EXHIBIT (C)(1)
CONFORMED COPY
AGREEMENT AND PLAN OF MERGER
dated as of
AUGUST 9, 1998
among
MOLECULAR DYNAMICS, INC.,
AMERSHAM PHARMACIA BIOTECH INC.
and
APB ACQUISITION CORP.
TABLE OF CONTENTS
Page
____
ARTICLE 1
The Offer
Section 1.1. The Offer........................................... 1
Section 1.2. Company Action...................................... 2
Section 1.3. Directors........................................... 3
ARTICLE 2
The Merger
Section 2.1. The Merger.......................................... 4
Section 2.2. Conversion of Shares................................ 5
Section 2.3. Surrender and Payment............................... 5
Section 2.4. Dissenting Shares................................... 6
Section 2.5. Stock Options....................................... 7
Section 2.6. Employee Stock Purchase Plan........................ 7
ARTICLE 3
The Surviving Corporation
Section 3.1. Certificate of Incorporation........................ 8
Section 3.2. Bylaws.............................................. 8
Section 3.3. Directors and Officers.............................. 8
ARTICLE 4
Representations and Warranties of the Company
Section 4.1. Corporate Existence and Power....................... 8
Section 4.2. Corporate Authorization............................. 9
Section 4.3. Governmental Authorization.......................... 9
Section 4.4. Non-Contravention................................... 9
Section 4.5. Capitalization...................................... 10
Section 4.6. Subsidiaries........................................ 10
Section 4.7. SEC Filings......................................... 11
Section 4.8. Financial Statements................................ 11
Section 4.9. Disclosure Documents................................ 12
Section 4.10. Absence of Certain Changes......................... 12
Section 4.11. No Undisclosed Material Liabilities................ 14
Section 4.12. Litigation......................................... 15
Section 4.13. Taxes.............................................. 15
Section 4.14. ERISA.............................................. 15
Section 4.15. Compliance with Laws............................... 17
Section 4.16. Finders' Fees...................................... 17
Section 4.17. Patents and Other Proprietary Rights............... 17
Section 4.18. Environmental Matters.............................. 19
Section 4.19. Approvals; Antitakeover Provisions................. 20
Section 4.20. Rights Plan........................................ 20
ARTICLE 5
Representations and Warranties of Buyer
Section 5.1. Corporate Existence and Power....................... 21
Section 5.2. Corporate Authorization............................. 21
Section 5.3. Governmental Authorization.......................... 21
Section 5.4. Non-contravention................................... 21
Section 5.5. Disclosure Documents................................ 22
Section 5.6. Finders' Fees....................................... 22
Section 5.7. Available Funds..................................... 22
ARTICLE 6
Covenants of the Company
Section 6.1. Conduct of the Company.............................. 23
Section 6.2. Stockholder Meeting; Proxy Material................. 25
Section 6.3. Access to Information............................... 25
Section 6.4. Other Offers........................................ 26
Section 6.5. Notices of Certain Events........................... 28
Section 6.6. Redemption of Rights Plan........................... 28
Section 6.7. Waiver of Standstill Agreement...................... 28
ARTICLE 7
Covenants of Buyer
Section 7.1. Obligations of Merger Subsidiary.................... 29
Section 7.2. Voting of Shares.................................... 29
Section 7.3. Director and Officer Liability...................... 29
Section 7.4. Employee Benefits................................... 29
ARTICLE 8
Covenants of Buyer and the Company
Section 8.1. Best Efforts........................................ 30
Section 8.2. Certain Filings..................................... 30
Section 8.3. Public Announcements................................ 30
Section 8.4. Further Assurances.................................. 30
Section 8.5. Company Stock Option................................ 31
ARTICLE 9
Conditions to the Merger
Section 9.1. Conditions to the Obligations of Each Party......... 34
ARTICLE 10
Termination
Section 10.1. Termination........................................ 35
Section 10.2. Effect of Termination.............................. 36
ARTICLE 11
Miscellaneous
Section 11.1. Notices............................................ 36
Section 11.2. Survival of Representations and Warranties......... 37
Section 11.3. Amendments; No Waivers............................. 37
Section 11.4. Fees and Expenses.................................. 38
Section 11.5. Successors and Assigns............................. 39
Section 11.6. Governing Law...................................... 40
Section 11.7. Counterparts; Effectiveness........................ 40
Section 11.8. Entire Agreement................................... 40
Section 11.9. Severability....................................... 40
Section 11.10. Definitions....................................... 40
ANNEX I Conditions to the Offer
EXHIBIT A Terms of Employee Retention Plans
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of August 9, 1998 among
Molecular Dynamics, Inc., a Delaware corporation (the "Company"), Amersham
Pharmacia Biotech Inc., a Delaware corporation ("Buyer") and APB Acquisition
Corp., a Delaware corporation and a wholly-owned subsidiary of Buyer ("Merger
Subsidiary").
WHEREAS, each of the Boards of Directors of Buyer, Merger
Subsidiary and the Company has approved and deems it advisable and in the best
interests of their respective stockholders to consummate the acquisition by
Buyer of the Company on the terms and subject to the conditions set forth
herein;
WHEREAS, in order to induce Buyer and Merger Subsidiary to
enter into this Agreement, the Company will grant to Buyer an option to
purchase Shares (as defined below) on the terms and subject to the conditions
set forth herein;
WHEREAS, concurrently with the execution of the Agreement, in
order to induce Buyer and Merger Subsidiary to enter into this Agreement,
certain stockholders of the Company have entered into the Stockholder
Agreement, dated as of the date hereof, among Buyer, Merger Subsidiary and
such stockholders, pursuant to which such stockholders have agreed to tender
the Shares owned by such stockholders, on the terms and subject to the
condition set forth therein;
NOW, THEREFORE, in consideration of the foregoing, and of the
mutual covenants and agreements set forth herein, the parties hereto agree as
follows:
ARTICLE 1
The Offer
Section 1.1. The Offer. (a) Provided that nothing shall have
occurred that would result in a failure to satisfy any of the conditions
set forth in Annex I hereto, Merger Subsidiary shall, as promptly as
practicable after the date hereof, but in no event later than five business
days following the public announcement of the terms of this Agreement,
commence an offer (the "Offer") to purchase all of the outstanding shares
(the "Shares") of common stock, $0.01 par value per share, of the Company
(the "Common Stock") and the associated rights to purchase Shares (the
"Rights") issued pursuant to the Rights Agreement between the Company and
Xxxxxx Trust and Savings Bank, as Rights Agent, dated as of November 23,
1994 (the "Rights Agreement") at a price of $20.50 per Share (and
associated Right), net to the seller in cash. The Offer shall be subject
to the condition that a number of Shares which, together with the Shares
then owned by Buyer, represents at least a majority of the Shares
outstanding on a fully diluted basis shall be validly tendered in
accordance with the terms of the Offer prior to the expiration date of the
Offer and not withdrawn (the "Minimum Condition") and to the other
conditions set forth in Annex I hereto. Without the consent of the
Company, Merger Subsidiary shall not (i) change the form of consideration
to be paid, (ii) decrease the price per Share, (iii) decrease the number of
Shares sought in the Offer, (iv) waive the Minimum Condition, (v) impose
conditions to the Offer in addition to those set forth in Annex I or (vi)
otherwise amend the terms and conditions of the Offer in a manner adverse
to the stockholders of the Company. Notwithstanding the foregoing, Merger
Subsidiary may, without the consent of the Company, (i) extend the Offer,
if at any scheduled or extended expiration date of the Offer any of the
Offer Conditions shall not be satisfied and waived, (ii) extend the offer
for any period required by any rule, regulation, interpretation or position
of the Securities and Exchange Commission (the "SEC") or the staff thereof
applicable to the Offer or any period required by applicable law and (iii)
extend the Offer on one or more occasions for an aggregate period of not
more than 10 business days beyond the latest expiration date that would
otherwise be permitted under clause (i) or (ii) of this sentence, if on
such expiration date there shall not have been tendered at least 90% of the
outstanding Shares.
