AGREEMENT AND PLAN OF MERGER BY AND AMONG GENENTECH, INC. GREEN ACQUISITION CORPORATION and TANOX, INC. Dated as of November 9, 2006
EXHIBIT
10.38
AGREEMENT
AND PLAN OF MERGER
BY
AND AMONG
GENENTECH,
INC.
GREEN
ACQUISITION CORPORATION
and
TANOX,
INC.
Dated
as of November 9, 2006
TABLE
OF CONTENTS
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Page
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ARTICLE
I THE MERGER
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1
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1.1
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The
Merger
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1
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1.2
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Effective
Time; Closing
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1
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1.3
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Effect
of the Merger
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2
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1.4
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Certificate
of Incorporation and Bylaws of Surviving Corporation
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2
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1.5
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Directors
and Officers of Surviving Corporation
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2
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1.6
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Effect
on Capital Stock
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2
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1.7
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Dissenting
Shares
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3
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1.8
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Surrender
of Certificates
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4
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1.9
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No
Further Ownership Rights in Company Common Stock
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5
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1.10
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Lost,
Stolen or Destroyed Certificates
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5
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1.11
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Adjustments
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5
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1.12
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Taking
of Necessary Action; Further Action
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5
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ARTICLE
II REPRESENTATIONS AND WARRANTIES OF COMPANY
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5
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2.1
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Organization
and Qualification; Subsidiaries
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6
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2.2
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Certificate
of Incorporation and Bylaws; Minutes
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6
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2.3
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Capitalization
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7
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2.4
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Authority
Relative to this Agreement
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8
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2.5
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No
Conflict; Required Filings and Consents
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8
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2.6
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Compliance
with Health Care Laws
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9
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2.7
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Permits
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10
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2.8
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FDA;
Global Regulation Compliance; Company Products and Company Research
Programs
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10
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2.9
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SEC
Filings; Financial Statements
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12
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2.10
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No
Undisclosed Liabilities
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15
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2.11
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Absence
of Certain Changes or Events
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15
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2.12
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Absence
of Litigation
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16
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2.13
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Employee
Benefit Plans
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16
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2.14
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Proxy
Statement
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21
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2.15
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Title
to Property
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21
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2.16
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Taxes
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23
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2.17
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Environmental
Matters
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25
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2.18
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Brokers;
Third Party Expenses
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26
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2.19
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Intellectual
Property
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26
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2.20
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Contracts
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32
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2.21
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Product
Liability Claims
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34
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2.22
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Insurance
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34
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2.23
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Opinion
of Financial Advisor
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35
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2.24
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Board
Approval
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35
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2.25
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Rights
Agreement
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35
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2.26
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State
Takeover Statutes
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35
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2.27
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Interested
Party Transactions
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35
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ARTICLE
III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER
SUB
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36
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3.1
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Corporate
Organization
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36
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3.2
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Authority
Relative to this Agreement
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36
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3.3
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No
Conflict; Required Filings and Consents
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36
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3.4
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Proxy
Statement
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37
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3.5
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Sufficient
Funds
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37
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Page
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3.6
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No
Prior Merger Sub Operations
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37
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ARTICLE
IV CONDUCT PRIOR TO THE EFFECTIVE TIME
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37
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4.1
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Conduct
of Business by Company
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37
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ARTICLE
V ADDITIONAL AGREEMENTS
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5.1
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Proxy
Statement
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41
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5.2
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Meeting
of Company Stockholders
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42
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5.3
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Confidentiality;
Access to Information
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43
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5.4
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No
Solicitation
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43
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5.5
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Public
Disclosure
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46
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5.6
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Reasonable
Efforts; Regulatory Matters
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47
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5.7
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Notification
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48
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5.8
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Third
Party Consents and Notices
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48
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5.9
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Indemnification
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49
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5.10
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Termination
of Certain Benefit Plans
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49
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5.11
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Section
16 Matters
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50
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5.12
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Disqualified
Individuals
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50
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5.13
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Company
Rights Agreement
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50
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5.14
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Takeover
Statutes
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50
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5.15
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FIRPTA
Compliance
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50
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ARTICLE
VI CONDITIONS TO THE MERGER
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51
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6.1
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Conditions
to Obligations of Each Party to Effect the Merger
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51
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6.2
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Additional
Conditions to Obligations of the Company
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51
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6.3
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Additional
Conditions to the Obligations of Parent and Merger Sub
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51
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ARTICLE
VII TERMINATION, AMENDMENT AND WAIVER
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52
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7.1
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Termination
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52
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7.2
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Notice
of Termination; Effect of Termination
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54
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7.3
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Fees
and Expenses
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54
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7.4
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Amendment
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56
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7.5
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Extension;
Waiver
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56
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ARTICLE
VIII GENERAL PROVISIONS
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56
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8.1
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Non-Survival
of Representations and Warranties
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56
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8.2
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Notices
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56
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8.3
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Interpretation;
Knowledge
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57
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8.4
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Counterparts
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58
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8.5
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Entire
Agreement; Third Party Beneficiaries
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58
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8.6
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Severability
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59
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8.7
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Other
Remedies; Specific Performance
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59
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8.8
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Governing
Law; Jurisdiction
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59
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8.9
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Rules
of Construction
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59
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8.10
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Assignment
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59
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8.11
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Waiver
of Jury Trial
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60
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INDEX
OF EXHIBITS
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Exhibit A
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Form
of Company Voting Agreement
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ii
AGREEMENT
AND PLAN OF MERGER
THIS
AGREEMENT AND PLAN OF MERGER is made and entered into as of November 9,
2006 (the “Agreement”),
by and among Genentech, Inc., a Delaware corporation (“Parent”),
Green Acquisition Corporation, a Delaware corporation and a wholly-owned
subsidiary of Parent (“Merger
Sub”),
and Tanox, Inc., a Delaware corporation (the “Company”).
RECITALS
WHEREAS,
the Boards of Directors of Parent, Merger Sub and the Company have each
determined that it is in the best interests of their respective stockholders
for
Parent to acquire the Company upon the terms and subject to the conditions
set
forth herein.
WHEREAS,
the Board of Directors of the Company (the “Board”)
has unanimously (i) determined that the Merger (as defined in Section 1.1)
is advisable and fair to, and in the best interests of, the Company and its
stockholders, (ii) approved this Agreement and the other transactions
contemplated by this Agreement, including the Merger and the transactions
contemplated by the Company Voting Agreements, and (iii) determined to
recommend that the stockholders of the Company adopt this Agreement.
WHEREAS,
the Board of Directors of Parent has (i) determined that the Merger is
advisable and fair to, and in the best interest of, Parent and its stockholders,
and (ii) approved this Agreement.
WHEREAS,
concurrently with the execution of this Agreement, as a condition and inducement
to Parent’s willingness to enter into this Agreement, certain stockholders of
the Company are entering into Voting Agreements, dated as of the date hereof,
in
substantially the form attached hereto as Exhibit A
(the “Company
Voting Agreements”).
WHEREAS,
Parent, Merger Sub and the Company desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also
to
prescribe certain conditions to the Merger.
NOW,
THEREFORE, in consideration of the covenants, promises and representations
set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
THE
MERGER
1.1
The
Merger.
At the Effective Time (as defined in Section 1.2)
and subject to and upon the terms and conditions of this Agreement and the
applicable provisions of the Delaware General Corporation Law (“Delaware
Law”),
Merger Sub shall be merged with and into the Company (the “Merger”),
the separate corporate existence of Merger Sub shall cease and the Company
shall
continue as the surviving corporation. The Company, as the surviving corporation
after the Merger, is hereinafter sometimes referred to as the “Surviving
Corporation.”
1.2
Effective
Time; Closing.
Upon the terms and subject to the conditions of this Agreement, the parties
hereto shall cause the Merger to be consummated by filing with the Secretary
of
State of the State of Delaware a certificate of merger (the “Certificate
of Merger”)
executed in accordance with the relevant provisions of Delaware Law (the time
of
such filing, or such later time as may be agreed in writing by the Company
and
Parent and specified in the Certificate of Merger, being the “Effective
Time”)
on, or as soon as practicable after, the Closing Date (as herein defined).
The
closing of the Merger (the “Closing”)
shall take place at the offices of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx,
Professional Corporation, 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx, at a time
and date to be specified by the parties hereto, which shall be no later than
the
second business day after the satisfaction or waiver of the conditions set
forth
in Article
VI
(other than those conditions which, by their terms,
1
are
to be satisfied or waived on the Closing Date, but subject to the satisfaction
or waiver thereof), or at such other time, date and location as the parties
hereto agree in writing. The date on which the Closing occurs is referred to
in
this Agreement as the “Closing
Date”.
1.3
Effect
of the Merger.
At the Effective Time, the effect of the Merger shall be as provided in this
Agreement and the applicable provisions of Delaware Law. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, all
of
the assets, properties, rights, privileges, powers and franchises of the Company
and Merger Sub shall vest in the Surviving Corporation, and all of the debts,
liabilities, obligations, restrictions and duties of the Company and Merger
Sub
shall become the debts, liabilities, obligations, restrictions and duties of
the
Surviving Corporation.
1.4
Certificate
of Incorporation and Bylaws of Surviving Corporation.
(a)
Certificate of Incorporation. As of the Effective Time, by virtue of the Merger
and without any action on the part of Merger Sub or the Company, the Certificate
of Incorporation of the Surviving Corporation shall be amended and restated
to
read the same as the Certificate of Incorporation of Merger Sub, as in effect
immediately prior to the Effective Time, subject to Section 5.9(a),
until thereafter amended in accordance with Delaware Law and such Certificate
of
Incorporation; provided,
however,
that as of the Effective Time the Certificate of Incorporation shall provide
that the name of the Surviving Corporation is “Tanox, Inc.”
(b)
Bylaws.
As of the Effective Time, by virtue of the Merger and without any action on
the
part of Merger Sub or the Company, the Bylaws of the Surviving Corporation
shall
be amended and restated to read the same as the Bylaws of Merger Sub, as in
effect immediately prior to the Effective Time, subject to Section 5.9(a),
until thereafter amended in accordance with Delaware Law, the Certificate of
Incorporation of the Surviving Corporation and such Bylaws; provided,
however,
that all references in such Bylaws to Merger Sub shall be amended to refer
to
“Tanox, Inc.”
1.5
Directors
and Officers of Surviving Corporation.
(a)
Directors.
The initial directors of the Surviving Corporation shall be the directors of
Merger Sub as of immediately prior to the Effective Time, until their respective
successors are duly elected or appointed and qualified or until their earlier
death, resignation or removal in accordance with the Certificate of
Incorporation and the Bylaws of the Surviving Corporation.
(b)
Officers.
The initial officers of the Surviving Corporation shall be the officers of
Merger Sub as of immediately prior to the Effective Time, until their respective
successors are duly appointed and qualified or until their earlier death,
resignation or removal in accordance with the Certificate of Incorporation
and
the Bylaws of the Surviving Corporation.
1.6
Effect
on Capital Stock.
Upon the terms and subject to the conditions of this Agreement, at the Effective
Time, by virtue of the Merger and without any action on the part of Merger
Sub,
the Company or the holders of any of the following securities, the following
shall occur:
(a)
Conversion
of Shares.
Each share of common stock, par value $0.01 per share, of the Company
(“Company
Common Stock”)
issued and outstanding immediately prior to the Effective Time (other than
any
shares of Company Common Stock to be canceled pursuant to Section 1.6(b)
and any Dissenting Shares, as defined in Section 1.7),
will be canceled and extinguished and automatically converted into the right
to
receive, upon surrender of the certificate(s) representing such Company Common
Stock in the manner provided in Section 1.8
(or in the case of a lost, stolen or destroyed certificate, upon delivery of
an
affidavit, and bond, if required, in the manner provided in Section 1.10),
cash in an amount equal to $20.00 per share, without interest (the “Per
Share Merger Consideration”
and the aggregate of all Per Share Merger Consideration, the “Merger
Consideration”).
2
(b)
Cancellation
of Treasury and Parent-Owned Shares.
All Company Common Stock held by the Company or owned by Merger Sub, Parent
or
any direct or indirect wholly-owned subsidiary of the Company or of Parent
immediately prior to the Effective Time shall be canceled and extinguished
without any conversion thereof.
(c)
Capital
Stock of Merger Sub.
Each share of common stock, par value $0.01 per share, of Merger Sub (the
“Merger
Sub Common Stock”)
issued and outstanding immediately prior to the Effective Time shall be
converted into one validly issued, fully paid and nonassessable share of common
stock, par value $0.01 per share, of the Surviving Corporation. Each certificate
evidencing ownership of shares of Merger Sub Common Stock outstanding
immediately prior to the Effective Time shall evidence ownership of such shares
of capital stock of the Surviving Corporation.
(d)
Stock
Options.
Except as set forth on Section 1.6(d)
of the Company Disclosure Letter (as defined in Article
II),
each option to purchase Company Common Stock (the “Company
Stock Options”),
whether vested or unvested, and all stock option plans or other equity-related
plans of the Company (the “Company
Stock Plans”),
that are unexpired, unexercised and outstanding as of the Effective Time shall
on the terms and subject to the conditions set forth in this Agreement, be
cancelled in its entirety at the Effective Time, and the holder of each shall
be
fully vested in such Company Stock Options, and the Parent shall pay or cause
to
be paid, as soon as reasonably practicable after the Effective Time, to each
such holder of Company Stock Options an amount of cash equal to the product
of
(i) the number of shares of Company Common Stock as to which such Company
Stock Option remains unexercised immediately prior to the Effective Time,
multiplied by (ii) the Per Share Merger Consideration minus the exercise
price of such Company Stock Option immediately prior to the Effective Time
(the
“Option
Merger Consideration”);
provided,
however,
that if the Per Share Merger Consideration does not exceed the exercise price
of
such Company Stock Option immediately prior to the Effective Time, the Option
Merger Consideration for such Company Stock Option shall be zero; and
provided
further,
that nothing in this Section 1.6(d)
shall prohibit the holder of a Company Stock Option from exercising such Company
Stock Option prior to the Effective Time in accordance with its terms and
applicable Legal Requirements. Prior to the Effective Time, the Company shall
timely deliver any notices to holders of Company Stock Options as may be
required by the terms of the Company Stock Plans and take any and all actions
necessary or appropriate to effectuate the foregoing, including, without
limitation, using all reasonable efforts to obtain any applicable consents
or
waivers from holders of Company Stock Options that were granted under the
Company’s 2000 Non-Employee Directors’ Stock Option Plan. The payment of the
Option Merger Consideration to the holder of a Company Stock Option shall be
reduced by any income, employment or other Tax withholding required under the
Code (as defined in Section 2.13(a)(ii))
or any provision of state, local or foreign Tax law.
1.7
Dissenting
Shares.
(a)
Notwithstanding any provision of this Agreement to the contrary, shares of
Company Common Stock that are outstanding immediately prior to the Effective
Time and that are held by stockholders who shall have not voted in favor of
the
Merger and who shall have demanded properly in writing appraisal for such
Company Common Stock in accordance with Section 262 of Delaware Law
(collectively, the “Dissenting
Shares”)
shall not be converted into, or represent the right to receive, the Per Share
Merger Consideration payable for each such share of Company Common Stock. Such
stockholders shall be entitled to receive payment of the appraised value of
such
Company Common Stock held by them in accordance with the provisions of such
Section 262, except that all Dissenting Shares held by stockholders who
shall have failed to perfect or who effectively shall have withdrawn or lost
their rights to appraisal of such Company Common Stock under such
Section 262 shall thereupon be deemed to have been converted into, and to
have become exchangeable for, as of the Effective Time, the right to receive
the
Per Share Merger Consideration payable for each such share of Company Common
Stock, without any interest thereon, upon surrender, in the manner provided
in
Section 1.8,
of the certificate or certificates that formerly evidenced such Company Common
Stock.
3
(b)
The Company shall give Parent (i) prompt notice of any demands for
appraisal received by the Company, withdrawals of such demands, and any other
instruments served pursuant to Delaware Law and received by the Company and
(ii) the opportunity to direct all negotiations and proceedings with
respect to demands for appraisal under Delaware Law. The Company shall not,
except with the prior written consent of Parent, make any payment with respect
to any demands for appraisal or offer to settle or settle any such demands.
1.8
Surrender
of Certificates.
(a)
Paying
Agent.
At the Effective Time, Parent shall deposit or cause to be deposited with a
bank
or trust company reasonably acceptable to the Company to act as agent (the
“Paying
Agent”),
for the benefit of the holders of Company Common Stock to receive the funds
to
which holders of Company Common Stock shall become entitled pursuant to
Section 1.6(a),
a cash amount sufficient to pay the Merger Consideration. Such funds shall
be
invested by the Paying Agent as directed by Parent; earnings from such
investments shall be the sole and exclusive property of Parent and the Surviving
Corporation, and no part of such earnings shall accrue to the benefit of holders
of the shares of Company Common Stock.
(b)
Payment
Procedures.
As soon as reasonably practicable after the Effective Time, Parent shall cause
the Paying Agent to mail to each holder of record (as of the Effective Time)
of
a certificate or certificates (the “Certificates”),
which immediately prior to the Effective Time represented the outstanding shares
of Company Common Stock, (i) a letter of transmittal in customary form
(which shall specify that delivery shall be effected, and risk of loss and
title
to the Certificates shall pass, only upon delivery of the Certificates to the
Paying Agent and shall contain such other provisions as Parent shall reasonably
specify) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for the portion of the Merger Consideration payable
upon surrender of said Certificates. Upon surrender of Certificates for
cancellation to the Paying Agent or to such other agent or agents as may be
appointed by Parent, together with such letter of transmittal, duly completed
and validly executed in accordance with the instructions thereto, and such
other
documents as may be required pursuant to those instructions, the holders of
such
Certificates formerly representing the Company Common Stock shall be entitled
to
receive in exchange therefor the portion of the Merger Consideration payable
for
such shares of Company Common Stock, and the Certificates so surrendered shall
forthwith be canceled. Until so surrendered, outstanding Certificates shall
be
deemed from and after the Effective Time, for all corporate purposes, to
evidence only the ownership of the respective portion of the Merger
Consideration to which the record holder of such Certificate is entitled by
virtue thereof. Promptly following surrender of any such Certificates and the
duly executed letters of transmittal, the Paying Agent shall deliver to the
record holders thereof, without interest, the portion of the Merger
Consideration to which such holder is entitled upon surrender of said
Certificates, subject to the restrictions set forth herein.
(c)
Payments
with respect to Unsurrendered Company Common Stock; No
Liability.
At any time following the 180th day after the Effective Time, the Surviving
Corporation shall be entitled to require the Paying Agent to deliver to it
any
funds which had been made available to the Paying Agent and not disbursed to
holders of Company Common Stock (including all interest and other income
received by the Paying Agent in respect of all funds made available to it),
and,
thereafter, such holders shall be entitled to look to Parent (subject to
abandoned property, escheat and other similar laws) only as general creditors
thereof with respect to any portion of the Merger Consideration that may be
payable upon due surrender of the Certificates held by them. Notwithstanding
the
foregoing, none of Parent, the Surviving Corporation nor the Paying Agent shall
be liable to any former holder of Company Common Stock for any portion of the
Merger Consideration delivered in respect of such Company Common Stock to a
public official pursuant to any abandoned property, escheat or other similar
Legal Requirement.
(d)
Transfers
of Ownership.
If the payment of the portion of the Merger Consideration to which such holder
is entitled is to be paid to a person other than the person in whose name the
Certificates surrendered in exchange therefor are registered, it will be a
condition of payment that the Certificates so surrendered be properly endorsed
and otherwise in proper form for transfer (including, if requested by Parent
or
the Paying
4
Agent,
a medallion guarantee), and that the persons requesting such payment will have
paid to Parent or any agent designated by it any transfer or other Taxes
required by reason of the payment of a portion of the Merger Consideration
to a
person other than the registered holder of the Certificates surrendered, or
established to the satisfaction of Parent or any agent designated by it that
such Tax has been paid or is not applicable.
(e)
Required
Withholding.
Each of the Paying Agent, Parent and the Surviving Corporation shall be entitled
to deduct and withhold from any consideration payable or otherwise deliverable
pursuant to this Agreement to any holder or former holder of the Company Common
Stock such amounts as may be required to be deducted or withheld therefrom
under
the Code or under any provision of state, local or foreign Tax law or under
any
other applicable Legal Requirement. To the extent such amounts are so deducted
or withheld, such amounts shall be treated for all purposes under this Agreement
as having been paid to the person to whom such amounts would otherwise have
been
paid.
1.9
No
Further Ownership Rights in Company Common Stock.
Payment of the Merger Consideration shall constitute payment in full
satisfaction of all rights pertaining to the Company Common Stock. From and
after the Effective Time, there shall be no further registration of transfers
on
the records of the Surviving Corporation of shares of the Company Common Stock
which were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for
any
reason, they shall be canceled and exchanged as provided in this Article I.
1.10
Lost,
Stolen or Destroyed Certificates.
In the event that any Certificates shall have been lost, stolen or destroyed,
the Paying Agent shall pay in exchange for such lost, stolen or destroyed
Certificates, upon the making of an affidavit of that fact by the holder
thereof, the portion of the Merger Consideration payable with respect thereto;
provided,
however,
that Parent or the Paying Agent may, in its discretion and as a condition
precedent to the payment of such portion of the Merger Consideration, require
the owner of such lost, stolen or destroyed Certificates to deliver a bond
(at
the sole expense of the holder of such Certificate) in such reasonable and
customary amount as it may direct as indemnity against any claim that may be
made against Parent, the Surviving Corporation or the Paying Agent with respect
to the Certificates alleged to have been lost, stolen or destroyed.
1.11
Adjustments.
In the event of any stock split, reverse stock split, stock dividend (including
any dividend or distribution of securities convertible into Company Common
Stock, whether directly or indirectly), reorganization, reclassification,
combination, recapitalization or other like change with respect to the Company
Common Stock occurring after the date of this Agreement and prior to the
Effective Time, all references in this Agreement to specified numbers of shares
of any class or series affected thereby, and all calculations provided for
that
are based upon numbers of shares of any class or series (or trading prices
therefor) affected thereby, shall be equitably adjusted to the extent necessary
to provide the parties the same economic effect as contemplated by this
Agreement prior to such stock split, reverse stock split, stock dividend,
reorganization, reclassification, combination, recapitalization or other like
change.
1.12
Taking
of Necessary Action; Further Action.
If, at any time after the Effective Time, any further action is necessary or
desirable to carry out the purposes of this Agreement and to vest the Surviving
Corporation with full right, title and possession to all assets, property,
rights, privileges, powers and franchises of the Company and Merger Sub, the
officers and directors of the Company and Merger Sub will take all such lawful
and necessary action.
ARTICLE II
REPRESENTATIONS
AND WARRANTIES OF COMPANY
The
Company hereby represents and warrants to Parent and Merger Sub, except as
are
specifically disclosed in writing in the disclosure schedule supplied by the
Company to Parent (which such exceptions shall reference
5
the
specific section and, if applicable, subsection number of this Article II
to which it applies, and, if applicable, any information disclosed in any such
section or subsection shall also be deemed to be disclosed with respect to
each
other such section or subsection to the extent that it is reasonably apparent
on
its face that such disclosure should also apply to such other section or
subsection), dated as of the date hereof and certified by a duly authorized
officer of the Company (the “Company
Disclosure Letter”),
as follows:
2.1
Organization
and Qualification; Subsidiaries.
(a)
Each of the Company and its subsidiaries is a corporation duly organized,
validly existing and in good standing (with respect to jurisdictions that
recognize the concept of good standing) under the laws of its respective
jurisdiction of organization and has the requisite corporate power and authority
to own, lease and operate its assets and properties and to carry on its business
as it is now being conducted, except for such failures to be so organized,
existing and in good standing (with respect to such jurisdictions that recognize
the concept of good standing) or to have such power and authority that,
individually or in the aggregate, would not reasonably be expected to have
a
Material Adverse Effect on the Company.
(b)
The Company has no subsidiaries except for the persons identified in
Section 2.1(b)
of the Company Disclosure Letter. Section 2.1(b)
of the Company Disclosure Letter also sets forth the form of ownership and
percentage voting and/or equity interest of the Company in its subsidiaries
and,
to the extent that a subsidiary set forth thereon is not wholly owned by the
Company, lists the other persons that have an ownership interest in such
subsidiary and sets forth the percentage of each such ownership interest.
Neither the Company nor any of its subsidiaries has agreed to make nor is
obligated to make nor is bound by any written, oral, express or implied
agreement, contract, subcontract, lease, mortgage, indenture, understanding,
arrangement, instrument, note, bond, warranty, purchase order, license,
sublicense, benefit plan, franchise or other instrument, obligation, commitment
or undertaking that is legally binding and with respect to which there are
continuing obligations, rights, or liabilities, including any amendments thereto
(a “Contract”)
or Legal Requirement (as defined in Section 2.3(a)
below), in effect as of the date hereof, to make any future investment in or
capital contribution to any other person or any sale or other disposition of
the
capital stock or any of the assets or operations of any such person.
(c)
Other than the subsidiaries set forth in Section 2.1(b)
of the Company Disclosure Letter, neither the Company nor any of its
subsidiaries directly or indirectly owns any equity or similar interest in
or
any interest convertible, exchangeable or exercisable for, any equity or similar
interest in, any person.
(d)
The Company and each of its subsidiaries is duly qualified to do business as
a
foreign corporation, and is in good standing (with respect to jurisdictions
that
recognize the concept of good standing), under the laws of all jurisdictions
where the character of the properties owned, leased or operated by it or the
nature of its activities makes such qualification necessary, except where the
failure to be so qualified and in good standing has not had, and would not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect on the Company. Section 2.1(d)
of the Company Disclosure Letter sets forth a true and complete list of each
state and other jurisdiction which the Company and each of its subsidiaries
is
qualified to do business as a foreign corporation.
2.2
Certificate
of Incorporation and Bylaws; Minutes.
(a)
The Company has previously furnished to Parent (i) a complete and correct
copy of its Certificate of Incorporation and Bylaws as amended to date
(together, the “Company
Charter Documents”)
and (ii) the equivalent organizational documents for each subsidiary of the
Company, each as amended to date. The Company Charter Documents and equivalent
organizational documents of each subsidiary of the Company are in full force
and
effect. The Company is not in violation of any of the provisions of the Company
Charter Documents, and no subsidiary of the Company is in violation of its
equivalent organizational documents.
(b)
The Company has delivered to Parent and its representatives true and complete
copies of the minutes (or, in the case of minutes that have not yet been
finalized, the most recent drafts thereof) of all meetings of the stockholders,
the Board of Directors and each committee of such Board of Directors of the
Company and each of its subsidiaries held since January 1, 2000.
6
2.3
Capitalization.
(a)
The authorized capital stock of the Company consists of 120,000,000 shares
of
Company Common Stock and 10,000,000 shares of Preferred Stock, par value of
$0.01 per share (“Company
Preferred Stock”).
