AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
DATED AS OF FEBRUARY 1, 2002
AMONG
BIOENVISION, INC.
BIOENVISON ACQUISITION CORP.
AND
PATHAGON INC.
TABLE OF CONTENTS
Page
ARTICLE I THE MERGER
1.1THE MERGER 1
1.2EFFECTIVE TIME 1
1.3EFFECT OF THE MERGER 2
1.4SUPPLEMENTARY ACTION 2
ARTICLE II THE SURVIVING CORPORATION
2.1CERTIFICATE OF INCORPORATION OF THE SURVIVING CORPORATION 2
2.2BYLAWS OF THE SURVIVING CORPORATION 2
2.3DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION 2
ARTICLE III CONSIDERATIONS; CONVERSION OF SHARES
3.1MERGER CONSIDERATION 2
3.2CONVERSION OF TARGET CAPITAL STOCK 2
3.3CAPITAL STOCK OF ACQUISITION CORP. 3
3.4ESCROW FUND 3
3.5DISSENTERS' RIGHTS 4
3.6EXCHANGE OF CERTIFICATES 4
3.7DIVIDENDS 5
3.8ADJUSTMENTS 6
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PARENT COMPANIES
4.1CORPORATE STATUS 6
4.2CAPITALIZATION OF PARENT 6
4.3AUTHORIZATION; ENFORCEABILITY 7
4.4NO VIOLATION 7
4.5CONSENTS, ETC 8
4.6SEC FILINGS 8
4.7ABSENCE OF CERTAIN CHANGES OR EVENTS 9
4.8LITIGATION 10
4.9OWNERSHIP AND OPERATIONS OF ACQUISITION CORP. 10
4.10 TAX MATTERS. 10
4.11. COMPLIANCE WITH LAW, CHARTER DOCUMENTS AND AGREEMENTS 10
ARTICLE V REPRESENTATIONS AND WARRANTIES OF TARGET
5.1ORGANIZATION, AUTHORITY, QUALIFICATION; LOCATIONS AND
NAMES;CORPORATE RECORDS 11
5.2AUTHORIZATION; ENFORCEABILITY 12
5.3CAPITALIZATION 12
5.4NO VIOLATION 13
5.5CONSENTS, ETC 14
5.6SUBSIDIARIES 14
5.7LEGAL PROCEEDINGS 14
5.8INTELLECTUAL PROPERTY 14
5.9COMPLIANCE WITH LAW, CHARTER DOCUMENTS AND AGREEMENTS 16
5.10 FINANCIAL STATEMENTS; BOOKS AND RECORDS 17
5.11 TITLE AND RELATED MATTERS 17
5.12 EMPLOYEE BENEFIT MATTERS 18
5.13 CONTRACTS AND TRANSACTIONS 18
5.14 RELATED PARTY TRANSACTIONS 19
5.15 ENVIRONMENTAL LAWS 19
5.16 TAX RETURNS AND PAYMENTS 19
5.17 INSURANCE 20
5.18 ABSENCE OF CERTAIN CHANGES OR EVENTS 20
5.19 TRADING IN PARENT COMMON STOCK 21
ARTICLE VI INTERIM OPERATIONS
6.1CONDUCT OF BUSINESS BY TARGET PENDING THE MERGER 21
6.2CONDUCT OF BUSINESS BY PARENT PENDING THE MERGER 22
6.3APPROVAL OF STOCKHOLDERS 22
ARTICLE VII ADDITIONAL AGREEMENTS
7.1BEST EFFORTS; COOPERATION; FURTHER ASSURANCES 23
7.2ACCESS TO INFORMATION 23
7.3NOTIFICATION OF CERTAIN MATTERS 23
7.4PUBLICITY 24
7.5EXCLUSIVE DEALINGS 24
7.6TRADING IN PARENT COMMON STOCK 24
7.7EMPLOYEE MATTERS 24
7.8TARGET AUDITORS 24
7.9PARENT FRANCHISE TAXES 25
7.10 PARENT BOARD OF DIRECTORS 25
7.11 LOCK-UP AGREEMENTS 25
ARTICLE VIII CONDITIONS TO THE OBLIGATIONS OF THE PARENT
COMPANIES
8.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES
AND COMPLIANCE WITH OBLIGATIONS 25
8.2CORPORATE MATTERS 25
8.3NO ADVERSE PROCEEDINGS 25
8.4CONSENTS AND APPROVALS 26
8.5PRIVATE PLACEMENT 26
8.6ESCROW AGREEMENT 26
8.7OPINION OF COUNSEL 26
8.8FINANCIAL STATEMENTS 26
8.9[INTENTIONALLY OMITTED] 26
8.10 CONFIDENTIALITY AGREEMENTS 26
8.11 REGISTRATION RIGHTS AGREEMENT 27
8.12ACQUISITION OF BUSINESS AND ASSETS PERTAINING TO OLIGON
AND METHYLENE BLUE TECHNOLOGIES 27
8.13 NO MATERIAL ADVERSE CHANGE 27
8.14 GOVERNMENTAL CONSENTS 27
8.15 CERTAIN ACTIONS 27
ARTICLE IX CONDITIONS TO THE OBLIGATIONS OF TARGET
9.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND \
COMPLIANCE WITH OBLIGATIONS 29
9.2CORPORATE MATTERS 30
9.3NO ADVERSE PROCEEDINGS 30
9.4NO MATERIAL ADVERSE CHANGE 30
9.5GOVERNMENTAL CONSENTS 30
9.6ESCROW AGREEMENT 30
9.7OPINION OF COUNSEL 30
9.8PRIVATE PLACEMENT 30
9.9REGISTRATION RIGHTS AGREEMENT 30
9.10 CERTAIN ACTIONS. 31
ARTICLE X CLOSING
10.1 CLOSING 32
10.2 DELIVERIES BY TARGET 32
10.3 DELIVERIES BY THE PARENT COMPANIES 33
ARTICLE XI TRANSFER RESTRICTIONS; COMPLIANCE WITH SECURITIES LAWS
11.1 LIMITATION ON DISPOSITION OF SHARES 33
11.2 LEGEND 33
ARTICLE XII SURVIVAL; INDEMNIFICATION AND ESCROW
12.1 SURVIVAL 34
ARTICLE XIII DEFINITIONS
13.1 DEFINED TERMS 34
13.2 OTHER DEFINITIONAL PROVISIONS 37
ARTICLE XIV TERMINATION
14.1 TERMINATION 37
14.2 EFFECT OF TERMINATION 38
ARTICLE XV GENERAL PROVISIONS
15.1 NOTICES 38
15.2 ENTIRE AGREEMENT 39
15.3 EXPENSES 39
15.4 AMENDMENT 39
15.5 WAIVER 39
15.6 BINDING EFFECT; ASSIGNMENT 40
15.7 INTERPRETATION 40
15.8 SEVERABILITY 40
15.9 GOVERNING LAW; INTERPRETATION 40
15.10 ARM'S LENGTH NEGOTIATIONS 40
15.11 CONFIDENTIALITY 40
15.12 COUNTERPARTS 41
LIST OF EXHIBITS AND SCHEDULES
Exhibit Description
3.4 List of Shareholders of TARGET
7.11 Lock-Up Agreement
8.12(a) Employees to Execute NDAs
8.12(b) Form of NDA
8.13 Registration Rights Agreement
9.10 Lock-Up Agreements
Disclosure Letters
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
("Agreement") dated as of , February 1, 2002 ("Agreement Date"),
among BIOENVISION, INC., a Delaware corporation ("PARENT"),
BIOENVISION ACQUISITION CORP., a Delaware corporation and a
wholly owned subsidiary of PARENT ("Acquisition Corp." and
together with PARENT sometimes hereinafter referred to as the
"PARENT Companies"), and PATHAGON INC., a Delaware corporation
("TARGET"). Certain other capitalized terms used herein and not
otherwise defined shall have the meanings as set forth in Article
XIII hereof.
WHEREAS, the parties hereto have entered into that certain
Agreement and Plan of Merger dated as of November 30, 2001 ("the
"Agreement");
WHEREAS, the parties hereto desire to effect the merger of
TARGET with and into Acquisition Corp. (the "Merger") pursuant to
the applicable provisions of the Delaware General Corporation Law
(the "DGCL"):
WHEREAS, as prior to, and as a condition to the Merger,
TARGET will acquire the business and assets, including
intellectual property, pertaining to the marketing/development of
OLIGON and Methylene Blue technologies;
WHEREAS, the Board of Directors of each of PARENT,
Acquisition Corp. and TARGET have approved the Merger and the
terms and conditions of this Agreement and have determined that
the Merger is in the best interests of their respective
stockholders;
WHEREAS, the Board of Directors of each of PARENT,
Acquisition Corp. and TARGET have directed that this Agreement
and the Merger be submitted to, and have recommended that they be
approved by, their respective stockholders; and
WHEREAS, the parties intend that the Merger qualify as a
tax-free reorganization within the meaning of Section 368(a) of
the Code.
NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants and agreements contained
herein, the parties hereto intending to be legally bound hereby
agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Subject to and upon the terms and
conditions of this Agreement and in accordance with the DGCL, at
the Effective Time (as defined in Section 1.2 hereof), TARGET
shall be merged with and into Acquisition Corp., which shall be
the surviving corporation (sometimes hereinafter referred to as
the "Surviving Corporation") in the Merger.
1.2 Effective Time. If all the conditions to the Merger
set forth in Articles VIII and IX hereof shall have been
fulfilled or waived in accordance herewith and this Agreement has
not been terminated as provided in Article XIV hereof, on the
Closing Date the parties hereto shall cause a certificates of
merger in the form required by the DGCL (the "Merger Filings"),
to be duly prepared and executed and filed in accordance with the
DGCL. The Merger shall become effective at the time the Merger
Filings are filed with the Secretary of State of the State of
Delaware in accordance with the DGCL, or at such later time which
the parties hereto have agreed upon and designated in such filing
as the effective time of the Merger (the "Effective Time").
1.3 Effect of the Merger. From and after the Effective
Time, the Merger shall have all the effects set forth in the
DGCL. Without limiting the generality of the foregoing, at the
Effective Time, by virtue of the Merger, all properties, rights,
privileges, powers and franchises of TARGET and Acquisition Corp.
shall vest in the Surviving Corporation and all debts,
liabilities and duties of TARGET and Acquisition Corp. shall
become the debts, liabilities and duties of the Surviving
Corporation.
1.4 Supplementary Action. If at any time after the
Effective Time, any further assignments or assurances in law or
any other things are necessary or desirable to vest or to perfect
or confirm of record in the Surviving Corporation the title to
any property or rights of TARGET or Acquisition Corp., or
otherwise to carry out the provisions of this Agreement, the
officers and directors of the Surviving Corporation are hereby
authorized and empowered, in the name of and on behalf of TARGET
and Acquisition Corp., to execute and deliver any and all things
necessary or proper to vest or to perfect or confirm title to
such property or rights in the Surviving Corporation, and
otherwise to carry out the purposes and provisions of this
Agreement.
ARTICLE II
THE SURVIVING CORPORATION
2.1 Certificate of Incorporation of the Surviving
Corporation. The Certificate of Incorporation of Acquisition
Corp. as in effect at the Effective Time shall be the certificate
of incorporation of the Surviving Corporation until thereafter
amended in accordance with such certificate and applicable Law,
except that, as of the Effective Time, Article I of such
Certificate of Incorporation shall be amended to read as follows:
"The name of the corporation is Pathagon, Inc."
2.2 Bylaws of the Surviving Corporation. The Bylaws of
Acquisition Corp. as in effect at the Effective Time shall be the
bylaws of the Surviving Corporation until thereafter amended in
accordance with such bylaws and applicable Law.
2.3 Directors and Officers of the Surviving Corporation.
The directors and officers of Acquisition Corp. at the Effective
Time shall be the directors and officers of the Surviving
Corporation until their respective successors are duly elected
and qualified in accordance with the Surviving Corporation's
certificate of incorporation, bylaws and applicable Law.
ARTICLE III
CONSIDERATIONS; CONVERSION OF SHARES
3.1 Merger Consideration. The aggregate
consideration payable by the PARENT in the Merger to holders of
shares of TARGET capital stock ("TARGET Capital Stock"), shall
consist of 7,000,000 shares (the "Merger Shares") of the Common
Stock, $0.001 par value per share, of PARENT ("PARENT Common
Stock"), which shall be issuable upon the Closing as specified in
Section 3.2 of this Agreement.
3.2 Conversion of TARGET Capital Stock.
(a) Exchange Ratio for Common Stock. Each share of Common
Stock, par value $.001 per share, of TARGET (the "TARGET Common
Stock") issued and outstanding immediately prior to the Effective
Time will be canceled and extinguished and automatically
converted (subject to Section 3.4) into the right to receive
shares of PARENT Common Stock as per the attached Exhibit (the
"Exchange Ratio").
(b) TARGET Treasury Shares. At the Effective Time, all
shares of TARGET Common Stock that are issued and held in
TARGET's treasury immediately prior to the Effective Time shall,
by virtue of the Merger and without any action on the part of the
holder thereof, cease to be outstanding and shall be cancelled
without payment of consideration therefor.
(c) Intentionally Omitted.
(d) Common Stock Options, Common Stock Warrants, and
Convertible or Exchangeable Securities. Each of the options,
warrants or other securities convertible into, exchangeable for,
or exercisable to acquire securities of TARGET (all of such
securities are sometimes hereinafter collectively referred to as
"Common Stock Warrants") that are outstanding immediately prior
to the Effective Time shall, by virtue of the Merger and without
any action on the part of the holder thereof, be cancelled,
terminated and rendered null and void.
(e) Between the date hereof and the Effective Time, TARGET
shall take no action to accelerate the date on which any Option
or Warrant vests or becomes exercisable or to amend or modify any
of the other terms and conditions thereof (including the exercise
price).
(f) It is the intention of the parties hereto that in no
event shall PARENT, by virtue of the Merger, be obligated to
issue in the aggregate a number of shares of PARENT Common Stock
greater than the Merger Shares to the holders of TARGET Capital
Stock, Options, Warrants and Common Stock Warrants outstanding
immediately prior to the Effective Time.
(g) Upon conversion of the outstanding TARGET Capital Stock
in accordance with this Section 3.2, all such shares shall no
longer be outstanding and shall automatically be canceled and
retired and shall cease to exist; and each certificate formerly
representing any such shares (a "Certificate") shall thereafter
represent only the right to receive the Merger Shares into which
the shares represented by such Certificate have been converted in
accordance with this Section 3.2. Certificates previously
representing shares of TARGET Capital Stock shall be exchanged
for certificates representing whole shares of PARENT Common Stock
and cash in lieu of any fractional share, without interest,
issued in consideration therefor upon the surrender of such
certificates in accordance with Section 3.4 hereof.
3.3 Capital Stock of Acquisition Corp. Each share of
common stock, par value $0.001 per share, of Acquisition Corp.
issued and outstanding immediately prior to the Effective Time
shall by virtue of the Merger and without any action on the part
of the Acquisition Corp. be converted into one validly issued,
fully-paid and non-assessable share of common stock of the
Surviving Corporation.
3.4 Intentionally Omitted
3.5 Dissenters' Rights. If holders of TARGET Capital Stock
are entitled to dissenters' rights in connection with the Merger
under the DGCL, any shares of TARGET Capital Stock ("Dissenting
Shares") held by persons who have complied with all requirements
for perfecting dissenter's rights under the DGCL ("Dissenting
Stockholders") shall not be converted into or represent the right
to receive the Merger Shares but shall be converted into the
right to receive such consideration as may be determined to be
due with respect to such Dissenting Shares pursuant to the DGCL.