Buyer and Merger Subsidiary further agree that in the event of
the failure of one or more of the conditions to the Offer to be satisfied or
waived on any date on which the Offer would otherwise have expired, Merger
Subsidiary shall, if such condition could reasonably be expected to be
satisfied, extend the Offer for a reasonable period time, provided that Merger
Subsidiary shall not be required to extend the Offer beyond October 31, 1998.
The initial expiration date of the Offer shall be 20 business days following
the commencement of the Offer. On the terms of the Offer and subject to the
foregoing, Merger Subsidiary shall pay for all Shares in accordance with
applicable law.
(b) As soon as practicable on the date of commencement of
the Offer, Buyer and Merger Subsidiary shall file with the SEC a Tender
Offer Statement on Schedule 14D-1 with respect to the Offer which will
contain the offer to purchase and form of the related letter of transmittal
(together with any supplements or amendments thereto, collectively the
"Offer Documents"). Buyer and the Company each agrees promptly to correct
any information provided by it for use in the Offer Documents if and to the
extent that it shall have become false or misleading in any material
respect. Merger Subsidiary agrees to take all steps necessary to cause the
Offer Documents as so corrected to be filed with the SEC and to be
disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. The Company and its
counsel shall be given an opportunity to review and comment on the Schedule
14D-1 (and any amendments thereto) prior to its being filed with the SEC.
Section 1.2. Company Action. (a) The Company hereby consents
to the Offer and represents that its Board of Directors, at a meeting duly
called and held, has (i) unanimously determined that this Agreement and the
transactions contemplated hereby, including the Offer and the Merger (as
defined in Section 2.1), are fair to and in the best interest of the Company's
stockholders, (ii) unanimously approved this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, which approval
satisfies in full any applicable requirements of the General Corporation Law
of the State of Delaware ("Delaware Law"), and (iii) unanimously resolved,
except as may be required, in response to an unsolicited bona fide written
Acquisition Proposal (as defined in Section 6.4), in order to comply with the
fiduciary duties of the Board of Directors under applicable law as advised in
writing by Venture Law Group, A Professional Corporation ("Company Counsel"),
to recommend acceptance of the Offer and approval and adoption of this
Agreement and the Merger by its stockholders. The Company further represents
that Vector Securities International, Inc. has delivered to the Company's
Board of Directors its written opinion that the consideration to be paid in
the Offer and the Merger is fair to the holders of Shares (other than Buyer
and Merger Subsidiary) from a financial point of view. The Company has been
advised that all of its directors and executive officers intend either to
tender their Shares pursuant to the Offer or to vote in favor of the Merger.
The Company will promptly furnish Buyer with a list of its stockholders,
mailing labels and any available listing or computer file containing the names
and addresses of all record holders of Shares and lists of securities
positions of Shares held in stock depositories, in each case true and correct
as of the most recent practicable date, and will provide to Buyer such
additional information (including, without limitation, updated lists of
stockholders, mailing labels and lists of securities positions) and such other
assistance as Buyer may reasonably request in connection with the Offer.
Buyer will return such materials promptly if the Offer is not consummated.
(b) As soon as practicable on the day that the Offer is
commenced, the Company will file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9") which shall reflect the
recommendations of the Company's Board of Directors referred to above. The
Company and Buyer each agree promptly to correct any information provided
by it for use in the Schedule 14D-9 if and to the extent that it shall have
become false or misleading in any material respect. The Company agrees to
take all steps necessary to cause the Schedule 14D-9 as so corrected to be
filed with the SEC and to be disseminated to holders of Shares, in each
case as and to the extent required by applicable federal securities laws.
Buyer and its counsel shall be given an opportunity to review and comment
on the Schedule 14D-9 prior to its being filed with the SEC.
Section 1.3. Directors. (a) Effective upon the acceptance for
payment pursuant to the Offer of a number of Shares that satisfies the Minimum
Condition, Buyer shall be entitled to designate the number of directors,
rounded up to the next whole number, on the Company's Board of Directors that
equals the product of (i) the total number of directors on the Company's Board
of Directors (giving effect to the election of any additional directors
pursuant to this Section) multiplied by (ii) the percentage that the number of
Shares beneficially owned by Buyer (including Shares accepted for payment)
bears to the total number of Shares outstanding; and the Company shall take
all action necessary to cause Buyer's designees to be elected or appointed to
the Company's Board of Directors, including, without limitation, increasing
the number of directors and seeking and accepting resignations of incumbent
directors. At such times, the Company will use its best efforts to cause
individuals designated by Buyer to constitute the same percentage as such
individuals represent on the Company's Board of Directors of (i) each
committee of the Board and (ii) each board of directors (and committee
thereof) of each Subsidiary (as defined in Section 4.6). Notwithstanding the
foregoing, the Company shall use its best efforts to cause at least three
members of the Company's Board of Directors as of the date hereof who are not
employees of the Company (the "Continuing Directors") to remain members of the
Board of Directors until the Effective Time (as defined in Section 2.1(b)),
and Buyer consents thereto. For purposes of Articles 9 and 10 and Sections
2.1, 6.2 and 11.3, no action taken by the Board of Directors of the Company
after the consummation of the Offer and prior to the Merger shall be effective
unless such action is approved by the affirmative vote of at least a majority
of the Continuing Directors. Notwithstanding any provisions of this Agreement
to the contrary, if, following the expiration of the Offer, Merger Subsidiary
shall own 90% or more the Shares, at the request of Buyer, the Board of
Directors of the Company shall take all actions necessary to effect the Merger
pursuant to Section 253 of the Delaware Law.
(b) The Company's obligations to appoint designees to the
Board of Directors shall be subject to Section 14(f) of the Exchange Act
(as defined in Section 4.3) and Rule 14f-1 promulgated thereunder. The
Company shall promptly take all actions required pursuant to Section 14(f)
and Rule 14f-1 in order to fulfill its obligations under this Section and
shall include in the Schedule 14D-9 such information with respect to the
Company and its officers and directors as is required under Section 14(f)
and Rule 14f-1 to fulfill its obligations under this Section. Buyer will
supply to the Company in writing and be solely responsible for any
information with respect to itself and its nominees, officers, directors
and affiliates required by Section 14(f) and Rule 14f-1.
ARTICLE 2
The Merger
Section 2.1. The Merger. (a) At the Effective Time (as
defined below), Merger Subsidiary shall be merged (the "Merger") with and into
the Company in accordance with Delaware Law, whereupon the separate existence
of Merger Subsidiary shall cease, and the Company shall be the surviving
corporation (the "Surviving Corporation").
(b) As soon as practicable after satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger, the Company and
Merger Subsidiary will file a certificate of merger ("Certificate of Merger")
with the Secretary of State of the State of Delaware and make all other
filings or recordings required by Delaware Law in connection with the Merger.