At the close of business on the date of this Agreement (i) 45,258,927
shares of Company Common Stock were issued and outstanding, all of which are
validly issued, fully paid and nonassessable; (ii) no shares of Company
Common Stock were held by subsidiaries of the Company; (iii) 554,700 shares
of Company Common Stock were held in treasury by the Company;
(iv) 2,677,418 shares of Company Common Stock were reserved for issuance
upon the exercise of outstanding options to purchase Company Common Stock under
the Company Stock Plans and (v) 5,248,185 additional shares of Company
Common Stock were reserved for future issuance pursuant to the Company Stock
Plans. The Company does not have any employee stock purchase plan, as such
term
is defined in Section 423 of the Code. As of the date hereof, no shares of
Company Preferred Stock were issued or outstanding and there are no outstanding
shares of Company Common Stock that are subject to risk of forfeiture. All
shares of Company Common Stock subject to issuance upon exercise of such Company
Stock Options, upon issuance on the terms and conditions specified in the
instrument pursuant to which they are issuable, will be duly authorized, validly
issued, fully paid and nonassessable. Except as set forth in Section 2.3(a)
of the Company Disclosure Letter, there are no Contracts to which the Company
is
bound obligating the Company to accelerate the vesting of any Company Stock
Option as a result of the transactions contemplated hereby (the “Transactions”)
or upon termination of employment or service with the Company or with any of
its
subsidiaries following the Merger (whether alone or in combination with any
other events) or otherwise. All outstanding shares of Company Common Stock,
all
outstanding Company Stock Options and all outstanding shares of capital stock
of
each subsidiary of the Company have been issued and granted in compliance with
all applicable securities laws and other applicable Legal Requirements (as
defined below). The exercise price of each Company Stock Option is no less
than
the fair market value of a share of Company Common Stock as determined on the
date of grant of such Company Stock Option. All grants of Company Stock Options
were properly approved by the Board or a duly and validly appointed committee
of
the Board in compliance with all applicable Legal Requirements and recorded
on
the Financial Statements (as defined in Section 2.9(b))
in accordance with GAAP, and no such grants involved any inappropriate “back
dating,” “forward dating” or similar practices with respect to the effective
date of grant. All repurchases of Company securities have been made in
compliance with all applicable Legal Requirements. For the purposes of this
Agreement, “Legal
Requirements”
means any federal, state, local, municipal, foreign or other law, statute,
legislation, constitution, principle of common law, binding resolution,
ordinance, code, edict, order, injunction, judgment, decree, rule, regulation,
ruling or requirement issued, enacted, adopted, promulgated, implemented or
otherwise put into effect by or under the authority of any Governmental Entity
(as defined in Section 2.5(b))
hereof. There are no declared or accrued but unpaid dividends with respect
to
any shares of Company Common Stock.
(b)
Section 2.3(b)
of the Company Disclosure Letter sets forth, as of the date of this Agreement
the following information with respect to each Company Stock Option outstanding
as of the date of this Agreement: (i) the name and address of the optionee;
(ii) the particular plan pursuant to which such Company Stock Option was
granted; (iii) the number of shares of Company Common Stock subject to such
Company Stock Option; (iv) the exercise price of such Company Stock Option;
(v) the date on which such Company Stock Option was granted; (vi) the
applicable vesting schedule; (vii) the date on which such Company Stock
Option expires; (viii) whether the exercisability of such Company Stock
Option will be accelerated in any way by the transactions contemplated by this
Agreement, and indicates the extent of acceleration; and (ix) whether such
Company Stock Option is intended to qualify as an incentive stock option within
the meaning of Section 422 of the Code.
(c)
Except for the Company Stock Options and the rights designated in connection
with the Rights Agreement, dated July 27, 2001 between the Company and
American Stock Transfer & Trust Company as rights agent (the
“Rights
Agreement”),
there are no subscriptions, options, warrants, equity securities, partnership
interests or similar ownership interests, calls, rights (including preemptive
rights), Contracts to
7
which
the Company or any of its subsidiaries is a party or by which the Company or
any
of its subsidiaries is bound obligating the Company or any of its subsidiaries
to issue, deliver or sell, or cause to be issued, delivered or sold, or
repurchase, redeem or otherwise acquire, or cause the repurchase, redemption
or
acquisition of, any shares of capital stock, partnership interests or similar
ownership interests of the Company or any of its subsidiaries or obligating
the
Company or any of its subsidiaries to grant, extend, accelerate the vesting
of
or enter into any such subscription, option, warrant, equity security, call,
right, commitment or agreement. There are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or other similar rights,
contingent or accrued, to receive shares of Company Common Stock or benefits
measured in whole or part by the value of a number of shares of Company Common
Stock with respect to the Company or any of its subsidiaries. Except for the
Company Stock Options, the Company Voting Agreements and the Rights Agreement,
there are no voting trusts, proxies, rights plans, anti-takeover plans or
Contracts to which the Company or any of its subsidiaries is a party or by
which
the Company or any of its subsidiaries is bound with respect to the voting,
acquisition, disposition of or imposition of any Encumbrance on (i) any
class of equity security of the Company or (ii) any equity security,
partnership interest or similar ownership interest of any of its subsidiaries.
(d)
True, correct and complete copies of (i) each of the Company Stock Plans,
(ii) the standard form of all Contracts and instruments relating to or
issued under the Company Stock Plans or Company Stock Option, (iii) each
Contract or instrument relating to or issued under the Company Stock Plans
or
Company Stock Option where the terms of such grant differ in any material
respect from such standard form agreements, and (iv) Contracts relating to
unvested shares, have been made available to Parent, and such Contracts and
instruments have not been amended, modified or supplemented since being made
available to Parent, and, except as contemplated by this Agreement, there are
no
Contracts to amend, modify or supplement such agreements or instruments in
any
case from those made available to Parent.
2.4
Authority
Relative to this Agreement.
The Company has all necessary corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the Transactions, subject, with respect to the Merger, to the Company
Stockholder Approval (as defined below). The execution and delivery of this
Agreement by the Company and the consummation by the Company of the Transactions
have been duly and validly authorized by all necessary corporate action on
the
part of the Company and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate the
Transactions other than (i) with respect to the Merger, the filing with the
Securities and Exchange Commission (the “SEC”)
of a proxy statement with respect to, and the receipt of, the Company
Stockholder Approval and (ii) the filing of the Certificate of Merger as
required by Delaware Law, subject, in each case, to the receipt of the Required
Consents. The affirmative vote of the holders of a majority of the shares of
Company Common Stock issued and outstanding on the record date set for the
meeting of the Company’s stockholders to adopt this Agreement is the only vote
of the holders of capital stock of the Company necessary to adopt this Agreement
and approve and adopt the Merger under applicable Legal Requirements and the
Company Charter Documents (the “Company
Stockholder Approval”).
This Agreement has been duly and validly executed and delivered by the Company
and, assuming the due authorization, execution and delivery by Parent and Merger
Sub, constitutes a legal and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, moratorium, reorganization or similar Legal
Requirements affecting the rights of creditors generally and the availability
of
equitable remedies (regardless of whether such enforceability is considered
in a
proceeding in equity or at law).
2.5
No
Conflict; Required Filings and Consents.
(a)
The execution and delivery of this Agreement by the Company does not, and the
performance of this Agreement by the Company will not, (i) result in the
creation of any material Encumbrance (as defined below) on any of the material
properties or assets of the Company or any of its subsidiaries,
(ii) conflict with or violate the Company Charter Documents or the
equivalent organizational documents of any of the Company’s subsidiaries,
(iii) subject, (A) with respect to the Merger, to the Company
Stockholder Approval and (B) to compliance with the requirements set forth
in Section 2.5(b),
conflict with or violate in any
8
material
respect any Legal Requirements applicable to the Company or any of its
subsidiaries or by which its or any of their respective properties is bound
or
affected, (iv) conflict with or violate, or result in any breach,
impermissible assignment or non-transferability of or constitute a default
(or
an event that with notice or lapse of time or both would become a default)
under, or materially impair the Company’s or any of its subsidiaries’ rights or
alter the rights or obligations of any third party under, or give to others
any
rights of termination, amendment, acceleration or cancellation of any Company
Contract (as defined in Section 2.20(a))
or (v) except to the extent that such conflicts, violations, breaches,
defaults, impairments, rights of termination, cancellation, acceleration,
Encumbrance or other effects would not in the aggregate have a material negative
impact on the Company, conflict with or violate, or result in any breach,
impermissible assignment or non-transferability of or constitute a default
(or
an event that with notice or lapse of time or both would become a default)
under, or impair the Company’s or any of its subsidiaries’ rights or alter the
rights or obligations of any third party under, or give to others any rights
of
termination, amendment, acceleration or cancellation of any Contract (other
than
a Company Contract) to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or its or any of their
respective properties are bound or affected. “Encumbrance”
means, with respect to any asset, mortgage, deed of trust, lien, pledge, charge,
security interest, title retention device, conditional sale or other security
arrangement, collateral assignment, claim, charge, adverse claim of title,
third
person ownership or right to use, restriction or other encumbrance of any kind
in respect of such asset (including any restriction on (1) the voting of
any security or the transfer of any security or other asset, (2) the
receipt of any income derived from any asset, (3) the use of any asset, and
(4) the possession, exercise or transfer of any other attribute of
ownership of any asset, but excluding current Taxes not yet due and payable).
(b)
The execution and delivery of this Agreement by the Company does not, and the
performance of this Agreement by the Company shall not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
supranational, national, state, municipal, local or foreign government, any
instrumentality, subdivision, court, administrative agency or commission or
other governmental authority or instrumentality, or any quasi-governmental
or
private body exercising any regulatory, taxing, importing or other governmental
or quasi-governmental authority (a “Governmental
Entity”),
except (i) for applicable requirements, if any, of the Securities Exchange
Act of 1934, as amended (the “Exchange
Act”),
state securities laws (“Blue
Sky Laws”)
and state takeover laws, such filings as may be required under, and compliance
with the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
“HSR
Act”)
and any other applicable Antitrust Law (as defined herein), the rules and
regulations of Nasdaq, and the filing and recordation of the Certificate of
Merger as required by Delaware Law, (ii) as set forth in Section 2.5(b)
of the Company Disclosure Letter and (iii) where the failure to obtain such
consents, approvals, authorizations or permits, or to make such filings or
notifications, could not, individually or in the aggregate, be material to
the
Company or its subsidiaries or prevent or materially delay consummation of
the
Transactions or otherwise prevent the Company from performing its obligations
under this Agreement (collectively, the “Required
Consents”).
2.6
Compliance
with Health Care Laws.
(a)
Neither the Company nor any of its subsidiaries has been the subject of any
investigation by a Governmental Entity as a result of or in connection with
the
Company’s or any of its subsidiaries’ research, development, clinical
activities, production or distribution activities related to the Company
Products.
(b)
The Company and each of its subsidiaries are in material compliance and, except
for any non-compliance that occurred prior to January 1, 2003 which,
individually or in the aggregate, would not reasonably be expected to have
a
Material Adverse Effect on the Company, have at all times been in material
compliance with all relevant federal and other Legal Requirements applicable
to
the Company and its subsidiaries, including the federal Anti-kickback and Fraud
and Abuse Prohibition Statutes (42 U.S.C. § 1320a-7b) and all
other Legal Requirements prohibiting false statements and improper remuneration
for purchasing products or services, the civil False Claims Act (31 U.S.C.
§§
3729 et
seq.),
the administrative False Claims Law (42 U.S.C. § 1320a-7b(a)), the Health
Insurance Portability and
9
Accountability
Act of 1996 (42 U.S.C. § 1301 et
seq.
and implementing regulations), the exclusion laws, SSA § 1128 (42 U.S.C.
1320a-7) and the regulations promulgated pursuant to such laws and regulations,
relating to the regulation of the Company and its subsidiaries (including the
pertinent requirements of Good Laboratory Practices, Good Clinical Practices,
Good Manufacturing Practices and the U.S. Food, Drug and Cosmetic Act and its
implementing regulations, including 21 CFR Parts 50, 54, 56, 58, 210, and
211 and the respective counterparts thereof promulgated by Governmental Entities
in countries outside the United States) (collectively, “Health
Care Laws”).
To its knowledge, the Company and each of its subsidiaries are in material
compliance and have at all times been in material compliance with all Health
Care Laws. Since January 1, 2003, neither the Company nor any of its
subsidiaries has received any written notice or communication and, to the
knowledge of the Company, prior to January 1, 2003, neither the Company nor
any of its subsidiaries received a written notice or communication, in each
case, from any Governmental Entity with respect to the Company regarding, and,
to the knowledge of the Company, there are no facts or circumstances that would
reasonably be expected to give rise to, any material violation of applicable
Health Care Laws or any other applicable Legal Requirement. To the knowledge
of
the Company, no change in the current conduct of the Company or its
subsidiaries, or their internal procedures or processes, is required in order
to
materially comply with Health Care Laws.
2.7
Permits.
The Company and each of its subsidiaries have obtained all federal, state,
county, local or foreign permits, authorizations, licenses, grants, variances
certifications, clearances, consents, franchises, exemptions, orders and
approvals (a) that are required by the Federal Food and Drug Administration
(the “FDA”),
any other Governmental Entity engaged in the regulation of the Company Research
Programs, Company Products or the Company’s or its subsidiaries’ manufacturing
and quality system or that are required by Health Care Laws or (b) that are
otherwise material to the Company and its subsidiaries (other than those
specified in Section 2.7(a)
above) and that are required for operating the Company or its subsidiaries
in
the manner currently conducted in any location in which they currently operate
(including those required to be obtained under Environmental and Safety Laws
(as
defined in Section 2.17(a))
(each, a “Company
Permit”
and collectively, the “Company
Permits”).
All such Company Permits are valid and in full force and effect. Section 2.7
of the Company Disclosure Letter lists all Company Permits. The Company and
its
subsidiaries are in compliance in all material respects with all covenants,
terms and conditions of such Company Permits. Neither the Company nor any of
its
subsidiaries has received any written notice or communication with respect
to
the Company from any Governmental Entity regarding, and, to the knowledge of
the
Company, there are no facts or circumstances that could give rise to,
(i) any violation of any Company Permit or (ii) any revocation,
non-renewal, withdrawal, suspension, cancellation, limitation, termination
or
adverse modification of any Company Permit. No such Company Permit will be
terminated or impaired, or will become terminable, in whole or in part, as
a
result of the consummation of the Transactions.
2.8
FDA;
Global Regulation Compliance; Company Products and Company Research
Programs.
(a)
The operation of the Company and the operation of its subsidiaries, including
the research, manufacture, import, export, testing, development, processing,
packaging, labeling, storage and distribution of all Company Products, is in
material compliance and, except for non-compliance prior to January 1, 2003
which, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect, have at all times been in material compliance
with all applicable Health Care Laws and other applicable Legal Requirements,
including to the extent applicable (1) those administered by the FDA and
(2) those administered by Governmental Entities in countries outside the
United States (including requirements for the manufacture of Company Products
for administration in human subjects). To the Company’s knowledge, the operation
of the Company and the operation of its subsidiaries are in material compliance
and have at all times been in material compliance with all applicable Health
Care Laws and other applicable Legal Requirements, including to the extent
applicable (1) those administered by the FDA and (2) those
administered by Governmental Entities in countries outside the United States
(including requirements for the manufacture of Company Products for
administration in human subjects). There is no pending or, to the knowledge
of
the Company, threatened Action in respect of the Company or Company Products
by
the FDA or any other Governmental Entity which has jurisdiction over the Company
Products
10
or
the operations, properties or processes of the Company or the Company’s
subsidiaries, or, to the knowledge of the Company, in respect of any third
person’s activities on behalf of the Company or its subsidiaries (excluding
Parent and Parent’s subsidiaries). The Company has no knowledge of any facts or
circumstances that are likely to give rise to any such Action.
(b)
(A) Except for non-compliance prior to January 1, 2003 which, individually
or in the aggregate, would not reasonably be expected to have a Material Adverse
Effect on the Company, and (B) at all times to the Company’s knowledge,
neither the Company nor any of its subsidiaries has had any Company owned or
leased manufacturing site (nor, to the knowledge of the Company, has any third
person (other than Parent and Parent’s subsidiaries) had any manufacturing site
that produces Company Products) subject to a Governmental Entity (including
FDA)
shutdown or import or export prohibition, nor received any FDA Form 483 notice
or similar notification from a Governmental Entity, “warning letters,” “untitled
letter” or, to the knowledge of the Company, requests or requirements to make
changes to the operations of the Company, a Company Research Program or the
Company Products that have not been complied with and, if not complied with,
would reasonably be expected to result in a material effect that is adverse
to
the Company’s or any of its subsidiaries’ ability to continue with the planned
activities at that manufacturing site, and, to the knowledge of the Company,
neither the FDA nor any Governmental Entity is considering such action. To
the
knowledge of the Company, no vigilance report or adverse event report is under
investigation by any Governmental Entity with respect to any Company Products,
the Company or its subsidiaries.
(c)
All activities (including, without limitation, clinical trials and any
studies, tests, and other preclinical activities the results of which have
been or will be submitted to a Governmental Entity (such as the FDA or its
counterparts worldwide), but excluding clinical trials conducted or being
conducted by Parent or Parent’s subsidiaries) conducted by the Company in
connection with any Company Product or Company Research Program, and, to the
Company’s knowledge, all such activities conducted by third persons on behalf of
the Company, which activities are required or purported to be conducted under
statutory or regulatory “good practices” applicable to biopharmaceutical
companies (e.g.,
Good
Laboratory Practices, Good Clinical Practices and Good Manufacturing Practices),
have been conducted in compliance in all material respects with the required
experimental protocols required by applicable Institutional Review Boards,
applicable Health Care Laws, and other applicable Legal
Requirements.
(d)
Neither the Company nor any of its subsidiaries has received any notices,
correspondence or other communication in respect of the Company, any subsidiary,
or any Company Product from the FDA or any other Governmental Entity requiring
the termination or suspension of any clinical trials of any Company Product,
or
any clinical trials conducted by, or on behalf of, the Company or any of its
subsidiaries and, to the knowledge of the Company, neither the FDA nor any
other
Governmental Entity is considering such action. Neither the Company nor any
of
its subsidiaries has received notification from a Governmental Entity of the
rejection of data obtained from any clinical trials conducted by, or at the
request of, the Company with respect to any Company Products, which data was
submitted to the Governmental Entity and which was necessary to obtain
regulatory approval of a particular Company Product or to move such Company
Product to the next phase of clinical development.
(e)
The manufacture of the Company Products by or, to the knowledge of the Company,
on behalf of, the Company or any of its subsidiaries (other than by Parent
or
Parent’s subsidiaries) is being conducted in compliance in all material respects
with all applicable Health Care Laws and other applicable Legal Requirements,
including the FDA’s Good Manufacturing Practices at 21 CFR §§210-211 and
applicable guidelines for products sold or used for clinical trials in the
United States, and the respective counterparts thereof promulgated by
Governmental Entities in countries outside the United States.
(f)
Neither the Company nor any of its subsidiaries is the subject of any pending
or, to the knowledge of the Company, threatened investigation in respect of
the
Company by the FDA pursuant to its “Fraud, Untrue Statements of Material Facts,
Bribery, and Illegal Gratuities” Final Policy set forth in 56 Fed. Reg. 46191
(September 10, 1991) and any amendments thereto. Neither the Company nor any
of
its subsidiaries has
11
committed
any act, made any statement, or failed to make any statement, in each case
in
respect of the Company or a subsidiary and that would provide a basis for the
FDA to invoke its policy with respect to “Fraud, Untrue Statements of Material
Facts, Bribery and Illegal Gratuities” and any amendments thereto. Neither the
Company nor any of its subsidiaries nor any of their respective officers or,
to
the knowledge of the Company after reasonable inquiry by the Company of its
Employees (other than Consultants) on or about the date of hire for each such
Employee, its Employees (other than Consultants) has been convicted of any
crime
or engaged in any conduct that could result in a debarment or exclusion
(i) under 21 U.S.C. Section 335a, or (ii) similar applicable
Legal Requirement. The Company and its subsidiaries have implemented
reasonable practices (consistent with prevailing industry standards) to
determine whether any of its Employees (other than Consultants who are not
Significant Consultants) have been convicted of any crime or engaged in any
conduct that could result in a debarment or exclusion (i) under 21 U.S.C.
Section 335a, or (ii) similar applicable Legal Requirement. To
the knowledge of the Company, no debarment or exclusionary claims, actions,
proceedings or investigations in respect of the Company or any of its
subsidiaries is pending or threatened against the Company, any of its
subsidiaries or any of their respective officers, employees or agents. For
purposes of this Agreement, a “Significant
Consultant”
is a Consultant (as defined in Section 2.13(a)(iv))
who (i) has responsibility for a function that is regulated by Health Care
Laws (as opposed to advising a regular Company employee who has such
responsibility) or (ii) devotes more than eighty (80) hours per
month for three or more months, in each case performing functions for the
Company or its subsidiaries.
(g)
The Company has delivered or made available to Parent true and complete copies
of all data, studies, results, and other information set forth in Section 2.8(g)
of the Company Disclosure Letter. Such information provided or made
available by the Company fairly represents all of the material ongoing research
and development of the Company Products and Company Research Programs (as
defined in Section 2.19), and, to the knowledge of the Company, there is no
scientific information, data or results in the Company’s possession or control
that have not been provided to Parent that a reasonable scientist would conclude
is necessary to accurately assess or value such program or project.
(h)
As of the date of this Agreement, the Company has in its control the amounts
of
each Company Product set forth in Section 2.8(g)
of the Company Disclosure Letter (including TNX 355, TNX 650, TNX 234, and
any other anti-CD4 product), in the form described therein (whether filled
containers, drug product, bulk drug substance or otherwise) (“Product
Inventory”).
All such Product Inventory has stability sufficient (and, where applicable,
approved by applicable Governmental Entities) such that it will not expire
prior
to use in the study or research for which it was manufactured, and all such
Product Inventory has been manufactured and stored in accordance with Good
Manufacturing Practices and applicable Health Care Laws.
(i)
Where data with respect to a particular Company Product or a product
candidate being studied in a Company Research Program has been provided to
Parent (a) the underlying Company Product or product candidate is in
Company’s possession and control as of the date hereof, along with any cell
lines, reagents or other materials necessary to produce that Company Product
or
product candidate in its current form, and (b) the Company has in its
possession and control the reagents and other materials required to reproduce
the experiments that generated the data provided to Parent, except to the extent
such reagents or other materials are readily commercially available and are
identified as such.
2.9
SEC
Filings; Financial Statements.
(a)
Since January 1, 2004, the Company has filed or furnished each form,
report, document, schedule, registration statement and definitive proxy
statement with the SEC required to be filed or furnished by the Company with
the
SEC under the Securities Act of 1933, as amended (the “Securities
Act”)
or the Exchange Act, as then in effect (the “Company
SEC Reports”).
The Company SEC Reports (i) were filed or furnished on a timely basis,
(ii) were prepared in accordance with the requirements of the Securities
Act or the Exchange Act and the rules and regulations of the SEC then in effect,
as the case may be, and (iii) did not at the time they were filed or
furnished (and if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such amended or superseding filing) contain
any
untrue statement of a
12
material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. None of the Company’s subsidiaries is
required to file or furnish any reports or other documents with the SEC.
(b)
Each set of consolidated financial statements (including, in each case, any
related notes thereto) contained in the Company SEC Reports (the “Financial
Statements”)
(including any Company SEC Report filed after the date of this Agreement):
(i) complied and will comply as to form in all material respects with the
published rules and regulations of the SEC with respect thereto in effect at
the
time of such filing; (ii) was and will be prepared in accordance with
United States generally accepted accounting principles (“GAAP”)
applied on a consistent basis throughout the periods involved (except as may
be
indicated in the notes thereto or, in the case of unaudited statements, may
not
contain footnotes as permitted by Form 10-Q or Form 8-K) and fairly
presented and will fairly present in all material respects the consolidated
financial position of the Company and its consolidated subsidiaries at the
respective dates thereof and the consolidated results of the Company’s and its
subsidiaries’ operations and cash flows for the periods indicated. Except as
reflected in the Financial Statements, neither the Company nor any of its
subsidiaries is a party to any material off-balance sheet arrangement (as
defined in Item 303 of Regulation S-K promulgated under the Securities
Act (“Regulation S-K”)).
All reserves that are set forth in or reflected in the Interim Balance Sheet
(as
defined below) have been established in accordance with GAAP consistently
applied. At June 30, 2006 (the “Interim
Balance Sheet Date”),
there were no material loss contingencies (as such term is used in Statement
of
Financial Accounting Standards No. 5 (“Statement
No. 5”)
issued by the Financial Accounting Standards Board in March 1975) that are
not
adequately provided for in the balance sheet as of the Interim Balance Sheet
Date (the “Interim
Balance Sheet”)
as required by Statement No. 5. The Company has not had any dispute with
any of its auditors regarding accounting matters or policies during any of
its
past three full fiscal years or during the current fiscal year-to-date. The
books and records of the Company and each of its subsidiaries have been, and
are
being maintained in all material respects in accordance with applicable legal
and accounting requirements.
(c)
To the Company’s knowledge, no fact, event or circumstance currently exists that
will prevent any material amount of the cash, investments or securities
represented by the line items “Cash and cash equivalents” and “Short-term
investments” on the face of the Company’s Condensed Consolidated Balance Sheet
included in the Company’s Quarterly Report on Form 10-Q for the period ended
June 30, 2006 (collectively, the “Closing
Cash Items”)
from being available as cash in the United States and the repatriation to the
Company of any such cash held outside of the United States will not result
in
the imposition of any material United States or foreign Tax Liability.
(d)
Section 2.9(d)
of the Company Disclosure Letter sets forth the Company’s forecasted expenses
for Tanox West for the Company’s fiscal year 2006 as of the date hereof (the
“Forecast”).
The Company prepared the Forecast in good faith.
(e)
The Company has previously furnished to Parent a complete and correct copy
of
any amendments or modifications, which have not yet been filed with the SEC
but
which are required to be filed, to agreements, documents or other instruments
which previously had been filed by the Company with the SEC pursuant to the
Securities Act or the Exchange Act.
(f)
The Company has established and maintains “disclosure controls and procedures”
(as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange
Act) that are reasonably designed to ensure that material information (both
financial and non-financial) relating to the Company and its subsidiaries
required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the rules and forms of the SEC, and that such
information is accumulated and communicated to the Company’s principal executive
officer and principal financial officer, or persons performing similar
functions, as appropriate to allow timely decisions regarding required
disclosure and to make the certifications of the principal executive officer
and
the principal financial officer of the Company required by Section 302 of
the Xxxxxxxx-Xxxxx Act of 2002 (“SOX”)
with respect to such reports. For purposes of this Agreement, “principal
executive officer” and “principal financial officer” shall have the meanings
given to such terms in SOX.
13
(g)
The Company and each of its subsidiaries has established and maintains, adheres
to and enforces a system of internal control over financial reporting (as
defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange
Act) which is effective in providing reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
in accordance with GAAP and SEC rules and regulations (including the Financial
Statements), including policies and procedures that (i) require the
maintenance of records that in reasonable detail accurately and fairly reflect
the transactions and dispositions of the assets of the Company and its
subsidiaries, (ii) provide reasonable assurance that material information
relating to the Company and its subsidiaries is promptly made known to the
officers responsible for establishing and maintaining the system of internal
controls; (iii) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with
GAAP, and that receipts and expenditures of the Company and its subsidiaries
are
being made only in accordance with appropriate authorizations of management
and
the Board; (iv) provide reasonable assurance that access to assets is
permitted only in accordance with management’s general or specific
authorization; (v) provide reasonable assurance that the reporting of
assets is compared with existing assets at regular intervals and appropriate
action is taken with respect to any differences; (vi) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of the assets of the Company and its subsidiaries; and
(vii) provide reasonable assurance that any “significant deficiencies” or
“material weaknesses” (as such terms are defined in Auditing Standard
No. 2, promulgated by the Public Company Accounting Oversight Board,
(“AS-2”)
in the design or operation of internal controls which are reasonably likely
to
materially and adversely affect the ability to record, process, summarize and
report financial information, and any fraud, whether or not material, that
involves the Company’s management or other Employees (other than Consultants who
are not Significant Consultants) who have a role in the preparation of financial
statements or the internal controls used by the Company and its subsidiaries,
are adequately and promptly disclosed to the Company’s independent auditors and
the audit committee of the Board. There (i) are no significant deficiencies
or material weaknesses in the system of internal control over financial
reporting used by the Company and its subsidiaries, (ii) is no fraud,
whether or not material, that involves the Company’s management or other
Employees (other than Consultants who are not Significant Consultants) who
have
a role in the preparation of financial statements or the internal control over
financial reporting used by the Company and its subsidiaries or (iii) is no
claim or allegation regarding any of the foregoing. Section 2.9(g)
of the Company Disclosure Letter summarizes each “control deficiency” (as
defined in AS-2) identified by the Company’s independent auditors since
January 1, 2004 through the date of this Agreement and not disclosed in the
Company SEC Reports.