TARGET shall give PARENT prompt notice of any demand received by
TARGET for appraisal of shares of TARGET Capital Stock,
withdrawals of such demands and any instruments served pursuant
to the DGCL and received by TARGET with respect to Dissenting
Shares, and PARENT shall have the right to participate in all
negotiations and proceedings with respect to any such demand.
TARGET agrees that, except with the prior written consent of
PARENT, it will not voluntarily make any payment with respect to,
or settle or offer to settle, any such demands.
Each Dissenting Stockholder who, pursuant to the provisions
of the DGCL, becomes entitled to payment of the fair value of
shares of TARGET Capital Stock shall receive payment therefor
(but only after the value therefor shall have been agreed upon or
finally determined pursuant to such provisions). If, after the
Effective Time, any Dissenting Stockholder shall effectively
withdraw or lose (through failure to perfect or otherwise) its
dissenter's rights under the DGCL, then, as of the later of the
Effective Time or the occurrence of such event, such Dissenting
Stockholder's shares of TARGET Capital Stock shall automatically
be converted into the right to receive the appropriate Merger
Shares as set forth in Section 3.2 above.
3.6 Exchange of Certificates.
(a) At the Closing, or as soon as practicable thereafter,
the TARGET Stockholders shall surrender their Certificate(s),
duly endorsed, for cancellation as of the Effective Time. On the
Closing Date or within five (5) days of PARENT's receipt of such
Certificates: (i) PARENT will cause its transfer agent to issue
to each tendering holder of a Certificate that has executed and
delivered any applicable, Stockholder Representations (as defined
in Section 6.3) (a "Tendering Holder") (A) a certificate
representing the number of whole shares of PARENT Common Stock to
which such Tendering Holder is entitled pursuant to Section 3.2,
if any, less the number of Escrow Shares of such Tendering Holder
that are to be withheld and placed in escrow pursuant to Section
3.4 and the Escrow Agreement, and (ii) PARENT or its transfer
agent will pay by check to such Tendering Holder (or to TARGET's
counsel in escrow for the Tendering Stockholder) an amount in
cash, without interest equal to the amount payable to the
Tendering Holder with respect to a fractional share in accordance
with Section 3.6(b), if any. As soon as practicable following
the Effective Time, PARENT will deliver the certificates
representing the Escrow Shares and the Escrow Cash to the Escrow
Agent pursuant to the Escrow Agreement.
(b) No certificates or scrip representing fractional shares
of PARENT Common Stock shall be issued as part of the Merger
Shares, and such fractional interests shall not entitle the owner
thereof to vote or to any rights as a stockholder of PARENT. All
fractional shares of PARENT Common Stock that a TARGET
Stockholder would otherwise be entitled to receive as part of the
Merger Shares shall be aggregated and if a fractional share
results from such aggregation, such TARGET Stockholder shall be
entitled to receive, in lieu thereof, an amount in cash
determined by multiplying (i) the average price of a share of
PARENT Common Stock (which shall be the average closing sales
price of a share of PARENT Common Stock as reported on the OTC
Bulletin Board over the ten (10) business day period immediately
preceding the Closing Date (the "Reference Price")), times (ii)
the fraction of a share of PARENT Common Stock to which such
TARGET Stockholder would otherwise have been entitled. No such
cash in lieu of fractional shares of PARENT Common Stock shall be
paid to any TARGET Stockholder until Certificates are surrendered
and exchanged in accordance with Section 3.6(a).
(c) Except for the PARENT Merger Shares to be registered in
the name of the Escrow Agent, if any Merger Shares are to be
delivered to a person other than the person in whose name the
Certificates for shares of TARGET Capital Stock surrendered for
exchange are registered, it shall be a condition to the payment
of such Merger Shares that (i) the Certificate(s) so surrendered
shall be transferable, and shall be properly assigned, endorsed
or accompanied by appropriate stock powers, (ii) the person
requesting such transfer shall pay PARENT, or its transfer agent,
any transfer or other taxes payable by reason of the foregoing or
establish to the satisfaction of PARENT that such taxes have been
paid or are not required to be paid and (iii) such transfer shall
otherwise be proper.
(d) In the event that any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of fact by
the person claiming such Certificate to be lost, stolen or
destroyed, PARENT shall issue in exchange for such lost, stolen
or destroyed Certificate the appropriate Merger Shares as if such
claimant were a Tendering Holder under this Section 3.6.
(e) Notwithstanding anything to the contrary in this
Section 3.6, none of PARENT, the Surviving Corporation or any
party hereto shall be liable to any person for any shares or
amounts properly delivered or paid to a public official pursuant
to any applicable abandoned property, escheat or similar Law.
(f) Any portion of the Merger Shares that remains unclaimed
by former stockholders of TARGET for one year after the Effective
Time shall be delivered to the Surviving Corporation. Any former
stockholder of the TARGET who has not complied with this Article
2 shall thereafter look only to the Surviving Corporation for
payment of their share of PARENT Common Stock and unpaid
dividends, if any.
3.7 Dividends. No dividends or other distributions that
are declared or made after the Effective Time with respect to
PARENT Common Stock payable to holders of record thereof after
the Effective Time shall be paid to a TARGET Stockholder entitled
to receive certificates representing PARENT Common Stock until
such TARGET Stockholder has properly surrendered such TARGET
Stockholder's Certificates. Upon such surrender, there shall be
paid to the TARGET Stockholder in whose name the certificates
representing such PARENT Common Stock shall be issued any
dividends which shall have become payable with respect to such
PARENT Common Stock between the Effective Time and the time of
such surrender, without interest. After such surrender, there
shall also be paid to the TARGET Stockholder in whose name the
certificates representing such PARENT Common Stock shall be
issued any dividend on such PARENT Common Stock that shall have a
record date subsequent to the Effective Time and prior to such
surrender and a payment date after such surrender; provided that
such dividend payments shall be made on such payment dates. In
no event shall the TARGET Stockholders entitled to receive such
dividends be entitled to receive interest on such dividends.
3.8 Adjustments. If, subsequent to the Agreement Date but
prior to the Effective Time, PARENT changes the number of shares
of PARENT Common Stock issued and outstanding as a result of a
stock split, reverse stock split, stock dividend,
recapitalization, subdivision, reclassification, combination,
exchange or other similar change with a record date prior to the
Effective Time, the Exchange Ratio and the number of Merger
Shares shall be proportionately and equitably adjusted to reflect
the effect of any such stock split, reverse stock split, stock
dividend, recapitalization or other similar change; provided,
that in no event shall any adjustment be made only as a result of
an increase in the authorized capital stock of PARENT or as a
result of the issuance of shares by PARENT in connection with any
financing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARENT COMPANIES
The PARENT Companies hereby represent and warrant to TARGET
as follows, provided, that the PARENT Companies shall furnish
their Disclosure Letter to TARGET not more than 10 business days
after the execution and delivery of this Agreement, which
Disclosure Letter shall set forth any exceptions to the following
representations and warranties; and provided further, that the
PARENT Companies may amend such Disclosure Letter from time to
time up to and prior to the Effective Time without any such
amendment constituting a breach of any representation or warranty
of the PARENT Companies; and, provided further still, that to any
representation pertaining to Acquisition Corp. (other than the
representations set forth in Sections 4.3 and 4.4) may not be
true and correct upon the Agreement Date but will be true and
correct at Closing:
4.1 Corporate Status. Each of PARENT and Acquisition Corp.
(i) is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, (ii) has the
corporate power and authority to own, lease and operate its
properties and assets and to conduct and carry on its business as
it is now being conducted and operated and (ii) is duly qualified
or licensed to conduct business as a foreign corporation and is
in good standing in all jurisdictions that require such
qualification or licensing, except where the failure to be so
qualified or licensed or to be in good standing will not have a
Material Adverse Effect on PARENT.
4.2 Capitalization of PARENT.
(a) The authorized capital stock of PARENT consists of
shares of PARENT Common Stock of which 9,585,406 shares of PARENT
Common Stock are issued and outstanding as of November 21, 2001.
All of the issued and outstanding shares of PARENT Common Stock
have been duly authorized and validly issued, are fully paid and
non-assessable and were offered, issued sold and delivered by
PARENT in compliance with all registration or qualification or
requirements ( or applicable exemptions therefrom) of all
applicable federal and state securities Laws. Upon consummation
of the Merger, the shares of PARENT Common Stock to be issued in
exchange for TARGET Capital Stock in accordance with this
Agreement will be, when so issued, duly authorized, validly
issued, fully paid and nonassessable.
(b) Except as set forth in the SEC Filings, as of October
18, 2001, December 5th 2001 and January 8, 2002, there were no
outstanding (i) securities convertible into or exchangeable for
capital stock of PARENT; (ii) obligations, options, warrants or
other rights of any kind or character to acquire, purchase or
subscribe for capital stock of PARENT or securities convertible
into or exchangeable for capital stock of PARENT, other than
options and warrants to purchase PARENT Common Stock granted in
the ordinary course of business since the date of the SEC
Filings; or (iii) agreements, arrangements or understandings of
any kind (other than engagements of financial advisors) relating
to the authorization, issuance or sale of capital stock of PARENT
or securities convertible into or exchangeable for capital stock
of PARENT, except such issuances or sales as are contemplated
pursuant to acquisition agreements entered (or to be entered)
into since the date of the SEC Filings.
(c) Except as set forth in the SEC Filings (i) there are no
outstanding or existing proxies, voting agreements, voting
trusts, preemptive rights, rights of first refusal, rights of
first offer, rights of co-sale or tag-along rights, stockholder
agreements to which PARENT is a party or other rights,
understandings or arrangements regarding the voting or
disposition of the capital stock of PARENT to which PARENT is a
party or any other restrictions (other than normal restrictions
on transfer under applicable federal and state securities laws)
applicable to any of PARENT's outstanding stock or other
securities or to the conversion of any shares of PARENT Capital
Stock in the Merger pursuant to any agreement or obligation to
which PARENT or any of its stockholders is a party; and (ii)
PARENT has not granted or agreed to grant to any person or entity
any rights (including piggyback registration rights) to have any
securities of PARENT, or any securities into which the securities
of PARENT are converted or for which such securities are
exchanged, registered with under the Securities Act or any other
Law.
(d) Except as set forth in the SEC Filings, no options or
warrants of PARENT (i) is subject to acceleration or automatic
vesting as a result of the occurrence of the Merger, or (ii)
contains any provisions accelerating the vesting of the right to
exercise such warrants upon a merger or consolidation involving
PARENT, an issuance or sale of PARENT Capital Stock, any sale of
all or substantially all of PARENT's assets or any business
combination or similar transactions involving or causing a change
of control of PARENT.
4.3 Authorization; Enforceability. Each of the PARENT
Companies will have the corporate power and authority to execute
and deliver this Agreement and all Transaction Documents to which
it is or will be a party, to perform its respective obligations
hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and
performance of this Agreement and the Transaction Documents has
been duly authorized by all necessary corporate action on the
part of each of the PARENT Companies. This Agreement has been
duly executed and delivered by each of the PARENT Companies and,
has been approved by the Boards of Directors of PARENT and
Acquisition Corp., constitutes, and, when executed by PARENT and
/ or Acquisition Corp. (as applicable) each Transaction Document
will constitute, a valid and binding obligation of the PARENT
Companies (as applicable), enforceable against them in accordance
with its terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws of general application affecting the enforcement of
creditors' rights generally and general equitable principles
regardless of whether such enforceability is considered in a
proceeding at law or in equity, and except to the extent that any
provisions requiring indemnification in connection with the
offering, issuance or sale of securities may violate public
policy. A true and correct copy of the resolutions of the Board
of Directors of PARENT and Acquisition Corp. approving the
Agreement and Merger will have been furnished to TARGET on or
prior to the Closing.
4.4 No Violation. The execution, delivery and performance
of this Agreement and the Transaction Documents by the PARENT
Companies does not and will not (i) conflict with or violate any
provision of the PARENT Companies' respective certificates of
incorporation or bylaws, each as amended to date; (ii) violate or
breach any provision of, or result, through the mere passage of
time, in a violation of, or result in the termination or
acceleration of, or entitle any party to terminate or accelerate
(whether after the giving of notice or lapse of time or both),
any obligation under, be in conflict with or constitute or result
in a default (or an event which, with notice or lapse of time or
both, would constitute such a default) under, or result in the
imposition of any Lien upon or with respect to the stock or any
assets, business or properties of the PARENT Companies pursuant
to, any Permit, Contract or other instrument, commitment or
obligation to which either of the PARENT Companies is a party or
by which either of the PARENT Companies or any of their
respective assets is bound or subject, or violate or conflict
with any other restriction of any kind or character to which the
PARENT Companies, or any of their respective properties or
assets, is subject or bound; (iii) violate any Order to which the
PARENT Companies is a party or it or its respective properties or
assets is subject or bound; or (iv) violate any Law applicable to
the PARENT Companies, except, in the case of clauses (i), (ii),
(iii) and (iv), for such violations, breaches conflicts or
defaults that will not have a Material Adverse Effect on PARENT.
4.5 Consents, etc. No consent, approval, order or
authorization of, or registration, qualification, designation,
declaration or filing with, any Governmental Authority or any
other Person on the part of the PARENT Companies is required in
connection with the execution, delivery and performance by PARENT
or Acquisition Corp. of this Agreement and the Transaction
Documents, except (a) filings required to comply with applicable
federal and state securities laws, (b) the Merger Filings, and
(c) such other consents, authorizations, filings, approvals and
registrations which, if not obtained or made, will not have a
Material Adverse Effect on PARENT and will not prevent,
materially alter or delay any of the transactions contemplated by
this Agreement or the Transaction Documents.
4.6 SEC Filings. PARENT has previously made available to
TARGET a copy of its Report on Form 10-KSB filed on October 18,
2001, on Form 10-QSB filed on December 5th, 2001 and on Form 8-K
filed on January 8, 2002 with the SEC Prior to the Closing Date,
PARENT will furnish to TARGET copies of all other reports, proxy
statements or other reports filed by PARENT with the SEC pursuant
to Sections 13, 14 or 15(d) of the Exchange Act between the
Agreement Date and the Closing Date (collectively, such reports
and proxy statements, with all amendments and modifications
thereto, including without limitation the 10KSB and the 8-K
referred to above, are referred to as the "SEC Filings") .
PARENT will also provide TARGET with drafts of such SEC Filings
not less than five (5) business days prior to effecting any such
filing. As of the date hereof, each SEC Filing (i) complied
(and, with respect to SEC Filings filed after the Agreement Date
and before the Closing Date, such SEC Filings will comply as of
the date of filing) in all material respects with the
requirements of the Exchange Act, and the rules and regulations
of the SEC thereunder applicable to such SEC Filings and (ii) did
not contain (and, with respect to SEC Filings filed after the
Agreement Date, will not contain as of the date of filing) 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. Each of the consolidated balance
sheets included in or incorporated by reference into the SEC
Filings (including the related notes and schedules) fairly
presents the consolidated financial position of PARENT and its
Subsidiaries as of its date, and each of the consolidated
statements of income, retained earnings and cash flows included
in or incorporated by reference into the SEC Filings (including
any related notes and schedules) fairly presents the results of
operations, retained earnings or cash flows, as the case may be,
of PARENT and its Subsidiaries for the periods set forth therein
(subject, in the case of unaudited statements, to normal year-end
audit adjustments which would not be material in amount or
effect), in each case in accordance with generally accepted
accounting principles consistently applied during the periods
involved, except as may be noted therein. Neither PARENT nor any
of its Subsidiaries has any liabilities or obligations required
to be disclosed in a balance sheet of PARENT or in the notes
thereto prepared in accordance with generally accepted accounting
principles consistently applied except (a) liabilities or
obligations reflected on, or reserved against in, a balance sheet
of PARENT or in the notes thereto, and included in the SEC
Filings and (b) liabilities or obligations incurred since
November 21, 2001 in the ordinary course of business.