The Merger shall become effective at such time as the Articles of Merger are
duly filed with the Secretary of State of the State of Delaware (the
"Effective Time").
(c) From and after the Effective Time, the Surviving
Corporation shall possess all the rights, privileges, powers and franchises
and be subject to all of the restrictions, disabilities and duties of the
Company and Merger Subsidiary, all as provided under Delaware Law.
Section 2.2. Conversion of Shares. At the Effective Time:
(a) each Share held by the Company as treasury stock or
owned by Buyer or any subsidiary of Buyer immediately prior to the
Effective Time shall be canceled, and no payment shall be made with respect
thereto;
(b) each share of common stock of Merger Subsidiary
outstanding immediately prior to the Effective Time shall be converted into
and become one share of common stock of the Surviving Corporation with the
same rights, powers and privileges as the shares so converted and shall
constitute the only outstanding shares of capital stock of the Surviving
Corporation; and
(c) each Share outstanding immediately prior to the
Effective Time shall, except as otherwise provided in Section 2.2(a) or as
provided in Section 2.4 with respect to Shares as to which appraisal rights
have been exercised, be converted into the right to receive $20.50 in cash,
without interest (the "Merger Consideration").
Section 2.3. Surrender and Payment. (a) Prior to the
Effective Time, Buyer shall appoint an agent (the "Exchange Agent") for the
purpose of exchanging certificates representing Shares for the Merger
Consideration. Buyer will make available to the Exchange Agent, in such
amounts as may be needed from time to time, the Merger Consideration to be
paid in respect of the Shares. Promptly after the Effective Time, Buyer will
send, or will cause the Exchange Agent to send, to each holder of Shares at
the Effective Time a letter of transmittal for use in such exchange (which
shall specify that the delivery shall be effected, and risk of loss and title
shall pass, only upon proper delivery of the certificates representing Shares
to the Exchange Agent).
(b) Each holder of Shares that have been converted into a
right to receive the Merger Consideration, upon surrender to the Exchange
Agent of a certificate or certificates representing such Shares, together
with a properly completed letter of transmittal covering such Shares, will
be entitled to receive the Merger Consideration payable in respect of such
Shares. From and after the Effective Time, all Shares which have been so
converted shall no longer be outstanding and shall automatically be
canceled and retired, and each such certificate shall, after the Effective
Time, represent for all purposes, only the right to receive such Merger
Consideration.
(c) If any portion of the Merger Consideration is to be
paid to a Person other than the registered holder of the Shares represented
by the certificate or certificates surrendered in exchange therefor, it
shall be a condition to such payment that the certificate or certificates
so surrendered shall be properly endorsed or otherwise be in proper form
for transfer and that the Person requesting such payment shall pay to the
Exchange Agent any transfer or other taxes required as a result of such
payment to a Person other than the registered holder of such Shares or
establish to the satisfaction of the Exchange Agent that such tax has been
paid or is not payable. For purposes of this Agreement, "Person" means an
individual, a corporation, a limited liability company, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or any agency or instrumentality
thereof.
(d) After the Effective Time, there shall be no further
registration of transfers of Shares. If, after the Effective Time,
certificates representing Shares are presented to the Surviving
Corporation, they shall be canceled and exchanged for the consideration
provided for, and in accordance with the procedures set forth, in this
Article 2.
(e) Any portion of the Merger Consideration made available
to the Exchange Agent pursuant to Section 2.3(a) that remains unclaimed by
the holders of Shares six months after the Effective Time shall be returned
to Buyer, upon demand, and any such holder who has not exchanged Shares for
the Merger Consideration in accordance with this Section 2.3 prior to that
time shall thereafter look only to Buyer for payment of the Merger
Consideration in respect of Shares. Notwithstanding the foregoing, Buyer
shall not be liable to any holder of Shares for any amount paid to a public
official pursuant to applicable abandoned property laws.
(f) Any portion of the Merger Consideration made available
to the Exchange Agent pursuant to Section 2.3(a) to pay for Shares for
which appraisal rights have been perfected shall be returned to Buyer, upon
demand.
Section 2.4. Dissenting Shares. Notwithstanding Section 2.2,
Shares outstanding immediately prior to the Effective Time and held by a
holder who has not voted in favor of the Merger or consented thereto in
writing and who has demanded appraisal for such Shares in accordance with
Delaware Law shall not be converted into a right to receive the Merger
Consideration, unless such holder fails to perfect or withdraws or otherwise
loses his right to appraisal. If after the Effective Time such holder fails to
perfect or withdraws or loses his right to appraisal, such Shares shall be
treated as if they had been converted as of the Effective Time into a right to
receive the Merger Consideration. The Company shall give Buyer prompt notice
of any demands received by the Company for the payment of fair value for
Shares, and Buyer shall have the right to participate in all negotiations and
proceedings with respect to such demands. The Company shall not, except with
the prior written consent of Buyer, make any payment with respect to, or
settle or offer to settle, any such demands.
Section 2.5. Stock Options. (a) At the Effective Time, (i)
each option to purchase shares of Common Stock outstanding under any employee
stock option or compensation plan or arrangement of the Company (except for
the Molecular Dynamics, Inc. 1993 Employee Stock Purchase Plan (the "Company
Stock Purchase Plan")) that is vested and exercisable (other than any option
that becomes vested and exercisable by its terms as a result of the
transactions contemplated hereby) shall be canceled, and the Company shall pay
each such holder in cash at the Effective Time for each such option an amount
determined by multiplying (A) the excess, if any, of the Merger Consideration
over the applicable exercise price per share of such option by (B) the number
of shares to which such option relates; and (ii) each option to purchase
shares of Common Stock outstanding under any employee stock option or
compensation plan or arrangement of the Company (except for the Company Stock
Purchase Plan) that is unvested or unexercisable at the Effective Time (each,
an "Unvested Option") shall be canceled, and Buyer shall replace each such
Unvested Option with an award (a "Replacement Award") with a total value
determined by multiplying (A) the excess, if any, of the Merger Consideration
over the applicable exercise price per share of such Unvested Option by (B)
the number of shares to which such Unvested Option relates. The total value
of the Replacement Award shall be payable in cash to the optionee in five
installments, with the first such installment (constituting 25% of the
Replacement Award) payable at the Effective Time and thereafter, the remaining
portion of the Replacement Award shall be paid in four equal installments on
the last business day of the third, sixth, ninth and twelfth month following
the Effective Time (provided that the optionee shall only be entitled to such
quarterly payment for any quarter during which such optionee is employed by the
Company or its successor as of such quarterly payment date). Each Replacement
Award shall represent an unfunded, unsecured obligation of the Company or its
successor.
(b) Prior to the Effective Time, the Company shall take all
actions (including, if appropriate, amending the terms of the Company's
stock option or compensation plans or arrangements) that are necessary to
give effect to the transactions contemplated by Sections 2.5(a).
Section 2.6. Employee Stock Purchase Plan. (a) As of the
Effective Time, the Company Stock Purchase Plan shall be terminated. Buyer
shall pay each participant in any then current offering under such Plan that
commences after the date hereof in cash at or promptly after the Effective
Time, in cancellation of all rights under such Plan, the amount of such
participant's account balance under the Plan.