(h)
Each of the principal executive officer of the Company and the principal
financial officer of the Company (or each former principal executive officer
of
the Company and each former principal financial officer of the Company, as
applicable) has made all certifications required by Sections 302 and 906 of
SOX and the rules and regulations promulgated thereunder with respect to the
Company SEC Reports. The Company’s management has completed an assessment of the
effectiveness of the Company’s system of internal control over financial
reporting in compliance with the requirements of Section 404 of SOX for the
fiscal year ended December 31, 2005, and such assessment concluded that
such controls were effective and the Company’s independent registered accountant
has issued (and not subsequently withdrawn or qualified) and attestation report
concluding the Company maintained effective internal control over financial
reporting as of December 31, 2005. Since December 31, 2005 and through
the date hereof, to the knowledge of the Company, no events, facts or
circumstances have occurred, or exist, such that management would not be able
to
complete its assessment of the effectiveness of the Company’s system of internal
control over financial reporting in compliance with the requirements of
Section 404 of SOX for the fiscal year ended December 31, 2006, and
conclude, after such assessment, that such controls were effective.
(i)
To the Company’s knowledge, Ernst & Young LLP, which has expressed its
opinion with respect to the financial statements of the Company and its
subsidiaries as of December 31, 2005, December 31, 2004 and
December 31, 2003 and for each of the fiscal years in the three fiscal year
period ended December 31, 2005 included in the Company SEC Reports
(including the related notes), is “independent” with respect to the Company and
each of its subsidiaries within the meaning of Regulation S-X since the
appointment of
14
Ernst &
Young LLP in that capacity. The Company is in compliance with the applicable
criteria for continued listing of the Company Common Stock on Nasdaq and has
not
since January 1, 2004 received any written notice from Nasdaq asserting any
non-compliance with such rules and regulations.
(j)
The Company has timely responded to all comment letters of the staff of the
SEC
relating to the Company SEC Reports, and the SEC has not advised the Company
that any final responses are inadequate, insufficient or otherwise
non-responsive. The Company has made available to Parent true, correct and
complete copies of all correspondence between the SEC, on the one hand, and
the
Company and any of its subsidiaries, on the other, since January 1, 2004,
including all SEC comment letters and responses to such comment letters by
or on
behalf of the Company. To the Company’s knowledge, none of the Company SEC
Reports is the subject of ongoing SEC review or outstanding SEC comment.
(k)
No attorney representing the Company or any of its subsidiaries, whether or
not
employed by the Company or any of its subsidiaries, or Employee has reported
to
the Board or any committee thereof or to any director or officer of the Company
evidence of a material violation of securities laws, breach of fiduciary duty,
fraudulent conduct (whether or not material) or similar violation by an Employee
or agent (while acting in that capacity).
2.10
No
Undisclosed Liabilities.
Neither the Company nor any of its subsidiaries has any liability, indebtedness,
obligation, deficiency, guaranty or endorsement of any type (whether absolute,
accrued, contingent, direct, indirect, or otherwise) (collectively,
“Liabilities”)
of a nature required to be disclosed on a balance sheet or in the related notes
to the consolidated financial statements prepared in accordance with GAAP and
which are, individually or in the aggregate with such other items, material
to
the business, assets, financial condition, results of operations or cash flows
of the Company and its subsidiaries taken as a whole, except
(i) Liabilities reflected or reserved in the Interim Balance Sheet,
(ii) Liabilities incurred since the Interim Balance Sheet Date in the
ordinary course of business consistent with past practices,
(iii) Liabilities incurred since the Interim Balance Sheet date which,
individually or in the aggregate, would not reasonably be expected to have
a
Material Adverse Effect on the Company, or (iii) Liabilities permitted
under Section 4.1
hereof or otherwise reasonably incurred in connection with the Company’s
performance of its obligations hereunder.
2.11
Absence
of Certain Changes or Events.
From the Interim Balance Sheet Date through the date hereof, there has not
been,
occurred or arisen: (a) any event or condition of any character that has
had or would be reasonably expected to have a Material Adverse Effect on the
Company; (b) any declaration, setting aside or payment of any dividend on,
or other distribution (whether in cash, stock or property) in respect of, any
of
the Company’s or any of its subsidiaries’ capital stock, or any purchase,
redemption or other acquisition by the Company of any of the Company’s capital
stock or any other securities of the Company or its subsidiaries or any options,
warrants, calls or rights to acquire any such shares or other securities, except
for repurchases from Employees following their termination pursuant to the
terms
of stock option or purchase agreements existing as of the Interim Balance Sheet
Date; (c) any split, combination or reclassification of any of the
Company’s or any of its subsidiaries’ capital stock; (d) any granting by
the Company or any of its subsidiaries of any increase in compensation or fringe
benefits to any Employee (other than Consultants who are not Significant
Consultants) or any payment by the Company or any of its subsidiaries of any
bonus or any entry by the Company or one of its subsidiaries into any Contract
(or amendment of an existing Contract) to grant or provide severance,
acceleration of vesting, termination pay or other similar benefits; (e) the
execution of any employment Contract or service Contract, the extension of
the
term of any existing employment Contract or service Contract with any Employee,
or any entry or other modification by the Company or any of its subsidiaries
of
any employment, severance, termination or indemnification Contract or any
Contract the benefits of which are contingent, or the terms of which are
materially altered, upon the occurrence of a transaction involving the Company
of the nature contemplated hereby; (f) entry by the Company or any of its
subsidiaries into (i) any licensing or other Contract providing for the
use, acquisition or disposition of any Intellectual Property (as defined in
Section 2.19
hereof) other than (A) licenses of commercially available third party
software applications for internal use by the Company or otherwise in the
Company’s ordinary course of business consistent with past practice and
(B) confidentiality agreements in the ordinary course of business
consistent with past practice, or (ii) any
15
amendment
or consent with respect to any material licensing or other Contract providing
for the use, acquisition or disposition of any Intellectual Property, other
than
confidentiality agreements in the ordinary course of business consistent with
past practice; (g) any change by the Company in its accounting methods,
principles or practices (including any change in depreciation or amortization
policies or rates or revenue recognition policies), except as required by
concurrent changes in GAAP; (h) any revaluation by the Company of any of
its assets, including writing off promissory notes or accounts receivable,
or
any sale of assets of the Company; (i) entry by the Company or any of its
subsidiaries into any Contract (other than the Voting Agreements) filed or
required to be filed by the Company with the SEC; (j) the incurrence,
creation or assumption of any material Encumbrance (other than a Permitted
Encumbrance) or any discharge of any material Encumbrance, any material
Liability for borrowed money or any material Liability or obligation as guaranty
or surety with respect to the obligations of others who are not wholly-owned
subsidiaries of the Company, (k) any purchase, offer to purchase, sale,
offer to sell, option to purchase or sell, agreement to transfer any interest
in, or any lease, right to use, sublease or other occupancy, of any Company
Real
Estate (as defined in Section 2.15(a))
by the Company or its subsidiaries; and (l) any announcement of or any
agreement by the Company, any of its subsidiaries, or any Employee on behalf
of
the Company, to do any of the things described in the preceding clauses (a)
through (k) (other than negotiations or agreements with Parent and Merger
Sub regarding the Transactions).
2.12
Absence
of Litigation.
Except as would not result in a material Liability, there are no claims,
actions, charges, investigations or other proceedings pending or, to the
knowledge of the Company, threatened against the Company or any of its
subsidiaries, or any of their respective properties or any of the executive
officers or directors of the Company or any of its subsidiaries before any
Governmental Entity or otherwise (each, an “Action”).
No investigation or review by any Governmental Entity is pending or, to the
knowledge of the Company, threatened against the Company or any of its
subsidiaries, or any of their respective properties or any of the executive
officers or directors of the Company or any of its subsidiaries, nor has any
Governmental Entity indicated to the Company an intention to conduct the same.
The Company has provided or made available to Parent true, correct and complete
copies of all complaints regarding the litigation referred to in Section 2.12
of the Company Disclosure Letter and has made available to Parent true, correct
and complete copies of all pleadings, motions and non-privileged written
correspondence regarding the litigation referred to in Section 2.12
of the Company Disclosure Letter. There has not been since January 1, 2000,
nor are there currently any internal investigations being conducted by the
Company, the Board (or any committee thereof) or any third party at the request
of any of the foregoing concerning any financial, accounting, auditing, Tax,
conflict of interest, illegal activity, fraudulent or deceptive conduct or
other
misfeasance or malfeasance issues with respect to the Company or any of its
subsidiaries.
2.13
Employee
Benefit Plans.
(a)
Definitions.
Except as otherwise provided for herein, for purposes of this Agreement, the
following terms shall have the meanings set forth below:
(i)
“COBRA”
shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended and as codified in Section 4980B of the Code and Section 601
et. seq. of ERISA;
(ii)
“Code”
shall mean the Internal Revenue Code of 1986, as amended;
(iii)
“Company
Employee Plan”
shall mean any Employee Plan, including all International Employee Plans;
(iv)
“Consultant”
shall mean any current or former independent contractor or leased employee
who
is (i) a natural person or (ii) a staffing agency or other entity that
leases or otherwise supplies employees to third persons on a consulting,
contract or project basis;
(v)
“DOL”
shall mean the U.S. Department of Labor;
(vi)
“Employee”
shall mean any current or former or retired employee, officer, Consultant or
director of the Company or any ERISA Affiliate;
16
(vii)
“Employment
Agreement”
shall mean each management, employment, severance, change of control, retention,
consulting (with a Consultant), relocation, repatriation, expatriation, visas,
work permit or other agreement, contract or understanding, written or otherwise,
between the Company or any ERISA Affiliate and any Employee under which the
Company has current or future obligations;
(viii)
“Employee
Plan”
shall mean any plan, program, policy, practice, Contract or other arrangement,
providing for compensation, severance, termination pay, deferred compensation,
performance awards, bonuses, stock or stock-related awards or purchases, fringe
benefits, loans, or other employee benefits or remuneration of any kind, whether
written or unwritten, funded or unfunded, including each “employee benefit
plan,” within the meaning of Section 3(3) of ERISA which is or has been
maintained, contributed to, or required to be contributed to, by the Company
or
any ERISA Affiliate for the benefit of any Employee, and with respect to which
the Company or any ERISA Affiliate has or may have any Liability, including
all
International Employee Plans;
(ix)
“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended;
(x)
“ERISA
Affiliate”
shall mean any other person or entity under common control with the Company
within the meaning of Section 414(b), (c), (m) or (o) of the Code
and the regulations issued thereunder;
(xi)
“FMLA”
shall mean the Family and Medical Leave Act of 1993, as amended;
(xii)
International
Employee Plan”
shall mean each Employee Plan that has been adopted or maintained by the Company
or any ERISA Affiliate pursuant to the laws of any country outside the United
States, whether informally or formally, or with respect to which the Company
or
any ERISA Affiliate will or may have any Liability, for the benefit of Employees
who perform services outside the United States;
(xiii)
“IRS”
shall mean the U.S. Internal Revenue Service;
(xiv)
“Multiemployer
Plan”
shall mean any “Pension Plan” (as defined below) which is a “multiemployer
plan,” as defined in Section 3(37) of ERISA;
(xv)
“Pension
Plan”
shall mean each Company Employee Plan which is an “employee pension benefit
plan,” within the meaning of Section 3(2) of ERISA.
(b)
Schedule.
Section 2.13(b)
of the Company Disclosure Letter contains an accurate and complete list of
each
Company Employee Plan, and each Employment Agreement existing as of the date
of
this Agreement. Neither the Company nor any ERISA Affiliate has any plan or
commitment to establish any new Company Employee Plan or Employment Agreement,
to modify any Company Employee Plan or Employment Agreement (except to the
extent required by applicable Legal Requirements, in each case as previously
disclosed to Parent in writing, or as required by this Agreement), or to adopt
or enter into any Company Employee Plan or Employment Agreement.
(c)
Documents.
The Company has provided or made available to Parent correct and complete copies
of: (i) all material documents embodying each Company Employee Plan and
each Employment Agreement including all amendments thereto and all related
trust
documents; (ii) the most recent annual actuarial valuations and annual and
periodic accounting, if any, prepared for each Company Employee Plan;
(iii) the three (3) most recent annual reports (Form Series 5500 and
all schedules and financial statements attached thereto), if any, required
under
ERISA or the Code in connection with each Company Employee Plan; (iv) the
most recent summary plan description together with the summary(ies) of material
modifications thereto, if any, required under ERISA with respect to each Company
Employee Plan; (v) the most recent IRS determination or opinion letter
issued with respect to each Company Employee Plan, if applicable, and all
applications and correspondence to or from the IRS or the DOL with respect
to
any such application or letter; (vi) all communications material to any
Employee or Employees relating to any Company Employee Plan and any proposed
Company Employee Plans, in each case, relating to any amendments, terminations,
establishments, increases or decreases in benefits, acceleration of payments
or
vesting schedules or other
17
events
which would result in any material Liability to the Company; (vii) all
correspondence to or from any Governmental Entity relating to any Company
Employee Plan; (viii) all COBRA forms and related notices (or such forms
and notices as required under comparable law); (ix) the three (3) most
recent plan years discrimination tests for each Company Employee Plan, where
applicable; (x) all material written agreements and contracts relating to
each Company Employee Plan, including administrative service agreements and
group insurance contracts and group annuity contracts; and (xi) all
registration statements, annual reports (Form 11-K and all attachments
thereto, if applicable to be filed) and prospectuses prepared in connection
with
each Company Employee Plan, as applicable.
(d)
Employee
Plan Compliance.
Company and its ERISA Affiliates have performed, in all material respects,
all
obligations required to be performed by them under, are not in material default
or violation of, and neither Company nor its ERISA Affiliates have any knowledge
of any material default or violation by any other party to, any Company Employee
Plan, and each Company Employee Plan has been established and maintained in
all
material respects (i) in accordance with its terms and (ii) in
compliance with all applicable laws, statutes, orders, rules and regulations,
including but not limited to ERISA and the Code. Any Company Employee Plan
intended to be qualified under Section 401(a) of the Code and each trust
intended to qualify under Section 501(a) of the Code (i) has either
applied for, prior to the expiration of the requisite period under applicable
U.S. Department of the Treasury (“Treasury”)
Regulations or IRS pronouncements, or obtained a favorable determination,
notification, advisory and/or opinion letter, as applicable, as to its qualified
status from the IRS, and (ii) incorporates or has been amended to
incorporate all provisions required to comply with the Tax Reform Act of 1986
and subsequent legislation. For each Company Employee Plan that is intended
to
be qualified under Section 401(a) of the Code, there has been no event,
condition or circumstance that has adversely affected or would reasonably be
expected to adversely affect the qualified status of such Company Employee
Plan.
No “prohibited transaction,” within the meaning of Section 4975 of the Code
or Sections 406 and 407 of ERISA, and not otherwise exempt under
Section 408 of ERISA, has occurred with respect to any Company Employee
Plan. There are no Actions pending or, to Company’s or any ERISA Affiliates’
knowledge, threatened (other than routine claims for benefits) against any
Company Employee Plan or against the assets of any Company Employee Plan. Each
Company Employee Plan can be amended, terminated or otherwise discontinued
after
the Effective Time in accordance with its terms, and the act of amending,
terminating or discontinuing any Company Employee Plan will not result in any
Liability to Parent, Company or any of its ERISA Affiliates (other than routine
administration expenses incurred with respect to any such amendment, termination
or discontinuance). There are no audits, inquiries or proceedings pending or
to
Company’s or any of its ERISA Affiliates’ knowledge threatened by the IRS, DOL,
or any other Governmental Entity with respect to any Company Employee Plan.
Neither Company nor any ERISA Affiliate is subject to any penalty or Tax with
respect to any Company Employee Plan under Section 502(i) of ERISA or
Sections 4975 through 4980 of the Code. The Company and its ERISA
Affiliates have, in all material respects, each timely made all contributions
and other payments required by and due under the terms of each Company Employee
Plan.
(e)
No
Pension or Funded Welfare Plans.
Neither the Company nor any ERISA Affiliate has ever maintained, established,
sponsored, participated in, or contributed to, or could have any obligation
to,
any (i) Pension Plan which is subject to Title IV of ERISA or
Section 412 of the Code, or (ii) “funded welfare plan” within the
meaning of Section 419 of the Code. Neither the Company nor any Company
subsidiary or ERISA Affiliate has incurred or expects to incur any Liability
under Title IV of ERISA or Section 412 of the Code. No Company
Employee Plan provides health benefits that are not fully insured through an
insurance contract.
(f)
Collectively
Bargained, Multiemployer and Multiple Employer Plans.
At no time has the Company or any ERISA Affiliate contributed to or been
obligated to contribute to any Multiemployer Plan. Neither the Company, nor
any
affiliate has at any time ever maintained, established, sponsored, participated
in, or contributed to any multiple employer plan, or to any plan described
in
Section 413 of the Code.
(g)
Deferred
Compensation Compliance.
The Company does not have a Company Benefit Plan that is a “nonqualified
deferred compensation plan” (as defined in Section 409A(d)(1) of the Code).
18
(h)
Executive
Loans.
Neither the Company nor any ERISA Affiliate has violated the provisions of
Section 402 of SOX applicable to loans to key executives, and the execution
of this Agreement and the consummation of the transactions contemplated hereby
will not, to the knowledge of the Company, cause such a violation of such
provisions of Section 402 of SOX.
(i)
Fair
Market Value.
No Company Stock Option or other right to acquire Company Common Stock or other
equity of the Company (i) has an exercise price that has been or may be
determined to be less than the fair market value of the underlying equity as
of
the date such Company Stock Option or other equity right was granted,
(ii) has any feature for the deferral of compensation other than the
deferral of recognition of income until the later of exercise or disposition
of
such Company Stock Options or other equity rights, or (iii) has been
granted after December 31, 2004, with respect to any class of stock of the
Company that is not “service recipient stock” (within the meaning of applicable
regulations under Section 409A).
(j)
Plan
Contributions.
With respect to the Company Employee Plans, there are no benefit or funding
obligations for which contributions have not been made or properly accrued
to
the extent required by GAAP or will not be offset by insurance. The assets
of
each Company Employee Plan which is fully funded are reported at their fair
market value in the books and records of such Company Plan, the applicable
related trust as indicated on the Financial Statements and, if applicable,
on
Forms 5500, and/or the Company and its subsidiaries.
(k)
No
Post-Employment Obligations.
No Company Employee Plan provides, or reflects or represents any Liability
to
provide retiree insurance or other retiree benefits to any person for any
reason, except as may be required by COBRA or other applicable statute, and
the
Company has never represented, promised or contracted (whether in oral or
written form) to any Employee (either individually or to Employees as a group)
or any other person that such Employee(s) or other person would be provided
with
retiree insurance or other benefits, except to the extent required by applicable
Legal Requirements.
(l)
Effect
of Transaction.
(i)
The execution of this Agreement and the consummation of the Transactions or
any
termination of employment or service in connection therewith will not (either
alone or upon the occurrence of any additional or subsequent events) constitute
an event under any Company Employee Plan, Employment Agreement, trust or loan
that will or may result in any payment (whether of severance pay or otherwise),
acceleration, forgiveness of indebtedness, vesting, distribution, increase
in
benefits or obligation to fund benefits with respect to any Employee other
than
accrued payments.
(ii)
No payment or benefit could give rise, directly or indirectly, to the payment
of
any amount that could reasonably be expected to be (i) non-deductible to
Company under Section 280G of the Code, (ii) characterized as a
“parachute payment” within the meaning of Section 280G of the Code or
(iii) subject to the excise Tax under Section 4999 of the Code. The
Company is not a party to or bound by any Tax indemnity agreement or any other
agreement that will require Parent or the Surviving Corporation to “gross-up” or
otherwise compensate any Employee because of the imposition of any excise Tax.
Section 2.13(l)(ii)
of the Company Disclosure Letter lists as of the date of this Agreement each
person who the Company reasonably believes is, with respect to the Company,
any
Company subsidiary and/or any ERISA affiliate, a “disqualified individual”
(within the meaning of Section 280G of the Code and the regulations
promulgated thereunder).
(m)
Employment
Matters.
The Company: (i) is in compliance in all material respects with all
applicable foreign, federal, state and local laws, rules, regulations and
ordinances respecting employment, employment practices, terms and conditions
of
employment, discrimination in employment, worker classification, wages,
benefits, hours, working conditions and occupational safety and health and
employment practices, in each case, with respect to Employees; (ii) has, in
all material respects, withheld and reported all amounts required by Legal
Requirements or by agreement to be withheld and reported with respect to wages,
benefits, salaries and other payments to Employees (excluding Consultants);
(iii) is not liable for any material arrears of wages, salaries,
commissions, bonuses, benefits or other compensation due or any Taxes or any
penalty for
19
failure
to comply with any of the foregoing; and (iv) is not liable for any payment
to any trust or other fund governed by or maintained by or on behalf of any
governmental authority, with respect to unemployment compensation benefits,
social security or other retiree benefits, or other benefits or obligations
for
Employees (excluding Consultants) (other than routine payments to be made in
the
normal course of business and consistent with past practice). There are no
pending or reasonably anticipated or, to the knowledge of the Company,
threatened Actions, audits or administrative matters against the Company or
any
ERISA Affiliate relating to any Employee, Employee Agreement, or Company
Employee Plan, or under any workers’ compensation policy or long-term disability
policy. The employment or services of each of the Employees located in the
United States is terminable at the will of the Company or its ERISA Affiliates
and any such termination would result in no Liability to the Company or to
any
ERISA Affiliate. Neither the Company nor any ERISA Affiliate has direct or
indirect material Liability with respect to any misclassification of any person
as an independent contractor rather than as an employee, or with respect to
any
worker leased from another employer.
(n)
Labor.
No work stoppage or labor strike against the Company is pending or reasonably
anticipated or, to the knowledge of the Company, threatened. The Company does
not know of any current activities or proceedings of any labor union to organize
any Employees (excluding Consultants) or of any such activities or proceedings
within the preceding three (3) years. There are no Actions, audits,
administrative matters, labor disputes or grievances pending, or, to the
knowledge of the Company, threatened or reasonably anticipated relating to
any
wage, benefit, medical or family leave, labor, safety or discrimination matters
involving any Employee, including charges of wage and/or hour violations, unfair
labor practices, discrimination, or wrongful termination complaints. Neither
the
Company nor any ERISA Affiliate is party to a current conciliation agreement,
consent decree, or other agreement or order with any federal, state, or local
agency or Governmental Entity with regard to employment practices. Neither
the
Company nor any ERISA Affiliate has engaged in any unfair labor practices within
the meaning of the National Labor Relations Act. The Company is not presently,
nor has it been in the past, a party to, or bound by, any collective bargaining
agreement or union contract with respect to Employees, no collective bargaining
agreement is being negotiated by the Company or any of its subsidiaries and
neither the Company or any of its subsidiaries has any duty to bargain with
any
labor organization.
(o)
International
Employee Plan.
Each International Employee Plan has been established, maintained and
administered in compliance with its terms and conditions and with the
requirements prescribed by any and all statutory or regulatory laws that are
applicable to such International Employee Plan. Furthermore, no International
Employee Plan has unfunded liabilities, that as of the Effective Time, will
not
be offset by insurance or fully accrued. Except as required by applicable Legal
Requirements, no condition exists that would prevent the Company or Parent
from
terminating or amending any International Employee Plan at any time for any
reason without Liability to the Company or its affiliates (other than ordinary
administration expenses or routine claims for benefits). Each International
Employee Plan has obtained from the Governmental Entity having jurisdiction
with
respect to such International Employee Plan any required determinations, if
any,
that such International Employee Plan is in compliance with the laws of the
relevant jurisdiction if such determinations are required in order to give
effect to such International Employee Plan.
(p)
WARN
Act.
The Company and any ERISA Affiliate have complied with the Workers Adjustment
and Retraining Notification Act of 1988, as amended (“WARN
Act”)
and all similar state or local laws, including applicable provisions of state
or
local law. All Liabilities relating to the employment, termination or employee
benefits of any former Employees (excluding Consultants) previously terminated
by the Company or an affiliate including all termination pay, severance pay
or
other amounts in connection with the WARN Act and all similar state laws, have
been paid, and no terminations prior to the Closing Date shall result in
unsatisfied Liability under WARN or any similar state or local law.
(q)
Employee
Information.
The Company and each of its subsidiaries has made available to Parent a true,
correct and complete list of the names of all current officers, directors,
and
employees of the Company and each subsidiary showing each such person’s name,
position, date of hire, work location, and each such person’s annualized salary
and target commission (as applicable), status as exempt/non-exempt, status
as
20
full-/part-time,
target bonus(es) and fringe benefits for the current fiscal year and the most
recently completed fiscal year. The Company and each of its subsidiaries has
made available to Parent the following additional information for each of its
current international employees: city/country of employment; citizenship; date
of hire; manager’s name and work location; date of birth; any material special
circumstances; and whether the employee was recruited from a previous employer.
(r)
True
and Correct Copies.
In addition to the documents referred to in Section 2.13(c)
above, the Company and each of its subsidiaries has made available to Parent
true, correct and complete copies of each of the following: (i) all
affirmative action plans; (ii) all forms of offer letters currently in use;
(iii) all forms of employment agreements and severance agreements for
current Employees (excluding Consultants); (iv) all forms of consultant
and/or independent contractor agreements currently in effect, (v) all forms
of confidentiality, non-disclosure, non-solicitation, non-competition or
inventions agreements between Employees and the Company or any of its
subsidiaries currently in use for such matters (and a true, correct and complete
list of current Employees not subject thereto); (vi) any agreements that
deviate in any material respect from forms described in (i) through
(v) above; (vi) all current management organization chart(s);
(vii) all current, in force agreements and/or insurance policies providing
for the indemnification of any officers or directors of the Company or any
of
its subsidiaries; (viii) summary of the Company’s current standard
severance policy and any policy in existence or effect during the immediately
preceding twelve (12) months; (ix) summary of outstanding Liability
for termination payments and benefits to Employees; and (x) a schedule of
bonus commitments made to Employees.
2.14
Proxy
Statement.