4.7 Absence of Certain Changes or Events.
(a) Since November 21, 2001, except as disclosed in the SEC
Filings, PARENT has not: (i) amended or otherwise changed its
Certificate of Incorporation or Bylaws; (ii) issued, sold,
pledged, disposed of or encumbered, or authorized the issuance,
sale, pledge, disposition or encumbrance of, any shares of its
capital stock of any class or any options, warrants, convertible
or exchangeable securities or other rights of any kind to acquire
any shares of such capital stock, or any other ownership
interest, of it (other than options and warrants of PARENT);
(iii) reclassified, combined, split, subdivided or redeemed,
purchased or otherwise acquired, directly or indirectly, any
PARENT capital stock; (iv) declared, set aside, made or paid any
dividend or other distribution, whether payable in cash, stock,
property or otherwise, with respect to any PARENT capital stock;
(v) acquired (including, without limitation, for cash or shares
of stock, by merger, consolidation or acquisition of stock or
assets) any interest in any corporation, partnership or other
business organization or division thereof or any assets, or made
any investment either by purchase of stock or securities,
contributions of capital or property transfer, or purchased any
property or assets of any other Person; (vi) made any loans or
advances to any other Person; (vii) sold, pledged, disposed of or
encumbered, or authorized the sale, pledge, disposition or
encumbrance of properties or assets, tangible or intangible,
having a value in any single transaction in excess of $50,000,
except sales of inventory in the ordinary course of business;
(viii) entered into, amended, terminated or canceled any
Contract, other than in the ordinary course of business,
consistent with past practice, (ix) except pursuant to the terms
of a Plan or Benefit Program, increased the compensation payable
or to become payable to its officers or salaried employees,
granted any severance or termination pay to, or entered into any
employment or severance agreement with, any of its directors,
officers or salaried personnel, or established, adopted, entered
into or amended any bonus, profit sharing, trust, compensation,
stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of
any directors, officers, personnel or employees, or taken any
action to accelerate any rights or benefits thereunder; (x)
changed any accounting policies or procedures or made any change
in any accounting methods or systems of internal accounting
controls, except as may be appropriate to conform to changes in
GAAP; (xi) made any Tax election, other than in the ordinary
course of business consistent with past practice; (xii) paid,
discharged or satisfied any Liens, claims, debts, 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 due and payable liabilities reflected or
reserved against in the PARENT's financial statements, as
appropriate, or liabilities incurred after November 21, 2001 in
the ordinary course of business and consistent with past
practice; (xiii) increased or decreased prices charged to its
customers, other than in the ordinary course of business
consistent with past practice, or failed to use all commercially
reasonable efforts to enforce any Contract or other agreement
with any customer or supplier, collect its accounts receivable,
or pay its accounts payable, in each case in the ordinary course
of business consistent with past practice; (xiv) entered into any
Contract or transaction with or for the benefit of, or made any
loan or advance to or for the benefit of, any of its directors,
officers, stockholders, Affiliates or Associates or any entity in
which any such director, officer, stockholder, Affiliate or
Associate, or their respective Affiliates or Associates, has a
direct or indirect interest, whether or not in the ordinary
course of business; or (xv) agreed, in writing or otherwise, to
take or authorize any of the foregoing actions or any action
which would make any representation or warranty in this Article
IV untrue or incorrect in any respect.
(b) Since November 21, 2001, except as disclosed in the SEC
Filings, and except as expressly contemplated by this Agreement,
there has not been any change in the business, operations,
assets, liabilities, financial condition or operating results of
PARENT or any other event or condition of any character that has
had or will have a Material Adverse Effect on PARENT, (ii) any
damage, destruction or loss, whether or not covered by insurance
to or of the assets of PARENT which has had or will have a
Material Adverse Effect on PARENT.
4.8 Litigation. Except as disclosed in the SEC Filings,
(i) there are no Legal Proceedings pending or, to PARENT's
knowledge, threatened against PARENT or Acquisition Corp.
(A) challenging the Merger, or seeking to restrain or prohibit
the consummation of the Merger, or (B) which, if determined
adversely to PARENT, will have a Material Adverse Effect on
PARENT, and (ii) there is no Order of any Governmental Authority
or arbitrator outstanding against PARENT which has had or will
have a Material Adverse Effect on PARENT.
4.9 Ownership and Operations of Acquisition Corp..
PARENT owns all of the issued and outstanding capital stock of
Acquisition Corp. Each outstanding shares of capital stock of
Acquisition Corp. is duly authorized, validly issued, fully paid
and non-assessable and each such share owned by PARENT is free
and clear of all encumbrances of any nature whatsoever.
Acquisition Corp. was formed solely for the purpose of engaging
in the transactions contemplated hereby, has engaged in no other
business activities and has conducted its operations only as
contemplated hereby.
4.10 Tax Matters.
(a) PARENT has no plan or intention to liquidate
Acquisition Corp. following the Merger or cause Acquisition Corp.
to sell or otherwise dispose of any assets of TARGET acquired in
the Merger, except for dispositions made in the ordinary course
of business or transfers described in Code Section 368(a)(2)(C)
and the Treasury Regulations issued thereunder.
(b) Following the Merger, PARENT will cause
Acquisition Corp. to continue TARGET's historic business or to
use a significant portion of TARGET's historic business assets in
a business, in each case, within the meaning of Section 1.368-
1(d) of the Treasury Regulations.
(c) Immediately after the Effective Time, the
Acquisition Corp. will own at least 90 percent of the fair market
value of the net assets and at least 70 percent of the fair
market value of the gross assets held by TARGET immediately prior
to the Effective Time.
(d) Following the Merger, Acquisition Corp. will not
issue additional shares that would result in PARENT losing
control of Acquisition Corp. within the meaning of Section 368(c)
of the Internal Revenue Code.
(e) PARENT has no plan or intention to reacquire any
of its stock issued in the Merger.
4.11 Compliance with Law, Charter Documents and Agreements.
Unless otherwise set forth in PARENT's SEC Filings, PARENT is not
in violation or default of any provisions of its Certificate of
Incorporation or Bylaws. PARENT (i) has all material Permits and
other authorizations necessary to own its properties and assets
and carry on its business as it is presently being conducted and
proposed to be conducted, (ii) is in compliance in all material
respects with all applicable Laws of all Governmental Authorities
having jurisdiction over its business or properties, and all
Permits held by it, and (iii) is in compliance in all material
respects with all of the terms and provisions of all material
Contracts except, in the case of clauses (i) - (iii) for any
violations, breaches conflicts or defaults, which will not have a
Material Adverse Effect on PARENT. Unless otherwise set forth in
PARENT's SEC Filings, PARENT has not received any written notice
or other communication from any Governmental Authority (or quasi-
governmental authority) regarding (a) any actual or possible
violation of Law or any Permit or any failure to comply with any
term or requirement of any Law or Permit, or (b) any actual or
possible revocation, withdrawal, suspension, cancellation,
termination or modification of any Permit that is material to and
required for the operation of its business as currently
conducted. PARENT has not been the subject of any audit by any
Governmental Authority for the purpose of determining whether it
has complied with applicable Law.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF TARGET
TARGET hereby represents and warrants to the PARENT
Companies as follows, provided, that TARGET shall furnish
TARGET's Disclosure Letter to PARENT Companies not more than 10
business days after the execution and delivery of this Agreement,
which Disclosure Letter shall set forth any exceptions to the
following representations and warranties; and provided further,
that TARGET may amend such Disclosure Letter from time to time up
to and prior to the Effective Time without any such amendment
constituting a breach of any representation or warranty of
TARGET; and, provided further still, that TARGET'S
representations and warranties relate to and include the business
and assets (including, without limitation, the Intellectual
Property) that TARGET is to acquire with respect to the OLIGON
and Methylene Blue Technologies as a condition to Closing, as if
the same had been acquired prior to Closing:
5.1 Organization, Authority, Qualification; Locations and
Names; Corporate Records.
(a) TARGET is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware. TARGET (i) has the corporate power and authority to
own, lease and operate its properties and assets and to conduct
and carry on its business as it is now being conducted and
operated and as proposed to be conducted and operated and (ii) is
duly qualified or licensed to conduct business as a foreign
corporation and is in good standing in all jurisdictions that
require such qualification or licensing, except where the failure
to be so qualified or licensed or to be in good standing will not
have a Material Adverse Effect on TARGET.
(b) The addresses of TARGET's principal place of business
and principal executive office are identified in the Disclosure
Letter. As of the Agreement Date, TARGET neither owns nor leases
any real property nor has any employees, sales representatives,
agents or inventory in any state in the United States or in any
other jurisdiction, other than those identified in the Disclosure
Letter.
(c) The copies of the Certificate of Incorporation, as
amended, and Bylaws of TARGET which have been provided to PARENT
are true, accurate and complete and reflect all amendments made
through the Agreement Date. The minute books of TARGET provided
to PARENT contain a complete summary of all meetings of TARGET's
directors and stockholders since the time of incorporation and
reflect all transactions referred to in such minutes accurately
in all material respects. The copies of stock ledgers of TARGET
which have been provided to PARENT contain accurate and complete
records of all issuances, transfers and cancellations of shares
of the capital stock of TARGET.
5.2 Authorization; Enforceability.
(a) TARGET has the corporate power and authority to
execute and deliver this Agreement and all Transaction Documents
to which it is or will be a party, to perform its obligations
hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and
performance of this Agreement and the Transaction Documents and
the consummation of the Merger has been duly authorized by all
necessary corporate action on the part of TARGET.
(b) This Agreement, the Transaction Documents and the
Merger have been approved by the Board of Directors of TARGET in
accordance with its Certificate of Incorporation and Bylaws and
the DGCL. A true and correct copy of the resolutions of the
Board of Directors of TARGET approving the Transaction Documents
and the Merger have been furnished to PARENT on or prior to the
Agreement Date.
(c) This Agreement has been duly executed and
delivered by TARGET and constitutes and, when executed by TARGET,
each Transaction Document will constitute, a valid and binding
obligation of TARGET, enforceable against TARGET in accordance
with its terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws of general application affecting the enforcement of
creditors' rights generally and general equitable principles
regardless of whether such enforceability is considered in a
proceeding at law or in equity.
(d) The restrictions contained in Section 203 of the
DGCL applicable to a "business combination" (as defined in such
Section 203) will not apply to the execution, delivery or
performance of this Agreement or to the consummation of the
Merger.
(e) The holders of TARGET Capital Stock are
"accredited investors" as defined in Rule 501 of Regulation D
under the Securities Act.
5.3 Capitalization.
(a) The authorized capital stock of TARGET ("TARGET Capital
Stock") and the issued and outstanding shares of TARGET Capital
Stock are set forth in the TARGET Disclosure Letter. All of the
issued and outstanding shares of TARGET Capital Stock have been
duly authorized and validly issued, are fully paid and
nonassessable, are not, currently subject to any claim, Lien,
preemptive right, right of first offer or right of recission, and
were offered, issued, sold and delivered by TARGET in compliance
with all registration or qualification requirements (or
applicable exemptions therefrom) of all applicable federal and
state securities Laws. TARGET has no liability (or potential
liability) to any Person for any dividends that have been
declared or accrued and remain unpaid. The TARGET Disclosure
Letter sets forth a true and correct list of all holders of
TARGET Capital Stock as of the Agreement Date, including the
number of shares of TARGET Capital Stock owned of record and
beneficially by each such holder.
(b) Except for the rights of the holders of the outstanding
TARGET Capital Stock set forth in TARGET's Certificate of
Incorporation and Bylaws and the rights of the holders of the
Options and Warrants set forth in the agreements or instruments
governing such options or warrants (true and complete copies of
which have been provided to PARENT) there are no options,
warrants, convertible securities or other securities, calls,
commitments, conversion privileges, preemptive rights or other
rights or agreements outstanding to which TARGET or any TARGET
stockholder is party to purchase or otherwise acquire (whether
directly or indirectly) any shares of TARGET's authorized but
unissued capital stock or any securities convertible into or
exchangeable for any shares of TARGET's Capital Stock or
obligating TARGET to grant, issue, extend, or enter into any such
option, warrant, convertible security or other security, call,
commitment, conversion privilege, preemptive right or other right
or agreement. No warrants, convertible debentures, or any other
securities of TARGET or rights to acquire shares of TARGET
Capital Stock or any warrants or other securities of TARGET will
become an option, warrant, convertible debenture, security or
other right to purchase or otherwise acquire any capital stock or
other securities of PARENT or the Surviving Corporation, or any
other obligation or liability of PARENT by reason of the Merger
or this Agreement. To TARGET's best Knowledge, no officer,
director or 10% or greater beneficial owner of TARGET Capital
Stock on an as converted to TARGET Common Stock basis has any
option, warrant or other right to acquire, any issued and
outstanding shares of TARGET Capital Stock from any holder of
shares of TARGET Capital Stock.
(c) (i) there are no outstanding or existing proxies,
voting agreements, voting trusts, preemptive rights, rights of
first refusal, rights of first offer, rights of co-sale or tag-
along rights, stockholder agreements to which TARGET, or to
TARGET's Knowledge, any of its stockholders is a party or other
rights, understandings or arrangements regarding the voting or
disposition of the capital stock of TARGET to which TARGET, or to
TARGET's Knowledge, any of its stockholders is a party, or any
other restrictions (other than normal restrictions on transfer
under applicable federal and state securities laws) applicable to
any of TARGET's outstanding stock or other securities or to the
conversion of any shares of TARGET's capital stock in the Merger
pursuant to any agreement or obligation to which TARGET, or to
TARGET's Knowledge, any of its stockholders is a party; and (ii)
TARGET has not granted or agreed to grant to any person or entity
any rights (including piggyback registration rights) to have any
securities of TARGET, or any securities into which the securities
of TARGET are converted or for which such securities are
exchanged (including any PARENT Common Stock into which such
TARGET Common Stock is converted pursuant to the Merger),
registered with under the Securities Act or any other Law.
(d) The Disclosure Letter sets forth a true and correct
list of all Options and Warrants that are outstanding on the
Agreement Date, setting forth the holder of each such Option or
Warrant, the date of grant, the exercise or conversion price, the
vesting schedule (if any) and the number, class and series of
shares of TARGET Capital Stock subject to each such Option or
Warrant. None of the Options or Warrants (A) is subject to
acceleration or automatic vesting as a result of the occurrence
of the Merger, or (B) contains any provisions accelerating the
vesting of the right to exercise such warrants upon a merger or
consolidation involving TARGET, an issuance or sale of TARGET
Capital Stock, any sale of all or substantially all of TARGET's
assets or any business combination or similar transactions
involving or causing a change of control of TARGET.
5.4 No Violation. The execution, delivery and performance
of this Agreement and the Transaction Documents by TARGET does
not and will not (i) conflict with or violate any provision of
TARGET's Certificate of Incorporation or Bylaws, each as amended
to date; (ii) violate or breach any provision of, or result,
through the mere passage of time, in a violation of, or result in
the termination or acceleration of, or entitle any party to
terminate or accelerate (whether after the giving of notice or
lapse of time or both), any obligation under, be in conflict with
or constitute or result in a default (or an event which, with
notice or lapse of time or both, would constitute such a default)
under, or result in the imposition of any Lien upon or with
respect to the stock or any assets, business or properties of
TARGET pursuant to, any Permit, Contract or other instrument,
commitment or obligation to which TARGET is a party or by which
TARGET or any of its assets is bound or subject, or violate or
conflict with any other restriction of any kind or character to
which TARGET, or any of its properties or assets, is subject or
bound; (iii) violate any Order to which TARGET is a party or it
or its properties or assets is subject or bound; or (iv) violate
any Law applicable to TARGET, except, in the case of clauses
(ii), (iii) and (iv), for such violations, breaches conflicts or
defaults, which will not have a Material Adverse Effect on
TARGET.