(b) Prior to the Effective Time, the Company shall take all
actions (including, if appropriate, amending the terms of the Company Stock
Purchase Plan) that are necessary to give effect to the transactions
contemplated by Section 2.6(a).
ARTICLE 3
The Surviving Corporation
Section 3.1. Certificate of Incorporation. (a) The
Certificate of Incorporation of the Surviving Corporation shall be amended
pursuant to the Certificate of Merger to read in its entirety as set forth in
the Certificate of Incorporation of Merger Subsidiary, except that the name of
the Surviving Corporation shall be Molecular Dynamics, Inc.
(b) The Surviving Corporation shall initially be authorized
to issue up to 1,000 shares of its common stock, par value $.01 per share.
Section 3.2. Bylaws. The bylaws of Merger Subsidiary in
effect at the Effective Time shall be the bylaws of the Surviving Corporation
until amended in accordance with applicable law.
Section 3.3. Directors and Officers. From and after the
Effective Time, until successors are duly elected or appointed and qualified
in accordance with applicable law, (a) the directors of Merger Subsidiary at
the Effective Time shall be the directors of the Surviving Corporation and (b)
the officers of the Company at the Effective Time shall be the officers of the
Surviving Corporation.
ARTICLE 4
Representations and Warranties of the Company
The Company represents and warrants to Buyer that, except as
set forth on the disclosure schedule of the Company which accompanies this
Agreement:
Section 4.1. Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of Delaware and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted. The Company is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its
activities makes such qualification necessary, except for those jurisdictions
where the failure to be so qualified would not, individually or in the
aggregate, have a material adverse effect on the financial condition,
business, assets or results of operations of the Company and the Subsidiaries
taken as a whole (a "Material Adverse Effect"). The Company has heretofore
delivered to Buyer true and complete copies of the Company's Certificate of
Incorporation and bylaws as currently in effect.
Section 4.2. Corporate Authorization. The execution, delivery
and performance by the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby are within the Company's
corporate powers and, except as set forth in the following sentence, have been
duly authorized by all necessary corporate action. The affirmative vote of
the holders of a majority of the Shares approving this Agreement, if
necessary, is the only vote of the holders of the Company's capital stock
necessary to approve the transactions contemplated by this Agreement. This
Agreement constitutes a valid and binding agreement of the Company.
Section 4.3. Governmental Authorization. The execution,
delivery and performance by the Company of this Agreement and the consummation
of the Merger by the Company require no action by or in respect of, or filing
with, any governmental body, agency, official or authority by the Company or
its subsidiaries other than (a) the filing of a Certificate of Merger in
accordance with Delaware Law; (b) compliance with any applicable requirements
of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX Xxx");
and (c) compliance with any applicable requirements of the Securities Exchange
Act of 1934 and the rules and regulations promulgated thereunder (the
"Exchange Act").
Section 4.4. Non-Contravention. The execution, delivery and
performance by the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby do not and will not (a)
contravene or conflict with the Certificate of Incorporation or bylaws of the
Company, (b) assuming compliance with the matters referred to in Section 4.3,
contravene or conflict with or constitute a violation of any provision of any
law, regulation, judgment, injunction, order or decree binding upon or
applicable to the Company or any Subsidiary, (c) constitute a default under or
give rise to a right of termination, cancellation or acceleration of any right
or obligation of the Company or any Subsidiary or to a loss of any benefit to
which the Company or any Subsidiary is entitled under any provision of any
agreement, contract or other instrument binding upon the Company or any
Subsidiary or any license, intellectual property rights franchise, permit or
other similar authorization held by the Company or any Subsidiary, or (d)
result in the creation or imposition of any Lien on any asset of the Company
or any Subsidiary except, in the case of clauses (b), (c) and (d), for such
matters as would not, individually or in the aggregate, have a Material
Adverse Effect. For purposes of this Agreement, "Lien" means, with respect to
any asset, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset.
Section 4.5. Capitalization. The authorized capital stock of
the Company consists of 30,000,000 shares of Common Stock, $0.01 par value per
share and 1,000,000 shares of Preferred Stock. As of July 5, 1998, there were
outstanding 10,278,300 shares of Common Stock, no shares of Preferred Stock,
and stock options to purchase an aggregate of 2,211,991 shares of Common Stock
(of which options to purchase an aggregate of 1,392,914 shares of Common Stock
were vested). All outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable. All
shares of Common Stock issuable upon exercise of outstanding stock options
have been duly authorized and will have been validly issued and will be fully
paid and nonassessable. Except as set forth in this Section, the Rights and
except for changes since July 5, 1998 resulting from the exercise of stock
options outstanding on such date, there are outstanding (a) no shares of
capital stock or other voting securities of the Company, (b) no securities of
the Company convertible into or exchangeable for shares of capital stock or
voting securities of the Company and (c) no options or other rights to acquire
from the Company, and no obligation of the Company to issue, any capital
stock, voting securities or securities convertible into or exchangeable for
capital stock or voting securities of the Company (the items in clauses (a),
(b) and (c) being referred to collectively as the "Company Securities").
There are no outstanding obligations of the Company or any Subsidiary to
repurchase, redeem or otherwise acquire any Company Securities.
Section 4.6. Subsidiaries. (a) Each Subsidiary is a
corporation duly incorporated, validly existing and, if applicable, in good
standing under the laws of its jurisdiction of incorporation, has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted and
is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the character of the property owned or
leased by it or the nature of its activities makes such qualification
necessary, except for those jurisdictions where failure to be so qualified
would not, individually or in the aggregate, have a Material Adverse Effect.
For purposes of this Agreement, "Subsidiary" means any corporation or other
entity of which the Company owns, directly or indirectly, stock, securities or
other ownership interests having ordinary voting power sufficient to elect a
majority of the board of directors or other persons performing similar
functions. All Subsidiaries and their respective jurisdictions of
incorporation are identified in the Company's annual report on Form 10-K for
the fiscal year ended December 28, 1997 (the "Company 10-K").
(b) All of the outstanding capital stock of, or other voting
securities or ownership interests in, each Subsidiary, is owned by the
Company, directly or indirectly, free and clear of any Lien and free of any
other limitation or restriction (including any restriction on the right to
vote, sell or otherwise dispose of such stock or other securities or ownership
interests). There are no outstanding (i) securities of the Company or any
Subsidiary convertible into or exchangeable for shares of capital stock or
other voting securities or ownership interests in any Subsidiary and (ii)
options or other rights to acquire from the Company or any Subsidiary, or other
obligation of the Company or any Subsidiary to issue, any capital stock, voting
securities or other ownership interests in, or any securities convertible into
or exchangeable for any capital stock, voting securities or ownership
interests in, any Subsidiary (the items in clauses (i) and (ii) being referred
to collectively as the "Subsidiary Securities"). There are no outstanding
obligations of the Company or any Subsidiary to repurchase, redeem or
otherwise acquire any outstanding Subsidiary Securities.
Section 4.7. SEC Filings. (a) The Company has delivered to
Buyer (i) the Company's annual reports on Form 10-K for its fiscal years ended
December 28, 1997, December 29, 1996, and Xxxxxxxx 00, 0000, (xx) its
quarterly report on Form 10-Q for its fiscal quarter ended March 31, 1998 (the
"Company 10-Q"), (iii) its proxy or information statements relating to
meetings of, or actions taken without a meeting by, the stockholders of the
Company held since December 28, 1997 and (iv) all of its other reports,
statements, schedules and registration statements filed with the SEC since
December 28, 1997.