The proxy statement to be sent to the stockholders of the Company in connection
with the Stockholders’ Meeting (as hereinafter defined) (such proxy statement,
as amended or supplemented, being referred to herein as the “Proxy
Statement”),
shall not, at the date the Proxy Statement (or any amendment or supplement
thereto) is first mailed to stockholders of the Company, at the time of the
Stockholders’ Meeting and at the Effective Time, contain any statement which, at
such time and in light of the circumstances under which it was made, is false
or
misleading with respect to any material fact, or which omits to state any
material fact necessary in order to make the statements therein not false or
misleading or necessary to correct any statement in any earlier communication
with respect to the solicitation of proxies, if any, for the Stockholders’
Meeting which shall have become false or misleading. Notwithstanding the
foregoing, the Company makes no representation or warranty with respect to
any
information supplied by Parent, Merger Sub or any of Parent’s or Merger Sub’s
representatives in writing for inclusion in the Proxy Statement. The Proxy
Statement shall comply in all material respects as to form with the requirements
of the Exchange Act and the rules and regulations thereunder.
2.15
Title
to Property.
(a)
Section 2.15(a)
of the Company Disclosure Letter sets forth a complete and accurate list as
of
the date of this Agreement of all real property owned by the Company or any
of
its subsidiaries, or in which the Company or any of its subsidiaries has an
ownership interest, including, without limitation, any rights, contracts or
options to acquire real property other than the Leased Real Estate defined
below
(the “Owned
Real Estate”).
(b)
Section 2.15(b)
of the Company Disclosure Letter sets forth a list of all real property
currently leased, subleased by or from the Company or any of its subsidiaries
or
otherwise used or occupied by the Company or any of its subsidiaries (the
“Leased
Real Estate”
and together with the Owned Real Estate, the “Company
Real Estate”),
the name of the lessor, sublessor, master lessor and/or lessee, the date and
term of the lease, sublease or other occupancy right and each amendment thereto,
the aggregate annual rental payable thereunder, the size of the Leased Real
Estate and a description of renewal options contained in such lease. The Company
has provided or made available to Parent true, correct and complete copies
of
all leases, lease guaranties, subleases, agreements for the leasing, use or
occupancy of, or otherwise granting a right in or relating to the Leased Real
Estate, including all amendments, terminations and modifications thereof (the
“Real
Estate Leases”).
All such Real Estate Leases are in full force and effect, are valid and
enforceable in accordance with their respective terms, subject to bankruptcy,
insolvency, reorganization,
21
moratorium
and similar state and federal laws affecting the rights of creditors generally
and equitable limitations, and there is not, under any such leases, any existing
material breach, default or event of default (or event which with notice or
lapse of time, or both, would constitute a material default) of the Company
or
any of its subsidiaries, or to the Company’s knowledge, of any other party
thereto.
(c)
To the knowledge of the Company, neither the operations of the Company nor
any
of its subsidiaries on the Company Real Estate nor such Company Real Estate,
violate in any material respect any Legal Requirement or Company Permit relating
to the particular property or such operations. The Company or its subsidiaries
currently occupies all of the Company Real Estate for the operation of its
business and there are no other parties occupying, or with a right to occupy,
the Company Real Estate. Section 2.15(c)(i)
of
the Company Disclosure Letter sets forth a list of all leasehold improvements
to
real property and improvements and other capital equipment used or held for
use
by the Company and its subsidiaries in their business operations as of
September 30, 2006. Such list includes pertinent information related to
property, plant and equipment (including leasehold improvements) such as asset
identification, location, acquisition date, original cost, accumulated
depreciation and net book value.
(d)
To the knowledge of the Company, the covenants, conditions, rights-of-way,
easements and similar restrictions affecting all or any portion of the Company
Real Estate (the “Exceptions
to Title”)
do not, in each case, materially impair the ability to use any such Company
Real
Estate in the operation of the businesses of the Company or its subsidiaries
as
presently conducted, and no material default or breach exists thereunder by
the
Company or any of its subsidiaries.
(e)
To the knowledge of the Company, there are no requirements (including any Legal
Requirements) imposed on the Owned Real Estate that require the Company or
any
of its subsidiaries to construct or pay for the cost of construction of any
off-site improvements or pay any other impact fee.
(f)
Neither the Company, nor any subsidiary of the Company has received any written
notice from any insurance company of any material defects or inadequacies in
any
Company Real Estate or any part thereof which could materially and adversely
affect the insurability of such property or the premiums for the insurance
thereof, nor has any written notice been given by any insurer of any such
property requesting the performance of any repairs, alterations or other work
with which substantial compliance has not been made.
(g)
The Company has received no written notice with respect to pending, and, to
the
knowledge of the Company, there are no threatened, condemnation or eminent
domain actions or proceedings, or any special assessments or other activities
of
any public or quasi-public body that would materially adversely affect the
Company Real Estate for use in the operations of its business as currently
conducted.
(h)
The Company and each of its subsidiaries has good and indefeasible title to
all
Owned Real Estate, or, in the case of leased properties and assets, valid
leasehold interests in or other valid contractual rights of use with respect
to,
all of its other properties and assets, used or held for use in its business,
free and clear of all Encumbrances except for the Exceptions to Title and
indebtedness that is reflected on the Interim Balance Sheet and
(i) Encumbrances for Taxes (as herein defined) not yet due and payable,
(ii) statutory Encumbrances which arise in the ordinary course of business,
are not material in amount and do not materially impair the Company’s or its
subsidiaries’ ownership or use of such properties and assets, (iii) liens
securing indebtedness that are reflected on the Interim Balance Sheet or
(iv) with respect to Owned Real Estate, minor imperfections of title, if
any, and land use laws which do not materially impair the use, occupancy or
value of the Company’s or its subsidiaries’ ownership of the Owned Real Estate
for its current purpose (each of (i) through (iv), a “Permitted
Encumbrance”).
(i)
To the knowledge of the Company, all the Company Real Estate and material
equipment of the Company and its subsidiaries, are in good operating condition
and repair, in all material respects (subject to ordinary wear and tear), free
from material defects which would adversely affect their use in the conduct
of
the business as currently conducted, and are otherwise suitable for the conduct
of business as currently conducted.
22
2.16
Taxes.
(a)
Definition
of Taxes.
For the purposes of this Agreement, “Tax”
or “Taxes,”
means (i) any and all federal, state, local and foreign taxes, assessments
and other governmental charges, duties and impositions, including taxes based
upon or measured by gross receipts, income, profits, sales, use and occupation,
and value added, ad valorem, transfer, franchise, withholding, payroll,
recapture, employment, excise and property taxes, together with all interest,
penalties and additions imposed with respect to such amounts; (ii) any
Liability for the payment of any amounts of the type described in
clause (i) as a result of being a member of an affiliated, consolidated,
combined or unitary group for any period; and (iii) any Liability for the
payment of any amounts of the type described in clause (i) or (ii) as
a result of any express or implied obligation to indemnify any other person
or
as a result of any obligations under any agreements or arrangements with any
other person with respect to such amounts and including any Liability for taxes
of a predecessor entity.
(b)
Tax
Returns and Audits.
(i)
The Company and each of its subsidiaries have timely filed all federal, state,
local and foreign returns, forms, estimates, information statements and reports
(“Returns”)
relating to Taxes required to be filed by the Company and each of its
subsidiaries with any Tax authority, except such Returns which are not,
individually or in the aggregate, material to the Company (“Company
Returns”).
The Company and each of its subsidiaries have paid all Taxes shown to be due
on
such Company Returns. All Company Returns were complete and accurate in all
material respects and have been prepared in substantial compliance with all
applicable Legal Requirements. The Company’s net operating losses and other Tax
attributes are accurately reflected on the Company Returns and, to the knowledge
of the Company, are not currently subject to any limitation under Sections
382
or 383 of the Code. The Company has made available to Parent correct and
complete copies of all Company Returns, examination reports, closing agreements
and statements of deficiencies assessed against or agreed to by the Company
or
any of its subsidiaries.
(ii)
Neither the Company nor any of its subsidiaries is delinquent in the payment
of
any material Tax nor is there any material Tax deficiency outstanding, proposed
or assessed against the Company or any of its subsidiaries, nor has the Company
or any of its subsidiaries executed any unexpired waiver of any statute of
limitations on or extension of any the period for the assessment or collection
of any Tax.
(iii)
No audit, or pending audit of, or other examination of any Company Return by
any
Tax authority is presently in progress, nor has the Company or any of its
subsidiaries been notified of any request for such an audit or other
examination.
(iv)
No adjustment relating to any Company Returns has been proposed in writing,
formally or informally, by any Tax authority to the Company or any of its
subsidiaries or any representative thereof.
(v)
Neither the Company nor any of its subsidiaries has any Liability for any
material unpaid Taxes (whether or not shown to be due on any Company Return)
which has not been accrued for or reserved on the Company’s Interim Balance
Sheet in accordance with GAAP, whether asserted or unasserted, whether or not
shown on any Company Return, contingent or otherwise, other than any Liability
for unpaid Taxes that may have accrued since the Interim Balance Sheet Date
in
connection with the operation of the business of the Company and its
subsidiaries in the ordinary course. There are no claims for Taxes being
asserted against the Company or any of its subsidiaries that have resulted
in,
and there are no, Encumbrances with respect to Taxes on any of the assets of
the
Company or any of its subsidiaries, other than Encumbrances which are not,
individually or in the aggregate, material, or customary Encumbrances for Taxes
not yet due and payable.
23
(vi)
There is no Contract, plan or arrangement to which the Company or any of its
subsidiaries is a party as of the date of this Agreement, including but not
limited to the provisions of this Agreement, covering any Employee (other than
a
Consultant who is not a Significant Consultant) that, individually or
collectively, would reasonably be expected to give rise to the payment of any
amount that would not be deductible pursuant to Sections 280G, 404 or
162(m) of the Code or that would give rise to a penalty under Section 409A
of the Code. There is no Contract, plan or arrangement to which the Company
or
any of its subsidiaries is a party or by which it is bound to compensate any
individual for excise Taxes paid pursuant to Section 4999 of the Code.
(vii)
Neither the Company nor any of its subsidiaries is party to or has any
obligation under any Tax-sharing, Tax indemnity or Tax allocation agreement
or
arrangement, nor does the Company or any of its subsidiaries have any Liability
or potential Liability to another party under any such agreement or arrangement.
Neither the Company nor any of its subsidiaries has ever been a member of a
group filing a consolidated, unitary, combined or similar Return (other than
such Company Returns which include only the Company and any of its subsidiaries)
under any federal, state, local or foreign law. Neither the Company nor any
of
its subsidiaries is party to any joint venture, partnership or other arrangement
that could be treated as a partnership for federal and applicable state, local
or foreign Tax purposes.
(viii)
None of the Company’s or its subsidiaries’ assets are Tax exempt use property
within the meaning of Section 168(h) of the Code.
(ix)
Neither the Company nor any of its subsidiaries has constituted either a
“distributing corporation” or a “controlled corporation” in a distribution of
stock intended to qualify for tax-free treatment under Section 355 of the
Code (x) in the two years prior to the date of this Agreement or
(y) in a distribution which could otherwise constitute part of a “plan” or
“series of related transactions” (within the meaning of Section 355(e) of
the Code) in conjunction with the Transactions.
(x)
Neither the Company nor any of its subsidiaries has consummated, has
participated in, or is currently participating in any transaction which was
or
is a “Tax shelter,” “listed transaction” or “reportable transaction” as defined
in Sections 6662, 6662A, 6011, 6012, 6111 or 6707A of the Code or the
Treasury Regulations promulgated thereunder, including, but not limited to,
transactions identified by the IRS by notice, regulation or other form of
published guidance as set forth in Treasury Regulation
Section 1.6011-4(b)(2).
(xi)
Each of the Company and each of its subsidiaries has in its possession official
foreign government receipts for any Taxes paid by it to any foreign Tax
authorities.
(xii)
The Company has made available to the Parent all documentation relating to
any
Tax holidays or incentives applicable to itself or its subsidiaries. The Company
and its subsidiaries are in compliance with the requirements for any such Tax
holidays or incentives.
(xiii)
Neither the Company nor any of its subsidiaries is or has ever been a “United
States real property holding corporation” within the meaning of Section 897
of the Code.
(xiv)
The Company and each of its subsidiaries has complied (and until the Effective
Time will comply) in all material respects with all applicable Legal
Requirements relating to the payment and withholding of Taxes (including
withholding of Taxes pursuant to Sections 1441, 1442, 1445 and 1446 of the
Code or similar provisions under any foreign law), has, in all material respects
within the time and in the manner prescribed by law, withheld from the wages
or
compensation of Employees (other than Consultants) and paid over to the proper
Governmental Entities (or is properly holding for such timely payment) all
amounts required to be so withheld and paid over under all applicable Legal
Requirements, including federal and state income Taxes, Federal Insurance
Contribution Act, Medicare Federal Unemployment Tax Act, relevant state income
and employment Tax withholding laws, and has in all material respects timely
filed all withholding Returns required to be filed.
24
2.17
Environmental
Matters.
(a)
Hazardous
Material.
No underground storage tanks, nor to the knowledge of the Company, any sumps,
vaults, clarifiers, xxxxx or septic systems are present, in, on, under or about
any property, including the land and the improvements, ground water and surface
water thereof, that the Company or any of its subsidiaries has at any time
owned, nor to the Company’s knowledge, on any property leased by the Company or
any of its subsidiaries (all owned and leased facilities collectively referred
to as the “Company
Business Facilities”).
Except as would not be reasonably expected to result in material Liability
to
the Company or its subsidiaries, no Hazardous Materials (as defined below)
are
present, in, on, under or about any property, including the land and the
improvements, ground water and surface water thereof, that the Company or any
of
its subsidiaries has at any time owned or on any property leased by the Company
or any of its subsidiaries. For purposes of this Section 2.17,
“Environmental
and Safety Laws”
shall mean any applicable foreign, federal, state or local laws, ordinances,
codes, regulations, rules, policies, directives, requirements, treaties, and
orders and all other permits, approvals, clearances, consents and conditions
associated therewith, which prohibit, regulate or control any Hazardous Material
or that are intended to assure the protection of the environment, health or
safety of Employees, workers or other persons, including the public. For the
purposes of this Agreement, “Hazardous
Materials”
shall mean any material or substance that is prohibited or regulated by
Environmental and Safety Laws or that has been designated by any Governmental
Entity to be radioactive, toxic, hazardous, or otherwise a danger to health,
reproduction or the environment, including PCBs, asbestos, petroleum, mold,
and
urea formaldehyde.
(b)
Hazardous
Materials Activities.
Except in compliance in all material respects with all Environmental and Safety
Laws and in a manner that would not reasonably be expected to result in a
material Liability to the Company, neither the Company nor any of its
subsidiaries has transported, transferred, recycled, treated, manufactured,
distributed, stored, used, disposed of, released or exposed its Employees or
others to Hazardous Materials or, to the knowledge of the Company, any product
containing a Hazardous Material or any product manufactured with Ozone depleting
substances (collectively “Hazardous
Materials Activities”).
The Hazardous Materials Activities of the Company prior to the Closing have
not
resulted in the exposure of any person to a Hazardous Material in a manner
which
has caused or could reasonably be expected to cause an adverse health effect
to
any such person.
(c)
Environmental
Liabilities; Compliance with Environmental and Safety Laws.
No action, proceeding, revocation proceeding, amendment procedure, writ or
injunction is pending, nor, to the Company’s knowledge, threatened by any
Governmental Entity against the Company or any of its subsidiaries concerning
any Company Environmental Permit, Hazardous Material or any Hazardous Materials
Activity of the Company or any of its subsidiaries. The Company has no knowledge
of any fact or circumstance which could reasonably be expected to involve the
Company or any of its subsidiaries in any environmental litigation or impose
upon the Company any material environmental Liability. Except as would not
reasonably be expected to result in a material Liability to the Company,
(i) neither the Company nor any of its subsidiaries has received any notice
(verbal or written) of any past or present noncompliance of its operations,
facilities, buildings or improvements located on any Company Business Facility
with Environmental and Safety Laws, (ii) no notices, administrative actions
or suits are pending or, to the knowledge of the Company, threatened against
the
Company or any of its subsidiaries or any such property relating to an actual
or
alleged violation of any Environmental and Safety Laws, (iii) neither the
Company nor any of its subsidiaries is a potentially responsible party under
the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601 et seq.
(“CERCLA”),
or any analogous state, local or foreign laws arising out of events occurring
prior to the Closing Date, and (iv) the operations, facilities, buildings
or improvements located on any Company Business Facility have complied in all
material respects with all Environmental and Safety Laws.
(d)
Environmental
Indemnities.
Neither the Company nor any of its subsidiaries have entered into any agreement
that may require it to guarantee, reimburse, pledge, defend, hold harmless
or
indemnify any other party with respect to liabilities arising out of
Environmental and Safety Laws, or the Hazardous Materials Activities of the
Company, any of its subsidiaries or any other individual or entity.
25
(e)
Decommissioning.
The Company does not have any material Liabilities with respect to
decommissioning associated with any use of or equipment using radioactive
materials.
(f)
Reports
and Records.
The Company has delivered or made available to Parent all environmental audits
and environmental assessments of any facility that is in the possession or
control of the Company or any of its subsidiaries.
2.18
Brokers;
Third Party Expenses.
Except for fees payable to Credit Suisse Securities (USA) LLC pursuant to an
engagement letter between the Company and Credit Suisse Securities (USA) LLC
dated as of January 31, 2006, a correct and complete copy of which has been
provided to Parent, neither the Company nor any of its subsidiaries or
affiliates has incurred, nor will it incur, directly or indirectly, any
Liability for brokerage or finders fees or agent’s commissions or any similar
charges in connection with this Agreement or the Transactions, and Parent will
not incur any such Liability, either directly or indirectly, as a result of
this
Agreement or the Merger as a result of any Contract entered by the Company,
any
of its subsidiaries or affiliates or any of their respective directors,
officers, employees, stockholders or agents. An itemized good faith estimate
as
of the date of this Agreement of the fees and expenses that may be payable
to
any investment banker, broker, advisor or similar party, and any accountant,
legal counsel or other person retained by the Company in connection with this
Agreement or the Transactions contemplated hereby, including the expenses of
investment bank referenced above, is set forth on Section 2.18
of the Company Disclosure Letter, including a list of all Contracts with such
persons that involve the payment by the Company or any of its subsidiaries
of
fees that are based on anything other than “time and materials” (which shall
include a summary of the terms under which such fees are earned and become
payable).
2.19
Intellectual
Property.
(a)
Definitions.
For all purposes of this Agreement, the following terms shall have the following
respective meanings:
“Company
Intellectual Property”
shall mean (i) any and all Company-Owned Intellectual Property and/or
(ii) any and all Company-Controlled Intellectual Property used or otherwise
exploited by the Company or any of its subsidiaries in the Conduct of the
Business of the Company, including in either of the foregoing (i) or
(ii) any Intellectual Property covering anti-IgE products.
For
purposes of this Section 2.19
and Section 2.20,
“Conduct
of the Business of the Company”
shall mean (i) the conduct of the Company Research Programs and/or
(ii) the research, discovery, development, manufacture or use of Company
Products and/or (iii) the grant of license rights (including any option or
other contingent right to obtain such rights) under Intellectual Property to
third persons, in the case of clauses (i) and (ii), (a) as conducted
on or before the date of this Agreement and/or (b) as conducted during from
the date hereof to immediately prior to the Closing.
“Company-Controlled
Intellectual Property”
shall mean any and all Intellectual Property to which the Company or any of
its
subsidiaries has valid rights granted by a third person to use or otherwise
exploit for the application(s) for which such Intellectual Property is used
or
otherwise exploited in the Conduct of the Business of the Company, in each
case
other than Company-Owned Intellectual Property.
“Company-Owned
Intellectual Property”
shall mean any and all Intellectual Property that is owned by the Company or
any
of its subsidiaries (whether solely or jointly with any third person).
“Company
Products”
shall mean any and all products or service offerings of the Company or any
of
its subsidiaries that are the subject of the any of the following (whether
by
the Company or any of its subsidiaries or third person on behalf or under
authority of or in cooperation with the Company or any of its subsidiaries)
(A) an IND (as defined in 21 C.F.R. §312.3) filed with the United States
FDA (or counterpart thereof filed with any ex-U.S. regulatory authority), or
(B) other testing in human subjects in clinical studies anywhere in the
world.
26
Company
Research Programs”
shall mean any and all of the Company’s or its subsidiaries’ research programs
ongoing immediately prior to the date of this Agreement in one or more specific
therapeutic areas (i.e.,
immune-mediated
diseases, infectious disease, inflammation and cancer) or one or more specific
biological pathways or targets (regardless of whether the expected product
is an
agonist, antagonist or otherwise modulates the pathway or target which have
been
identified by Company to Parent (specifically, such programs that are related
or
directed to XX00, XX0, Tissue Factor, Factor D or Complement C5a)).
“Company
Registered Intellectual Property”
shall mean all Registered Intellectual Property owned (in whole or part) by
the
Company or any of its subsidiaries.
“Intellectual
Property”
shall mean any or all of the following and all rights (whether common law,
statutory or otherwise) in, arising out of, or associated therewith existing
anywhere in the world: (1) United States and foreign patents, inventor’s
certificates and utility models (including any substitutions, extensions,
confirmations, reissues, divisions, re-examinations, renewals and extensions
thereof) and any and all applications (including any utility, continuation,
divisional, substitution, continuations-in-part, provisional, reissue, or
reexamination application) and registrations therefor, and equivalent or similar
rights anywhere in the world in inventions and discoveries (“Patents”);
(2) copyrights and any and all applications and registrations therefor;
(3) domain names, uniform resource locators and other names and locators
associated with the Internet, and any and all applications or registrations
therefor (“Domain
Names”);
(4) trade names, logos, business symbols, trade dress, assumed names,
fictitious names, corporate names, certification marks, collective marks,
d/b/a’s, trademarks and service marks, (in each case together with any and all
related goodwill) and any and all applications and registrations therefor
(“Trademarks”);
(5) all rights in databases and data collections; (6) all inventions
(whether or not patentable), trade secrets, and other confidential information
including technology, know how, data, processes, schematics, business methods,
formulae, drawings, prototypes, models, designs, compositions of matter,
techniques, improvements, methods (including manufacturing methods), clinical
and regulatory strategies, formulations, manufacturing data and processes
specifications, manuals, research and development/clinical proposals and
customer and supplier lists and other industry information, and all
documentation relating to any of the foregoing (“Trade
Secrets and Confidential Information”),
in each case to the extent recognized as intellectual property under applicable
law.
“IP
Contracts”
shall mean all Contracts to which the Company or any of its subsidiaries is
a
party and pursuant to which (1) Company-Owned Intellectual Property or
Company-Controlled Intellectual Property is licensed (including by way of any
sublicense, grant of an option or other future contingent right, covenant of
non-assertion or covenant not to xxx) or otherwise transferred (including as
a
result of assignment, novation or otherwise, provided that a non-disclosure
or
confidentiality agreement, without more, shall not be considered a “transfer”)
to any third person, (2) any third person has licensed (including any
sublicense) or otherwise transferred to the Company any rights under
Intellectual Property used or otherwise exploited in the Conduct of the Business
of the Company or (3) Company has an option or right to obtain a
non-exclusive or exclusive license to or other transfer of Intellectual Property
of a third person, or a third person has an option or right to obtain a
non-exclusive or exclusive license to or other transfer of Company Intellectual
Property.
“Registered
Intellectual Property”
shall mean Intellectual Property that is duly registered with or issued by
an
appropriate Governmental Entity of which the rights conveyed by the registration
or issuance are in effect as of the date hereof, and any application filed
with
an appropriate Governmental Entity for registration or issuance.
(b)
Representations.
(i)
Company
Intellectual Property.
(1)
Company
Products and Company Research Programs.
Section 2.19(b)(i)(1)
of the Company Disclosure Letter contains a complete and accurate list of all
Company Products and all Company Research Programs.
27
(2)
Company
Registered Intellectual Property.
a)
Section 2.19(b)(i)(2)
of the Company Disclosure Letter contains a complete and accurate list of all
Company Registered Intellectual Property and lists, where applicable,
(I) the jurisdictions in which each such item of Company Registered
Intellectual Property has been issued or registered, or in which an application
for registration or issuance is pending, (II) whether such Registered
Intellectual Property is owned solely by Company or jointly with third persons,
and (III) current actions for each Company Registered Intellectual Property
that, to the knowledge of the Company, must be taken within ten (10) months
after October 1, 2006 for the purposes of obtaining, maintaining,
perfecting, preserving or renewing any Company Registered Intellectual Property
to the maximum extent legally available, including the payment of any
registration, maintenance, annuity or renewal fees, or the filing of any
responses to formality requirements or office actions to avoid any derogation
of
rights under the Company Registered Intellectual Property, including preserving
maximal patent term adjustment rights.
b)
Section 2.19(b)(i)(2)
of the Company Disclosure Letter contains a complete and accurate list by
jurisdiction of any litigation, opposition, reexamination, interference
proceeding, nullity action, reissue proceeding, cancellation, objection, claim
or other equivalent proceeding or action pending, asserted or threatened against
the Company or its subsidiaries with respect to the ownership, validity,
registerability, enforceability, infringement or use of, or right to license,
any Company Registered Intellectual Property. To the knowledge of the Company,
no valid basis for any such litigation, opposition, reexamination, interference
proceeding, nullity action, reissue proceeding, cancellation, objection, claim
or other equivalent proceeding or action exists.
(3)
IP
Contracts.
Neither the Company nor any of its subsidiaries is a party to or is bound by
any
IP Contracts that meet any of the following descriptions, except to the extent
those IP Contracts are listed in Section 2.19(b)(i)(3)
of the Company Disclosure Letter and are identified thereon using the categories
below, in each case listing (i) the person(s) with whom such IP Contract is
made, (ii) the date thereof, and (iii) the Company Product or Company
Research Program to which such IP Contract applies, if applicable:
a)
material transfer agreements under which the Company or any of its subsidiaries
has received or has a right to receive information or materials related to
actual or potential pharmaceutical products, biological pathways, disease
states, research tools, or other scientific or medical information;
b)
pursuant to which the Company or any of its subsidiaries has granted a third
person the right to practice any Company Intellectual Property, except for
rights to conduct internal research for a limited period of time or rights
under
a material transfer agreement where the Company owns any resulting inventions
or
intellectual property;
c)
pursuant to which the Company or any of its subsidiaries has obtained any
Intellectual Property (or has obtained any option to obtain any Intellectual
Property or license thereto) required or used for research, discovery,
development, manufacture, use, import, sale, offer for sale or other
exploitation of any Company Product or for engaging in any Company Research
Program;
d)
pursuant to which the Company or any of its subsidiaries has granted any
exclusive rights (or an option to obtain exclusive rights) to any third person
under any Company Intellectual Property;
e)
pursuant to which the Company or any of its subsidiaries is engaging in
scientific research or other activities that are likely to create Intellectual
Property, where that Intellectual Property is not solely owned by the Company
or
any of its subsidiaries, except
28
where
the research or other activities have been completed and, to the knowledge
of
the Company, no Intellectual Property was created;
f)
pursuant to which the Company or any of its subsidiaries is obligated to pay
any
royalty, milestones, or other similar payments, including but not limited to
profit sharing, manufacturing or similar payments (i) that are contingent
on the occurrence of future events or (ii) that vary with the amount of any
Company Product produced, sold or otherwise exploited;
g)
pursuant to which a third person is obligated to pay to the Company or any
of
its subsidiaries any royalty, milestones, or make any other payments that are
contingent on the occurrence of future events or that vary with the amount
of
product produced, sold or otherwise exploited (including sharing of profits).