5.5 Consents, etc. No consent, approval, order or
authorization of, or registration, qualification, designation,
declaration or filing with, any Governmental Authority or any
other Person on the part of TARGET is required in connection with
the execution, delivery or performance by TARGET of this
Agreement and the Transaction Documents, except (a) the Merger
Filings, and (b) the consents, authorizations, filings, approvals
and registrations set forth in the Disclosure Letter none of
which, if not obtained or made, will have a Material Adverse
Effect on TARGET or prevent, materially alter or delay any of the
transactions contemplated by this Agreement or the Transaction
Documents.
5.6 Subsidiaries. TARGET does not own or control, directly
or indirectly, any ownership, equity or profit interest in any
other corporation, limited liability company, association, joint
venture, partnership or other business entity.
5.7 Legal Proceedings. (i) There are no Legal Proceedings
pending or, to TARGET's best Knowledge, threatened against
TARGET, its business or its assets (or against any of their
officers, directors, employees, consultants or agents in their
capacity as such or relating to their employment, services or
relationship with TARGET), and (ii) there is no Order of any
Governmental Authority or arbitrator outstanding against TARGET
or, to TARGET's best Knowledge, against any of their officers,
directors, employees, consultants or agents in their capacity as
such or relating to their employment, services or relationship
with TARGET. To TARGET's best Knowledge, there is no basis for
any stockholder or former stockholder of TARGET, or any other
Person, to assert a claim against TARGET or PARENT based upon:
(i) a disputed claim of ownership of capital stock, options,
warrants or other rights to acquire ownership of, any shares of
the capital stock of TARGET, (ii) any rights as a stockholder of
TARGET, including any option, warrant or preemptive rights, right
of refusal, rights of co-sale or tag along rights or rights to
notice or to vote, (iii) any rights under any agreement among
TARGET and its stockholders or among the stockholders of TARGET,
or (iv) TARGET entering into this Agreement or any Transaction
Document or consummating the Merger or any of the transactions
contemplated by this Agreement or any Transaction Document.
5.8 Intellectual Property.
(a) TARGET IP Rights; Intellectual Property. TARGET
owns, or has the valid right or license to use, possess, sell or
license, all Intellectual Property (as defined below) and any
intellectual property necessary or required for the conduct of
its business as presently conducted and as presently proposed to
be conducted, including without limitation, the OLIGON and
Methylene Blue technologies (such Intellectual Property being
hereinafter collectively referred to as the "TARGET IP Rights"),
and such rights to use, possess, distribute sell or license are
sufficient for the conduct of such business. As used herein, the
term "Intellectual Property" means, collectively, all worldwide
intellectual property rights, including, without limitation,
patents, patent applications, rights to file for patent
applications (including but not limited to continuations,
continuations-in-part, divisional and reissues), trademarks,
logos, service marks, trade names and service names (in each case
whether or not registered) and applications for and the right to
file applications for registration thereof, Internet domain
names, copyrights (whether or not registered) and applications
for and the right to file applications for registration thereof,
moral rights, mask work rights, mask work registrations and
applications therefor, licenses, inventions, trade secrets, trade
dress, proprietary processes and formulae, software source code
and object code, algorithms, net lists, architectures,
structures, screen displays, layouts, development tools, designs,
blueprints, specifications, technical drawings (or similar
information in electronic format) and any other intellectual
property rights arising under the laws of the United States of
America, any State thereof, or any country or province, and all
documentation and media (in whatever form) constituting,
describing or relating to the foregoing, including, without
limitation, manuals, programmers' notes, memoranda and records.
All of the Intellectual Property pertaining to the OLIGON and
Methylene Blue technologies is listed on the Disclosure Schedule.
(b) No Default. Neither the execution, delivery and
performance of this Agreement nor the consummation of the Merger
and the other agreements and transactions contemplated hereby
and/or by the Transaction Documents will: (i) constitute a
breach, violation or default by TARGET under any material
instrument, contract, license or other agreement governing any
TARGET IP Rights; (ii) cause the forfeiture or termination of, or
give rise to a right of forfeiture or termination of, any TARGET
IP Rights; or (iii) impair the right of TARGET to use, possess,
sell or license any TARGET IP Rights or portion thereof.
(c) No Infringement by TARGET. Neither the license,
publication, sale, distribution, marketing, or intended use of
any product or service currently licensed, utilized, sold or
provided by TARGET or currently under development by TARGET
violates any license or agreement between TARGET and any third
party or infringes or misappropriates any Intellectual Property
of any third party; and there is no pending or, to TARGET's
Knowledge, threatened, claim or litigation contesting the
validity, ownership or right of TARGET to use, possess, sell,
market, distribute, license or transfer of any TARGET IP Rights,
nor to TARGET's Knowledge, is there any basis for any such claim,
nor has TARGET received any notice asserting that any TARGET IP
Right or the proposed use, sale, distribution, license or
transfer thereof conflicts or will conflict with the rights of
any other party, nor to the TARGET's Knowledge, is there any
basis for any such assertion.
(d) No Breach by Employees or Consultants. No
employee, consultant or independent contractor of TARGET: (i) is
in violation of any material term or covenant of any employment
contract, patent disclosure agreement, invention assignment
agreement, non-disclosure agreement, non-competition agreement or
any other contract or agreement with any other party by virtue of
such employee's, consultant's, or independent contractor's being
employed by, or performing services for, TARGET. Neither
TARGET's employment of its employees, nor the use by TARGET of
the services of any consultant or independent contractor,
subjects TARGET to any material liability to any third party.
(e) Protection of TARGET IP Rights. TARGET has taken
all necessary and appropriate steps to protect, preserve and
maintain the TARGET IP Rights and its proprietary rights therein.
All officers, employees, consultants and contractors of TARGET
having access to proprietary information of TARGET, its customers
or business partners, or who have developed or used any
inventions or other proprietary information for use by TARGET,
have executed and delivered an agreement whereby they have agreed
to hold TARGET's proprietary information in confidence. The
Disclosure Letter contains a true and correct list of (i) valid
written assignments that TARGET has secured from all consultants,
contractors and, where applicable, employees who were involved
in, or who contributed to, the creation or development of any
TARGET IP Rights, or the rights to such contributions to the
extent not owned by TARGET by operation of law and (ii) any
right, license, claim, or interest whatsoever that any current or
former employee, officer, director, consultant or independent
contractor of TARGET has in or with respect to any TARGET IP
Rights.
(f) Registered and Unregistered Intellectual Property.
The Disclosure Letter contains a true and correct list of (i) all
worldwide registrations of any patents, copyrights, trademarks,
service marks and Internet domain names with any governmental or
quasi-governmental authority held by TARGET; (ii) all
applications, registrations, filings and other formal actions
made or taken pursuant to federal, state and foreign laws by
TARGET to secure, perfect or protect its interest in TARGET IP
Rights, including, without limitation, all patent applications,
copyright applications, and trademark or service marks
applications, and (iii) all unregistered trademarks and service
marks. All registered patents, copyrights, trademarks, service
marks and Internet domain names held by TARGET are valid and
enforceable.
(g) Licenses and Other Agreements. The Disclosure
Letter contains a complete list of (i) all licenses, sublicenses,
assignments, indemnities, and other agreements as to which TARGET
is a party and pursuant to which any person or entity is
authorized to use any TARGET IP Rights, and (ii) all licenses,
sublicenses, assignments, indemnities, and other agreements as to
which TARGET is a party and pursuant to which TARGET is
authorized to use any third party Intellectual Property that is
incorporated in, or form a part of, any product or service sold,
licensed, distributed, provided or marketed by TARGET.
(h) No Infringement by Third Parties. To TARGET's
best Knowledge, there is no unauthorized use, disclosure,
infringement or misappropriation of any TARGET IP Rights by any
third party, including any TARGET employee or former employee,
consultant or independent contractor. TARGET has not agreed to
indemnify any person for any infringement of any Intellectual
Property of any third party through the sale, license, lease,
supply, marketing or distribution of any products, goods or
services by TARGET. To TARGET's best Knowledge, each Person from
which TARGET acquires products, goods or services (i) obtained or
made or sold such products or goods or performed such services
without violating the Intellectual Property or other rights of
any Person, (ii) has all rights and permissions necessary to
distribute such products and goods to TARGET or perform such
services for TARGET, and (iii) has all rights and permissions
necessary to grant TARGET the right to redistribute such
products, goods or services.
(i) Royalties; Fees; Honoraria. To TARGET's best
Knowledge, there are no royalties, honoraria, fees or other
payments payable by TARGET to any third person by reason of the
ownership, use, possession, license, sale, marketing, advertising
or disposition of any TARGET IP Rights.
5.9 Compliance with Law, Charter Documents and Agreements.
TARGET is not in violation or default of any provisions of its
Certificate of Incorporation or Bylaws. TARGET (i) has all
material Permits and other authorizations necessary to own its
properties and assets and carry on its business as it is
presently being conducted and proposed to be conducted, (ii) is
in compliance in all material respects with all applicable Laws
of all Governmental Authorities having jurisdiction over its
business or properties, and all material Permits held by it, and
(iii) is in compliance in all material respects with all of the
terms and provisions of all Contracts listed in the Disclosure
Letter, except, in the case of clauses (i) - (iii) for any
violations, breaches conflicts or defaults, which will not have a
Material Adverse Effect on TARGET. The Disclosure Letter sets
forth a true and complete list of all material Permits held by
TARGET; no other Permits are necessary for TARGET to own its
properties and assets and carry on its business as it is
presently being conducted and proposed to be conducted, other
than those Permits the failure of which to obtain will not have a
Material Adverse Effect on TARGET. Each Permit listed in
Paragraph 5.9 of the Disclosure Letter is in full force and
effect. TARGET has not received any written notice nor, to
TARGET's best Knowledge, any other communication from any
Governmental Authority (or quasi-governmental authority)
regarding (a) any actual or possible violation of Law or any
Permit or any failure to comply with any term or requirement of
any Law or Permit, or (b) any actual or possible revocation,
withdrawal, suspension, cancellation, termination or modification
of any Permit that is material to and required for the operation
of its business as currently conducted. TARGET has not been the
subject of any audit by any Governmental Authority for the
purpose of determining whether it has complied with applicable
Law
5.10 Financial Statements; Books and Records.
(a) The Disclosure Letter contains a true and correct copy
of (i) TARGET's audited consolidated financial statements
(balance sheet and profit and loss statement, statement of
stockholders' equity and statement of cash flows, including notes
thereto) at and as of December 1999 , (ii) TARGET's unaudited
consolidated financial statements (balance sheet and profit and
loss statement, statement of stockholders' equity and statement
of cash flows, including notes thereto) at and as of December
2000 and December 2001 , (iii) (collectively, the "TARGET
Financial Statements"). All of the Financial Statements are in
accordance with the books and records of TARGET have been
prepared in accordance with GAAP applied on a consistent basis
throughout the periods indicated and fairly present the financial
condition and operating results of TARGET as of the dates and for
the periods indicated therein, subject in the case of the
unaudited TARGET Financial Statements to the absence of footnotes
and year-end adjustments that are not material in the aggregate.
(b) Except as set forth in TARGET's unaudited consolidated
balance sheet as of December 31, 2001 (the "Most Recent Balance
Sheet"), TARGET has no debts, liabilities or obligations, whether
accrued, absolute, contingent, known, unknown or otherwise, and
whether or not of a nature required to be reflected or reserved
against in a balance sheet in accordance with GAAP, other than
(A) debts, liabilities or obligations incurred in the ordinary
course of business subsequent to December 31, 2001, none of which
are material, and (B) executory contract obligations under (x)
Contracts set forth in the Disclosure Letter or (y) Contracts not
required to be listed in the Disclosure letter. Except as
disclosed in the TARGET Financial Statements, TARGET is not a
guarantor or indemnitor of any indebtedness of any other Person.
(c) Except as set forth in the Disclosure Letter, the
books, records and accounts of TARGET (i) are in all material
respects true, complete and correct, (ii) have been maintained in
accordance with good business practices, and (iii) are stated in
reasonable detail and accurately and fairly reflect the basis for
the TARGET Financial Statements. TARGET has devised and
maintains a system of internal accounting controls sufficient to
provide reasonable assurances that (A) transactions are executed
in accordance with management's general or specific
authorization; (B) transactions are recorded as necessary (x) to
permit preparation of financial statements in conformity with
generally accepted accounting principles or any other criteria
applicable to such statements, (y) to maintain accountability for
assets, and (C) the amount recorded for assets on the books and
records of TARGET is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect
to any differences.
5.11 Title and Related Matters. TARGET does not own any
real property. The Most Recent Balance Sheet reflects all of the
properties and assets used by TARGET in its business, except for
(i) properties or assets acquired or disposed of in the ordinary
course of business since the date thereof, and (ii) properties or
assets not required under GAAP to be reflected thereon. TARGET
owns its properties and assets free and clear of all Liens,
except statutory Liens for the payment of current taxes that are
not yet delinquent and such imperfections of title and
encumbrances, if any, which are not material in character, amount
or extent, and do not detract from the value or interfere with
the present use, of the property subject thereto or affected
thereby. The properties and assets of TARGET that are material
to the operation of its business are (i) in all material respects
adequate for the conduct of its business as currently conducted
and as proposed to be conducted, and (ii) in good condition and
repair, normal wear and tear excepted. With respect to the
properties and assets it leases, TARGET holds valid leasehold
interests free and clear of all Liens and such leases are fully
effective and afford it peaceful and undisturbed possession of
the subject matter of the lease. TARGET is in compliance in all
material respects with all zoning, building, safety or
environmental ordinance, regulation or requirement or other Laws
applicable to the operation of owned or leased properties, and
has not received any written notice of such violation with which
it has not complied.
5.12 Employee Benefit Matters. The TARGET does not and has
not sponsored, maintained or contributed to any "employee benefit
plan", as defined in Section 3(3) of ERISA (including, but not
limited to, employee benefit plans which are not subject to the
provisions of ERISA) ("Plan"). Other than as set forth in the
Disclosure Letter TARGET is not a party to any collective
bargaining agreement, profit sharing, stock option, stock
purchase, pension, bonus, incentive, retirement, incentive award
plan or arrangement, vacation policy, severance pay policy or
agreement for severance pay, accelerated vesting or similar
benefits following termination of employment or upon the
execution of this Agreement or the Closing, deferred compensation
agreement or arrangement, consulting agreement, employment
contract, medical reimbursement, life insurance or other benefit
plan, agreement, arrangement, program, practice or understanding
("Benefit Program"). TARGET has no full-time or part-time
employees. There are no existing or, to TARGET's best Knowledge,
threatened labor disputes. TARGET owes no wages, bonuses,
commissions, taxes, penalties or assessments, owed to, or arising
out of the employment of, any officer, director, employee or
other person or consultant. TARGET is in compliance in all
material respects with all applicable laws respecting employment
and employment practices, terms and conditions of employment,
wages and hours, occupational safety and health, and is not
engaged in any unfair labor or unfair employment practices.
There is no unfair labor practice charge or complaint or any
other matter against (or to TARGET's best Knowledge, involving)
TARGET pending or, to TARGET's best Knowledge, threatened before
any Governmental Authority. No agreement, arbitration or court
decision or governmental order to which TARGET is a party or, to
TARGET's best Knowledge, to which it or any of its properties or
assets is bound or subject in any way limits or restricts TARGET
from relocating or closing any of its operations.