(b) As of its filing date, each such report or statement filed
pursuant to the Exchange Act did not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which
they were made, not misleading.
(c) Each such registration statement, as amended or
supplemented, if applicable, filed pursuant to the Securities Act of 1933
as of the date such statement or amendment became effective did not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading.
Section 4.8. Financial Statements. (a) The audited condensed
consolidated financial statements and unaudited condensed consolidated interim
financial statements of the Company included in its annual reports on Form
10-K referred to in Section 4.7 and the Company 10-Q fairly present, in
conformity with generally accepted accounting principles applied on a
consistent basis (except as may be indicated in the notes thereto), the
consolidated financial position of the Company and its consolidated
subsidiaries as of the dates thereof and their consolidated results of
operations and cash flows for the periods then ended (subject to normal
year-end adjustments in the case of any unaudited interim financial
statements). For purposes of this Agreement, "Balance Sheet" means the
consolidated balance sheet of the Company as of December 31, 1997 set forth in
the Company 10-K and "Balance Sheet Date" means December 31, 1997.
(b) The unaudited, consolidated interim financial
statements of the Company at and as of June 30, 1998 set forth in Schedule
4.08(b) hereto (the "Interim Financial Statements") fairly present, in
conformity with generally accepted accounting principles applied on a
consistent basis (except as may be indicated in the notes thereto), the
consolidated financial position of the Company and its consolidated
subsidiaries as of such date and their consolidated results of operations
and cash flows for the six-month period then ended (subject to normal year-
end adjustments).
(c) Schedule 4.08(c) hereto contains a complete and
accurate description of the cash, cash equivalents and securities available
for sale of the Company as of July 31, 1998.
Section 4.9. Disclosure Documents. (a) Each document required
to be filed by the Company with the SEC in connection with the transactions
contemplated by this Agreement (the "Company Disclosure Documents"),
including, without limitation, the Schedule 14D-9, the proxy or information
statement of the Company (the "Company Proxy Statement"), if any, to be filed
with the SEC in connection with the Merger, and any amendments or supplements
thereto will, when filed, comply as to form in all material respects with the
applicable requirements of the Exchange Act.
(b) At the time the Company Proxy Statement or any amendment
or supplement thereto is first mailed to stockholders of the Company and at
the time such stockholders vote on adoption of this Agreement, the Company
Proxy Statement, as supplemented or amended, if applicable, will not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. At the time of the
filing of any Company Disclosure Document other than the Company Proxy
Statement, at the time of any distribution thereof and at the time of
consummation of the Offer, such Company Disclosure Document will not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. The representations
and warranties contained in this Subsection 4.9(b) will not apply to
statements or omissions included in the Company Disclosure Documents based
upon information furnished to the Company in writing by Buyer specifically for
use therein.
(c) The information with respect to the Company or any
Subsidiary that the Company furnishes to Buyer in writing specifically for
use in the Offer Documents will not, at the time of the filing thereof, at
the time of any distribution thereof and at the time of the consummation of
the Offer, 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 made therein, in the light of the circumstances under
which they were made, not misleading.
Section 4.10. Absence of Certain Changes. Except as disclosed
in the Company 10-K or in the Company 10-Q, or in writing to Buyer prior to
the date hereof, or, in the case of Subsections 4.10(d) and (f), in the
Interim Financial Statements, since the Balance Sheet Date, the Company and
Subsidiaries have conducted their business in the ordinary course consistent
with past practice and there has not been:
(a) any event, occurrence or development or state of
circumstances or facts which has had or could reasonably be expected to
have a Material Adverse Effect;
(b) any declaration, setting aside or payment of any
dividend or other distribution with respect to any shares of capital stock
of the Company, or any repurchase, redemption or other acquisition by the
Company or any Subsidiary of any outstanding shares of capital stock or
other securities of, or other ownership interests in, the Company or any
Subsidiary;
(c) any amendment of any material term of any outstanding
security of the Company or any Subsidiary;
(d) any incurrence, assumption or guarantee by the Company
or any Subsidiary of any indebtedness for borrowed money, or any foreign
currency, hedging, financial derivative or similar transactions, other than
in the ordinary course of business and in amounts and on terms consistent
with past practices;
(e) any creation or assumption by the Company or any
Subsidiary of any Lien on any material asset other than in the ordinary
course of business consistent with past practices;
(f) any making of any loan, advance or capital contributions
to or investment in any Person other than loans, advances or capital
contributions to or investments in wholly-owned Subsidiaries made in the
ordinary course of business consistent with past practices or any amendment
of the terms of any loan to executive officers or directors;
(g) any damage, destruction or other casualty loss (whether
or not covered by insurance) affecting the business or assets of the
Company or any Subsidiary which, individually or in the aggregate, has had
or could reasonably be expected to have a Material Adverse Effect;
(h) any transaction or commitment made, or any contract or
agreement entered into, by the Company or any Subsidiary relating to its
assets or business (including the acquisition or disposition of any assets,
including any license, disposition, assignment, transfer or encumbrance of
Intellectual Property (as defined below)) or any relinquishment by the
Company or any Subsidiary of any contract or other right, in either case,
material to the Company and the Subsidiaries taken as a whole, other than
transactions and commitments in the ordinary course of business consistent
with past practice and those contemplated by this Agreement;
(i) any change in any method of accounting or accounting
practice by the Company or any Subsidiary, except for any such change
required by reason of a concurrent change in generally accepted accounting
principles or in Regulation S-X promulgated under the Exchange Act;
(j) any tax election, other than those consistent with past
practice, not required by law or any settlement or compromise of any tax
liability in either case that is material to the Company and the
Subsidiaries;
(k) any (i) grant of any severance or termination pay to any
director, officer or employee of the Company or any Subsidiary, (ii)
increase in benefits payable under any existing severance or termination
pay policies or employment agreements, (iii) entering into of any
employment, deferred compensation or other similar agreement (or any
amendment to any such existing agreement) with any director, officer or
employee of the Company or any Subsidiary or (iv) increase in compensation,
bonus or other benefits payable to directors, officers or employees of the
Company or any Subsidiary, other than any such increases payable to
employees other than directors or officers in the ordinary course of
business consistent with past practice;
(l) any labor dispute, other than routine individual
grievances, or any activity or proceeding by a labor union or
representative thereof to organize any employees of the Company or any
Subsidiary, which employees were not subject to a collective bargaining
agreement at the Balance Sheet Date, or any lockouts, strikes, slowdowns,
work stoppages or threats thereof by or with respect to such employees; or
(m) any cancellation of any licenses, sublicenses,
franchises, permits or agreements to which the Company or any Subsidiary is
a party, or any notification to the Company or any Subsidiary that any
party to any such arrangements intends to cancel or not renew such
arrangements beyond their expiration date as in effect on the date hereof,
which cancellation or notification, individually or in the aggregate, has
had or reasonably could be expected to have a Material Adverse Effect.
Section 4.11. No Undisclosed Material Liabilities. There are
no liabilities or obligations of the Company or any Subsidiary of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, and there is no existing condition, situation or set of
circumstances which could reasonably be expected to result in such a liability
or obligation, other than:
(a) liabilities or obligations disclosed or provided for in
the Balance Sheet or the Interim Financial Statements;
(b) liabilities or obligations incurred in the ordinary
course of business consistent with past practice since the Balance Sheet
Date, which in the aggregate could not reasonably be expected to have a
Material Adverse Effect;
(c) liabilities or obligations arising from the action
involving the Company, certain affiliates of Buyer and Xxxxxx-Xxxxx
Corporation and disclosed in Note 7 to the interim financial statements
included in the Company 10-Q; and
(d) liabilities or obligations under this Agreement.