In
addition, Section 2.19(b)(i)(3)
of the Company Disclosure Letter contains the Company’s and its subsidiaries’
current forms of the following (where “current” includes any of the following
used by the Company or any of its subsidiaries during the 12-month period prior
to the date of this Agreement): employment agreement, nondisclosure agreement,
assignment of invention agreement or similar Contracts relating to the
protection, ownership, development, use or transfer of Company Intellectual
Property (collectively, “IPR
Form Agreements”).
(ii)
Validity.
To the knowledge of the Company, the Company has materially complied with all
the requirements of each applicable Governmental Entity (including the United
States Patent and Trademark Office and foreign counterparts thereof) with
respect to the filing and prosecution of the Company Registered Intellectual
Property, including timely payment of all required fees and filing of all
documents, recordations and certificates to such Governmental Entity. Neither
the Company nor any of its subsidiaries has received written notice from a
third
person of or has obtained an opinion of counsel addressing and the Company
has
no knowledge of any (i) prior art or prior public uses, sales, offers for
sale or disclosures which would invalidate any Company Registered Intellectual
Property (in whole or in part) or (ii) conduct the result of which would
render the Company Registered Intellectual Property (in whole or in part)
invalid or unenforceable.
(iii)
Ownership.
(1)
To the knowledge of the Company no Company Intellectual Property, Company
Research Program or Company Product is subject to, and the Company and its
subsidiaries are not a party to, any proceeding or outstanding decree, order,
judgment or settlement agreement or stipulation that (i) restricts or may
restrict in any manner the use, transfer or licensing thereof by the Company
or
any of its subsidiaries or may adversely affect the validity, use or
enforceability of such Company Intellectual Property, or (ii) restricts or
may restrict the Conduct of the Business of the Company in order to accommodate
Intellectual Property rights of any third person.
(2)
To the knowledge of the Company (I) all Company-Owned Intellectual Property
is fully transferable, alienable or licensable by Surviving Corporation without
restriction and without payment of any kind to any person and (II) except as
otherwise set forth in the respective IP Contract, all of the Company’s rights
in Company-Controlled Intellectual Property are fully transferable, alienable
or
licensable by Surviving Corporation without restriction and without payment
of
any kind to any person.
(3)
To the knowledge of the Company, the Company or its subsidiaries owns, and
has
good and exclusive title to, each item of Company-Owned Intellectual Property
free and clear of any Encumbrance, except for any Encumbrance which would not
reasonably be expected to have a material negative impact on (A) the
Conduct of the Business of the Company, (B) the value or use of any
material Company Intellectual Property or (C) the sale, offer for sale,
importation or other commercial exploitation of any Company Product anywhere
in
the world. Without limiting the
29
foregoing,
to the knowledge of the Company: (i) the Company or a subsidiary of the
Company is the exclusive owner of all registrations obtained by the Company
for
Trademarks that are used to designate the source or origin of the Company
Products; and (ii) the Company or a subsidiary of the Company owns
exclusively, and has good title to, or has the right to use, all copyrighted
works that are embodied in any Company Product.
(4)
To the knowledge of the Company, no person other than the Company or its
subsidiaries has ownership rights or license rights granted by the Company
or
its subsidiaries to improvements made by or for the Company or its subsidiaries
to any Company Intellectual Property, Company Product, or subject of any Company
Research Program.
(5)
To the knowledge of the Company, except where Patents claiming or covering
the
composition of matter of any pharmaceutically or biologically active ingredient
incorporated into any Company Product is licensed or acquired from a third
person, the Company or its subsidiaries has filed applications for one or more
Patents claiming or covering patentable compositions of matter, in each case
with respect to Company Products that are as of the date of this Agreement,
the
subject of an IND (or equivalent), or the subject of a clinical trial or other
study involving human subjects.
(6)
To the knowledge of the Company, within the twelve (12) months immediately
prior to the date hereof, neither the Company nor any of its subsidiaries has
(i) transferred ownership of, or granted any exclusive license of or
exclusive right to use, Company Intellectual Property, to any third person,
or
(ii) permitted the Company’s rights in any Company Intellectual Property to
lapse or enter the public domain, except to the extent such failure would not
adversely affect the Conduct of the Business of the Company.
(7)
To the knowledge of the Company, in each case in which the Company or any of
its
subsidiaries has acquired sole ownership of any Intellectual Property from
any
person, the Company or such subsidiary has obtained a valid and enforceable
assignment sufficient to irrevocably transfer all rights in and to all such
Intellectual Property and the associated rights therein (including the right
to
seek future damages with respect thereto) and has recorded each assignment
of
Registered Intellectual Property assigned to the Company or such subsidiary
with
the relevant Governmental Entity.
(8)
To the knowledge of the Company, no employee, independent contractor or agent
of
the Company or any of its subsidiaries, past or present, is in material default
or breach of any term relating to the protection, ownership, development, use
or
transfer of Company-Owned Intellectual Property in any Employment Agreement,
nondisclosure agreement, assignment of invention agreement or similar
Contracts. To the knowledge of the Company, all employees of, consultants
to or vendors of the Company or any of its subsidiaries with permitted access
to
Trade Secrets and Confidential Information of the Company or any of its
subsidiaries that are used in Conduct of the Business of the Company are a
party
to written Contracts under which, among other things, each such employee,
consultant or vendor is obligated to maintain the confidentiality of such Trade
Secrets and Confidential Information and, in the case of employees and
consultants of the Company or any of its subsidiaries, assign to the Company
or
its subsidiary all Intellectual Property created by such employee or consultant
in the scope of employment or consultancy with the Company or its
subsidiaries. To the knowledge of the Company, none of the Company’s nor
its subsidiaries’ current employees is the owner of any Patent for any device,
process, design or invention of any kind that is now used or needed by the
Company or any of its subsidiaries in the Conduct of the Business of the Company
and was conceived during the course of his or her employment with the Company,
which Patent has not been assigned or licensed to the Company or its
subsidiary. To the knowledge of the Company, all Company-Owned Intellectual
Property developed under Contract to the Company or its subsidiaries have been
assigned to the Company or its subsidiary or are contractually obligated to
be
assigned. To the knowledge of the Company,
30
the
Company’s and its subsidiaries’ employees’ performance of their employment
activities does not violate such employees’ contractual obligations to any third
person.
(iv)
Non-Infringement.
(1)
Neither the Company nor its subsidiaries has received a written notice from
any
third person alleging, or an opinion of counsel directed to, and the Company
has
no knowledge that, the Conduct of the Business of the Company or the
manufacture, use, sale, offer for sale importation or other commercial
exploitation, if occurring as of the date hereof, of any Company Product in
its
current form, infringes, without reference to any research or development
exemption therefrom or misappropriates any Intellectual Property of any third
person or constitutes unfair competition or trade practices under the laws
of
any jurisdiction.
(2)
To the knowledge of the Company, all Intellectual Property incorporated into
or
embodied in any Company Product was developed solely by either
(A) employees of the Company acting within the scope of their employment or
(B) by third persons who have licensed to the Company or validly assigned
or are under an obligation to assign all of their rights in or to such
Intellectual Property to the Company. To the extent any such Intellectual
Property comprises Company Registered Intellectual Property, the Company or
its
subsidiaries, to the knowledge of the Company, has recorded each such assignment
with the relevant Governmental Entity.
(3)
Neither the Company nor any of its subsidiaries have entered into any Contract
that may require it to reimburse, defend, hold harmless or indemnify any third
person with respect to Liabilities arising out of the infringement or
misappropriation of any Intellectual Property, except to the extent those
Contracts are listed in Section 2.19(b)(iv)(3)
of the Company Disclosure Letter.
(v)
IP
Contracts.
(1)
To the knowledge of the Company, all of the IP Contracts listed in Section 2.19(b)(i)(3)
of the Company Disclosure Letter are in full force and effect.
(2)
To the knowledge of the Company, the consummation of the transactions
contemplated by this Agreement will neither violate nor result in the breach,
modification, cancellation, termination or suspension of any IP Contract.
Following the Effective Time, Surviving Corporation will be permitted to
exercise all of the Company’s rights under all IP Contracts (including, without
limitation, the right to receive royalties), to the same extent the Company
would have been able to had the transactions contemplated by this Agreement
not
occurred and without being required to pay any additional amounts or
consideration other than fees, royalties or payments which the Company would
otherwise be required to pay had such transactions contemplated hereby not
occurred.
(3)
Neither this Agreement nor the transactions contemplated by this Agreement,
will
result in (A) Surviving Corporation granting to any third person any right
in any Intellectual Property, or (B) Surviving Corporation being obligated
to pay any royalties or other amounts to any third person in excess of those
payable by Company prior to the Closing.
(vi)
Sufficiency
of Intellectual Property.
To the knowledge of the Company as of the date hereof, the Company Intellectual
Property constitutes (A) the Intellectual Property that is currently used
or otherwise exploited by the Company in the Conduct of the Business of the
Company and (B) the Intellectual Property that would be necessary for the
manufacture, use, sale, offer for sale, importation or other commercial
exploitation of any Company Product in its current form, if such manufacture,
use, sale, offer for sale, importation or other commercial exploitation were
occurring as of the date hereof.
(vii)
Government
Rights.
To the knowledge of the Company, no government funding, facilities of a
university, college, other educational institution or research center or funding
from third persons was used in the development of any Company-Owned Intellectual
Property that is material to the Conduct
31
of
the Business of the Company and would result in any march-in rights, ownership
rights or any future obligation by the Company to make any payment or grant
any
license.
(viii)
Third-Party
Infringement.
To the knowledge of the Company, no person has infringed or misappropriated,
or
is infringing or misappropriating, any Company-Owned Intellectual Property
in a
manner that would be expected to adversely affect the Conduct of the Business
of
the Company or the sale, offer for sale, importation or other commercial
exploitation of any Company Product.
(ix)
Trade
Secret Protection.
To the knowledge of the Company, the Company and its subsidiaries have taken
all
reasonable and customary steps to protect the rights of the Company and its
subsidiaries in their Trade Secrets and Confidential Information, and any Trade
Secrets and Confidential Information of third persons provided to the Company
under an obligation of confidentiality.
(x)
Maintenance
of Invention Materials.
To the knowledge of the Company, the Company and its subsidiaries have
maintained and secured (or cause to be maintained and secured) all documentation
and other materials (including signed, dated and witnessed laboratory notebooks)
necessary or appropriate to establish conception, reduction to practice or
other
matters of inventorship (including timing thereof) or ownership with respect
to
Company-Owned Intellectual Property in accordance with practices standard and
customary in the biopharmaceutical industry.
2.20
Contracts.
(a)
Except for Contracts between the Company or its subsidiaries on the one hand
and
Parent or a subsidiary of Parent on the other hand, neither the Company nor
any
of its subsidiaries is a party to or is bound by any of the following Contracts
as of the date of this Agreement, except to the extent those Contracts are
listed in Section 2.20(a)
of the Company Disclosure Letter and are identified thereon using the numbering
below, in each case listing (i) the person(s) with whom such Contract is
made and (ii) the date thereof:
(i)
any employment or consulting Contract with any officer or director, or any
Employee (excluding offer letters for “at-will” Employees) or any other type of
Contract (whether or not such Contract is an Employment Agreement, as defined
in
Section 2.13(a)(vi))
with any Employee that is not terminable within thirty (30) days by the
Company without Liability to the Company or Parent, including any Contract
requiring it to make or accelerate a payment to any Employee on account of
the
Merger, any Transaction or any Contract that is entered into in connection
with
this Agreement;
(ii)
any Contract or plan, including any stock option plan, stock appreciation right
plan or stock purchase plan (A) relating to the sale, issuance, grant,
exercise, award, purchase, repurchase or redemption of any shares of Company
Common Stock or any other securities of the Company or any of its subsidiaries
or any options, warrants, convertible notes or other rights to purchase or
otherwise acquire any such shares of stock, other securities or options,
warrants or other rights therefor, except for the Company Stock Plans, or
(B) any of the benefits of which will be increased, or the vesting of
benefits of which will be accelerated, by the occurrence of any of the
Transactions or the value of any of the benefits of which will be calculated
on
the basis of any of the Transactions;
(iii)
any Contract requiring the Company to engage in ongoing research or development,
which obligations extend beyond January 1, 2007 and are not terminable by
the Company (with or without penalty) on less than ninety (90) days prior
notice;
(iv)
any Contract (whether non-compete or otherwise) containing provisions which
have
or would reasonably be expected to have the effect of prohibiting or impairing
any business practice of the Company or any of its subsidiaries (including
engaging in research and development or the development or commercialization
of
any Company Product), any acquisition of property (tangible or intangible)
by
the Company or any of its subsidiaries, any other conduct of business by the
Company or any of its subsidiaries, or otherwise limiting the freedom of the
Company or any of its subsidiaries to engage in any line of business in any
geographical area or to compete with any person. Without
32
limiting
the generality of the foregoing, neither the Company nor any of its subsidiaries
has entered into any Contract under which the Company or any of its subsidiaries
is prohibited or impaired from engaging in any areas of research or development
or from the licensing, manufacturing, selling or distributing any Company
Intellectual Property or exploiting any Technology of the Company;
(v)
any Contract under which the Company has granted or is obligated to grant any
person any “opt-in” rights, exclusive rights, rights of refusal or similar
rights;
(vi)
any Contract under which the Company is obliged to enter into any further
agreement or license, under which the Company is obligated to accept or use
manufacturing (including cell culture, bulk manufacturing or fill and finish)
capacity or to pay for manufacturing capacity not used or accepted, or under
which the Company has any material “take or pay” commitment;
(vii)
any Contract relating to the disposition by the Company or any of its
subsidiaries of a material amount of assets not in the ordinary course of
business, or pursuant to which the Company or its subsidiaries has acquired
a
business or entity, or material assets of a person (other than purchases in
the
ordinary course of business that are customarily effected on a purchase order
basis), whether by way of merger, consolidation, purchase of stock, purchase
of
assets, exclusive license or otherwise, or any Contract pursuant to which the
Company or any of its subsidiaries has any material ownership interest in any
person other than the Company’s subsidiaries;
(viii)
any Contract currently in force under which the Company or any of its
subsidiaries has continuing obligations to provide to a third person information
about any Company Research Program or any other scientific or clinical data
produced by the Company, including research, characterization, manufacturing,
clinical, pre-clinical or other information and including information regarding
the Company’s planned research and development activities;
(ix)
any joint venture Contract, collaboration Contract or any other Contract that
involves a sharing of revenues, profits, cash flows, expenses (including
development expenses) or losses with other persons;
(x)
any Contract requiring the Company or any of its subsidiaries to undertake
a
clinical trial (or to have a third person undertake a clinical trial on the
Company’s or its subsidiaries’ behalf) of an existing Company Product or the
subject of a Company Research Program;
(xi)
any Contract that authorizes any third person to sell, offer for sale, market
or
otherwise distribute any Company Products or results of any Company Research
Programs;
(xii)
any mortgages, indentures, guarantees, promissory notes, loans or credit
agreements, security Contracts or other Contracts or instruments relating to
the
borrowing of money or extension of credit, or any currency exchange, commodities
or other hedging arrangement or any leasing transaction of the type required
to
be capitalized in accordance with GAAP;
(xiii)
any settlement or litigation “standstill” Contract;
(xiv)
any Contract of guarantee, support, assumption or endorsement of, or any similar
commitment with respect to, the obligations, liabilities (whether accrued,
absolute, contingent or otherwise) or indebtedness of any other person;
(xv)
any Contract (including open purchase orders) under which the Company has a
commitment to purchase goods, capital equipment, services or other items in
excess of $50,000 for any Contract or series of Contracts;
(xvi)
any Contract (i) pursuant to which any third person is required to make
payments to the Company in excess of $20,000 per annum, (ii) pursuant to
which the Company or any of its subsidiaries is obligated to pay any royalty
or
similar payments, including but not limited to profit sharing or similar
payments, or (iii) pursuant to which the Company or any of its subsidiaries
is obligated to pay any milestone payment or similar payment, including any
payment of a
33
pre-determined
amount in excess of $100,000, which payment is contingent on the occurrence
of a
future event, but excluding any fee-for-service Contract;
(xvii)
any Contract pursuant to which the Company or any of its subsidiaries is a
lessor or lessee of any equipment or other fixed assets, including machinery,
equipment, motor vehicles, office furniture, fixtures or other personal property
involving payments in excess of $20,000 per annum or involving any manufacturing
equipment with a value in excess of $10,000;
(xviii)
any Contract with any person with whom the Company or any of its subsidiaries
does not deal at arm’s length;
(xix)
any Contract with any investment banker, broker, advisor or similar party,
or
any accountant, legal counsel or other person retained by the Company, in
connection with this Agreement and the Transactions;
(xx)
any Contract with any Governmental Entity (a “Government
Contract”)
or any material federal, state, county, local or foreign governmental consent,
license, permit, grant, or other authorization of a Governmental Entity
(excluding Company Permits) that is required for the operation in all material
respects of the Company’s or any of its subsidiaries’ businesses;
(xxi)
any Contract entitling a third person (other than an Employee) to a commission
or “finder’s fee” payable by the Company or any of its subsidiaries; or
(xxii)
any Contract not otherwise disclosed in Section 2.20
of the Company Disclosure Letter (i) under which the consequences of a
default could reasonably be expected to be material to the Company,
(ii) that is of the nature required to be filed by Company as an exhibit to
an Annual Report on Form 10-K under the Exchange Act; (iii) involving
in excess of $100,000 being paid by or to the Company over the term thereof,
or
(iv) that is otherwise material to the Company or any of its subsidiaries
or their respective businesses, operations, properties, assets, financial
condition, results of operations or cash flows; any such Contract listed or
required to be listed in Section 2.19(b)(iii)
or Section 2.20(a)
of the Company Disclosure Letter being a “Company
Contract”.
(b)
Neither the Company nor any of its subsidiaries, nor, to the Company’s
knowledge, any other person that is a party to a Company Contract, is in breach,
violation or default under, and neither the Company nor any of its subsidiaries
has received notice that it has breached, violated or defaulted under, any
of
the material terms or conditions of any Company Contract. The Company or the
applicable Company subsidiary is entitled to all benefits under any Company
Contract. Each of the Company Contracts is in full force and effect, and has
not
been amended in any material respect, except to the extent that such amendment
is described in Section 2.20(a)
of the Company Disclosure Letter. Except as noted in Section 2.20(b),
the Company has delivered or made available to Parent or its representatives
true, correct and complete copies of each of the Company Contracts required
to
be listed in Section 2.20(a)
of the Company Disclosure Letter; provided
that, to the extent that third party confidentiality restrictions expressly
prohibit disclosure of such Company Contract to Parent, Section 2.20(b)
of the Company Disclosure Letter sets forth a description of the subject matter
of each such Company Contract and a general indication of the nature of the
rights and obligations granted thereunder. The Company is not a party to any
Government Contract (other than Company Permits).
2.21
Product
Liability.
The Company has made available to Parent a true and correct list of all serious
adverse events reported to the Company in connection with clinical trials of
any
Company Product (other than Xolair). The Company has never made payments in
respect of a product liability matter that relates to the administration of
substances to humans. There is no current product liability claim made against
the Company or its subsidiaries.
2.22
Insurance.
Section 2.22
of the Company Disclosure Letter lists all insurance policies (including fire
and casualty, general liability, director & officer liability, business
interruption, product liability and sprinkler and water damage insurance
policies) and/or fidelity bonds covering the assets, business, equipment,
properties,
34
operations,
and Employees of the Company (collectively, the “Insurance
Policies”)
and includes for each such Insurance Policy, the amount of the annual premium
and the maximum coverage amounts per incident and per year. The Company and
each
of its subsidiaries have made available to Parent true, correct and complete
copies of all Insurance Policies. There is no claim by the Company or any of
its
subsidiaries pending under any of the Insurance Policies as to which coverage
has been questioned, denied or disputed by the underwriters of such policies
or
bonds. All premiums due and payable under all such Insurance Policies have
been
paid, and the Company and each of its subsidiaries, as the case may be, is
otherwise in material compliance with the terms of such Insurance Policies.
The
Company has not made any untrue statement about itself or its business in any
application for insurance. All Insurance Policies remain in full force and
effect, and neither the Company nor any of its subsidiaries has knowledge of
any
threatened termination of, or premium increase with respect to, any such
Insurance Policies.
2.23
Opinion
of Financial Advisor.
The Board has received the opinion of Credit Suisse Securities (USA) LLC, to
the
effect that, as of the date of this Agreement, the Per Share Merger
Consideration is fair, from a financial point of view, to the stockholders
of
Company Common Stock. A copy of the written opinion delivered by Credit Suisse
Securities (USA) LLC shall be delivered to Parent following the signing of
this
Agreement.
2.24
Board
Approval.
The full Board, by resolutions duly adopted (and not thereafter modified or
rescinded) as of the date of this Agreement, has unanimously (a) approved
this Agreement and the Merger and determined that this Agreement and the Merger
are advisable and fair to, and in the best interests of, the Company and its
stockholders, (b) approved, subject to stockholder approval of this
Agreement, the Transactions, and (c) directed that adoption of this
Agreement be submitted to the Company stockholders for consideration and
recommended that the stockholders of the Company adopt this Agreement.
2.25
Rights
Agreement.
The Company has taken all action so that (i) Parent shall not be an
“Acquiring Person” under the Rights Agreement for so long as this Agreement is
in effect and (ii) the entering into of this Agreement and the Merger and
the other transactions contemplated hereby will not result in the grant of
any
rights to any person under the Rights Agreement or enable or require the Rights
(as defined therein) to be exercised, distributed or triggered as a result
thereof. The Rights Agreement shall terminate in accordance with its terms
and
be of no further force or effect at the Effective Time.
2.26
State
Takeover Statutes.
The Board has approved the Merger, this Agreement and the Company Voting
Agreements and taken all actions sufficient to render inapplicable to the
Merger, the execution, delivery and performance of this Agreement and the
Company Voting Agreements and the Transactions and the transactions contemplated
by the Company Voting Agreements, the provisions of Section 203 of Delaware
Law applicable to a “business combination” (as defined in such
Section 203). No other state takeover statute or similar statute or
regulation or anti-takeover provision in the Company Charter Documents applies
to, purports to apply or at the Effective Time will be applicable to the Merger,
this Agreement and the Company Voting Agreements or the Transactions and the
transactions contemplated by the Company Voting Agreements.
2.27
Interested
Party Transactions.
Except as set forth in the Company SEC Reports, since the date of the Company’s
last proxy statement filed with the SEC, no event has occurred that would be
required to be reported by the Company pursuant to Item 404 of
Regulation S-K promulgated by the SEC. Section 2.27
of the Company Disclosure Letter identifies each person who is an “affiliate”
(as that term is used in Rule 145 promulgated under the Securities Act) of
the Company as of the date hereof.
35
ARTICLE III
REPRESENTATIONS
AND WARRANTIES OF PARENT
AND
MERGER SUB
Parent
and Merger Sub hereby jointly and severally represent and warrant to the
Company, as follows:
3.1
Corporate
Organization.
Each of Parent and Merger Sub is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has the
requisite corporate power and authority and all necessary governmental approvals
to own, lease and operate its properties and to carry on its business as it
is
now being conducted, except where the failure to be so organized, existing
or in
good standing or to have such power, authority and governmental approvals would
not prevent or materially delay consummation of the Transactions, or otherwise
prevent Parent or Merger Sub from performing their respective material
obligations under this Agreement.
3.2
Authority
Relative to this Agreement.
Each of Parent and Merger Sub has all necessary corporate power and authority
to
execute and deliver this Agreement, and to perform its obligations hereunder
and
to consummate the Transactions. The execution and delivery of this Agreement
by
Parent and Merger Sub and the consummation by Parent and Merger Sub of the
Transactions have been duly and validly authorized by all necessary corporate
action on the part of Parent and Merger Sub, and no other corporate proceedings
on the part of Parent or Merger Sub are necessary to authorize this Agreement,
or to consummate the Transactions (other than, with respect to the Merger,
the
filing of the Certificate of Merger as required by Delaware Law). This Agreement
has been duly and validly executed and delivered by Parent and Merger Sub and,
assuming the due authorization, execution and delivery by the Company,
constitutes a legal and binding obligation of Parent and Merger Sub, enforceable
against Parent and Merger Sub in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization or
similar Legal Requirements affecting the rights of creditors generally and
the
availability of equitable remedies (regardless of whether such enforceability
is
considered in a proceeding in equity or at law).
3.3
No
Conflict; Required Filings and Consents.
(a)
The execution and delivery of this Agreement by Parent and Merger Sub does
not,
and the performance of this Agreement by Parent and Merger Sub will not,
(i) conflict with or violate the Parent’s or Merger Sub’s Certificate of
Incorporation or Bylaws, each as amended to date, (ii) subject to
compliance with the requirements set forth in Section 3.3(b)
hereof, conflict with or violate any Legal Requirements applicable to Parent,
or
(iii) conflict with or violate, result in any breach of or constitute a
default (or an event that with notice or lapse of time or both would become
a
default) under, or impair Parent’s rights under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a Encumbrance on any of the properties or assets of Parent pursuant
to any Contract to which Parent is a party or by which Parent or its properties
are bound or affected, except to the extent such conflict, violation, breach,
default, impairment or other effect could not in the case of clause (ii) or
(iii) individually or in the aggregate, prevent or materially delay
consummation of the Transactions or otherwise prevent Parent or Merger Sub
from
performing their respective material obligations under this Agreement.
(b)
The execution and delivery of this Agreement by Parent and Merger Sub does
not,
and the performance of this Agreement by Parent and Merger Sub shall not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Entity except (i) for applicable
requirements, if any, of the Exchange Act, Blue Sky Laws and state takeover
laws, the pre-merger notification requirements under the HSR Act and of foreign
Governmental Entities, the rules and regulations of the NYSE, and the filing
and
recordation of the Certificate of Merger as required by Delaware Law and
(ii) where the failure to obtain such consents, approvals, authorizations
or permits, or to make such filings or notifications, could not, individually
or
in the aggregate, prevent or materially delay consummation of the Transactions
or otherwise prevent Parent or Merger Sub from performing their respective
material obligations under this Agreement.
36
3.4
Proxy
Statement.
The information supplied by Parent and Merger Sub for inclusion in the Proxy
Statement shall not, at the date the Proxy Statement (or any amendment or
supplement thereto) is first mailed to stockholders of the Company, at the
time
of the Stockholders’ Meeting or at the Effective Time, contain any untrue
statement of a material fact, or omit to state any material fact required to
be
stated therein or necessary in order to make the statements therein, in light
of
the circumstances under which they were made, not false or misleading, or
necessary to correct any statement in any earlier communication with respect
to
the solicitation of proxies for the Stockholders’ Meeting which shall have
become false or misleading. Notwithstanding the foregoing, Parent and Merger
Sub
make no representation or warranty with respect to any information supplied
by
the Company or any of its representatives for inclusion in the Proxy Statement.
3.5
Sufficient
Funds.
Parent will have at the Effective Time sufficient cash or cash-equivalent funds
to consummate the Transactions, including acquiring all of the outstanding
shares of Company Common Stock in the Merger.
3.6
No
Prior Merger Sub Operations.
Merger Sub was formed solely for the purpose of effecting the Merger and has
not
engaged in any business activities or conducted any operations other than in
connection with the transactions contemplated hereby.
ARTICLE IV
CONDUCT
PRIOR TO THE EFFECTIVE TIME
4.1
Conduct
of Business by Company.