5.13 Contracts and Transactions.
(a) TARGET is not a party to or bound by: (i) any Contract
which may not be canceled by TARGET without penalty in excess of
$25,000 upon notice of 30 days or less or which provides for
payments by or to TARGET in an amount in excess of $25,000 over
the term of the Contract; (ii) any Contract containing any
covenant limiting in any respect the right of TARGET to engage in
any line of business or in any jurisdiction or to compete with
any Person or granting any exclusive distribution rights; (iii)
any Contract relating to the disposition or acquisition by TARGET
after the Agreement Date of a material amount of assets not in
the ordinary course of business or pursuant to which TARGET has
any material ownership interest in any corporation, partnership,
joint venture or other business enterprise; or (iv) any Contract
restricting TARGET's right to use TARGET IP Rights.
(b) True and complete copies of all Contracts are set forth
in the Disclosure Letter, including all amendments thereto have
been provided to PARENT prior to the Agreement Date. All such
Contracts are valid and enforceable in accordance with their
respective terms, in each subject to applicable bankruptcy,
insolvency and other similar laws affecting the enforceability of
creditors' rights generally, general equitable principles and the
discretion of courts in granting equitable remedies. There is
not under any of such Contracts any existing material breach,
default or event of default by TARGET or event that with notice
or lapse of time or both would constitute a material breach,
default or event of default by TARGET, nor has TARGET received
written notice of, or made a claim with respect to, any material
breach or default by any other party to any such Contract. To
TARGET's best Knowledge, no party to any Contract set forth the
Disclosure Letter intends to withdraw, cancel, modify or amend
such Contract.
5.14 Related Party Transactions. No director, officer or
other Affiliate or Associate of TARGET or any entity in which any
such director, officer or other Affiliate or Associate, has any
direct or indirect material interest in, or owns any beneficial
interest in any Person (other than a publicly held corporation
whose stock is traded on a national securities exchange or in the
over-the-counter market and less than 1% of the stock of which is
beneficially owned by any such persons) that has any direct or
indirect interest in: (i) any property (real, personal or mixed),
tangible, or intangible, used or currently intended to be used
in, the business or operations of TARGET, (ii) any Contract, or
any other arrangement or understanding with, or relating to, the
business or operations of TARGET, or any Person with which TARGET
has a business relationship; (iii) any loan, arrangement,
understanding, agreement or contract for or relating to
indebtedness of TARGET or (iv) any Person that competes with
TARGET.
5.15 Environmental Laws. To TARGET's best Knowledge, TARGET
is not in violation of any applicable Environmental Law and
TARGET is not and will not be required to make any expenditures
to comply with any Environmental Law.
5.16 Tax Returns and Payments.
(a) The Disclosure Letter sets forth a true and complete
list of all Taxes to which TARGET currently is subject. Except
as set forth in the Disclosure Letter, (i) TARGET has timely
filed all Tax Returns required by applicable Law and all such Tax
Returns are true and correct in all material respects, and (ii)
such Tax Returns are not subject to penalties under Section 6662
of the Code, relating to accuracy-related penalties (or any
corresponding provision of the state, local or foreign Tax law)
or any predecessor provision of law. An extension of time within
which to file any Tax Return that has not been filed has not been
requested or granted.
(b) TARGET has paid all Taxes (including estimated Taxes)
and other assessments due on or prior to the Agreement Date,
except those, if any, currently being contested by it in good
faith by TARGET and which are listed in the Disclosure Letter;
and TARGET is not delinquent in the payment of any Tax nor
delinquent in the filing of any Tax Return. Without limiting the
generality of the foregoing, TARGET has reported and duly paid
state and local sales and use Taxes in all states in which it is
required to report and pay such Taxes.
(c) TARGET has not filed a consent pursuant to the
provisions of Section 341(f) (or any corresponding provision of
state, local or foreign income tax law) or agreed to have Section
341(f)(2) of the Code (or any corresponding provision of state,
local or foreign income tax law) apply to any disposition of any
asset owned by it. TARGET has not made any other elections
pursuant to the Code (other than elections that relate solely to
methods of accounting, depreciation or amortization) other than
in the ordinary course of business consistent with past
practices. TARGET has not had any Tax deficiency threatened,
claimed, proposed or assessed against it, nor has it executed any
waiver of any statute of limitations on or extending the period
for the assessment or collection of any Tax, assessment or other
governmental charge. TARGET has not received any notification or
other communication indicating that any issues have been raised
(and are currently pending) by the Internal Revenue Service or
any other Governmental Authority regarding its Taxes or Tax
Returns, nor has its Tax Returns been audited by the Internal
Revenue Service or any other Governmental Authority. TARGET has
withheld or collected from each payment made to each of its
employees, whether in cash, stock or in kind, the full amount of
all Taxes (including, but not limited to, federal income taxes,
Federal Insurance Contribution Act taxes and Federal Unemployment
Tax Act taxes) required to be withheld or collected therefrom,
and has paid the same to the proper Governmental Authority or
authorized depositories. No material special charges, penalties,
fines, liens or other similar encumbrances have been asserted
against TARGET with respect to the payment or failure to pay any
Taxes which have not been paid or received without further
liability to TARGET. TARGET has provided to PARENT prior to the
Agreement Date copies of all Tax Returns of TARGET for the prior
taxable periods.
(d) TARGET (i) has not been a member of an affiliated group
of corporations, within the meaning of Section 1504 of the Code
and(ii) has agreed to make nor is it required to make any
adjustments under Section 481(a) of the Code by reason of a
change in accounting method or otherwise.
5. 17 Insurance. The Disclosure Letter sets forth a
true and complete list of all insurance policies in force naming
TARGET as an insured or beneficiary or as a loss payable payee or
for which TARGET has paid or is obligated to pay all or part of
the premiums. TARGET has not received written notice of any
pending or threatened cancellation or material premium increase
(retroactive or otherwise) with respect thereto, and, TARGET is
in compliance with all conditions contained therein. There are
no pending claims against such insurance by TARGET as to which
insurers are defending under reservation of rights or have denied
liability, and there exists no material claim under such
insurance that has not been properly filed by TARGET. Except for
the self-insurance retentions or deductibles set forth in the
policies listed in the Disclosure Letter, to TARGET's best
Knowledge, the policies maintained by it are adequate in scope
and amount to cover all prudent and reasonably foreseeable risks
which may arise in the conduct of their business as currently
conducted and as proposed to be conducted.
5.18 Absence of Certain Changes or Events.
(a) Since the end of the last fiscal year for which
TARGET has obtained and furnished to PARENT Companies audited
financial statements of TARGET and its subsidiaries, TARGET has
not: (i) amended or otherwise changed its Certificate of
Incorporation or Bylaws; (ii) issued, sold, pledged, disposed of
or encumbered, or authorized the issuance, sale, pledge,
disposition or encumbrance of, any shares of its capital stock of
any class or any options, warrants, convertible or exchangeable
securities or other rights of any kind to acquire any shares of
such capital stock, or any other ownership interest, of it (other
than Options and Warrants set forth in the Disclosure Letter);
(iii) reclassified, combined, split, subdivided or redeemed,
purchased or otherwise acquired, directly or indirectly, any of
its capital stock; (iv) declared, set aside, made or paid any
dividend or other distribution, whether payable in cash, stock,
property or otherwise, with respect to any of its capital stock;
(v) acquired (including, without limitation, for cash or shares
of stock, by merger, consolidation or acquisition of stock or
assets) any interest in any corporation, partnership or other
business organization or division thereof or any assets, or made
any investment either by purchase of stock or securities,
contributions of capital or property transfer, or purchased any
property or assets of any other Person; (vi) created, incurred or
assumed any material indebtedness for borrowed money, whether or
not in the ordinary course of business, issued any debt
securities, or assumed, guaranteed, endorsed or otherwise become
liable or responsible (whether directly, contingently or
otherwise) for, any material obligations of any other Person;
(vii) made any loans or advances to any other Person; (viii) made
any capital expenditures in excess of $25,000; (ix) sold,
pledged, disposed of or encumbered, or authorized the sale,
pledge, disposition or encumbrance of properties or assets,
tangible or intangible, having a value in any single transaction
in excess of $25,000, or sold, licensed, assigned or transferred
any TARGET IP Rights, except sales of inventory in the ordinary
course of business; (x) entered into, amended, terminated or
canceled any material Contract, other than in the ordinary course
of business, consistent with past practice, (xi) except pursuant
to the terms of a Plan or Benefit Program or as set forth in the
Disclosure Letter, increased the compensation payable or to
become payable to its officers or salaried employees, granted any
severance or termination pay to, or entered into any employment
or severance agreement with, any of its directors, officers or
salaried personnel, or established, adopted, entered into or
amended any bonus, profit sharing, trust, compensation, stock
option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of
any directors, officers, personnel or employees, or taken any
action to accelerate any rights or benefits thereunder; (xii)
changed any accounting policies or procedures or made any change
in any accounting methods or systems of internal accounting
controls, except as may be appropriate to conform to changes in
GAAP; (xiii) made any Tax election, other than in the ordinary
course of business consistent with past practice; (xiv) paid,
discharged or satisfied any material Liens, claims, debts,
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 due and payable liabilities
reflected or reserved against in the TARGET Financial Statements,
as appropriate, or liabilities incurred after the date of the
Most Recent Balance Sheet in the ordinary course of business and
consistent with past practice; (xv) increased or decreased prices
charged to its customers, other than in the ordinary course of
business consistent with past practice, or failed to use all
commercially reasonable efforts to enforce any Contract or other
agreement with any customer or supplier, collect its accounts
receivable, or pay its accounts payable, in each case in the
ordinary course of business consistent with past practice; or
(xvi) agreed, in writing or otherwise, to take or authorize any
of the foregoing actions or any action which would make any
representation or warranty in Article V hereof untrue or
incorrect in any respect.
(b) Since the end of the last fiscal year for which TARGET
has obtained and furnished to PARENT Companies audited financial
statements of TARGET and its subsidiaries, there has not been
with respect to TARGET any change in the business, operations,
assets, liabilities, financial condition or operating results of
TARGET or any other event or condition of any character, whether
or not arising in the ordinary course of business, which change
by itself or in conjunction with all other such changes has had
or may reasonably be expected to have a Material Adverse Effect
on TARGET.
5.19 Trading in PARENT Common Stock. During the two month
period prior to the Agreement Date, none of TARGET, any holder of
5% or more of the shares of TARGET or any person or entity from
which TARGET is to acquire the business and assets pertaining to
the OLIGON and Methylene Blue technologies, or any officer or
director of TARGET or any such other person or entity, has
directly or indirectly purchased or sold (including short sales)
any shares of PARENT Common Stock (or any put, call, option or
derivative security or the like relating thereto) in any
transactions effected on the OTC Bulletin Board or otherwise.
ARTICLE VI
INTERIM OPERATIONS
6.1 Conduct of Business by TARGET Pending the Merger.
TARGET hereby covenants and agrees that, between the Agreement
Date and the Effective Time, (i) TARGET shall operate its
business only in the ordinary course consistent with past
practice and will not engage in any new line of business or enter
into any new Contract, transaction or activity or make any
commitment except in the ordinary course of business consistent
with past practice; and (ii) TARGET shall use commercially
reasonable efforts to preserve intact its business organization,
to keep available the services of its current officers, employees
and consultants, and to preserve its present relationships with
customers, suppliers and other persons with which it has business
relations. Notwithstanding the foregoing, nothing in this
Section 6.1 shall preclude TARGET from acquiring the business and
assets pertaining to the OLIGON and Methylene Blue technologies
that TARGET is required to acquire as a condition to Closing.
6.2 Conduct of Business by PARENT Pending the Merger.
PARENT hereby covenants and agrees that, between the Agreement
Date and the Effective Time, (i) PARENT shall operate its
business only in the ordinary course consistent with past
practice and will not engage in any new line of business or enter
into any new Contract, transaction or activity or make any
commitment except in the ordinary course of business consistent
with past practice; and (ii) PARENT shall use commercially
reasonable efforts to preserve intact its business organization,
to keep available the services of its current officers, employees
and consultants, and to preserve its present relationships with
customers, suppliers and other persons with which it has business
relations. Notwithstanding the foregoing, nothing in this
Section 6.1 shall preclude PARENT from doing any of the
following: increasing its authorized capital stock; amending its
Certificate of Incorporation to preclude (from and after the
Effective Date) action by written consent or nominations of
directors other than pursuant to the PARENT's customary
nomination process; amending its Bylaws to permit the number of
directors constituting the PARENT's Board of Directors to be
increased; issuing securities in connection with any financing;
conforming the PARENT's outstanding options to the terms and
conditions of the Warrant issued to SCO Capital Partners LLP or,
with the prior consent of TARGET, which shall not be unreasonably
withheld, adopting a new stock option plan.
6.3 Approval of Stockholders. Within ten (10) days after
the date hereof, TARGET shall solicit stockholder approval by
written consent in accordance with applicable law from those
holders of TARGET Capital Stock for the purpose of obtaining
their approval of this Agreement, the Merger and the other
transactions contemplated hereby ("Consents"), and shall use its
best efforts to obtain such Consents;. TARGET will prepare and
send to the aforesaid holders and other persons for such purpose
a notice of Merger and a recommendation by TARGET's Board of
Directors and management that such stockholders consent to this
Agreement and the Merger and the notification regarding
dissenters' rights required by the DGCL (the "Notice of Merger").
The Notice of Merger shall be in such form and contain such
information so as to permit compliance by PARENT with the
requirements of Section 4(2) and Rule 506 of Regulation D under
the Securities Act in connection with the offering and issuance
of shares of PARENT Common Stock in the Merger and comply in all
material respects with all applicable Laws, including Section 151
and other applicable provisions of the DGCL. The Notice of
Merger shall comply with the requirements of Section 4(2) and
Rule 506 under the Securites Act, as aforesaid, including,
without limitation, SEC filings pertaining to PARENT. Without
limiting the generality of the foregoing, TARGET shall arrange
for the appointment of a "purchaser representative," as defined
in Rule 501 of Regulation D under the Securities Act, reasonably
satisfactory to PARENT (the "Purchaser Representative"), shall
use its best efforts to have each holder of TARGET securities
who is not an "accredited investor" as defined in Rule 501 agree
to the appointment, and accept the representation, of such
Purchaser Representative, and shall use its best efforts to cause
each holder of TARGET securities to execute and deliver to PARENT
such offeree questionnaires and/or representation letters as may
have been requested by PARENT ("Stockholder Representations").
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1 Best Efforts; Cooperation; Further Assurances. Each of
the parties hereto shall use commercially reasonable efforts to
take, or cause to be taken, all appropriate actions, and to do,
or cause to be done, all things necessary, proper or advisable
under applicable Laws to consummate and make effective the
transactions contemplated herein, including, without limitation,
(i) cooperating with the other in the preparation and filing of
all forms, notifications, reports and information, if any,
required or reasonably deemed advisable pursuant to any Law or
the rules of the OTC Bulletin Board or any other exchange on
which the PARENT Common Stock is listed, in connection with the
transactions contemplated by this Agreement; (ii) using
commercially reasonable efforts to obtain all licenses, Permits,
consents, approvals, authorizations, qualifications and orders of
any Governmental Authority or other Persons (including parties to
Contracts with TARGET) as are necessary for the consummation of
the transactions contemplated hereby (provided, that nothing
herein shall require PARENT or TARGET, as the case may be, to
amend, modify or terminate any material Contract, or take or
refrain from taking any action with respect to its business as
currently conducted or as proposed to be conducted, to obtain any
such license, Permit, consent, approval, authorization,
qualification or orders); (iii) making on a prompt and timely
basis all governmental or regulatory notifications and filings
required to be made by it for the consummation of the
transactions contemplated hereby; (iv) defending all Legal
Proceedings challenging this Agreement or the consummation of the
transactions contemplated hereby and to lift or rescind any
injunction or restraining order or other order adversely
affecting the ability of the parties to consummate the
transactions contemplated hereby; and (v) executing and
delivering such additional instruments and other documents and
taking such further actions as may be necessary or appropriate to
effectuate, carry out and comply with all of the terms of this
Agreement and the transactions contemplated hereby.