Section 4.12. Litigation. Except as set forth in the Company
10-K, there is no action, suit, investigation or proceeding pending, or to the
knowledge of the Company threatened, or any circumstances which are likely to
give rise to any such proceedings, against or affecting the Company or any
Subsidiary or any of their respective properties or any of their respective
officers or directors in their capacity as officers or directors of the
Company (or any basis therefor) before any court or arbitrator or before or by
any governmental body, agency or official (x) as of the date hereof, or (y)
which could reasonably be expected, individually or in the aggregate, to have
a Material Adverse Effect.
Section 4.13. Taxes. The Company has filed all material tax
returns, statements, reports and forms required to be filed with any tax
authority when due and in accordance with all applicable laws, and all taxes
shown as due and payable thereon have been timely paid, or withheld and
remitted, to the appropriate taxing authority. No deficiency in payment of
any taxes for any period has been asserted by any taxing authority which
remains unsettled at the date hereof except for deficiencies which would not
have a Material Adverse Effect. The Company and Subsidiaries do not own any
interest in real property in the State of New York or in any other
jurisdiction in which a tax is imposed on the transfer of a controlling
interest in an entity that owns any interest in real property.
Section 4.14. ERISA. (a) Schedule 4.14(a) contains a correct
and complete list identifying each "employee benefit plan", as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974 ("ERISA"),
each employment, severance or similar contract, plan, arrangement or policy
and each plan or arrangement (written or oral) providing for compensation,
bonuses, profit-sharing, stock option or other stock related rights or other
forms of incentive or deferred compensation, vacation benefits, insurance
coverage (including any self-insured arrangements), health or medical
benefits, disability benefits, workers' compensation, supplemental
unemployment benefits, severance benefits and post-employment or retirement
benefits (including compensation, pension, health, medical or life insurance
benefits) which is maintained, administered or contributed to by the Company
or any affiliate (as defined below) and covers any employee or former employee
of the Company or any affiliate or under which the Company or any affiliate
has any liability. Copies of such plans (and, if applicable, related trust
agreements) and all amendments thereto and written interpretations thereof
have been furnished to Buyer together with the three most recent annual
reports (Form 5500 including, if applicable, Schedule B thereto) prepared in
connection with any such plan. Such plans are referred to collectively herein
as the "Employee Plans". For purposes of this Section, "affiliate" of any
Person means any other Person which, together with such Person, would be
treated as a single employer under Section 414 of the Code. The only Employee
Plans which individually or collectively would constitute an "employee pension
benefit plan" as defined in Section 3(2) of ERISA (the "Pension Plans") are
identified as such in the list referred to above.
(b) No Employee Plan (i) constitutes a "multiemployer plan", as
defined in Section 3(37) of ERISA; (ii) is maintained in connection with any
trust described in Section 501(c)(9) of the Code; or (iii) is subject to Title
IV of ERISA. The Company knows of no "reportable event", within the meaning of
Section 4043 of ERISA, and no event described in Section 4041, 4042, 4062 or
4063 of ERISA has occurred in connection with any Employee Plan. Neither the
Company nor any of its affiliates has incurred any material liability under
Title IV of ERISA arising in connection with the termination of, or complete
or partial withdrawal from, any plan covered or previously covered by Title IV
of ERISA. Nothing done or omitted to be done and no transaction or holding of
any asset under or in connection with any Employee Plan has or will make the
Company or any Subsidiary, or any officer or director of the Company or any
Subsidiary, subject to any liability under Title I of ERISA or liable for any
tax pursuant to Section 4975 of the Code.
(c) Each Employee Plan which is intended to be qualified
under Section 401(a) of the Code is so qualified and has been so qualified
during the period from its adoption to date, and each trust forming a part
thereof is exempt from tax pursuant to Section 501(a) of the Code. The
Company has furnished to the Buyer copies of the most recent Internal
Revenue Service determination letters with respect to each such Plan. Each
Employee Plan has been maintained in substantial compliance with its terms
and with the requirements prescribed by any and all statutes, orders, rules
and regulations, including but not limited to ERISA and the Code, which are
applicable to such Plan.
(d) There is no contract, agreement, plan or arrangement
covering any employee or former employee of the Company or any affiliate
that, individually or collectively, could give rise to the payment of any
amount that would not be deductible pursuant to the terms of Sections
162(a)(1) or 280G of the Code.
(e) The Company does not provide post-employment health or
medical benefits for former employees of the Company and its affiliates
except as required to avoid imposition of tax under Section 4980B of the
Code. No condition exists that would prevent the Company or any Subsidiary
from amending or terminating any Employee Plan or Benefit Arrangement
providing health or medical benefits in respect of any active employee of
the Company or any Subsidiary other than limitations imposed under the
terms of a collective bargaining agreement.
(f) Except as disclosed in writing to Buyer prior to the
date hereof, there has been no amendment to, written interpretation or
announcement (whether or not written) by the Company or any of its
affiliates relating to, or change in employee participation or coverage
under, any Employee Plan or Benefit Arrangement which would increase
materially the expense of maintaining such Employee Plan or Benefit
Arrangement above the level of the expense incurred in respect thereof for
the fiscal year ended on the Balance Sheet Date.
(g) Neither the Company nor any Subsidiary is a party to or
subject to any union contract or any employment contract or arrangement
providing for annual future compensation of $150,000 or more with any
officer, consultant, director or employee.
(h) The list delivered to Buyer prior to the date hereof
entitled "Option Activity for Current Option Holders Only" accurately sets
forth, as of July 5, 1998, the number of options to purchase Shares
("Company Options") outstanding, the number of vested Company Options
outstanding and the exercise price of such Company Options. The number of
vested Company Options outstanding which have an exercise price equal to or
greater than $20.50 is 51,750.
Section 4.15. Compliance with Laws. Neither the Company nor
any Subsidiary is in violation of, or has violated, any applicable provisions
of any laws, statutes, ordinances or regulations, except for any such
violation that, individually or in the aggregate, has not had and could not
reasonably be expected to have a Material Adverse Effect.
Section 4.16. Finders' Fees. Except for Vector Securities
International, Inc., a copy of whose engagement agreement has been provided to
Buyer, there is no investment banker, broker, finder or other intermediary
which has been retained by or is authorized to act on behalf, of the Company
or any Subsidiary who might be entitled to any fee or commission from Buyer or
any of its affiliates upon consummation of the transactions contemplated by
this Agreement.
Section 4.17. Patents and Other Proprietary Rights.
(a) The Company and its subsidiaries have not granted or
promised to grant any exclusive licenses or any material non-exclusive
licenses or covenants not to xxx thereunder to any third party in respect of
any Intellectual Property (as defined below) used in or necessary for the
conduct of its business as currently conducted or as proposed to be conducted
as reflected in the Company's existing business plans (other than (A) to
Buyer or its subsidiaries, (B) trademark or service xxxx licenses entered
into in the ordinary course of business under distribution and supply
agreements and (C) technology transfer and technology access agreements
substantially on the terms of the Company's standard form agreements). The
patents owned by the Company and its subsidiaries are valid and enforceable
and any patent issuing from patent applications of the Company and its
subsidiaries will be valid and enforceable for the duration of its term
other than any such lack of validity or enforceability which, individually
or in the aggregate, would not reasonably be expected to have a Material
Adverse Effect.