During the period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement pursuant to its terms or the
Effective Time, the Company and each of its subsidiaries shall, except to the
extent that Parent shall otherwise consent in writing or as otherwise required
by this Agreement or by applicable Legal Requirements, (i) carry on its
business in the ordinary course in substantially the same manner as heretofore
conducted and in compliance with all applicable Legal Requirements,
(ii) pay its Liabilities and Taxes when due in the ordinary course in
substantially the same manner as heretofore conducted and in compliance with
all
applicable Legal Requirements, (iii) pay or perform other obligations when
due, (iv) use all reasonable efforts to assure that each such Contract entered
into after the date hereof will not require the procurement of any consent,
waiver or novation or provide for any material change in the obligations of
any
party hereto in connection with, or terminate as a result of the consummation
of, the Merger, and shall give reasonable advance notice to Parent prior to
allowing any Company Contract, IP Contract or material right thereunder to
lapse
or terminate by its terms (it being understood that, after the date of this
Agreement, the Company may only enter into an IP Contract if the entry into
such
IP Contract is not otherwise prohibited by this Section 4.1,
including Section 4.1(f)
below), (v) maintain each of its leased premises in accordance with the
terms of the applicable lease in all material respects, (vi) use all
reasonable efforts to maintain in good condition, consistent with standard
industry practices, Company’s procedures and Good Laboratory Practices, Good
Clinical Practices and Good Manufacturing Practices, any and all Product
Inventory (as defined in Section 2.8)
not used in the ordinary course of business for clinical trials or compassionate
use, (vii) use all reasonable efforts to maintain in accordance with
standard industry practices and the Company’s procedures and pursuant to Company
Contracts in effect as of the date of this Agreement, any DNA, protein,
expression product, cell line, reagent, know-how or other material that
constitutes a Company Product or product candidate, or that is necessary to
produce any Company Product or product candidate or perform research or clinical
trials with regard to any product candidate being pursued as of the date of
this
Agreement; (ix) notify and give Parent the opportunity to participate in
the defense or settlement of any litigation to which the Company is a party,
and
(x) use all reasonable efforts to (A) preserve intact its present
business organization, (B) keep available the services of any Employees
identified in writing by Parent to the Company as a “key employee”, and
(C) preserve its relationships with customers, suppliers, distributors,
consultants, licensors, licensees and others with which it has business
dealings.
37
In
addition, without the prior written consent of Parent, except as required by
this Agreement or Legal Requirements and except as disclosed in Section 4.1
of the Company Disclosure Letter, during the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
pursuant to its terms or the Effective Time, the Company shall not do any of
the
following and shall not permit its subsidiaries to do any of the following:
(a)
Waive any stock repurchase rights, accelerate, amend or change the period of
exercisability or vesting of any Company Stock Options or other rights granted
under any Company Stock Plan or the vesting of the securities purchased or
purchasable under such Company Stock Options or other rights or the vesting
schedule or repurchase rights applicable to any unvested shares;
(b)
Amend or change any other terms of Company Stock Options or other rights granted
under the Company Stock Plans;
(c)
Authorize cash payments in exchange for any Company Stock Options or other
rights granted under Company Stock Plans or the securities purchased or
purchasable under those Company Stock Options or rights;
(d)
Grant or pay, or enter into any Contract or amendment to an existing Contract
providing for the granting of, any severance or termination pay (whether in
cash, stock, equity securities, or property) or the acceleration of vesting
or
other benefits to any Employee, except pursuant to written agreements
outstanding on the date hereof and as identified in Section 4.1(d)
of the Company Disclosure Letter, or adopt any new severance or termination
plan, program or arrangement, or amend or modify or alter in any manner any
severance or termination plan or Contract existing on the date hereof (including
any retention, change of control or similar agreement), or grant any
equity-based compensation, whether payable in cash or stock;
(e)
Transfer or make available to a third person any research materials or product
candidates owned by the Company except, with respect only to materials and
product candidates that are not Company Products or necessary for manufacturing
or use of Company Products, Company may distribute such research materials
or
product candidates under a material transfer agreement on the form provided
to
Parent;
(f)
(i) sell, lease, license or transfer any right in or to any Company Intellectual
Property (including by way of option) or take any action or enter into any
option that would have the same effect, or otherwise take actions which would
reasonably be expected to materially impair the value of any Company
Intellectual Property, (ii) modify or amend any IP Contract existing as of
the date of this Agreement (including any financial provision thereof) or enter
into any IP Contract with any person which would have been required to be
included on any schedule set forth in Section 2.19
of the Company Disclosure Letter, (iii) purchase, license or otherwise
acquire any rights to any Intellectual Property of a third person (including
through exercise of any option) or (iv) exercise any option to obtain a
license to the Intellectual Property of a third person to the extent the
exercise of such option would create a future payment obligation or other
Liability on the part of Parent after the Closing;
(g)
Except for non-capital purchases in the ordinary course of business that are
customarily effected on a purchase order basis, enter into any Contract or
series of Contracts involving commitments by the Company and its subsidiaries
in
excess of $250,000 over the life of such Contract or series of Contracts;
(h)
Enter into any Contract requiring the Company to provide to any person any
Intellectual Property, Company Product or a product candidate being studied
in a
Company Research Program (in any form, including antibodies, proteins, fragments
or drug substances);
(i)
Conduct the Company’s business such that its operating cash expenditures
(excluding capital expenditures permitted under Section 4.1(bb)
and expenditures for toxicology studies) exceed $4.5 million on a monthly basis;
(j)
Declare, set aside or pay any dividends on or make any other distributions
(whether in cash, stock, equity securities or property) in respect of any
capital stock or split, combine or reclassify any capital stock or issue or
authorize the issuance of any other securities in respect of, in lieu of or
in
substitution for any capital stock;
38
(k)
Purchase, redeem or otherwise acquire, directly or indirectly, any shares of
capital stock of the Company or its subsidiaries, except repurchases of unvested
shares at or below cost in connection with the termination of the employment
relationship with any Employee pursuant to stock option or purchase Contracts
in
effect on the date of this Agreement, provided
that no such repurchase shall be permitted in the event the per share repurchase
price is greater than the Per Share Merger Consideration;
(l)
Issue, deliver, sell, purchase, authorize, grant or designate (including by
certificate of designation) or pledge or otherwise encumber, or propose any
of
the foregoing with respect to any shares of capital stock or any securities
convertible into shares of capital stock, or subscriptions, rights, warrants
or
options to acquire any shares of capital stock or any securities convertible
into shares of capital stock, or enter into other Contracts of any character
obligating it to issue any such shares or convertible securities, other than
the
issuance, delivery and/or sale of Company Common Stock pursuant to the exercise
of Company Stock Options outstanding as of the date of this Agreement;
(m)
Cause, permit or submit to a vote of the Company’s stockholders any amendments
to the Company Charter Documents (or similar governing instruments of any of
its
subsidiaries);
(n)
Acquire or agree to acquire by merging or consolidating with, or by purchasing
any equity interest in or a portion of the assets of, or by any other manner,
any person or division thereof, or otherwise acquire or agree to enter into
any
joint ventures, strategic partnerships or similar alliances;
(o)(i) Sell
or otherwise dispose of any physical properties or physical assets, except
in
the ordinary course of business and at no less than the fair market value of
such physical assets or physical properties, (ii) lease, license or
encumber any Company-owned or controlled physical properties or physical assets,
or (iii) enter into any Contract for the purchase or sale of any interest
in real property, grant any security interest in any real property, enter into
any lease, sublease, license or other occupancy Contract with respect to any
real property or violate (in any material respect), alter, amend, modify, or
terminate any of the terms of any Real Estate Leases;
(p)
Make any loan, advance or capital contribution to or investment in any person,
incur any indebtedness for borrowed money or guarantee any such indebtedness
or
the indebtedness of another person, issue or sell any debt securities or
options, warrants, calls or other rights to acquire any debt securities of
the
Company, enter into any “keep well” or other Contract to maintain any financial
statement condition, forgive or discharge in whole or in part any outstanding
loans or advances, modify any loan previously granted, enter into any hedging
agreement or other financial Contract designed to protect the Company or its
subsidiaries against fluctuations in commodities prices or exchange rates,
or
enter into any arrangement having the economic effect of any of the foregoing;
(q)(i)
Adopt, terminate or amend any Company Employee Plan or enter into any Company
Employee Plan, or amend any compensation, bonus, commission, insurance coverage
(except (A) as contemplated by this Agreement and (B) for any Company
Employee Plan with a Consultant, which shall be governed by Section 4.1(t)
and any other applicable provisions of this Section 4.1),
benefit, entitlement, grant or award provided or made under any Company Employee
Plan; (ii) enter into any employment Contract or collective bargaining
agreement; (iii) pay any special bonus, commission or special remuneration
to any Employee (cash, equity or otherwise); (iv) increase the salaries,
bonuses, commissions or wage rates or fringe benefits (including rights to
severance or indemnification) of its Employees; (v) pay any benefit not
provided for as of the date of this Agreement under any Company Employee Plan
(provided
that nothing herein is intended to preclude the accrual of benefits under the
terms of such Company Employee Plans in effect as of the date of this
Agreement); or (vi) add any new members to the Board or any scientific or
other advisory board; (v) pay any benefit not provided for as of the date
of this Agreement under any Company Employee Plan; or (vi) add any new
members to the Board;
(r)
discuss, announce or otherwise disseminate information to the Company’s
employees regarding any severance plan or practice of the Company, whether
or
not the terms of such plan or practice would be triggered by the Closing, except
for announcements or other communications regarding such matters as are provided
by Parent;
39
(s)
(i) Pay, discharge, settle or satisfy any Liabilities, other than the
payment, discharge, settlement or satisfaction of Liabilities
(I) recognized or disclosed in the most recent financial statements (or the
notes thereto) of the Company included in the Company SEC Reports, (II) incurred
since the date of the Interim Balance Sheet in the ordinary course of business
consistent with past practices or (III) incurred since the date of the Interim
Balance Sheet pursuant to and in accordance with Contracts in effect as of
the
date hereof or permitted to be entered into pursuant to this Section 4.1;
provided,
however,
that the payment, discharge, settlement or satisfaction of any Liability
relating to or arising out of any Action shall be governed by Section 4.1(z));
(t)
(i) Enter into (unless otherwise permitted by this Section 4.1),
modify or amend (unless such amendment, if it were a new Contract, would be
otherwise permitted by this Section 4.1),
or terminate any Contract (including an IP Contract) of a nature required to
be
listed as a Company Contract in Section 2.19
or Section 2.20
of the Company Disclosure Letter or waive, delay the exercise of, release or
assign any material rights or claims thereunder or knowingly fail to enforce
any
Company Contract (including the confidentiality or nondisclosure provisions
of
any such Company Contract), or (ii) enter into or amend any Contract
pursuant to which any other person is granted exclusive rights or “most favored
party” rights of any type or scope with respect to any Company Research
Programs, Company Products or Company Intellectual Property or containing any
non-competition covenants or other material restrictions relating to the
Company’s, any of its subsidiaries or Parent’s business activities or the effect
of which would be to grant to a third person following the Merger the actual
or
potential right to license any Intellectual Property owned by Parent or its
subsidiaries or otherwise would have the effect of prohibiting or impairing
any
business practice of the Company, any of its subsidiaries or Parent or limiting
the freedom of the Company, any of its subsidiaries or Parent to engage in
any
line of business or to compete with any person or in any market or geography;
(u)
Except as required by GAAP or SEC rules and regulations as concurred with by
its
independent auditors and after notice to Parent, revalue any of its assets
or
make any change in accounting methods, principles or practices;
(v)
(i) Enter into or materially modify any Contract relating to the distribution,
sale, license, manufacture or marketing by third persons of the Company Products
or any subject or product of a Company Research Program; or (ii) renew any
Contract relating to the distribution, sale, license, manufacture or marketing
by third persons of the Company Products or any subject or product of a Company
Research Program, except to the extent that such renewals are on terms
substantially similar to the terms of such Contracts in effect as of the date
hereof;
(w)
Make or change any material Tax election or accounting method, enter into any
Tax sharing or similar agreement or closing agreement, settle or compromise
any
material Tax Liability or consent to any extension or waiver of any limitation
period with respect to Taxes;
(x)
(i) hire any officers or employees or enter into, or amend or extend the
term of, any Employment Agreement with any officer or employee (except that,
in
the event an employee is terminated pursuant to clause (ii) hereof or
voluntarily terminates, including by death or disability, his or her employment,
a replacement may be engaged to fill such terminated employee’s position,
provided
(A) any consideration payable for services rendered by such replacement is
of a kind and amount not otherwise prohibited by this Section 4.1
and substantially similar in kind and amount to the consideration paid for
such
terminated employee, and (B) any arrangement with any such replacement
shall be terminable, at the sole option of Parent, without payment or penalty
at
the Effective Time, other than payment as may be required by applicable Legal
Requirements or the Company’s employee handbook), (ii) terminate any
Employee (other than Consultants who are not Significant Consultants) identified
in writing by Parent to the Company as a “key employee” (except for termination
for cause), or take any action that would allow any employee to claim a
constructive termination or termination for “good reason”; or (iii) hire
any consultants or independent contractors or enter into, or amend or extend
the
term of, any consulting Contract with any consultant or independent contractor
unless any such Contract is on customary terms and rates and is either
(A) scheduled to be completed within 90 days after the date of this
Agreement or (B) terminable at the sole option of Parent, without payment
or penalty at the Effective Time;
40
(y)
Make any individual or series of related payments outside of the ordinary course
of business (including payments to legal, accounting or other professional
service advisors) in excess of $100,000 in the aggregate, other than
(i) pursuant to Contracts existing on the date hereof and made available to
Parent prior to the date hereof and (ii) payment to legal counsel and other
advisers as set forth in Section 2.18
of the Company Disclosure Letter;
(z)
Commence or settle any threatened or pending Action (including material
litigation or any other material disputes), whether or not commenced prior
to
the date of this Agreement;
(aa)
Adopt, implement or amend any stockholder rights plan (including the Rights
Agreement), “poison pill” anti-takeover plan or other similar plan, device or
arrangement that, in each case, is applicable to Parent or any of its affiliates
or the transactions contemplated by this Agreement;
(bb)
Make any capital expenditures, capital additions, capital improvements or other
expenditures in excess of $200,000 in the aggregate;
(cc)
Materially change the amount of any insurance coverage;
(dd)
Fail to timely file any of the forms, reports or documents required to be filed
with the SEC;
(ee)
Enter into any Contract or transaction in which any officer, director or
Employee of the Company or any of its subsidiaries (or, to the knowledge of
the
Company, any member of their families) has an interest under circumstances
that,
if entered immediately prior to the date of this Agreement, would require that
such Contract be listed on Section 2.20(a)
of the Company Disclosure Letter; or
(ff)
Agree to take any of the actions described in Section 4.1(a)
through Section 4.1(ee).
ARTICLE V
ADDITIONAL
AGREEMENTS
5.1
Proxy
Statement.
(a)
As promptly as practicable after the execution of this Agreement, the Company
shall prepare, and file with the SEC, preliminary proxy materials relating
to
the Company Stockholder Approval; provided
that the parties acknowledge that the parties’ goal is that the Company file the
Proxy Statement within 15 days after execution of this Agreement and that if
the
Company does not file the Proxy Statement within such period, the Company’s
senior executives shall discuss the reasons for the failure to meet such goals
with Parent’s duly appointed representatives. Parent shall provide promptly to
the Company such information concerning Parent as, in the reasonable judgment
of
Parent or its counsel, may be required or appropriate for inclusion in the
Proxy
Statement, or in any amendments or supplements thereto. At the earliest
practicable time following the later of (i) receipt and resolution of SEC
comments thereon, or (ii) the expiration of the 10-day waiting period
provided in Rule 14a-6(a) promulgated under the Exchange Act, the Company
shall file definitive proxy materials with the SEC and cause the Proxy Statement
to be mailed to its stockholders. The Company will cause the Proxy Statement
to
comply with all applicable Legal Requirements. Prior to filing the preliminary
proxy materials, definitive proxy materials or any other filing with the SEC
or
any other Governmental Entity, the Company shall provide Parent (which term
shall in all instances in this Section 5.1
also include Parent’s counsel) with reasonable opportunity to review and comment
on each such filing in advance and the Company shall in good faith consider
including in such filings all comments reasonably proposed by Parent;
provided
that Parent shall have provided to the Company its comments as promptly as
practicable after the Proxy Statement has been transmitted to Parent for its
review.
(b)
The Company will notify Parent promptly of the receipt of any comments from
the
SEC or its staff (or of notice of the SEC’s intent to review the Proxy
Statement) and of any request by the SEC or its staff or any other government
officials for amendments or supplements to the Proxy Statement or any other
filing or for additional/supplemental information, and will supply Parent with
copies of all correspondence between
41
the
Company or any of its representatives, on the one hand, and the SEC, or its
staff or any other government officials, on the other hand, with respect to
the
Proxy Statement or other filing. The Company and its outside counsel shall
permit Parent and its outside counsel to participate in all planned
communications with the SEC and its staff (including all meetings and telephone
conferences) relating to the Proxy Statement, this Agreement or the Merger.
The
Company shall consult with Parent prior to responding to any comments or
inquiries by the SEC or any other Governmental Entity with respect to the Proxy
Statement and shall provide Parent with reasonable opportunity to review and
comment on any such written response in advance and shall include in such
response all comments reasonably proposed by Parent (provided that Parent shall
have provided its comments to the Company as promptly as practicable after such
written response has been transmitted to Parent for its review). Whenever any
event occurs prior to the Effective Time (including events relating to the
Company or any of its affiliates, directors or officers) that is required to
be
set forth in an amendment or supplement to the Proxy Statement or any other
filing, the Company shall promptly inform Parent of such occurrence, provide
Parent with reasonable opportunity to review and comment on any such amendment
or supplement in advance, shall in good faith consider including in such
amendment or supplement all comments reasonably proposed by Parent, and shall
cooperate in filing with the SEC or its staff or any other government officials,
and/or mailing to the stockholders of the Company, such amendment or supplement;
provided
that Parent shall have provided to the Company its comments as promptly as
practicable after the Proxy Statement has been transmitted to Parent for its
review.
(c)
If at any time prior to the Effective Time Parent should discover any
information relating to itself or to any of its affiliates, directors or
officers which should be set forth in an amendment or supplement to the Proxy
Statement, so that the Proxy Statement would not include any misstatement of
a
material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they are made,
not
misleading, Parent shall promptly notify the Company and an appropriate
amendment or supplement describing such information shall be promptly filed
with
the SEC and, to the extent required by Legal Requirements, disseminated to
the
stockholders of the Company.
5.2
Meeting
of Company Stockholders.
(a)
Promptly after the date hereof, the Company shall take all action necessary
in
accordance with Delaware Law, the rules of Nasdaq and the Company Charter
Documents to convene a special meeting of its stockholders for the purpose
of
considering and taking action with respect to the Company Stockholder Approval
(the “Stockholders’
Meeting”),
to be held as promptly as practicable after execution of this Agreement;
provided
that the parties acknowledge that the Company’s goal is (to the extent
permissible under applicable law) to convene such special meeting within 45
days
after the Proxy Statement is cleared by the SEC (or, if no SEC comments are
received on or prior to the tenth day after the initial filing of the Proxy
Statement, within 55 days after such initial filing), and that if the
Stockholders’ Meeting is not convened within such period, the Company’s senior
executives shall discuss the reasons for the failure to meet such goals with
Parent’s duly appointed representatives. The Company shall use all reasonable
efforts to solicit from its stockholders proxies in favor of the adoption of
this Agreement and shall take all other action necessary or advisable to secure
the vote or consent of its stockholders required by the rules of Nasdaq or
Delaware Law to obtain such approvals. Notwithstanding anything to the contrary
contained in this Agreement, the Company may adjourn or postpone the
Stockholders’ Meeting to the extent necessary to ensure that any necessary
supplement or amendment to the Proxy Statement is provided to the Company’s
stockholders in advance of a vote on this Agreement or, if as of the time for
which the Stockholders’ Meeting is originally scheduled (as set forth in the
Proxy Statement) there are insufficient shares of Company Common Stock
represented (either in person or by proxy) to constitute a quorum necessary
to
conduct the business of the Stockholders’ Meeting. The Company shall ensure that
the Stockholders’ Meeting is called, noticed, convened, held and conducted, and
that all proxies solicited by the Company in connection with the Stockholders’
Meeting are solicited, in compliance with Delaware Law, the Company Charter
Documents, the rules of Nasdaq and all other applicable Legal Requirements.
42
(b)
Subject to the terms of Section 5.4(d):
(i) the Board shall unanimously recommend that the Company’s stockholders
adopt this Agreement at the Stockholders’ Meeting; (ii) the Proxy Statement
shall include (A) the fairness opinion referred to in Section 2.23
and (B) a statement to the effect that the Board has unanimously
recommended that the Company’s stockholders vote in favor of the Company
Stockholder Approval at the Stockholders’ Meeting; and (iii) neither the
Board nor any committee thereof shall withdraw, amend, change or modify, or
propose or resolve to withdraw, amend, change or modify in any manner adverse
to
Parent, the unanimous recommendation of the Board that the Company’s
stockholders vote in favor of the Company Stockholder Approval. For purposes
of
this Agreement, said recommendation of the Board shall be deemed to have been
modified in a manner adverse to Parent if said recommendation shall no longer
be
unanimous.
5.3
Confidentiality;
Access to Information.
(a)
The parties acknowledge that Parent and the Company have previously executed
a
mutual confidentiality agreement, dated as of June 22, 2006 (the
“Confidentiality
Agreement”),
which Confidentiality Agreement will continue in full force and effect in
accordance with its terms, and each of Parent and the Company will hold, and
will cause their respective directors, officers, employees, agents and advisors
(including attorneys, accountants, consultants, bankers, and financial advisors)
to hold any Information (as defined in the Confidentiality Agreement)
confidential in accordance with the terms thereof.
(b)
The Company shall: (i) afford Parent and its accountants, counsel, advisors
and other representatives reasonable access, upon reasonable notice, to the
properties (including for the purpose of performing such environmental tests
and
due diligence review as Parent may desire), books, records and personnel of
the
Company during the period prior to the Effective Time to obtain all information
concerning the business, including the status of product development efforts,
properties, financial positions, results of operations and personnel of the
Company, as Parent may reasonably request (it being understood that Parent
shall
use all reasonable efforts to conduct such access during normal business hours),
and (ii) furnish Parent on a timely basis with such financial and operating
data and other information with respect to the business, operations and
properties of the Company and its subsidiaries as Parent may from time to time
reasonably request, except for information covered by attorney-client privilege
or subject to confidentiality (which information shall be treated in accordance
with the procedures put in place by Parent and the Company on or prior to the
date hereof). Except for disclosures expressly permitted by the terms of the
Confidentiality Agreement, Parent shall hold, and shall cause its
representatives to hold, all information received from the Company, directly
or
indirectly, in confidence in accordance with the Confidentiality Agreement.
(c)
No information or knowledge obtained by Parent pursuant to this Section 5.3
will affect or be deemed to modify any representation or warranty contained
herein or the conditions to the obligations of the parties to consummate the
Transactions.
5.4
No
Solicitation.
(a)
No
Solicitation.
The Company and its subsidiaries shall not, nor shall they permit any of their
respective officers and directors (or affiliates of any of such officers or
directors), controlled affiliates, or employees or any investment banker,
attorney, accountant or other advisor or representative retained by (or
otherwise working on behalf of) the Company or any of its subsidiaries
(collectively, “Representatives”)
to directly or indirectly: (i) solicit, initiate, knowingly encourage,
knowingly facilitate, or induce any inquiry with respect to, or the making,
submission or announcement of, any Acquisition Proposal (as defined in
Section 5.4(g)(i)),
(ii) participate or otherwise engage in any discussions or negotiations
regarding, or furnish to any person any nonpublic information with respect
to,
or take any other action (including granting any person a waiver or release
under any standstill or similar agreement with respect to any class of equity
security of the Company or any of its subsidiaries or amending, waiving or
terminating the Rights Agreement, other than as contemplated by this Agreement,
or redeeming any rights under the Rights Agreement, other than as contemplated
by this Agreement) to facilitate any inquiries or the making of any proposal
that constitutes or may reasonably be expected to lead to, any Acquisition
Proposal, (iii) engage in
43
discussions
with any person with respect to any Acquisition Proposal, except as to the
existence of these provisions, (iv) approve, endorse or recommend any
Acquisition Proposal (except to the extent specifically permitted pursuant
to
Section 5.4(d)),
or (v) enter into any letter of intent or similar document or any Contract
relating to an Acquisition Proposal (other than a confidentiality agreement
entered into with a party making an Acquisition Proposal as permitted by
Section 5.4(c)(i)
below). The Company and its subsidiaries will immediately cease, and will cause
its Representatives to immediately cease, any and all existing activities,
discussions or negotiations with any third parties conducted heretofore with
respect to any Acquisition Proposal.
(b)
Notification
of Unsolicited Acquisition Proposals.
(i)
As promptly as practicable (but in no event more than 36 hours thereafter)
after
receipt of any Acquisition Proposal or any request for nonpublic information
or
inquiry which it reasonably believes would lead to an Acquisition Proposal,
the
Company shall provide to Parent written notice of the material terms and
conditions of such Acquisition Proposal, request or inquiry, and the identity
of
the person or group making any such Acquisition Proposal, request or inquiry,
a
copy of all written materials provided in connection with such Acquisition
Proposal, request or inquiry and a written summary of any such Acquisition
Proposal, request or inquiry, if it is not in writing. After receipt of the
Acquisition Proposal, request or inquiry, the Company shall continue to provide
to Parent as promptly as practicable (but in no event more than 48 hours
thereafter) written notice setting forth all such information as is reasonably
necessary to keep Parent informed in all material respects of the status and
material terms (including material amendments or proposed material amendments)
of any such Acquisition Proposal, request or inquiry and shall promptly provide
to Parent a copy of all written materials provided in connection with such
Acquisition Proposal, request or inquiry.
(ii)
The Company shall provide Parent with at least 48 hours prior notice (or such
lesser prior notice as is provided to the members of the Board) of any meeting
at which the Board is reasonably expected to consider any Acquisition Proposal.
(c)
Superior
Offers.
Notwithstanding anything to the contrary contained in Section 5.4,
in the event that the Company or any of its subsidiaries receives a bona fide
written Acquisition Proposal from a third party that is not solicited or
otherwise procured in violation of Section 5.4(a)
that the Board has in good faith concluded (following consultation with its
outside legal counsel and its financial advisor) is, or is reasonably likely
to
be, a Superior Offer (as defined in Section
5.4(g)(ii)),
it may then take the following actions:
(i)
Furnish nonpublic information to the third party making such Acquisition
Proposal (and its Representatives), provided
that (A) (1) concurrently with furnishing any such nonpublic
information to such party, it gives Parent at least one business day prior
written notice of its intention to furnish nonpublic information and (2) it
receives from the third party an executed confidentiality and standstill
agreement, the terms of which are at least as restrictive as the terms contained
in the Confidentiality Agreement and (B) contemporaneously with furnishing
any such nonpublic information to such third party, the Company furnishes such
nonpublic information to Parent (to the extent such nonpublic information has
not been previously so furnished); and
(ii)
Engage in negotiations with the third party with respect to the Acquisition
Proposal, provided
that concurrently with entering into negotiations with such third party, the
Company gives Parent at least one business day prior written notice of its
intention to enter into negotiations with such third party.
(d)
Changes
of Recommendation.