7.2 Access to Information. From the Agreement Date to the
Effective Time, each party hereto shall (and shall cause its
directors, officers, employees, auditors, counsel and agents to)
afford the other party hereto and the other party's officers,
employees, auditors, counsel and agents full and complete access
on reasonable notice during business hours, without undue
disruption of operations, to all assets, properties, books,
records, accounts, contracts and documents of or relating to such
providing party and such other information as the receiving party
may reasonably request concerning the businesses, finances and
properties of such providing party and its operations. Until the
Effective Time, all confidential information provided pursuant to
this Section 7.2 will be subject to the confidentiality agreement
previously executed by PARENT and TARGET (the "Confidentiality
Agreement") and the provisions of Section 15.11 hereof.
7.3 Notification of Certain Matters. TARGET shall give
prompt written notice to PARENT of (i) any material change in the
normal course of its business; (ii) the receipt by it of notice
of any governmental complaints, investigations or hearings (or
communications indicating that the same may be contemplated) or
the receipt by it of a notice of the institution or the threat of
litigation or other legal proceedings involving it; and (iii) the
occurrence or non-occurrence of any other event which causes, or
would be reasonably likely to cause, any representation or
warranty of TARGET contained herein to be untrue or inaccurate in
any respect, or any covenant, condition or agreement of TARGET
contained herein not to be complied with or satisfied in any
respect.
7.4 Publicity. No press release or other public
announcement related to this Agreement or the transactions
contemplated hereby shall be issued by any party without the
prior written approval of the other parties hereto, except that
PARENT may make such public disclosure which it believes in good
faith to be required by applicable Law or the rules of the OTC
Bulletin Board.
7.5 Exclusive Dealings. From the Agreement Date until the
Effective Time, or earlier termination of this Agreement as
provided in Article XIV hereof, none of PARENT, TARGET or their
respective Affiliates and Associates shall, nor shall PARENT or
TARGET authorize or permit any of their respective officers,
directors, employees, agents or representatives to, directly or
indirectly: (i) solicit, initiate, encourage the initiation or
submission by others of any Acquisition Proposal (as hereinafter
defined); (ii) enter into or participate in discussions or
negotiations with, respond to solicitations relating to, furnish
to any Person any information with respect to, or take any other
action to encourage or facilitate any inquiries or the making of
any proposal that constitutes, or may reasonably be expected to
lead to, any Acquisition Proposal; or (iii) enter into any
Contract, agreement or commitment (whether or not binding) with
respect to any Acquisition Proposal. For purposes of this
Agreement, the term "Acquisition Proposal" means any proposal
with respect to a sale or other disposition of all or any part
of the assets, business or properties of PARENT, on the one hand,
and TARGET, on the other hand (whether by merger, consolidation,
sale of stock or assets or otherwise), or a purchase or other
acquisition by PARENT, on the one hand, and TARGET, on the other
hand, of all or any part of the assets, business or properties of
any other Person (whether by merger, consolidation, sale of stock
or assets or otherwise). Each party hereto will immediately
notify the other party if any third party initiates any
solicitation, discussion or negotiation with respect to any
Acquisition Proposal, as well as the identity of such third party
and the material terms of any such Acquisition Proposal.
7.6 Trading in PARENT Common Stock. From the Agreement
Date until the Effective Time, neither TARGET or any person or
entity which shall be a shareholder of TARGET immediately prior
to the Closing as a consequence of the acquisition by TARGET, as
required under this Agreement, prior to Closing of the business
and assets pertaining to the OLIGON and Methylene Blue
technologies, nor any officer, director, Affiliate or Associate
with respect thereto, will directly or indirectly purchase or
sell (including short sales) any shares of PARENT Common Stock
(or any put, call, option or derivative security or the like
relating thereto) in any transactions effected on the OTC
Bulletin Board or otherwise.
7.7 Employee Matters. Nothing in this Agreement shall be
construed to require PARENT, the Surviving Corporation, or any
Affiliate of PARENT to continue the employment of any employee of
TARGET or to continue in effect any Plan or Benefit Program;
provided, that each employee of TARGET who becomes an employee of
PARENT, the Surviving Corporation or an affiliate thereof after
the Effective Time (the "Hired Employee") shall be eligible to
receive salary and benefits (such as health insurance, bonuses
and stock options) consistent with PARENT's standard human
resource policies.
7.8 TARGET Auditors. TARGET will cause its management and
its independent auditors to facilitate i) the preparation and
delivery by TARGET to PARENT on a timely basis of such audited
and unaudited financial statements (including pro forma financial
statements if required), at TARGET'S expense, as required by
PARENT to comply with applicable SEC regulations, and (ii) the
review, on a timely basis, of any TARGET audit or review work
papers since inception, including the examination of selected
interim financial statements and data.
7.9 PARENT Franchise Taxes. PARENT shall have fully paid,
on or prior to Closing, all outstanding franchise taxes owing by
PARENT in the State of Delaware.
7.10 PARENT Board of Directors. At closing, there will be
three
directors on the Board of Directors of Parent, one of which shall
be ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇, an individual designated by the Target Board
of Directors as the same was constituted prior to the closing.
Promptly after the closing, the Parent shall initiate the steps
necessary to amend its Bylaws so as to permit the size of the
Parent's Board of Directors to be increased, and shall take all
steps necessary to cause such increase to be effected as soon as
practicable (including, without limitation, preparing and filing
a proxy statement with the SEC in a timely manner and completing
a shareholder meeting to vote on the matter). Promptly upon
increasing the size of PARENT's Board of Directors to at least 5
directors, a second individual designated by TARGET's Board of
Directors as the same was constituted prior to the closing shall
be elected by Parent's Board of Directors to fill a vacancy on
Parent's Board of Directors, increasing to two the aggregate
number of directors on PARENT"s Board of Directors who were
designated by TARGET's Board.
7.11 Lock-Up Agreements. At closing, PARENT shall cause to
be
delivered to TARGET Lock-Up Agreements, substantially in the form
of Exhibit 9.10 hereto, executed by ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
Bioaccelerate Limited, Jano Holdings Limited and Lifescience
Ventures Limited.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF THE PARENT COMPANIES
The obligations of the PARENT Companies to effect the Merger
and the other transactions contemplated hereunder shall be
subject to the fulfillment at or prior to the Effective Time of
the following conditions, any or all of which may be waived in
whole or in part by PARENT:
8.1 Accuracy of Representations and Warranties and
Compliance with Obligations; Disclosure Letter. The
representations and warranties of TARGET contained in this
Agreement shall be true and correct in all material respects
(except for such representations and warranties that are
qualified by their terms by a reference to materiality or
knowledge, which representations and warranties shall be true and
correct in all respects) at and as of the Effective Time with the
same force and effect as though made at and as of that time
except that those representations and warranties which address
matters only as of a particular date shall have been true and
correct as of such date. TARGET shall have performed and
complied in all material respects with all of its obligations
required by this Agreement to be performed or complied with at or
prior to the Effective Time. TARGET shall have delivered to the
PARENT Companies a certificate, dated as of the Closing Date and
signed by its President, to the effect of the foregoing. The
Disclosure Letter of TARGET shall not have been amended in such a
manner so as not to be acceptable to TARGET in form and in
substance.
8.2 Corporate Matters. TARGET shall have delivered to the
PARENT Companies: (a) copies of the Certificate of Incorporation
and Bylaws of TARGET as in effect immediately prior to the
Effective Time; (b) copies of resolutions adopted by the Board of
Directors and stockholders of TARGET authorizing this Agreement
and the consummation of the transactions contemplated hereby; and
(c) a certificate of good standing of TARGET issued by the
Secretary of State of Delaware and each other state in which
TARGET is qualified to do business as of a date not more than
five (5) days prior to the Closing Date, certified in the case of
subsections (a) and (b) of this Section 8.2 as of the Closing
Date by the President of TARGET as being true, correct and
complete.
8.3 No Adverse Proceedings. No court or Governmental
Authority or other regulatory body shall have enacted, issued,
promulgated, enforced or entered any Law or Order (whether
temporary, preliminary or permanent) which is then in effect and
has the effect of making illegal, materially restricting or
preventing or prohibiting the Merger or the transactions
contemplated by this Agreement. No Legal Proceeding shall be
overtly threatened or pending against the PARENT Companies or
TARGET before any court or Governmental Authority which seeks to
restrain, prohibit, invalidate or collect damages arising out of
the Merger or any other transaction contemplated hereby or obtain
damages or other relief from any such party, in connection with
this Agreement or the consummation of the transactions
contemplated hereby.
8.4 Consents and Approvals. TARGET shall have delivered to
PARENT copies of (a) all consents, approvals, orders and
authorizations of, and all registrations, qualifications,
designations, declarations or filings with, any Governmental
Authority or other Persons required in connection with the
execution and delivery by TARGET of this Agreement or the
consummation by TARGET of the transactions contemplated hereby
and (b) all consents to the transactions contemplated hereby and
waivers of rights to terminate or modify any Contracts, rights or
obligations of TARGET from any Person from whom such consent or
waiver is required under any Contract or instrument, or who, as a
result of the transactions contemplated hereby, would have such
rights to terminate or modify such Contracts or instruments,
either by the terms thereof or as a matter of Law. Consents shall
have been received from the required holders as set forth in
Section 5.3(c) herein
8.5 Private Placement. The offering and issuance of shares
of PARENT Common Stock in the Merger shall be in compliance with
Section 4(2) of the Securities Act and Rule 506 of Regulation D
thereunder and all other applicable federal and state securities
Laws to the satisfaction of PARENT and its counsel, and TARGET
and holders of TARGET Capital Stock shall have taken all steps
reasonably required by PARENT to ensure such compliance,
including, without limitation, (i) the appointment of a Purchaser
Representative by each holder of TARGET Capital Stock that is not
an "accredited investor" as defined in Rule 501 and (ii) the
execution and delivery to PARENT of Stockholders Representations
by each holder of TARGET Capital Stock. TARGET shall also have
delivered to PARENT such executed agreements and related
documentation to establish compliance under Section 4(2) and
Regulation 506 under the Securities Act in connection with the
issuance of Merger Shares and other consideration by PARENT
pursuant to this Agreement.
8.8 Financial Statements. PARENT shall have received
audited financial statements of TARGET of the fiscal years ended
1999, and unaudited statements for 2000 and 2001, and related pro
forma financial statements, as well as applicable unaudited
financial statements for the period since the completion of such
fiscal year, together with an agreement by TARGET's independent
public accountant that they will provide any consent that could
reasonably be required, as may be necessary or appropriate for
inclusion in any report required by the SEC to be filed by PARENT
with respect to the Merger. The TARGET's independent public
acountant shall also furnish any comparable consent with respect
to each other SEC filing by PARENT in which it is required.
8.9 Intentionally Omitted
8.10 Confidentiality Agreements. PARENT shall have entered
into non-compete, non-solicitation, confidentiality and
inventions agreements with each of the individuals identified by
PARENT in its sole discretion, if any, which individuals are
involved with the business and assets of TARGET or the business
and assets pertaining to the OLIGON and Methylene Blue
technologies to be acquired by TARGET prior to Closing, in each
case upon terms and conditions approved by PARENT (the "NDA").
8.11 Acquisition of Business and Assets Pertaining to OLIGON
and Methlyene Blue Technologies. TARGET shall have acquired the
business and assets pertaining to the OLIGON and Methylene Blue
Technologies on terms and conditions satisfactory to PARENT in
form and in substance.
8.12 No Material Adverse Change. Between the Agreement Date
and the Effective Time, there shall not have been any Material
Adverse Change with respect to TARGET or the business and assets
to be acquired by TARGET prior to Closing with respect to the
OLIGON and Methylene Blue technologies, and TARGET shall have
delivered to PARENT a certificate to such effect, dated as of the
Closing Date and signed by an executive officer..
8.13 Governmental Consents. Any applicable waiting period
under the HSR Act with respect to the Merger shall have expired
or been terminated. TARGET shall have delivered to PARENT copies
of (a) all consents, approvals, orders and authorizations of, and
all registrations, qualifications, designations, declarations or
filings with, any Governmental Authority required in connection
with the execution and delivery by TARGET of this Agreement or
the consummation by TARGET of the transactions contemplated
hereby and (b) all consents to the transactions contemplated
hereby and waivers of rights to terminate or modify any
Contracts, rights or obligations of TARGET and in respect of the
businesses and assets pertaining to the OLIGON and Methylene Blue
technologies to be acquired by TARGET prior to Closing, from any
Person from whom such consent or waiver is required under any
Contract or instrument, or who, as a result of the transactions
contemplated hereby, would have such rights to terminate or
modify such Contracts or instruments, either by the terms thereof
or as a matter of Law.
8.14 Certain Actions.
Except as contemplated by this Agreement, TARGET shall not
have, between the Agreement Date and the Effective Time, directly
or indirectly, done or have proposed or agreed to do any of the
following without prior consultation with PARENT and receipt of
PARENT's prior written consent, which consent shall not be
unreasonably withheld:
(a) (i) amend or otherwise change its Certificate of
Incorporation or Bylaws (other than amendments which are not
material to PARENT); (ii) issue, sell, pledge, dispose of, or
encumber, or, authorize the issuance, sale, pledge, disposition,
or encumbrance of any shares of its capital stock of any class or
any options, warrants, convertible or exchangeable securities or
other rights of any kind to acquire any shares of such capital
stock, or any other ownership interest, of it, other than the
issuance of TARGET capital stock upon (x) exercise of (and in
accordance with the terms of) any currently outstanding options
or currently outstanding warrants for capital stock of TARGET or
(y) conversion or exchange of (and in accordance with the terms
of) any TARGET capital stock outstanding as of the Agreement
Date; (iii) reclassify, combine, split, subdivide or redeem,
purchase or otherwise acquire, directly or indirectly, any of its
capital stock; or (iv) declare, set aside, make or pay any
dividend or other distribution, whether payable in cash, stock,
property or otherwise, with respect to any of its capital stock;
acquire (including, without limitation, for cash or shares of
stock, by merger, consolidation or acquisition of stock or
assets) any interest in any corporation, partnership or other
business organization or division thereof or any assets, or make
any investment either by purchase of stock or securities,
contributions of capital or property transfer, or purchase any
property or assets of any other Person in excess of $25,000;
(b) (i) create, incur or assume any indebtedness for
borrowed money, whether or not in the ordinary course of
business, or issue any debt securities in excess of $25,000; (ii)
assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for,
the obligations of any Person; (iii) make any loans or advances
to any other Person other than to employees in the ordinary
course of business consistent with past practice; or (iv) make or
commit to make any capital expenditures in excess of $25,000,
other than those proposed to be made in any financial budgets
(c) not in the ordinary course of business: (i) issue any
debt securities in excess of $25,000; (ii) assume, guarantee,
endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for, the obligations of any
Person; (iii) make any loans or advances to any other Person
other than to employees in the ordinary course of business
consistent with past practice; or (iv) make or commit to make any
capital expenditures in excess of $25,000, other than those
proposed to be made in any financial budgets delivered to PARENT
prior to the Agreement Date;
(d) (i) sell, pledge, dispose of or encumber, or authorize
the sale, pledge, disposition or encumbrance of any of its
properties or assets, tangible or intangible, except in each case
in the ordinary course of business; (ii) enter into any new
Contract other than in the ordinary course of business,
consistent with past practice; or (iii) amend, terminate or
cancel any material contract or fail to perform in any material
respect any of its obligations thereunder;
(e) (i) change any accounting policies or procedures,
change any annual accounting period or make any change in any
accounting methods or systems of internal accounting controls,
except as may be appropriate to conform to changes in GAAP; (ii)
revalue any of its assets, including writing down the value of
any assets or writing off any notes or accounts receivable; (iii)
make or change any Tax election, file any amended Tax Return,
enter into any closing agreement, settle any Tax claim or
assessment, surrender any right to claim refund of Taxes, consent
to any extension or waiver of the limitation period applicable to
any Tax claim or assessment, or take any other action or omit to
take any action, if any such action or omission would have the
effect of increasing the Tax liability of PARENT or TARGET;
(f) pay, discharge or satisfy any Liens, claims, debts,
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 due and payable liabilities
reflected or reserved against in the TARGET Financial Statements,
as appropriate, or liabilities incurred after the date of the
Most Recent Balance Sheet in the ordinary course of business and
consistent with past practice;
(g) increase or decrease prices charged to its customers,
other than in the ordinary course of business consistent with
past practice, or fail to use all commercially reasonable efforts
to enforce any Contract or other agreement with any customer or
supplier, collect its accounts receivable, or pay its accounts
payable, in each case in the ordinary course of business
consistent with past practice;
(h) except as contemplated in other provisions of this
Agreement, enter into any contract or transaction with or for the
benefit of any of its directors, officers, stockholders,
Affiliates or Associates or any entity in which any such
director, officer, stockholder, Affiliate or Associate, or their
respective Affiliates or Associates, has a direct or indirect
interest, whether or not in the ordinary course of business; or
agree, in writing or otherwise, to take or authorize any of the
foregoing actions or any action which would make any
representation or warranty in Article IV hereof untrue or
incorrect in any respect; or
(i) (i) solicit, initiate, encourage the initiation or
submission by others of any Acquisition Proposal; (ii) enter into
or participate in discussions or negotiations with, respond to
solicitations relating to, furnish to any Person any information
with respect to, or take any other action to encourage or
facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal; or (iii) enter into any Contract, agreement
or commitment (whether or not binding) with respect to any
Acquisition Proposal.
