be exercised in part, the holder hereof shall be entitled to receive upon
surrender hereof another Warrant Certificate or Certificates evidencing the
number of Warrants not so exercised.
The holder of this Warrant Certificate shall not, by virtue hereof, be
entitled to any of the rights of a stockholder in Dura, either at law or in
equity, and the rights of the holder are limited to those expressed in the
Warrant Agreement.
If this Warrant Certificate shall be surrendered for exercise within any
period during which the transfer books for the Common Stock are closed for any
purpose, Dura shall not be required to make delivery of certificates for shares
purchasable upon such transfer until the date of the reopening of said transfer
books.
Exhibit A-4
Each holder of this Warrant Certificate, by accepting the same, consents
and agrees with Dura, the Warrant Agent and with every other holder of a Warrant
Certificate that:
(a) this Warrant Certificate is transferable on the registry books of
the Warrant Agent only upon the terms and conditions set forth in the Warrant
Agreement; and
(b) Dura and the Warrant Agent may deem and treat the person in whose
name this Warrant Certificate is registered as the absolute owner hereof
(notwithstanding any notation of ownership or other writing hereon made by
anyone other than Dura or the Warrant Agent) for all purposes whatever and
neither Dura nor the Warrant Agent shall be affected by any notice to the
contrary.
This Warrant Certificate shall not be valid or enforceable for any
purpose until it shall have been countersigned by the Warrant Agent.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
ABBREVIATION DEFINED TERM
TEN COM Tenants in common
JT TEN Joint tenants with right of survivorship
and not as tenants in common
CUST Custodian
U/B/M/A Uniform Gifts to Minors Act
Additional abbreviations may also be used though not in the above list.
Exhibit A-5
ELECTION TO PURCHASE
(To be executed upon exercise of Warrant)
Dated ,
-------- ----
The undersigned hereby irrevocably exercises this Warrant to purchase
________ shares of Common Stock and herewith makes payment of $________ in
payment of the Exercise Price thereof on the terms and conditions specified in
this Warrant Certificate, surrenders this Warrant Certificate and all right,
title, and interest therein to Dura and directs that the Warrant Shares
deliverable upon the exercise of such Warrants be registered in the name and at
the address specified below and delivered thereto.
Name:
---------------------------------------------------------------
(Please Print)
Address:
------------------------------------------------------------
City, State and Zip Code:
-------------------------------------------
If such number of Warrant Shares is less than the aggregate number of
Warrant Shares purchasable hereunder, the undersigned requests that a new
Warrant Certificate representing the balance of such Warrant Shares to be
registered in the name and at the address specified below and delivered thereto.
Name:
---------------------------------------------------------------
(Please Print)
Address:
------------------------------------------------------------
City, State and Zip Code:
-------------------------------------------
Taxpayer's Identification or Social Security Number:
----------------
Signature(s)
--------------------------------------
--------------------------------------
Exhibit A-6
NOTE: The above signature(s) must correspond with the name as written upon the
face of this Warrant Certificate in every particular, without alteration or
enlargement or any change whatsoever. If the certificate representing the
Warrant Shares or any Warrant Certificate representing Warrants not exercised is
to be registered in a name other than that in which this Warrant Certificate is
registered, the signature of the holder hereof must be guaranteed.
Signature(s) Guaranteed:
-----------------------------------
Exhibit A-7
ASSIGNMENT
FOR VALUE RECEIVED, hereby sells, assigns and transfers to:
--------
Name:
---------------------------------------------------------------
(Please Print)
Address:
------------------------------------------------------------
City, State and Zip Code:
-------------------------------------------
Taxpayer's Identification or Social Security Number: ___________________
the right to purchase up to ________ Warrant Shares represented by this
Warrant and does hereby irrevocably constitute and appoint ________ to
transfer said Warrant with full power of substitution in the premises.
Dated: ,
-------- ---- -----------------------------------
-----------------------------------
Signature(s) of registered Holder
NOTE: The above signature(s) must correspond with the name as written upon the
face of this Warrant Certificate in every particular, without alteration or
enlargement or any change whatsoever.
Signature(s) Guaranteed:
--------------------------------------
Exhibit A-8
Exhibit B
TERMS OF THE PARENT WARRANTS
Expiration Date Sixty months from the Closing Date.
Exercise Price per Share $17.94 which equals $14.35 (the
of Parent Common Stock "Measurement Price") multiplied by 1.25.
Fraction of a share of Parent To be determined based on the Black-Scholes
Common Stock issued upon exercise Option Pricing Model such that each Share
of each Parent Warrant shall receive $2.50 in calculated value,
subject to the effects of the Collar Range
referred to in the following paragraph.
The Black-Scholes valuation shall use an
underlying asset value equal to the
Measurement Price; a volatility factor of
65%; a sixty-month term from date of
calculation and a risk-free rate equal to
6.43%.
Collar A collar around the Measurement Price of
plus or minus twenty percent (the "Collar
Range"). If the average closing price of
the Parent Common Stock for the ten
consecutive trading days ending on the day
prior to the day during which the Special
Meeting occurs is within the Collar Range
(including the end points), then the Black-
Scholes valuation described in the
preceding paragraph shall not be adjusted
and the fraction of a share of Parent
Common Stock issued upon exercise of each
Parent Warrant shall be the same as
determined above at the time of the public
announcement. If the Closing Price is
above or below the Collar Range, then the
calculated value described in the preceding
paragraph shall be at the high end of the
Collar Range or at the low end of the
Collar Range, respectively, and the
fraction of a share of Parent Common Stock
shall be correspondingly adjusted.