In response to the receipt of a Superior Offer, the Board may withhold,
withdraw, amend or modify its unanimous recommendation in favor of the Merger,
and, in the case of a Superior Offer that is a tender or exchange offer made
directly to its stockholders, may recommend that its stockholders accept the
tender or exchange offer (any of the foregoing actions, whether by the Board
or
a committee thereof, a “Change
of Recommendation”)
or terminate this Agreement pursuant to Section 7.1(h)
of this Agreement (provided,
however,
that the Company shall not terminate this Agreement
44
pursuant
to Section 7.1(h)
and any purported termination pursuant to Section 7.1(h)
shall be void and of no further force or effect, unless prior to or concurrently
with such termination, the Company pays the Termination Fee), only if all of
the
following conditions in clauses (i) through (v) are met:
(i)
A Superior Offer with respect to the Company has been made and has not been
withdrawn;
(ii)
The Stockholders’ Meeting has not occurred;
(iii)
The Company shall have (A) provided to Parent five business days prior
written notice which shall state expressly (1) that the Company has
received a Superior Offer, (2) the material terms and conditions of the
Superior Offer and the identity of the person or group making the Superior
Offer, and (3) that the Board intends to effect a Change of Recommendation
and the manner in which it intends to do so or terminate this Agreement and
enter into a definitive agreement with respect to such Superior Offer,
(B) provided to Parent a copy of all written materials delivered to the
person or group making the Superior Offer in connection with such Superior
Offer
that have not already been provided to Parent, (C) made available to Parent
all materials and information made available to the person or group making
the
Superior Offer in connection with such Superior Offer and (D) during such
five business day period, engaged in good faith negotiations to amend this
Agreement in a manner as would enable the Company to proceed with the Board’s
recommendation to the Company’s stockholders in favor of the Company Stockholder
Approval with respect to this Agreement, as it may be amended (and the Company
shall make its Chairman and senior executives available for discussions with
Parent and otherwise negotiate in good faith with Parent with respect thereto
during such five business day period);
(iv)
The Board has concluded in good faith, following consultation with its outside
legal counsel and financial adviser, that, in light of such Superior Offer
and
notwithstanding any adjustments or negotiations pursuant to Section 5.4(d)(iii)(D),
the failure of the Board to effect a Change of Recommendation is reasonably
likely to constitute a breach of its fiduciary duties to the Company’s
stockholders under applicable law; and
(v)
It shall not have materially breached Section 5.2.
Provided
however, that in the event of any material revisions to the Superior Offer,
the
Company shall deliver a new written notice to Parent and comply with the
requirements of this Section 5.4(d),
including the five-day good faith notice period provided for, with respect
to
such new written notice.
(e)
Continuing
Obligation to Call, Hold and Convene Stockholders’ Meeting; No Other
Vote.
Notwithstanding anything to the contrary contained in this Agreement, the
obligation of the Company to call, give notice of, convene and hold the
Stockholders’ Meeting shall not be limited or otherwise affected by the
commencement, disclosure, announcement or submission to it of any Acquisition
Proposal with respect to it, or by any Change of Recommendation. The Company
shall not submit to the vote of its stockholders any Acquisition Proposal,
or
propose to do so.
(f)
Compliance
with Tender Offer Rules.
Nothing contained in this Agreement shall prohibit the Board from taking and
disclosing to its stockholders a position contemplated by Rules 14d-9 and
14e-2(a) promulgated under the Exchange Act. Without limiting the foregoing
proviso, the Company shall not effect a Change of Recommendation unless
specifically permitted pursuant to the terms of Section 5.4(d).
(g)
Certain
Definitions.
For purposes of this Agreement, the following terms shall have the following
meanings:
(i)
“Acquisition
Proposal”
shall mean any offer or proposal (whether written, oral or otherwise), relating
to any transaction or series of related transactions involving: (A) any
purchase or acquisition by any person or “group” (as defined under
Section 13(d) of the Exchange Act and the rules and regulations thereunder)
of more than a fifteen percent (15%) interest in the total outstanding
voting securities of the Company or any of its subsidiaries or any tender offer
or exchange offer that if consummated would result in any person or group
beneficially owning fifteen percent (15%) or more
45
of
the total outstanding voting securities of the Company or any of its
subsidiaries or any merger, consolidation, business combination or similar
transaction involving the Company or any of its subsidiaries, (B) any sale,
lease (other than in the ordinary course of business), exchange, transfer,
license (other than in the ordinary course of business) or disposition of more
than fifteen percent (15%) of the assets of the Company (including its
subsidiaries taken as a whole), or (C) any liquidation or dissolution of
the Company, in each case other than the Transactions; and
(ii)
“Superior
Offer”
shall mean a bona fide written offer that is made by a third party to acquire,
directly or indirectly, pursuant to a tender offer, exchange offer, merger,
consolidation or other business combination, all or substantially all of the
assets of the Company or a majority of the total outstanding voting securities
of the Company and as a result of which the stockholders of the Company
immediately preceding such transaction would hold less than fifty percent
(50%) of the equity interests in the surviving or resulting entity of such
transaction or any direct or indirect parent or subsidiary thereof, on terms
that the Board has in good faith concluded (following the receipt of advice
of
its outside legal counsel and its financial adviser), taking into account,
among
other things, all legal, financial, regulatory and other aspects of the offer
and the person making the offer, to be more favorable, from a financial point
of
view, to the Company’s stockholders (in their capacities as stockholders) than
the terms of the Merger (as they may be amended in accordance with Section 5.4(d)(iii)(D))
and is reasonably capable of being consummated and for which financing, to
the
extent required, is then fully committed or reasonably determined by the Board
to be available to consummate such a transaction.
(h)
Without limiting the foregoing, it is understood that (i) any violation of
the restrictions set forth above by any officer or director of the Company
and
(ii) any violation of the restrictions set forth above by any agent or
representative of the Company of which the Company has knowledge (prior to
such
violation) shall be deemed to be a breach of this Agreement by the Company.
The
Company and its subsidiaries shall not (A) authorize, direct or permit any
of the persons identified in clauses (i) and (ii) of this Section 5.4(h)
or (B) authorize or direct any affiliate of the Company to violate the
provisions of this Section 5.4
and shall promptly inform all such Representatives of the restrictions set
forth
in this Section 5.4.
5.5
Public Disclosure.
(a)
The initial press release with respect to the execution of this Agreement shall
be a joint press release to be reasonably agreed upon by Parent and the Company.
Thereafter, the Company shall not issue or cause the publication of any press
release or other public announcement (to the extent not previously issued or
made in accordance with this Agreement) with respect to the Merger, this
Agreement or the other Transactions without the prior consent of Parent, except:
(a) as may be required by applicable Legal Requirements or by the rules and
regulations of Nasdaq, in which case the Company shall not issue or cause the
publication of such press release or other public announcement without prior
consultation with Parent, to the extent practicable and (b) as may be
consistent with actions taken by the Company or the Board (or any committee
thereof) pursuant to Section 5.4(d).
(b)
Subject to Parent’s compliance with applicable Legal Requirements or the rules
and regulations of the New York Stock Exchange, from the date hereof until
the
earlier to occur of the Closing and the termination of this Agreement pursuant
to Section 7.1
hereof, Parent shall inform the Company prior to issuing or causing the
publication of any press release or other public announcement with respect
to
the Merger, this Agreement or the other Transactions; provided,
however,
that nothing in this Section 5.5(b)
shall prohibit Parent from responding to questions and inquiries from third
parties regarding the Merger, this Agreement or the other Transactions.
(c)
The Company shall consult with Parent before issuing any press release or
otherwise making any public statement with respect to the Company’s earnings or
results of operations, and shall not issue any such press release or make any
such public statement prior to such consultation.
46
5.6
Reasonable
Efforts; Regulatory Matters.
(a)
Other than taking any action permitted by Section 5.4(d)
and subject to the limitations set forth in Section 5.6(d),
upon the terms and subject to the conditions set forth in this Agreement, each
of the parties agrees to use all reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and cooperate
with the other parties in doing, all things necessary, proper or advisable
to
consummate and make effective, in the most expeditious manner practicable,
the
Transactions, including using all reasonable efforts to accomplish the
following: (i) the taking of all reasonable acts necessary to cause the
conditions precedent set forth in Article
VI
to be satisfied, (ii) the obtaining of all necessary actions or
non-actions, waivers, consents, approvals, orders and authorizations from
Governmental Entities and the making of all necessary registrations,
declarations and filings (including registrations, declarations and filings
with
Governmental Entities, if any) and the taking of all reasonable steps as may
be
necessary to avoid any suit, claim, action, investigation or proceeding by
any
Governmental Entity, (iii) the obtaining of all consents, approvals or
waivers from third parties required as a result of the Transactions,
(iv) responding to any investigations or proceedings related to this
Agreement or the consummation of the Transactions, including a request for
additional information or documents, and (v) the execution or delivery of
any additional instruments reasonably necessary to consummate the Transactions,
and to fully carry out the purposes of, this Agreement. In connection with
and
without limiting the foregoing, the Company and its Board shall, if any state
takeover statute or similar statute or regulation is or becomes applicable
to
the Transactions or this Agreement, use all reasonable efforts to ensure that
the Transactions may be consummated as promptly as practicable on the terms
contemplated by this Agreement and otherwise to minimize the effect of such
statute or regulation on the Transactions and this Agreement.
(b)
Each of Parent and the Company shall, as soon as practicable, make any initial
filings required under the HSR Act, and as promptly as practicable make any
other additional filings required by any other applicable Antitrust Laws (as
defined below). Subject to the limitations set forth in Section 5.6(d),
each of Parent and the Company shall use all reasonable efforts to take such
action as may be required to cause the expiration or early termination of the
waiting or notice periods under the HSR Act or other Antitrust Laws with respect
to the Transactions as promptly as possible after execution of this Agreement.
To the extent permitted by applicable law, the parties shall consult and
cooperate with one another, and consider in good faith the views of one another,
in connection with any analyses, appearances, presentations, memoranda, briefs,
arguments, opinions and proposals made or submitted by or on behalf of any
party
hereto in connection with proceedings under or relating to the HSR Act or any
foreign or other Antitrust Law; provided,
that with respect to any such analyses, appearances, presentations, memoranda,
briefs, arguments, opinions or proposals, each of Parent and the Company need
not supply the other (or its counsel) with copies (or in case of oral
presentations, a summary) to the extent that any law, treaty, rule or regulation
of any Governmental Entity applicable to such party or confidentiality agreement
to which such party is bound (which shall be governed in accordance with the
procedures put in place by Parent and the Company on or prior to the date
hereof) requires such party or its subsidiaries to restrict or prohibit access
to any such properties or information. For purposes of this Agreement,
“Antitrust
Laws”
shall mean the HSR Act and any other federal, state or foreign statutes, rules,
regulations, orders or decrees that are designed to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint
of
trade.
(c)
Each party will notify the other promptly upon the receipt of: (i) any
comments from any officials of any Governmental Entity in connection with any
filings made pursuant to this Section 5.6,
and (ii) any request by any officials of any Governmental Entity for
amendments or supplements to any filings made pursuant to, or information
provided to comply in all material respects with, any Legal Requirements.
Whenever any event occurs that is required to be set forth in an amendment
or
supplement to any filing made pursuant to Section 5.6(b),
each
party will promptly inform the other of such occurrence and cooperate in filing
with the applicable Governmental Entity such amendment or supplement. To the
extent reasonably practicable, neither the Company nor Parent shall, nor shall
they permit their respective representatives to, participate independently
in
any substantive meeting or discussion, either in person or by telephone, with
any Governmental Entity in connection with the proposed Transactions unless
it
consults with the other party in advance and, to the extent not prohibited
by
such Governmental Entity, gives the other party the opportunity to attend and
participate.
47
(d)
Notwithstanding anything in this Agreement to the contrary (including the other
provisions of this Section 5.6),
if any administrative or judicial action or proceeding is instituted (or
threatened to be instituted) challenging any transaction contemplated by this
Agreement as violative of any Antitrust Law, it is expressly understood and
agreed that: (i) Parent shall not have any obligation to litigate or
contest any administrative or judicial Action or any decree, judgment,
injunction or other order, whether temporary, preliminary or permanent brought
by or before an administrative tribunal, court or other similar tribunal or
body; (ii) Parent shall be under no obligation to make proposals, execute
or carry out agreements or submit to orders providing for a Divestiture and
(iii) the Company may not conduct or agree to conduct a Divestiture without
the prior written consent of Parent. “Divestiture”
shall mean (1) the sale, license or other disposition or holding separate
(through the establishment of a trust or otherwise) of any assets or categories
of assets of Parent or any of its affiliates or the Company, (2) the
imposition of any limitation or restriction on the ability of Parent or any
of
its affiliates to freely conduct their business or the Company’s business or own
such assets, or (3) the holding separate of the shares of Company Common
Stock or any limitation or regulation on the ability of Parent or any of its
affiliates to exercise full rights of ownership of the shares of Company Common
Stock.
5.7
Notification.
Each party shall give prompt notice to the other party upon becoming aware
that
any representation or warranty made by it contained in this Agreement has become
untrue or inaccurate or of any failure to comply with or satisfy in any respect
any covenant, condition or agreement to be complied with or satisfied by it
under this Agreement, in each case such that the conditions set forth in
Section 6.2(a)
or Section 6.2(b)
(as it relates to knowledge acquired by Parent) or Section 6.3(a)
or Section 6.3(b)
(as it relates to knowledge acquired by the Company), as applicable, would
not
be satisfied; provided,
however,
that no such notification shall affect the representations, warranties,
covenants or agreements of the parties or the conditions to the obligations
of
the parties under this Agreement. Each party shall promptly notify the other
party of (i) any change, event, violation, inaccuracy, circumstance or
effect that has had or would reasonably be expected to have a Material Adverse
Effect on such party and (ii) any Actions commenced or, to such party’s
knowledge, threatened against, relating to or involving or otherwise affecting
such party or any of its subsidiaries that relate to the consummation of the
Merger.
5.8
Third
Party Consents and Notices.
(a)
As soon as practicable following the date hereof, the Company shall use all
reasonable efforts to obtain any consents, waivers and approvals under any
Company Contracts required to be obtained in connection with the consummation
of
the Transactions, as set forth on Section 5.8
of the Company Disclosure Letter; provided
that neither the Company nor any of its subsidiaries shall, without the prior
written consent of Parent, expend any material amount, assume any material
Liability or suffer or permit the loss of any material right or benefit in
connection with obtaining any of the foregoing consents, waivers or approvals.
(b)
As soon as practicable following the date hereof, the Company shall deliver
any
notices required under any Company Contracts that are required to be provided
in
connection with the execution of this Agreement or prior to the effectiveness
of
the Merger.
(c)
With respect to all Employees (other than Consultants), the Company and/or
any
of its subsidiaries shall be responsible for providing any notices required
to
be given and otherwise complying with WARN or similar statutes or regulations
of
any jurisdiction relating to any plant closing or mass layoff (or similar
triggering event) caused by the Company or any of its subsidiaries, and Parent
shall have no responsibility or Liability under WARN (or any other similar
statute or regulation) with respect to such Employees. If Parent determines
that an event would trigger WARN obligations (or obligations arising under
similar statutes or regulations) within 60 days following the Effective Time,
the Company or the Company’s subsidiaries shall, at Parent’s request, provide
notices to all Employees (other than Consultants) as are required to be provided
under WARN (or any similar statute or regulation), in a form approved by and
as
directed by Parent.
48
5.9
Indemnification.
(a)
From and after the Effective Time, Parent shall, and shall cause the Surviving
Corporation to fulfill and honor in all respects the obligations with respect
to
all rights to indemnification and exculpation from liabilities, including
advancement of expenses, for acts or omissions occurring at or prior to the
Effective Time now existing in favor of the current and former directors or
officers of the Company pursuant to any indemnification agreements between
the
Company and its directors and officers (in each case, as in effect on the date
hereof and listed on the Company Disclosure Letter), and any indemnification
provisions under the Company Charter Documents as in effect on the date hereof
in favor of the Company’s directors and officers and Employees (the
“Indemnified
Parties”),
and such obligations shall survive the Merger and shall continue in full force
and effect in accordance with their terms. The Certificate of Incorporation
and
Bylaws of the Surviving Corporation will contain provisions with respect to
exculpation and indemnification that are at least as favorable to the
Indemnified Parties as those contained in the Company Charter Documents as
in
effect on the date hereof, which provisions will not be amended, repealed or
otherwise modified for a period of six (6) years from the Effective Time in
any manner that would adversely affect the rights thereunder of individuals
who,
immediately prior to the Effective Time, were Employees or agents of the
Company, unless such modification is required by applicable law.
(b)
At any time prior to the Closing, Company may purchase, for a price (which
shall
in no event exceed the Cap Amount regardless of any amounts credited against
premium payments previously paid by the Company) not to exceed the amount set
forth on Section 5.9(b)
of the Company Disclosure Letter (the “Cap
Amount”),
directors’ and officers’ liability tail coverage (for a period of six
(6) years following the Effective Time), covering those persons who are
currently covered by the Company’s directors’ and officers’ liability insurance
policy, on terms comparable to those applicable to the current directors and
officers of the Company, and covering all periods prior to the Effective Time
(the “Tail
Coverage”).
Following the Closing, in the event Company shall not have purchased the Tail
Coverage, Parent shall (or shall cause the Surviving Corporation to) purchase
the Tail Coverage, provided
that in no event shall Parent or the Surviving Corporation be required to expend
in the aggregate in connection with the purchase of such Tail Coverage an amount
in excess of the Cap Amount and, in the event a comparable level of directors’
and officers’ liability Tail Coverage is not readily available for the Cap
Amount without undue effort or expense, Parent (or the Surviving Corporation,
as
the case may be) shall only be obligated to purchase such Tail Coverage as
may
be purchased for the Cap Amount.
(c)
If the Surviving Corporation or any of its successors or assigns
(i) consolidates with or merges into any other person and is not the
continuing or surviving corporation or entity of such consolidation or merger
or
(ii) transfers or conveys all or substantially all of its properties and
other assets to any person, then, and in each such case, Parent shall cause
proper provision to be made so that the successors and assigns of the Surviving
Corporation shall expressly assume the obligations set forth in this
Section 5.9.
If (A) the Surviving Corporation transfers any material portion of its
assets, in a single transaction or in a series of transactions or
(B) Parent takes any action to materially impair the financial ability of
the Surviving Corporation to satisfy the obligations referred to in this
Section 5.9,
Parent will either guarantee such obligations or take such other action to
insure that the ability of the Surviving Corporation, legal and financial,
to
satisfy such obligations will not be diminished in any material respect.
(d)
This Section 5.9
is (i) intended for the irrevocable benefit of, and to grant third party
rights to, the Indemnified Parties and shall be binding on all successors and
assigns of Parent, the Company and the Surviving Corporation and (ii) in
addition to, and not in substitution for, any other rights to indemnification
or
contribution that any such person may have by Contract or otherwise. Each of
the
Indemnified Parties shall be entitled to enforce the covenants contained in
this
Section 5.9.
5.10
Termination
of Certain Benefit Plans.
Except as set forth on Section 5.10
of the Company Disclosure Letter, effective no later than the day immediately
preceding the Closing Date, the Company and its ERISA Affiliates, as applicable,
shall each terminate any and all group severance, separation or salary
continuation plans, programs or arrangements and any and all plans intended
to
include a Code Section 401(k) arrangement
49
(unless
Parent provides written notice to the Company that such 401(k) plans shall
not
be terminated) (collectively, for purposes of this Section 5.10“Company
Group Employee Plans”).
Unless Parent provides such written notice to the Company, no later than five
(5) business days prior to the Closing Date, the Company shall provide
Parent with evidence that such Company Group Employee Plan(s) have been
terminated (effective no later than the day immediately preceding the Closing
Date) pursuant to resolutions of the Board. The form and substance of such
resolutions shall be subject to advance review and approval of Parent. The
Company also shall take such other actions in furtherance of terminating such
Company Group Employee Plan(s) as Parent may reasonably require.
5.11
Section 16
Matters.
The Company shall take all such steps as may be required (to the extent
permitted under applicable law) to cause any disposition of Company Common
Stock
(including derivative securities with respect to Company Common Stock) resulting
from the transactions contemplated by Article I
of this Agreement by each Company Insider to be exempt under Rule 16b-3
promulgated under the Exchange Act. “Company
Insiders”
shall mean those individuals who are subject to the reporting requirement of
Section 16(b) of the Exchange Act with respect to the Company.
5.12
Disqualified
Individuals.
At least five (5) business days prior to the Closing Date, the Company
shall, to the extent not already disclosed on Section 2.13(l)(ii)
of the Company Disclosure Letter, deliver to Parent a schedule which sets forth
each person who the Company reasonably believes is, with respect to the Company
or any ERISA Affiliate, a “disqualified individual” within the meaning of
Section 280G of the Code and the regulations promulgated thereunder, as of
the date such schedule is delivered to Parent.
5.13
Company
Rights Agreement. The
Company shall not redeem the Rights or amend or modify (including by delay
of
the “Distribution Date” thereunder) or terminate the Company Rights Agreement
prior to the Effective Time unless, and only to the extent that: (i) it is
required to do so by order of a court of competent jurisdiction or (ii) the
Board has concluded in good faith, following consultation with its outside
legal
counsel, that the failure of the Board to effect such an amendment, modification
or termination is reasonably likely to constitute a breach of its fiduciary
duties to the Company’s stockholders under applicable law.
5.14
Takeover
Statutes.
(a)
The Board shall take all actions sufficient to render inapplicable to the
Merger, the execution, delivery and performance of this Agreement and the
Company Voting Agreements and the Transactions and the transactions contemplated
by the Company Voting Agreements, the provisions of Section 203 of Delaware
Law applicable to a “business combination” (as defined in such Section 203
and any other state takeover statue or similar statute or regulation).
(b)
If any “fair price”, “moratorium”, “control share acquisition” or other form of
anti-takeover statute or regulation shall become applicable to the Transactions,
the Company and the members of the Board shall grant such approvals and take
such actions as are reasonably necessary so that the Transactions may be
consummated as promptly as practicable on the terms contemplated hereby and
otherwise act to eliminate or minimize the effects of such statute or regulation
on the Transactions.
5.15
FIRPTA
Compliance.
On the Closing Date, the Company shall deliver to Parent a properly executed
statement prepared in accordance with the certification requirements set forth
in Treasury Regulations Section 1.1445-2(c)(3) certifying that the shares
of Company Common Stock are not U.S. real property interests.
50
ARTICLE VI
CONDITIONS
TO THE MERGER
6.1
Conditions
to Obligations of Each Party to Effect the Merger.
The respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Closing Date of each
of
the following conditions. any and all of which may be waived in whole or in
part
by Parent, Merger Sub and the Company, as the case may be, to the extent
permitted by applicable Legal Requirements:
(a)
Company
Stockholder Approval.
The Company Stockholder Approval shall have been obtained.
(b)
No
Order.
No Governmental Entity shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, executive order, decree, injunction
or
other order (whether temporary, preliminary or permanent) which is in effect
and
which has the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger; provided,
however,
that the right to assert this condition shall not be available to any party
whose breach of any provision of this Agreement results in the imposition of
any
such statute, rule, regulation, executive order, decree, injunction or other
order or the failure of any the foregoing to be resisted, resolved or lifted,
as
applicable.
(c)
Governmental
Approvals.
All applicable waiting periods under the HSR Act shall have expired or been
terminated and all other material regulatory consents, approvals, expiration
of
waiting periods, and clearances of Governmental Entities under any applicable
material foreign or other Legal Requirements (including other Antitrust Laws)
in
connection with this Agreement and the transactions contemplated hereby
(including the Merger) (other than the filing of the Certificate of Merger)
shall have been obtained, and if the SEC shall have reviewed and/or provided
comments to the Proxy Statement, such comments and any related issues or matters
with the SEC shall have been resolved.
6.2
Additional
Conditions to Obligations of the Company.
The obligation of the Company to consummate and effect the Merger shall be
subject to the satisfaction at or prior to the Closing Date of each of the
following conditions, any of which may be waived, in writing, exclusively by
the
Company:
(a)
The representations and warranties of Parent and Merger Sub contained in this
Agreement shall be (i) true and correct in all material respects at and as
of the date of this Agreement (except for those representations and warranties
that are qualified by the word “material”, “Material Adverse Effect” or a
similar phrase, which shall be true and correct in all respects at and as of
the
date of this Agreement) and (ii) true and correct at and as of the Closing
Date as though made at and as of the Closing Date, except for such failures
to
be true and correct at and as of the Closing Date as would not have, in each
case or in the aggregate, a Material Adverse Effect on Parent (it being
understood and agreed that, for purposes of this clause (ii), all materiality
qualifications and other qualifications based on the word “material”, “Material
Adverse Effect” or similar phrases contained in such representations and
warranties shall be disregarded); provided,
however,
notwithstanding the foregoing, the representations and warranties that are
made
as of a particular date or period shall be true and correct only at and as
of
such date or period. The Company shall have received a certificate to such
effect signed on behalf of Parent and Merger Sub by a duly authorized officer
of
Parent and Merger Sub.
(b)
Agreements
and Covenants.
Parent and Merger Sub shall have performed or complied in all material respects
with all agreements and covenants required by this Agreement to be performed
or
complied with by them on or prior to the Closing Date, and the Company shall
have received a certificate to such effect signed on behalf of Parent and Merger
Sub by an authorized officer of Parent and Merger Sub.
6.3
Additional
Conditions to the Obligations of Parent and Merger Sub.
The obligations of Parent and Merger Sub to consummate and effect the Merger
shall be subject to the satisfaction at or prior to the Closing Date of each
of
the following conditions, any of which may be waived, in writing, exclusively
by
Parent:
(a)
Representations
and Warranties.
The representations and warranties of the Company contained in this Agreement
shall be (i) true and correct in all material respects at and as of the
date of this Agreement
51
(except
for those representations and warranties that are qualified by the word
“material”, “Material Adverse Effect” or a similar phrase, which shall be true
and correct in all respects at and as of the date of this Agreement) and
(ii) true and correct at and as of the Closing Date as though made at and
as of the Closing Date, except for such failures to be true and correct at
and
as of the Closing Date as would not have, in each case or in the aggregate,
a
Material Adverse Effect on the Company (it being understood and agreed that,
for
purposes of this clause (ii), all materiality qualifications and other
qualifications based on the word “material”, “Material Adverse Effect” or
similar phrases contained in such representations and warranties shall be
disregarded and any purported update of or modification to the Company
Disclosure Letter made after the execution of this Agreement shall be
disregarded); provided,
however,
notwithstanding the foregoing, (i) the representations and warranties that
are made as of a particular date or period shall be true and correct only at
and
as of such date or period and (ii) the representations and warranties
contained in Section 2.3(a),
Section 2.4,
Section 2.23
and Section 2.25
shall be true and correct in all material respects at and as of the date of
this
Agreement and at as of the Closing Date. Parent shall have received a
certificate to such effect signed on behalf of the Company by the Chief
Executive Officer and the Vice President of Finance of the Company.
(b)
Agreements
and Covenants.
The Company shall have performed or complied in all material respects with
all
agreements and covenants required by this Agreement to be performed or complied
with by it at or prior to the Closing Date, and Parent shall have received
a
certificate to such effect signed on behalf of the Company by the Chief
Executive Officer and the Chief Financial Officer of the Company.
(c)
Material
Adverse Effect.
No Material Adverse Effect with respect to the Company and its subsidiaries
shall have occurred since the date of this Agreement and not been cured, and
Parent shall have received a certificate to such effect signed on behalf of
the
Company by the Chief Executive Officer and the Vice President of Finance of
the
Company.
(d)
No
Governmental Restriction.