(b) (1) the Company and each of its subsidiaries owns, or is
licensed to use or otherwise possesses the legal right to use (in each case,
free and clear of any Liens (other than Liens arising out of payment
obligations in respect of such Intellectual Property) in respect of the
Company's or any of its subsidiaries' interests therein) all Intellectual
Property used in or necessary for the conduct of its business as currently
conducted;
(2) the use of any Intellectual Property by the Company
and its subsidiaries does not infringe on or otherwise violate the
rights of any person;
(3) no product (or component thereof or process) used,
sold or manufactured by the Company or any of its subsidiaries
infringes or otherwise violates the Intellectual Property of any
other person; and
(4) no person is challenging, infringing on or
otherwise violating any right of the Company or any of its
subsidiaries with respect to any Intellectual Property owned by
and/or licensed to the Company and its subsidiaries,
except as would not have a Material Adverse Effect.
For purposes of this Agreement "Intellectual Property" shall
mean trademarks, service marks, brand names, certification marks, trade dress,
assumed names, trade names and other indications of origin, the goodwill
associated with the foregoing and registrations in any jurisdiction of, and
applications in any jurisdiction to register, the foregoing, including any
extension, modification or renewal of any such registration or application;
inventions, discoveries and ideas, whether patentable or not in any
jurisdiction; manufacturing know-how; patents, applications for patents
(including, without limitation, division, continuations, continuations in part
and renewal applications), and any renewals, extensions or reissues thereof,
in any jurisdiction; nonpublic information, trade secrets and confidential
information and rights in any jurisdiction to limit the use or disclosure
thereof by any person; writings and other works, whether copyrightable or not
in any jurisdiction; registration or applications for registration of
copyrights in any jurisdiction, and any renewals or extensions thereof; or any
similar intellectual property or proprietary rights.
(c) Except as disclosed in writing to Buyer prior to the
date hereof, none of the processes, techniques and formulae, research and
development results and other know-how relating to the business of the
Company and its subsidiaries, the value of which to the Company is
contingent upon maintenance of the confidentiality thereof, has been
disclosed by the Company or any affiliate thereof to any person or entity
other than those persons or entities who are bound to hold such information
in confidence pursuant to confidentiality agreements or by operation of
law, other than any such disclosure which, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.
Section 4.18. Environmental Matters. (a) Except as set forth
in the Company 10-K:
(i) no notice, notification, demand, request for
information, citation, summons, complaint or order has been
received by, or, to the knowledge of the Company, is pending
or threatened by any Person against, the Company or any
Subsidiary nor has any material penalty been assessed
against the Company or any Subsidiary with respect to any
(A) alleged violation of any Environmental Law or liability
thereunder, (B) alleged failure to have any permit,
certificate, license, approval, registration or
authorization required under any Environmental Law, (C)
generation, treatment, storage, recycling, transportation or
disposal of any Hazardous Substance or (D) discharge,
emission or release of any Hazardous Substance;
(ii) no Hazardous Substance has been discharged,
emitted, released or is present at any property now or
previously owned, leased or operated by the Company or any
Subsidiary, which circumstances, individually or in the
aggregate, could reasonably be expected to result in a
Material Adverse Effect; and
(iii) there are no Environmental Liabilities that
have had or could reasonably be expected to have a Material
Adverse Effect.
(b) Except as disclosed in writing to Buyer prior to the
date hereof, there has been no environmental investigation, study, audit,
test, review or other analysis conducted of which the Company has knowledge
in relation to the current or prior business of the Company or any property
or facility now or previously owned or leased by the Company or any
Subsidiary which has not been delivered to Buyer prior to the date hereof.
(c) For purposes of this Section 4.18, the following terms
shall have the meanings set forth below:
"Company" and "Subsidiary" shall include any entity which
is, in whole or in part, a predecessor of the Company or any
Subsidiary;
"Environmental Laws" means any and all federal, state, local
and foreign statutes, laws, judicial decisions, regulations,
ordinances, rules, judgments, orders, decrees, codes, plans,
injunctions, permits, concessions, grants, franchises,
licenses, agreements and governmental restrictions, relating
to human health, the environment or to emissions, discharges
or releases of pollutants, contaminants or other hazardous
substances or wastes into the environment, including without
limitation ambient air, surface water, ground water or land,
or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport
or handling of pollutants, contaminants or other hazardous
substances or wastes or the clean-up or other remediation
thereof;
"Environmental Liabilities" means any and all liabilities of
or relating to the Company and any Subsidiary, whether
contingent or fixed, actual or potential, known or unknown,
which (i) arise under or relate to matters covered by
Environmental Laws and (ii) relate to actions occurring or
conditions existing on or prior to the Effective Time; and
"Hazardous Substances" means any toxic, radioactive,
corrosive or otherwise hazardous substance, including
petroleum, its derivatives, by-products and other
hydrocarbons, or any substance having any constituent
elements displaying any of the foregoing characteristics,
which in any event is regulated under Environmental Laws.
Section 4.19. Approvals; Antitakeover Provisions. Section 203
of the Delaware Law does not in any way restrict the acquisition of Shares
pursuant to the Offer, the consummation of the Merger or the other
transactions contemplated hereby. The adoption of this Agreement by the
affirmative vote of the holders of Shares entitling such holders to exercise
at least a majority of the voting power of the Shares is the only vote of
holders of any class or series of the capital stock of the Company that may be
required to adopt this Agreement, or to approve the Merger or any of the other
transactions contemplated hereby and no higher or additional vote is required
pursuant to of the Company's Certificate of Incorporation or otherwise.
Section 4.20. Rights Plan. The Rights Agreement has been
amended to render the Rights Agreement inapplicable to the Offer, the Merger,
the Company Stock Option, this Agreement, the Stockholder Agreement dated as
of the date hereof among Buyer, Merger Subsidiary and certain stockholders of
the Company (the "Stockholder Agreement") or any transaction contemplated
hereby or thereby between the Company, Buyer, Merger Subsidiary or such
stockholders.
ARTICLE 5
Representations and Warranties of Buyer
Buyer represents and warrants to the Company that:
Section 5.1. Corporate Existence and Power. Each of Buyer and
Merger Subsidiary is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business in all material
respects as now conducted. Since the date of its incorporation, Merger
Subsidiary has not engaged in any activities other than in connection with or
as contemplated by this Agreement or in connection with arranging any
financing required to consummate the transactions contemplated hereby.
Section 5.2. Corporate Authorization. The execution, delivery
and performance by Buyer and Merger Subsidiary of this Agreement and the
consummation by Buyer and Merger Subsidiary of the transactions contemplated
hereby are within the corporate powers of Buyer and Merger Subsidiary and have
been duly authorized by all necessary corporate and stockholder action. This
Agreement constitutes a valid and binding agreement of each of Buyer and Merger
Subsidiary.