8.15 Dissenting Stockholders. TARGET shall have furnished
to PARENT a list of all Dissenting stockholders of TARGET and the
number of shares of TARGET securities owned by each such
Dissenting stockholder and the number of shares of PARENT
securities into which each such Dissenting stockholder's shares
would have converted had such holder not dissented. No more than
% of the holders of TARGET securities immediately prior to the
Closing (including, for this purpose, as if they were holers of
TARGET securities, persons or entities which are to receive
consideration from or through PARENT in the Merger as a
consequence of the acquisition by TARGET of the business and
assets pertaining to the OLIGON and Methylene Blue technologies)
shall have demanded appraisal of their shares.
ARTICLE IX
CONDITIONS TO THE OBLIGATIONS OF TARGET
The obligations of TARGET to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of
the following conditions, any or all of which may be waived in
whole or in part by TARGET:
9.1 Accuracy of Representations and Warranties and
Compliance with Obligations; Disclosure Letter. The
representations and warranties of the PARENT Companies contained
in this Agreement shall be true and correct in all material
respects (except for such representations and warranties that are
qualified by their terms by a reference to materiality or
knowledge, which representations and warranties shall be true and
correct in all respects) at and as of the Effective Time with the
same force and effect as though made at and as of that time
except that those representations and warranties which address
matters only as of a particular date shall have been true and
correct as of such date. Each of the PARENT Companies shall have
performed and complied in all material respects with all of its
obligations required by this Agreement to be performed or
complied with at or prior to the Effective Time. Each of the
PARENT Companies shall have delivered to TARGET a certificate,
dated as of the Closing Date and signed by an executive officer,
to the effect of the foregoing. The Disclosure Letter of PARENT
shall not have been amended in such a manner so as not to be
acceptable to TARGET in form and in substance.
9.2 Corporate Matters. PARENT shall have delivered to
TARGET: (a) copies of the Certificate or Articles of
Incorporation and Bylaws of each of PARENT and Acquisition Corp.
as in effect immediately prior to the Effective Time; (b) copies
of resolutions adopted by the Board of Directors of PARENT and
the Board of Directors and stockholder of Acquisition Corp.
authorizing this Agreement and the consummation of the
transactions contemplated hereby; and (c) a certificate of good
standing of PARENT issued by the Secretary of State of the State
of Delaware as of a date not more than five (5) days after the
Closing Date, certified in the case of subsections (a) and (b) of
this Section 9.2 as of the Closing Date by an executive officer
of PARENT as being true, correct and complete.
9.3 No Adverse Proceedings. No court or Governmental
Authority or other regulatory body shall have enacted, issued,
promulgated, enforced or entered any Law or Order (whether
temporary, preliminary or permanent) which is then in effect and
has the effect of making illegal, or preventing or prohibiting
the Merger or the transactions contemplated by this Agreement.
No Legal Proceeding shall be overtly threatened or pending
against the PARENT Companies or TARGET before any court or
Governmental Authority which seeks to restrain, prohibit,
invalidate or collect damages arising out of the Merger or any
other transaction contemplated hereby or obtain damages or other
relief from any such party, in connection with this Agreement or
the consummation of the transactions contemplated hereby.
9.4 No Material Adverse Change. Between the Agreement Date
and the Effective Time, there shall not have been any Material
Adverse Change with respect to PARENT, and PARENT shall have
delivered to TARGET a certificate to such effect, dated as of the
Closing Date and signed by an executive officer.
9.5 Governmental Consents. Any applicable waiting period
under the HSR Act with respect to the Merger shall have expired
or been terminated. PARENT shall have delivered to TARGET copies
of (a) all consents, approvals, orders and authorizations of, and
all registrations, qualifications, designations, declarations or
filings with, any Governmental Authority required in connection
with the execution and delivery by PARENT of this Agreement or
the consummation by PARENT of the transactions contemplated
hereby and (b) all consents to the transactions contemplated
hereby and waivers of rights to terminate or modify any
Contracts, rights or obligations of PARENT from any Person from
whom such consent or waiver is required under any Contract or
instrument, or who, as a result of the transactions contemplated
hereby, would have such rights to terminate or modify such
Contracts or instruments, either by the terms thereof or as a
matter of Law.
9.6 Intentionally Omitted
9.7 Intentionally Omitted
9.8 Private Placement. The offering and issuance of shares
of
PARENT Common Stock in the Merger shall be in compliance with
Section 4(2) of the Securities Act and Rule 506 of Regulation D
thereunder and all other applicable federal and state securities
Laws to the reasonable satisfaction of TARGET and its counsel.
9.9 Certain Actions.
Except as contemplated by this Agreement, PARENT shall not
have, between the Agreement Date and the Effective Time, directly
or indirectly, done or have proposed or agreed to do any of the
following without prior consultation with TARGET and receipt of
TARGET's prior written consent, which consent shall not be
unreasonably withheld:
(a) (i) amend or otherwise change its Certificate of
Incorporation or Bylaws (other than amendments which are not
material to TARGET); (ii) issue, sell, pledge, dispose of, or
encumber, or, authorize the issuance, sale, pledge, disposition,
or encumbrance of any shares of its capital stock of any class or
any options, warrants, convertible or exchangeable securities or
other rights of any kind to acquire any shares of such capital
stock, or any other ownership interest, of it, other than the
issuance of PARENT capital stock upon (x) exercise of (and in
accordance with the terms of) any currently outstanding options
or currently outstanding warrants for capital stock of PARENT or
(y) conversion or exchange of (and in accordance with the terms
of) any PARENT capital stock outstanding as of the Agreement
Date; (iii) reclassify, combine, split, subdivide or redeem,
purchase or otherwise acquire, directly or indirectly, any of its
capital stock; or (iv) declare, set aside, make or pay any
dividend or other distribution, whether payable in cash, stock,
property or otherwise, with respect to any of its capital stock;
acquire (including, without limitation, for cash or shares of
stock, by merger, consolidation or acquisition of stock or
assets) any interest in any corporation, partnership or other
business organization or division thereof or any assets, or make
any investment either by purchase of stock or securities,
contributions of capital or property transfer, or purchase any
property or assets of any other Person in excess of $25,000;
(b) (i) create, incur or assume any indebtedness for
borrowed money, whether or not in the ordinary course of
business, or issue any debt securities in excess of $25,000; (ii)
assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for,
the obligations of any Person; (iii) make any loans or advances
to any other Person other than to employees in the ordinary
course of business consistent with past practice; or (iv) make or
commit to make any capital expenditures in excess of $25,000,
other than those proposed to be made in any financial budgets
(c) not in the ordinary course of business: (i) issue any
debt securities in excess of $25,000; (ii) assume, guarantee,
endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for, the obligations of any
Person; (iii) make any loans or advances to any other Person
other than to employees in the ordinary course of business
consistent with past practice; or (iv) make or commit to make any
capital expenditures in excess of $25,000, other than those
proposed to be made in any financial budgets delivered to TARGET
prior to the Agreement Date;
(d) (i) sell, pledge, dispose of or encumber, or authorize
the sale, pledge, disposition or encumbrance of any of its
properties or assets, tangible or intangible, except in each case
in the ordinary course of business; (ii) enter into any new
Contract other than in the ordinary course of business,
consistent with past practice; or (iii) amend, terminate or
cancel any material contract or fail to perform in any material
respect any of its obligations thereunder;
(e) (i) change any accounting policies or procedures,
change any annual accounting period or make any change in any
accounting methods or systems of internal accounting controls,
except as may be appropriate to conform to changes in GAAP; (ii)
revalue any of its assets, including writing down the value of
any assets or writing off any notes or accounts receivable; (iii)
make or change any Tax election, file any amended Tax Return,
enter into any closing agreement, settle any Tax claim or
assessment, surrender any right to claim refund of Taxes, consent
to any extension or waiver of the limitation period applicable to
any Tax claim or assessment, or take any other action or omit to
take any action, if any such action or omission would have the
effect of increasing the Tax liability of TARGET or PARENT;
(f) pay, discharge or satisfy any Liens, claims, debts,
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 due and payable liabilities
reflected or reserved against in the PARENT Financial Statements,
as appropriate, or liabilities incurred after the date of the
Most Recent Balance Sheet in the ordinary course of business and
consistent with past practice;
(g) increase or decrease prices charged to its customers,
other than in the ordinary course of business consistent with
past practice, or fail to use all commercially reasonable efforts
to enforce any Contract or other agreement with any customer or
supplier, collect its accounts receivable, or pay its accounts
payable, in each case in the ordinary course of business
consistent with past practice;
(h) except as contemplated in other provisions of this
Agreement, enter into any contract or transaction with or for the
benefit of any of its directors, officers, stockholders,
Affiliates or Associates or any entity in which any such
director, officer, stockholder, Affiliate or Associate, or their
respective Affiliates or Associates, has a direct or indirect
interest, whether or not in the ordinary course of business; or
agree, in writing or otherwise, to take or authorize any of the
foregoing actions or any action which would make any
representation or warranty in Article IV hereof untrue or
incorrect in any respect; or
(i) (i) solicit, initiate, encourage the initiation or
submission by others of any Acquisition Proposal; (ii) enter into
or participate in discussions or negotiations with, respond to
solicitations relating to, furnish to any Person any information
with respect to, or take any other action to encourage or
facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal; or (iii) enter into any Contract, agreement
or commitment (whether or not binding) with respect to any
Acquisition Proposal.
9.10 Lock-Up Agreements. At closing, TARGET shall have
received
Lock-Up Agreements, substantially in the form of Exhibit 9.10
hereto and reasonably acceptable to TARGET in form and in
substance, executed by ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, Bioaccelerate Limited,
Jano Holdings Limited and Lifescience Ventures Limited.
ARTICLE X
CLOSING
10.1 Closing. Unless this Agreement shall have been
terminated pursuant to the provisions of Article XIV hereof, the
closing of the transactions contemplated by this Agreement (the
"Closing") shall take place at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, 1251 Avenue of the Americas, 29th Floor, New
York, New York, at 10:00 am., local time, on February 1, 2002.
The date on which the Closing occurs is referred to as the
"Closing Date." The Closing shall be deemed completed as of
12:01 a.m. on the morning of the Closing Date.
10.2 Deliveries by TARGET. At or prior to the Closing,
TARGET shall deliver (or cause to be delivered) to PARENT:
(a) each certificate or other letter, agreement and other
document or instruments required to be delivered by TARGET to
PARENT in accordance with Article VIII hereof;
(b) the stock book, stock ledger and minute book of TARGET;
(c) constructive possession of all originals and copies of
agreements, instruments, documents, deeds, books, records, files,
tax returns and other data and information within the possession
of TARGET;
(d) evidence satisfactory to PARENT that with respect to
each of TARGET's accounts, credit lines, safe deposits boxes or
vaults the authority of all individuals with respect thereto has
been terminated, other than those individuals designated by
PARENT in writing;
(e) the Merger Filings, duly executed by TARGET; and
(f) such other documents, instruments, agreements and all
certificates and other evidence as PARENT or its counsel may
reasonably request as to the satisfaction of the conditions to
PARENT's obligations set forth herein.
10.3 Deliveries by the PARENT Companies. At or prior to the
Closing, the PARENT Companies shall deliver (or cause to be
delivered) to TARGET:
(a) each certificate or other letter, agreement and other
document or instruments required to be delivered by PARENT to
TARGET in accordance with Article IX hereof;
(b) the Merger Filings, duly executed by Acquisition Corp.;
and
(c) such other documents, instruments, agreements and all
certificates and other evidence as TARGET or its counsel may
reasonably request as to the satisfaction of the conditions to
TARGET's obligations set forth herein.
ARTICLE XI
TRANSFER RESTRICTIONS; COMPLIANCE WITH SECURITIES LAWS
11.1 Limitation on Disposition of Shares. The shares of
PARENT Common Stock to be issued to the TARGET Stockholders
pursuant to the Merger have not been registered under the
Securities Act, and may not be sold, transferred or otherwise
disposed of, except pursuant to an exemption from the
registration requirements under the Securities Act or an
effective registration statement filed by PARENT with the SEC
under the Securities Act.
11.2 Legend. All certificates representing shares of PARENT
Common Stock issued pursuant to the Merger shall bear the
following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT") AND MAY
NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF BY THE HOLDER EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT FILED
UNDER THE ACT, AND IN COMPLIANCE WITH
APPLICABLE SECURITIES LAWS OF ANY STATE WITH
RESPECT THERETO, OR IN ACCORDANCE WITH AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE COMPANY THAT
AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE."
PARENT may place stop transfer orders with its transfer agent
with respect to such certificates in accordance with federal
securities laws.
ARTICLE XII
SURVIVAL
12.1 Survival. All representations, warranties and
covenants of TARGET contained in this Agreement will survive the
Effective Time and remains operative and in full force and
effect, regardless of any investigation made by or on behalf of
PARENT for six (6) months after the Closing Date.
ARTICLE XIII
DEFINITIONS
13.1 Defined Terms. As used herein, the following terms
shall have the following meanings:
"Affiliate" shall have the meaning ascribed to it in Rule
12b-2 of the General Rules and Regulations under the Exchange
Act, as in effect on the Agreement Date.
"Agreement" shall have the meaning ascribed to it in the
preamble.
"Associate" shall have the meaning ascribed to it in Rule
12b-2 of the General Rules and Regulations under the Exchange
Act, as in effect on the Agreement Date.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and the regulations thereunder.
"Contract" means any contract, agreement, lease, note,
mortgage, bond, indenture, loan or credit agreement, deed,
franchise, covenant, license, commitment, undertaking, obligation
or understanding, whether written or oral, express or implied.
The term Contract shall not include a Plan or Benefit Program or
this Agreement.