There shall not be any pending or threatened Action by any Governmental Entity
(i) challenging or seeking to restrain or prohibit the consummation of the
Merger or any of the Transactions or (ii) seeking to require Parent or the
Company, or any subsidiary or affiliate of either of them, to effect a
Divestiture.
(e)
Xxxxxxxx-Xxxxx
Certifications; No Restatement.
With respect to any Company SEC Reports filed with the SEC after the date of
this Agreement, neither the principal executive officer nor the principal
financial officer of the Company shall have failed to provide the necessary
certifications in the form required under Section 302 and Section 906
of the SOX. There shall not have been any restatement of the Company’s
consolidated financial statements, and the Company shall not be aware of any
event that would reasonably be expected to result in any such restatement.
The
Company’s auditors shall not have resigned or threatened to resign.
ARTICLE VII
TERMINATION,
AMENDMENT AND WAIVER
7.1
Termination.
This Agreement may be terminated at any time prior to the Effective Time, and
the Merger may be abandoned, notwithstanding any requisite adoption of this
Agreement by the stockholders of the Company:
(a)
by mutual written consent of the Company and Parent;
(b)
by either the Company or Parent if the Effective Time shall not have occurred
on
or before May 9, 2007 (the “Initial
Termination Date”)
for any reason; provided,
however,
that in the event that a condition to the Merger set forth in Section 6.1(b)
(solely if such condition has not been satisfied as a result of an Action by
a
Governmental Entity to enforce Antitrust Laws), Section 6.1(c)
or Section 6.3(d)
(solely if such condition has not been satisfied as a result of an Action by
a
Governmental Entity to enforce Antitrust Laws) shall not have been satisfied
on
or prior to the Initial Termination Date and all of the other conditions
52
to
the Merger set forth in Article
VI
(other than those conditions that are capable of being waived by the party
seeking to terminate) shall have been satisfied on or prior to the Initial
Termination Date, either Parent or the Company may elect to extend the Initial
Termination Date, by written notice to the other prior to or on the Initial
Termination Date, until August 9, 2007 (the “Extended
Termination Date”);
provided,
further,
that, in each case, the right to terminate this Agreement under this
Section 7.1(b)
shall not be available to any party whose action or failure to act has been
a
principal cause of or resulted in the failure of the Effective Time to occur
on
or before such date and such action or failure to act constitutes a breach
of
this Agreement;
(c)
by either the Company or Parent if any Legal Requirement makes consummation
of
the Merger illegal or if a Governmental Entity of competent jurisdiction shall
have issued an order, decree or ruling or taken any other action, in any case
having the effect of permanently restraining, enjoining or otherwise prohibiting
the Merger, which order, decree, ruling or other action is final and
nonappealable;
(d)
by either the Company or Parent if the Company Stockholder Approval shall not
have been obtained by reason of the failure to obtain the required vote at
the
Stockholders’ Meeting or at any adjournment or postponement thereof;
provided,
however,
that the right to terminate this Agreement under this Section 7.1(d)
shall not be available to a party where the failure to obtain the Company
Stockholder Approval shall have been caused by the action or failure to act
of
such party and such action or failure to act constitutes a breach by such party
of this Agreement;
(e)
by the Company, upon a breach of any representation, warranty, covenant or
agreement on the part of Parent set forth in this Agreement, or if any
representation or warranty of Parent shall have become untrue, in either case
such that the conditions set forth in Section 6.2(a)
or Section 6.2(b)
would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue; provided,
however,
that if such inaccuracy in Parent’s representations and warranties or breach by
Parent is capable of being cured by Parent through the exercise of all
reasonable efforts, then the Company may not terminate this Agreement under
this
Section 7.1(e)
until 30 days after delivery of written notice from the Company to Parent of
such breach or inaccuracy, provided
Parent continues to exercise all reasonable efforts to cure such breach or
inaccuracy (it being understood that the Company may not terminate this
Agreement pursuant to this Section 7.1(e)
if it shall have materially breached this Agreement or if such breach or
inaccuracy by Parent is cured during such 30-day period);
(f)
by Parent, upon a breach of any representation, warranty, covenant or agreement
on the part of the Company set forth in this Agreement, or if any representation
or warranty of the Company shall have become untrue, in either case such that
the conditions set forth in Section 6.3(a)
or Section 6.3(b)
would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue; provided,
however,
that if such inaccuracy in the Company’s representations and warranties or
breach by the Company is capable of being cured by the Company through the
exercise of all reasonable efforts, then Parent may not terminate this Agreement
under this Section 7.1(f)
until 30 days after delivery of written notice from Parent to the Company of
such breach or inaccuracy, provided
the Company continues to exercise all reasonable efforts to cure such breach
or
inaccuracy (it being understood that Parent may not terminate this Agreement
pursuant to this Section 7.1(f)
if such breach or inaccuracy by the Company is cured during such 30-day period);
(g)
by Parent, if a Material Adverse Effect on the Company shall have occurred
since
the date hereof and shall not have been cured;
(h)
by the Company, in accordance with Section 5.4(d)
of this Agreement, provided, that, in order for the termination of this
Agreement pursuant to this Section 7.1(h)
to be deemed effective, the Company shall have complied with Section 5.4(d)
of this Agreement and paid the Termination Fee referred to in Section 7.3(b)(i)
of this Agreement concurrently with or prior to such termination; or
(i)
by Parent if a Triggering Event (as defined below) shall have occurred prior
to
obtaining the Company Stockholder Approval. For the purposes of this Agreement,
a “Triggering
Event”
shall be deemed to have occurred if: (i) the Board or any committee thereof
shall for any reason have withdrawn or
53
withheld,
or shall have amended, changed, qualified or modified in a manner adverse to
Parent the Board’s or committee’s unanimous recommendation in favor of the
adoption of this Agreement (it being understood that the taking of a neutral
position or no position with respect to an Acquisition Proposal beyond the
Acquisition Proposal Assessment Period, as defined below, shall be considered
an
adverse modification), except in connection with a material breach of this
Agreement by Parent or Merger Sub; (ii) the Company shall have failed to
include in the Proxy Statement the unanimous recommendation of the Board that
holders of Company Common Stock vote in favor of the adoption of this Agreement;
(iii) the Board or any committee thereof shall have approved or recommended
any Acquisition Proposal; (iv) the Company shall have entered into any
letter of intent or similar document or any Contract accepting any Acquisition
Proposal; (v) a tender or exchange offer relating to securities of the
Company shall have been commenced by a person unaffiliated with Parent and
the
Company shall not have sent to its securityholders pursuant to Rule 14e-2
promulgated under the Securities Act, within ten (10) business days (such
ten (10) business day period, the “Acquisition
Proposal Assessment Period”)
after such tender or exchange offer is first published sent or given, a
statement disclosing that the Board recommends rejection of such tender or
exchange offer; (vi) the Board shall have failed to reaffirm its approval
or recommendation of this Agreement as promptly as practicable (but in any
event
within five (5) business days) after receipt of a written request to do so
from Parent; or (vii) the Company shall have materially breached
Section 5.2
or Section 5.4.
7.2
Notice
of Termination; Effect of Termination.
Any termination of this Agreement under and in accordance with Section 7.1
will be effective immediately upon (subject to, in the case of Section 7.1(e)
or Section 7.1(f),
if the proviso therein is applicable, prior delivery of notice of the breach
30
days prior to notice of termination) the delivery of written notice of the
terminating party to the other parties hereto. In the event of the termination
of this Agreement as provided in Section 7.1,
this Agreement shall be of no further force or effect and there shall be no
Liability to any party hereunder in connection with the Agreement or the
Transactions, except (i) as set forth in Section 5.3(a),
this Section 7.2,
Section 7.3
and Article
VIII,
each of which shall survive the termination of this Agreement, and
(ii) nothing herein shall relieve any party from Liability for any
intentional or willful breach of, or any intentional misrepresentation made
in
this Agreement. No termination of this Agreement shall affect the obligations
of
the parties contained in the Confidentiality Agreement, all of which obligations
shall survive termination of this Agreement in accordance with their terms.
7.3
Fees
and Expenses.
(a)
General.
Except as set forth in this Section 7.3,
all fees and expenses incurred in connection with this Agreement and the
Transactions shall be paid by the party incurring such expenses whether or
not
the Merger is consummated; provided
that Parent and the Company shall share equally the filing fees for the
Notification and Report Forms filed with the FTC and DOJ under the HSR Act
and
premerger notification and report forms under similar applicable Legal
Requirements of other jurisdictions.
(b)
Company
Payments.
(i)
Provided no Termination Fee is payable pursuant to clauses (ii) or
(iii) below, the Company shall pay to Parent in immediately available funds
prior to or concurrently with such termination an amount equal to Thirty-Two
Million Dollars ($32,000,000) (the “Termination
Fee”)
if this Agreement is terminated by the Company pursuant to Section 7.1(h).
(ii)
Provided no Termination Fee is payable pursuant to clause (i) above or
(iii) below, the Company shall pay to Parent in immediately available
funds, within one (1) business day thereafter the Termination Fee if this
Agreement is terminated by Parent or the Company and prior to such termination
a
Triggering Event shall have occurred.
(iii)
Provided no Termination Fee is payable pursuant to clauses (i) or
(ii) above, the Company shall pay to Parent in immediately available funds,
within two (2) business days thereafter, an amount equal to the Termination
Fee, if this Agreement is terminated by Parent or the Company pursuant to
54
Section 7.1(b)
or the Company Stockholder Approval shall not have been obtained at the
Stockholders’ Meeting or any adjournment or postponement thereof and any of the
following shall occur:
(1)
if following the date hereof and prior to the termination of this Agreement,
a
third party has announced an Acquisition Proposal, and within 12 months
following the termination of this Agreement, any Company Acquisition (as defined
below) is consummated; or
(2)
if following the date hereof and prior to the termination of this Agreement,
a
third party has announced an Acquisition Proposal, and within 12 months
following the termination of this Agreement, the Company enters into a letter
of
intent or similar document or any Contract providing for any Company Acquisition
and a Company Acquisition is ultimately consummated (whether prior to or after
such twelve-month period).
(iv)
The Company hereby acknowledges and agrees that the agreements set forth in
this
Section 7.3(b)
are an integral part of the transactions contemplated by this Agreement, and
that, without these agreements, Parent would not enter into this Agreement.
Accordingly, if the Company fails to pay in a timely manner the amounts due
pursuant to this Section 7.3(b)
and,
in order to obtain such payment, Parent makes a claim that results in a judgment
against the Company for the amounts set forth in this Section 7.3(b),
the Company shall pay to Parent its reasonable costs and expenses (including
reasonable attorneys’ fees and expenses) in connection with such suit, together
with interest on the amounts set forth in this Section 7.3(b)
at the prime rate of Citibank in effect on the date such payment was required
to
be made. Payment of the fees described in this Section 7.3(b)
shall not be in lieu of damages incurred in the event of any intentional or
willful breach of, or any intentional misrepresentation made in, this Agreement.
(v)
No payment under this Section 7.3
shall limit in any respect any rights or remedies available to Parent and Merger
Sub relating to any breach or failure to perform any representation, warranty,
covenant or agreement set forth in this Agreement resulting, directly or
indirectly, in the right to receive any payment under this Section 7.3.
Notwithstanding any other provision of Section 7.3(b)
(other than the immediately preceding sentence) to the contrary, in no event
shall the Company be required to pay Parent any amounts under this Section 7.3(b)
in excess of the Termination Fee.
(vi)
For the purposes of this Agreement, “Company
Acquisition”
shall mean any of the following transactions (other than the transactions
contemplated by this Agreement): (A) a merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar transaction
involving the Company pursuant to which the stockholders of the Company
immediately preceding such transaction hold less than 80% of the aggregate
equity interests in the surviving or resulting entity of such transaction or
any
direct or indirect parent thereof, (B) a sale or other disposition by the
Company of assets representing in excess of 20% of the aggregate fair market
value of the Company’s business immediately prior to such sale or (C) the
acquisition by any person or group (including by way of a tender offer or an
exchange offer or issuance by the Company), directly or indirectly, of
beneficial ownership or a right to acquire beneficial ownership of shares
representing in excess of 20% of the voting power of the then outstanding shares
of capital stock of the Company.
(c)
Parent
Payment.
In the event that (i) this Agreement is terminated by Parent or the Company
pursuant to Section 7.1(b)
or Section 7.1(c);
provided,
with respect to Section 7.1(c),
solely to the extent such order, decree, ruling or other action is based on
an
Action brought by a Governmental Entity under Antitrust Laws and (ii) all
of the conditions set forth in Section 6.1
are satisfied (other than (A) Section 6.1(b)
solely to the extent the existence of such statute, rule, regulation, executive
order, decree, injunction or other order is based upon Antitrust Laws in an
Action brought by a Governmental Entity and (B) Section 6.1(c)
solely to the extent such Legal Requirements are Antitrust Laws) and
Section 6.3
(other than Section
6.3(d))
are satisfied, Parent shall promptly, but in no event later than three
(3) business days following the receipt by Parent of documentation (in
detail) of such expenses in form and substance reasonably satisfactory to
Parent, reimburse the Company for its out-of-pocket fees and expenses, up to
an
aggregate of five million dollars ($5,000,000), incurred by Company after the
filing of Company’s initial HSR notification and in connection with or relating
55
to
the review pursuant to the HSR Act of the Transactions contemplated hereby
(including fees and expenses of all attorneys, consultants, economists and
other
experts retained by Company and all duplicating and travel and related
expenses), provided
that Company will consult in advance with Parent, and consider in good faith
the
advice of Parent, regarding the retention of any consultants, economists and
other experts.
7.4
Amendment.
Subject to applicable law, this Agreement may be amended by the parties hereto
at any time by execution of an instrument in writing signed on behalf of each
of
Parent and the Company.
7.5
Extension;
Waiver.
At any time prior to the Effective Time, the Company, on the one hand, or Parent
and Merger Sub, on the other hand, may, to the extent legally allowed,
(i) extend the time for the performance of any of the obligations or other
acts of the other parties hereto, (ii) waive any inaccuracies in the
representations and warranties made to such party contained herein or in any
document delivered pursuant hereto and (iii) waive compliance with any of
the agreements or conditions for the benefit of such party contained herein;
provided
that any condition set forth in Section 6.1(a)
may not be waived without the express written consent of Parent and the Company.
Any agreement on the part of a party hereto to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf
of
such party. Delay in exercising any right under this Agreement shall not
constitute a waiver of such right.
ARTICLE VIII
GENERAL
PROVISIONS
8.1
Non-Survival
of Representations and Warranties.
The representations and warranties of the Company, Parent and Merger Sub
contained in this Agreement and the other agreements, certificates and documents
contemplated hereby shall terminate and be of no further force or effect at,
and
as of, the Effective Time. The covenants and agreements in this Agreement and
the other agreements, certificates and documents contemplated hereby shall
terminate at the Effective Time unless such covenants or agreements by its
terms
contemplated performance after the Effective Time, it being understood this
Section 8.1
shall not limit any covenant or agreement of the parties which by its terms
contemplates performance after the Effective Time.
8.2
Notices.
All notices and other communications hereunder shall be in writing and shall
be
deemed given if delivered personally or by commercial delivery service, or
sent
via telecopy (receipt confirmed) to the parties at the following addresses
or
telecopy numbers (or at such other address or telecopy numbers for a party
as
shall be specified by like notice):
(a) if
to Parent or Merger Sub, to:
Genentech,
Inc.
0
XXX Xxx
Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention:
Corporate Secretary
Telephone
No.: (000) 000-0000
Telecopy
No.: (000) 000-0000
with a
copy to:
Xxxxxx
Xxxxxxx Xxxxxxxx & Xxxxxx
Professional
Corporation
000
Xxxx Xxxx Xxxx
Xxxx
Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx
X. Xxxxxx, Esq.
Xxxxxxx
X Xxxxxxxxxxx, Esq.
Telephone
No.: (000) 000-0000
Telecopy
No.: (000) 000-0000
56
(b) if
to the Company, to:
Tanox,
Inc.
10555
Stella Link
Xxxxxxx,
Xxxxx 00000-0000
Attention:
General Counsel
Telephone
No.: (000) 000-0000
Telecopy
No.: (000) 000-0000
with
a copy to:
Winstead
Xxxxxxxx & Xxxxxx
Professional
Corporation
000
Xxxxx Xxxxxx
Xxxxxxx,
XX 00000
Attention:
Xxxxx X. Xx, Esq.
Telephone
No.: (000) 000-0000
Telecopy
No.: (000) 000-0000
8.3
Interpretation;
Knowledge.
(a)
When a reference is made in this Agreement to Exhibits, such reference shall
be
to an Exhibit to this Agreement unless otherwise indicated. When a reference
is
made in this Agreement to Articles or Sections, such reference shall be to
an
Article or Section, respectively, of this Agreement unless otherwise indicated.
Unless otherwise indicated the words “include,” “includes” and “including” when
used herein shall be deemed in each case to be followed by the words “without
limitation.” As used herein, an item shall be deemed to have been “furnished” to
Parent if such item has been sent to Parent or its representatives, provided
to
Parent or its representatives or made available to Parent or its representatives
for review, in a data room or otherwise. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. When reference
is
made herein to “the business of” an entity, such reference shall be deemed to
include the business of all direct and indirect subsidiaries of such entity.
Reference to the subsidiaries of an entity shall be deemed to include all direct
and indirect subsidiaries of such entity. Where a reference is made to a law,
such reference is to such law, as amended, and all rules and regulations
promulgated thereunder, unless the context requires otherwise.
(b)
For purposes of this Agreement, the term “knowledge”
means with respect to a party hereto, with respect to any matter in question,
that any of the executive officers or directors of such party has actual
knowledge of such matter; provided
that with respect to any executive officer or director, such executive officer
or director shall have made reasonable inquiry of the current Employees (other
than Consultants who are not Significant Consultants) responsible for such
matter in question.
(c)
For purposes of this Agreement, the term “Material
Adverse Effect”
when used in connection with any entity, including the Company and its
subsidiaries, means (1) any change, event, violation, inaccuracy,
circumstance or effect, individually or when aggregated with other changes,
events, violations, inaccuracies, circumstances or effects, that is or is
reasonably expected to be materially adverse to (i) the business, assets
(including intangible assets), liabilities, financial condition, or results
of
operations of such entity and its subsidiaries taken as a whole, (ii) the
ability of such entity to perform its obligations under this Agreement and
to
timely consummate the Transactions, and (2) with respect to the Company or
its subsidiaries, any event arising after the date of this Agreement relating
to
Omalizumab (Xolair) that would reasonably be expected to have a material adverse
impact on the sales, future value or revenue of Omalizumab (Xolair);
provided,
however,
that, except otherwise provided below, none of the following shall be deemed
either alone or in combination to constitute, and none of the following shall
be
taken into account in determining whether there has been or will be, a Material
Adverse Effect: (A) changes in the financial markets generally in the
United States or that are the result of acts of war or terrorism;
(B) general national or international
57
economic,
financial, political or business conditions (including changes in Legal
Requirements or GAAP or the interpretation thereof) in each case affecting
generally the biopharmaceutical industry, which do not have a materially
disproportionate effect (relative to other industry participants) on the Company
and its subsidiaries taken as a whole; (C) the execution, announcement and
performance of this Agreement by the Company or its subsidiaries, or any actions
taken, delayed or omitted to be taken by the Company (and the results thereof)
that are required or prohibited (but only in the event that the Company has
sought a waiver from Parent, and Parent has failed to agree to such waiver
within a reasonable period of time after such request), as the case may be,
pursuant to this Agreement or at the specific request of Parent or Merger Sub
(it being understood that the provision of consent contemplated under
Section 5.1
hereof shall not be deemed to be at the specific request of Parent);
(D) the failure of the applicable party to this Agreement to meet
projections of earnings, cash burn rates, revenues or other financial measures
(whether such projections were made by such party or independent third parties),
in and of itself (it being understood that the facts or occurrences giving
rise
or contributing to such failure may be deemed to constitute, or be taken into
account in determining whether there has been, or will be, a Material Adverse
Effect); (E) any change in the stock price or trading volume of the
applicable party to this Agreement, in and of itself (it being understood that
the facts or occurrences giving rise or contributing to such failure may be
deemed to constitute, or be taken into account in determining whether there
has
been, or will be, a Material Adverse Effect); (F) any item set forth on
Schedule
8.3(F);
(G) the results of any clinical trial (excluding Omalizumab (Xolair)); or
(H) any change after the date hereof of Parent’s projections for the sale
of Omalizumab (Xolair), in and of itself (it being understood that the facts
or
occurrences giving rise or contributing to such change may be deemed to
constitute, or be taken into account in determining whether there has been,
or
will be, a Material Adverse Effect).
(d)
For purposes of this Agreement, the term “person”
shall mean any individual, corporation (including any non-profit corporation),
general partnership, limited partnership, limited liability partnership, joint
venture, estate, trust, company (including any limited liability company or
joint stock company), firm or other enterprise, association, organization,
entity or Governmental Entity.
(e)
For purposes of this Agreement, the term “business
day”
shall mean each day that is not a Saturday, Sunday or other day on which banking
institutions located in San Francisco, California are authorized or obligated
by
law or executive order to close, and the term “day” when not immediately
preceded by the word “business” shall mean a calendar day.
(f)
For purposes of this Agreement, the terms “subsidiary”
and “subsidiaries”
with respect to any party shall mean (i) solely with respect to the
Company, Tanox Biotech (Shanghai) Co. Ltd. and (ii) any corporation,
partnership, association, trust or other form of legal entity of which
(A) more than 50% of the outstanding voting securities are directly or
indirectly owned by such party, or (B) such party or any subsidiary of such
party is a general partner (excluding partnerships in which such party or any
subsidiary of such party does not have a majority of the voting interest of
such
partnership).
(g)
Unless the context of this Agreement otherwise requires: (i) words of any
gender include each other gender; (ii) words using the singular or plural
number also include the plural or singular number, respectively; and
(iii) the terms “hereof,”
“herein,”
“hereunder”
and derivative or similar words refer to this entire Agreement.
8.4
Counterparts.
This Agreement may be executed in one or more counterparts, all of which shall
be considered one and the same agreement and shall become effective when one
or
more counterparts have been signed by each of the parties and delivered to
the
other party, it being understood that all parties need not sign the same
counterpart.
8.5
Entire
Agreement; Third Party Beneficiaries.
This Agreement and the documents and instruments and other agreements among
the
parties hereto as contemplated by or referred to herein, including the Company
Disclosure Letter, (a) constitute the entire agreement among the parties
with respect to the subject matter hereof and supersede all prior agreements
and
understandings, both written and oral, among the parties with respect to
58
the
subject matter hereof, it being understood that the Confidentiality Agreement
shall continue in full force and effect and shall survive any termination of
this Agreement as modified by Section 5.3(a)
and Section 5.3(b) are
not intended to confer, and shall not be construed as conferring, upon any
other
person any rights or remedies hereunder, except as specifically provided in
Section 5.9(d).
8.6
Severability.
In the event that any provision of this Agreement, or the application thereof,
becomes or is declared by a court of competent jurisdiction to be illegal,
void
or unenforceable, the remainder of this Agreement will continue in full force
and effect and the application of such provision to other persons or
circumstances will be interpreted so as reasonably to effect the intent of
the
parties hereto. The parties further agree to replace such void or unenforceable
provision of this Agreement with a valid and enforceable provision that will
achieve, to the extent possible, the economic, business and other purposes
of
such void or unenforceable provision.
8.7
Other
Remedies; Specific Performance.
Except as otherwise provided herein, any and all remedies herein expressly
conferred upon a party will be deemed cumulative with and not exclusive of
any
other remedy conferred hereby, or by law or equity upon such party, and the
exercise by a party of any one remedy will not preclude the exercise of any
other remedy, and nothing in this Agreement shall be deemed a waiver by any
party of any right to specific performance or injunctive relief. The parties
hereto agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions without the
necessity of proving the inadequacy of money damages as a remedy and without
the
necessity of posting any bond or other security in order to prevent breaches
of
this Agreement and to enforce specifically the terms and provisions hereof
in
any court of the United States or any state having jurisdiction, this being
in
addition to any other remedy to which they are entitled at law or in equity.
8.8
Governing
Law; Jurisdiction.
This Agreement shall be governed by and construed in accordance with the laws
of
the State of Delaware, regardless of the laws that might otherwise govern under
applicable principles of conflicts of law thereof. The parties hereto hereby
irrevocably submit to the exclusive jurisdiction of the Court of Chancery in
Newcastle County in the state of Delaware (and any appellate courts therefrom),
or if such jurisdiction shall be unavailable, any court in the State of Delaware
and the Federal courts of the United States of America, each located within
Newcastle County in the State of Delaware., solely in respect of the
interpretation and enforcement of the provisions of this Agreement and of the
documents referred to in this Agreement, and in respect of the transactions
contemplated hereby and thereby, and hereby waive, and agree not to assert,
as a
defense in any action, suit or proceeding for the interpretation or enforcement
hereof or thereof, that it is not subject thereto or that such action, suit
or
proceeding may not be brought or is not maintainable in said courts or that
the
venue thereof may not be appropriate or that this Agreement or any such document
may not be enforced in or by such courts, and the parties hereto irrevocably
agree that all claims with respect to such action or proceeding shall be heard
and determined in the Court of Chancery in the State of Delaware or, if
jurisdiction is not available in the Court of Chancery, any other Delaware
state
court or Federal court, each located in Newcastle, County Delaware. The parties
hereby consent to and grant any such court jurisdiction over the person of
such
parties and over the subject matter of such dispute and agree that mailing
of
process or other papers in connection with any such action or proceeding in
the
manner provided in Section 8.2
or in such other manner as may be permitted by applicable law, shall be valid
and sufficient service thereof. With respect to any particular action, suit
or
proceeding, venue shall lie solely in Newcastle County, Delaware.
8.9
Rules
of Construction.
The parties hereto agree that they have been represented by counsel during
the
negotiation and execution of this Agreement and, therefore, waive the
application of any law, regulation, holding or rule of construction providing
that ambiguities in an agreement or other document will be construed against
the
party drafting such agreement or document.
8.10
Assignment.
No party may assign or delegate, in whole or in part, by operation of law or
otherwise, either this Agreement or any of the rights, interests, or obligations
hereunder without the prior written approval of the other parties, and any
such
assignment without such prior written consent shall be null and void, except
59
that
Parent may assign its rights (but not its obligations) under this Agreement
to
any direct or indirect wholly-owned subsidiary of Parent without the prior
written consent of the Company. Subject to the preceding sentence, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
8.11
Waiver
of Jury Trial.
EACH OF PARENT, COMPANY AND MERGER SUB HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE
ACTIONS OF PARENT, COMPANY OR MERGER SUB IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE AND ENFORCEMENT HEREOF.
[Remainder
of Page Intentionally Left Blank]
60
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement and Plan of
Merger to be executed by their duly authorized respective officers as of the
date first written above.
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GENENTECH,
INC.
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||
|
By:
|
/s/ XXXXXX
XXXXXXXX
|
|
|
Xxxxxx
Xxxxxxxx, Chairman and
Chief
Executive Officer
|
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|
GREEN
ACQUISITION CORPORATION
|
||
|
By:
|
/s/ XXXXXXX
XXXXXXXXXX
|
|
|
Xxxxxxx
Xxxxxxxxxx, President and
Chief
Executive Officer
|
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TANOX,
INC.
|
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|
By:
|
/s/ XXXXX
X. XXXXX
|
|
|
Xxxxx
Xxxxx,
Chairman
of the Board of Directors
|
||
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