"Disclosure Letter" means the letter dated the Agreement
Date from TARGET to PARENT setting forth, among other things,
items the disclosure of which is necessary or appropriate either
in response to an express disclosure requirement contained in
this Agreement or as an exception to one or more of TARGET's
representations, warranties or covenants contained in this
Agreement.
"Environmental Law" shall mean any Law, Order, consent
decree, settlement agreement or governmental requirement, which
relates to or otherwise imposes liability or standards of conduct
concerning mining or reclamation of mined land, discharges,
emissions, releases or threatened releases of noises, odors or
any pollutants, contaminants or hazardous or toxic wastes,
substances or materials, whether as matter or energy, into
ambient air, water, or land, or otherwise relating to the
manufacture, processing, generation, distribution, use,
treatment, storage, disposal, cleanup, transport or handling of
pollutants, contaminants, or hazardous wastes, substances or
materials, including (but not limited to) the Comprehensive
Environmental Response, Compensation and Liability Act of 1980,
the Superfund Amendments and Reauthorization Act of 1986, as
amended, the Resource Conservation and Recovery Act of 1976, as
amended, the Toxic Substances Control Act of 1976, as amended,
the Federal Water Pollution Control Act Amendments of 1972, the
Clean Water Act of 1977, as amended, any so called "Superlien"
law, and any other similar Federal, state or local statutes.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"GAAP" means generally accepted accounting principles in
effect in the United States of America from time to time.
"Governmental Authority" means any governmental, regulatory
or administrative body, agency, commission, board, arbitrator or
authority, any court or judicial authority, any public, private
or industry regulatory authority, whether international,
national, federal, state or local, and any entity or official
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any Laws.
"Knowledge" means the actual and constructive knowledge of a
person acting in a prudent manner. The knowledge of the an
entity shall include the knowledge of such entity's officers and
directors.
"Law" means and includes (i) any statute, decree,
constitution, rule, regulation, ordinance, code, requirement,
announcement, order, judgment, directive or other binding action
of or by a any Governmental Authority; (ii) any treaty, pact,
compact or other agreement to which any Governmental Authority is
a signatory or party; (iii) any judicial or administrative
interpretation of application of any Law described in (i) or (ii)
above; and (iv) any amendment or revision of any Law described in
(i), (ii) or (iii) above.
"Legal Proceeding" means any action, claim, lawsuit,
litigation, demand, suit, inquiry, hearing, investigation,
indictment, information, notice of a violation, arbitration,
appeal or other dispute or legal proceeding, whether civil,
criminal, administrative or otherwise.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including, but not
limited to, any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform
Commercial Code or comparable Law of any jurisdiction in
connection with such mortgage, pledge, security interest,
encumbrance, lien or charge).
"Material Adverse Effect", when used with reference to any
entity or group of entities, means any event, change or effect
that is (or will with the passage of time be), individually or in
the aggregate, with other events, changes or effects, materially
adverse to the condition (financial or otherwise), properties,
assets, liabilities, rights, obligations, operations, business or
prospects of such entity and its subsidiaries, taken as a whole,
other than: (a) a change arising or resulting, directly or
indirectly, from conditions affecting the Biotechnology industry
as a whole or the U.S. economy as a whole, (b) a change that is
proximately caused by the public announcement of, and the
response or reaction of customers, vendors, licensors, investors
or employees of such entity or group of entities to, this
Agreement, the Merger or any of the transactions contemplated by
this Agreement to the extent so attributable, (c) a seasonal
reduction in a party's revenues or earnings that is consistent
with such party's past operating history, or (d) a change arising
from an act or omission of another party to this Agreement (or an
affiliate of such party) and not from an act or omission of such
entity or group of entities undergoing the change; provided, that
with respect to PARENT, neither (x) a reduction in the market
price or trading volume of the PARENT Common Stock, nor (y) a
failure by PARENT to meet the revenue or earnings predictions of
analysts, any other revenue or earnings predictions or
expectations, for any period ending (or for which earnings are
released) on or after the Agreement Date and prior to the Closing
Date shall, in and of itself, or taken together, constitute a
Material Adverse Effect with respect to PARENT.
"Material Adverse Change" when used with reference to any
entity or group of entities, a material adverse change in or to
the condition (financial or otherwise), properties, assets,
liabilities, rights, obligations, operations, business or
prospects of such entity and its subsidiaries, taken as a whole,
other than: (a) a change arising or resulting, directly or
indirectly, from conditions affecting the Biotechnology industry
as a whole or the U.S. economy as a whole, (b) a change that is
proximately caused by the public announcement of, and the
response or reaction of customers, vendors, licensors, investors
or employees of such entity or group of entities to, this
Agreement, the Merger or any of the transactions contemplated by
this Agreement to the extent so attributable, (c) a seasonal
reduction in a party's revenues or earnings that is consistent
with such party's past operating history, or (d) a change arising
from an act or omission of another party to this Agreement (or an
affiliate of such party) and not from an act or omission of such
entity or group of entities undergoing the change; provided, that
with respect to PARENT, neither (x) a reduction in the market
price or trading volume of the PARENT Common Stock, nor (y) a
failure by PARENT to meet the revenue or earnings predictions of
analysts, any other revenue or earnings predictions or
expectations, for any period ending (or for which earnings are
released) on or after the Agreement Date and prior to the Closing
Date, shall, in and of itself, or taken together, constitute a
Material Adverse Change with respect to PARENT.
"Order" means any order, writ, judgment, injunction, decree
or ruling of or by a Governmental Authority.
"Permit" means any permit, license, registration,
authorization, certificate, order or approval of or from any
Governmental Authority or other Person (including without
limitation those relating to the occupancy or use of owned or
leased real property).
"Person" means an individual, partnership, corporation,
business trust, joint stock company, estate, trust,
unincorporated association, joint venture, Governmental Authority
or other entity, of whatever nature.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as
amended.
"Taxes" means all taxes, fees or other assessments,
including, but not limited to, income, excise, property, sales,
franchise, intangible, withholding, social security and
unemployment taxes imposed by any federal, state, local or
foreign governmental agency, and any interest or penalties
related thereto.
"Tax Returns" means federal, state, foreign and local tax
reports, returns, information returns and other Tax filings.
"Transaction Documents" means all documents, certificates
and agreements required to be delivered by any party under this
Agreement, including the Merger Filing, the Escrow Agreement, the
Employment Agreement, the NDAs and the Stockholders' Agreement.
13.2 Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the
defined meanings when used in any certificates, reports or other
documents made or delivered pursuant hereto or thereto, unless
the context otherwise requires.
(b) Terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) Unless otherwise expressly indicated herein, all
matters of an accounting nature in connection with this Agreement
and the transactions contemplated hereby shall be determined in
accordance with GAAP applied on a basis consistent with prior
periods, where applicable.
(d) As used herein, the neuter gender shall also denote the
masculine and feminine, and the masculine gender shall also
denote the neuter and feminine, where the context so permits.
ARTICLE XIV
TERMINATION
14.1 Termination. This Agreement may be terminated at any
time prior to the Effective Time:
(a) by mutual written consent of PARENT and TARGET at any
time prior to the Closing; or
(b) by either PARENT or TARGET, if the Closing does not
occur by February 5, 2002; or
(c) by either PARENT or TARGET, in the event of (i) a
material breach by the other party of any representation or
warranty contained this Agreement, which breach cannot be or has
not been cured within 5 days after the giving of written notice
to the breaching party of such breach and which breach or
breaches would result in a failure to satisfy any condition to
PARENT's or TARGET's obligations set forth in Article VIII or IX,
respectively; or (ii) a material breach by the other party of any
of the covenants or agreements contained in this Agreement, which
breach cannot be or has not been cured within 5 days after the
giving of written notice to the breaching party of such breach;
provided that the non-breaching party provides the breaching
party with a written notice of termination within 5 days after
the earlier of the expiration of such 5-day period or the date it
receives a written notice from the breaching party stating that
it is unable or unwilling to cure such breach;
(d) by either PARENT or TARGET, if (i) there shall be a
final nonappealable Order of a federal or state court restraining
or prohibiting the consummation of the Merger, or (ii) there
shall be any action taken, or any statute, rule regulation or
order enacted, promulgated or issued or deemed applicable to the
Merger by any governmental authority, which would make the
consummation of the Merger illegal; or
(e) by PARENT immediately following a breach by TARGET of
the provisions of Section 7.5; or
(f) by either PARENT or by TARGET if (i) the other party
shall not have furnished its Disclosure Letter to the intended
recipient thereof within the required number of days following
the execution and delivery or this Agreement, (ii) the Disclosure
Letter so furnished shall not be acceptable, in form and in
substance, to the intended recipient and the intended recipient
shall not have confirmed such acceptability in writing to the
party required to furnish the Disclosure Letter within five (5)
business days of the date upon which the Disclosure Letter is
received from the party required to furnish the same; or (iii)
any amendment to the Disclosure Letter so furnished shall not be
acceptable, in form and in substance, to the intended recipient
and the intended recipient shall not have confirmed such
acceptability in writing to the party required to furnish the
Disclosure Letter at the Closing.
14.2 Effect of Termination. In the event of termination of
this Agreement pursuant to Section 14.1, written notice thereof
shall promptly be given to the other party hereto, and upon such
notice this Agreement shall terminate and each party shall bear
their own costs expenses incurred by such party in connection
with the negotiation, execution, delivery and performance of this
Agreement . Except as provided below or elsewhere in this
Agreement, in the event of the termination of this Agreement
pursuant to Section 14.1, this Agreement shall forthwith become
void and of no further force and effect, there shall be no
liability on the part of the PARENT Companies or TARGET or any of
their respective officers or directors to the other, all rights
and obligations of any party hereto shall cease and the parties
shall be released from any and all obligations. However, the
Confidentiality Agreement and the provisions of Section 15.11
hereof shall remain in full force and effect. Nothing herein
shall relieve any party from liability for damages resulting from
the breach of any of its representations, warranties, covenants
or agreements set forth in this Agreement.
ARTICLE XV
GENERAL PROVISIONS
15.1 Notices. All notices and other communications required
or permitted under this Agreement shall be in writing and will be
either hand delivered in person, sent by telecopier, sent by
certified or registered first class mail, postage pre-paid, or
sent by nationally recognized express courier service. Such
notices and other communications will be effective (i) upon
receipt if hand delivered or sent by telecopier, (ii) five (5)
days after mailing if sent by mail, and (iii) one (1) day after
dispatch if sent via next day service by express courier, to the
following addresses, or such other addresses as any party may
notify the other parties in accordance with this Section:
(a) if to the PARENT Bioenvision, Inc.
Companies, to: ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇
Attn: Dr. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
President
Telecopy:
With a copy to: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇
LLP
1251 Avenue of the Americas
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇-
1104
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to TARGET, to: Pathagon Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice
Chairman
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax : (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
15.2 Entire Agreement. This Agreement (including the
Exhibits and Schedules attached hereto and the Disclosure Letter)
and other documents delivered at the Closing pursuant hereto,
contains the entire understanding of the parties in respect of
its subject matter and supersedes all prior agreements and
understandings (oral or written) between or among the parties
with respect to such subject matter. The Exhibits and Schedules
attached hereto and the Disclosure Letter constitute a part
hereof as though set forth in full above.
15.3 Expenses. Except as set forth in this Section 15.3 or
as otherwise provided in this Agreement, the parties hereto shall
pay their own fees and expenses, including their own legal,
accounting, consulting and financial advisory fees, incurred in
connection with this Agreement or any transaction contemplated
hereby, whether or not the Merger is consummated.
15.4 Amendment. This Agreement (including the Schedules and
Exhibits attached hereto) may not be modified, amended,
supplemented, canceled or discharged, except by written
instrument executed by all parties. The Agreement may be amended
by the parties hereto at any time before or after approval of the
stockholders of TARGET; but, after such approval, no amendment
will be made which by applicable Law requires the further
approval of the stockholders of TARGET without obtaining such
further approval. The Disclosure Letters may be amended from
time to time as provided herein.
15.5 Waiver. No failure to exercise, and no delay in
exercising, any right, power or privilege under this Agreement
shall operate as a waiver, nor shall any single or partial
exercise of any right, power or privilege hereunder preclude the
exercise of any other right, power or privilege. No waiver of
any breach of any provision shall be deemed to be a waiver of any
preceding or succeeding breach of the same or any other
provision, nor shall any waiver be implied from any course of
dealing between the parties. No extension of time for
performance of any obligations or other acts hereunder or under
any other agreement shall be deemed to be an extension of the
time for performance of any other obligations or any other acts.
The rights and remedies of the parties under this Agreement are
in addition to all other rights and remedies, at law or equity
that they may have against each other.
15.6 Binding Effect; Assignment. The rights and obligations
of this Agreement shall bind and inure to the benefit of the
parties and their respective successors and assigns. Nothing
expressed or implied herein shall be construed to give any other
person any legal or equitable rights hereunder. Except as
expressly provided herein, the rights and obligations of this
Agreement may not be assigned by TARGET or PARENT.
15.7 Interpretation. When a reference is made in this
Agreement to an article, section, paragraph, clause, schedule or
exhibit, such reference shall be deemed to be to this Agreement
unless otherwise indicated. The headings contained herein and on
the schedules are for reference and convenience purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement or the schedules. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall
be deemed to be followed by the words "without limitation." Time
shall be of the essence in this Agreement.
15.8 Severability. Any term or provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction only, be ineffective only to the extent
of such prohibition or unenforceability, and shall not invalidate
the remaining provisions hereof or affect the validity or
enforceability of such provision in any other jurisdiction.
15.9 Governing Law; Interpretation. This Agreement shall be
construed in accordance with and governed for all purposes by the
internal laws of the State of New York applicable to contracts
executed and to be wholly performed within such state, except
Merger related provisions governed by the DGCL.
15.10 Arm's Length Negotiations. Each party herein
expressly represents and warrants to all other parties hereto
that: (a) before executing this Agreement, said party has fully
informed itself of the terms, contents, conditions and effects of
this Agreement; (b) said party has relied solely and completely
upon its own judgment in executing this Agreement; (c) said party
has had the opportunity to seek and has obtained the advice of
counsel before executing this Agreement; (d) said party has acted
voluntarily and of its own free will in executing this Agreement;
(e) said party is not acting under duress, whether economic or
physical, in executing this Agreement; and (f) this Agreement is
the result of arm's length negotiations conducted by and among
the parties and their respective counsel.
15.11 Confidentiality. PARENT and TARGET each recognize
that they have received and will receive confidential information
concerning the other during the course of the Merger negotiations
and preparations. Accordingly, PARENT and TARGET each agree (a)
to use its respective commercially reasonable efforts to prevent
the unauthorized disclosure of any confidential information
concerning the other that was or is disclosed during the course
of such negotiations and preparations, and is clearly designated
in writing as confidential at the time of disclosure, (b) to not
make use of or permit to be used any such confidential
information other than for the purpose of effectuating the Merger
and related transactions, and (c) comply fully with the terms of
the Confidentiality Agreement. The obligations of this section
will not apply to information that (i) is or becomes part of the
public domain, (ii) is disclosed by the disclosing party to third
parties without restrictions on disclosure, (iii) is received by
the receiving party from a third party without breach of a
nondisclosure obligation to the other party, (iv) is necessary or
desirable in connection with a Legal Proceeding or to enforce one
parties rights under this Agreement and the Transaction Documents
or (v) is required to be disclosed by Law. If this Agreement is
terminated, all copies of documents containing confidential
information shall be returned by the receiving party to the
disclosing party.
15.12 Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be an original
but all of which together shall constitute one and the same
instrument.
(Execution Page Follows)
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the day and
year first above written.
BIOENVISION, INC.
By:
Name: Dr. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: President
BIOENVISION ACQUISITION CORP.
By:
Name: Dr. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: President
PATHAGON INC.
By:
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