Section 5.3. Governmental Authorization. The execution,
delivery and performance by Buyer and Merger Subsidiary of this Agreement and
the consummation by Buyer and Merger Subsidiary of the transactions
contemplated by this Agreement require no action by or in respect of, or
filing with, any governmental body, agency, official or authority other than
(a) the filing of the Certificate of Merger in accordance with Delaware Law,
(b) compliance with any applicable requirements of the HSR Act or of antitrust
laws and regulations in the Federal Republic of Germany; and (c) compliance
with any applicable requirements of the Exchange Act.
Section 5.4. Non-contravention. The execution, delivery and
performance by Buyer and Merger Subsidiary of this Agreement and the
consummation by Buyer and Merger Subsidiary of the transactions contemplated
hereby do not and will not (a) contravene or conflict with the Memorandum and
Articles of Association of Buyer or the Certificate of Incorporation or bylaws
of Merger Subsidiary, (b) assuming compliance with the matters referred to in
Section 5.3, contravene or conflict with any provision of law, regulation,
judgment, order or decree binding upon Buyer or Merger Subsidiary, or (c)
constitute a default under or give rise to any right of termination,
cancellation or acceleration of any right or obligation of Buyer or Merger
Subsidiary or to a loss of any benefit to which Buyer or Merger Subsidiary is
entitled under any agreement, contract or other instrument binding upon Buyer
or Merger Subsidiary other than (i) the Standstill Agreement, dated as of
April 6, 1994, between the Company, Nycomed Amersham plc (as successor to
Amersham International plc, "Nycomed") and Amersham Holdings, Inc. (the
"Standstill Agreement") and (ii) any such termination, cancellation,
acceleration or loss which, individually or in the aggregate, would not
reasonably be expected to have a material adverse effect on Buyer or Merger
Subsidiary.
Section 5.5. Disclosure Documents. (a) The information with
respect to Buyer and its subsidiaries that Buyer furnishes to the Company in
writing specifically for use in any Company Disclosure Document will not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in the light of
the circumstances under which they were made, not misleading (i) in the case
of the Company Proxy Statement, at the time the Company Proxy Statement or any
amendment or supplement thereto is first mailed to stockholders of the Company
and at the time the stockholders vote on adoption of this Agreement (if
applicable), and (ii) in the case of any Company Disclosure Document other
than the Company Proxy Statement, at the time of the filing thereof, at the
time of any distribution thereof, and at the time of consummation of the Offer.
(b) The Offer Documents, when filed, will comply as to form
in all material respects with the applicable requirements of the Exchange
Act and will not at the time of the filing thereof, at the time of any
distribution thereof or at the time of consummation of the Offer, contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading, provided, that
this representation and warranty will not apply to statements or omissions
in the Offer Documents based upon information furnished to Buyer or Merger
Subsidiary in writing by the Company specifically for use therein.
Section 5.6. Finders' Fees. Except for Xxxxxx Xxxxxxx & Co.
Incorporated, whose fees will be paid by Buyer, there is no investment banker,
broker, finder or other intermediary who might be entitled to any fee or
commission from the Company or any of its affiliates upon consummation of the
transactions contemplated by this Agreement.
Section 5.7. Available Funds. Buyer and Merger Subsidiary
have or will have the funds necessary to consummate the Offer and the Merger.
ARTICLE 6
Covenants of the Company
Section 6.1. Conduct of the Company. From the date hereof
until the Effective Time, the Company and the Subsidiaries shall conduct their
business in the ordinary course consistent with past practice and shall use
their reasonable best efforts to preserve intact their business organizations
and relationships with third parties and to keep available the services of
their present officers and employees. Without limiting the generality of the
foregoing, from the date hereof until the Effective Time the Company will not,
and will cause its Subsidiaries not to:
(a) adopt or propose any change in its certificate of
incorporation or bylaws;
(b) except pursuant to existing agreements or arrangements
(i) acquire (by merger, consolidation or
acquisition of stock or assets) any material corporation,
partnership or other business organization or division thereof,
or sell, lease or otherwise dispose of a material subsidiary or a
material amount of assets or securities;
(ii) make any investment in an amount in excess of
$250,000 in the aggregate whether by purchase of stock or
securities, contributions to capital or any property transfer
(other than investments in marketable securities made in
compliance with the Company's cash management policy), or
purchase for an amount in excess of $250,000 in the aggregate,
any property or assets of any other individual or entity;
(iii) waive, release, grant or transfer any rights of
material value;
(iv) license, dispose of, assign, transfer or
encumber any Intellectual Property other than technology transfer
and technology access agreements substantially on the terms of
the Company's standard form agreements;
(v) modify or change in any material respect any
existing material license, lease, contract, or other document;
(vi) enter into any supply or distribution agreement
providing for a term in excess of twelve months;
(vii) except to refund or refinance commercial paper,
incur, assume or prepay an amount of long-term or short-term debt
in excess of $2,000,000 in the aggregate;
(viii) assume, guarantee, endorse or otherwise become
liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other person which are in
excess of $250,000 in the aggregate;
(ix) make any loans to any other person which are in
excess of $250,000 in the aggregate or
(x) authorize any new capital expenditures which,
individually or in the aggregate, are in excess of $500,000;
(c) split, combine or reclassify any shares of its capital
stock, declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect
of its capital stock, other than cash dividends and distributions by a
wholly owned Subsidiary of the Company to the Company or to a subsidiary
all of the capital stock which is owned directly or indirectly by the
Company, or redeem, repurchase or otherwise acquire or offer to redeem,
repurchase, or otherwise acquire any of its securities or any securities of
its Subsidiaries;
(d) adopt or amend any bonus, profit sharing, compensation,
severance, termination, stock option, pension, retirement, deferred
compensation, employment or employee benefit plan, agreement, trust, plan,
fund or other arrangement for the benefit and welfare of any director,
officer or employee, or (except for normal increases in the ordinary course
of business that are consistent with past practices and that, in the
aggregate, do not result in a material increase in benefits or compensation
expense to the Company) increase in any manner the compensation or fringe
benefits of any director, officer or employee or pay any benefit not
required by any existing plan or arrangement (including, without
limitation, the granting of stock options or stock appreciation rights or
the removal of existing restrictions in any benefit plans or agreements);
(e) revalue in any material respect any of its assets,
including, without limitation, writing down the value of inventory in any
material manner or write-off of notes or accounts receivable in any
material manner;
(f) pay, discharge or satisfy any material claims,
liabilities or obligations (whether absolute, accrued, asserted or
unasserted, contingent or otherwise) other than the payment, discharge or
satisfaction in the ordinary course of business, consistent with past
practices, of liabilities reflected or reserved against in the consolidated
financial statements of the Company or incurred in the ordinary course of
business, consistent with past practices;
(g) make any tax election or settle or compromise any
material income tax liability;
(h) take any action other than in the ordinary course of
business and consistent with past practices with respect to accounting
policies or procedures; or
(i) agree or commit to do any of the foregoing; or
(j) take or agree or commit to take any action that would
make any representation and warranty of the Company hereunder inaccurate in
any respect at, or as of any time prior to, the Effective Time.
Section 6.2. Stockholder Meeting; Proxy Material. The Company
shall cause a meeting of its stockholders (the "Company Stockholder Meeting")
to be duly called and held as soon as reasonably practicable following the
consummation of the Offer for the purpose of voting on the approval and
adoption of this Agreement, unless a vote shall not be required under Delaware
Law. The Directors of the Company shall, except as may be required, in
response to an unsolicited bona fide written Acquisition Proposal (as defined
in Section 6.4), in order to comply with the fiduciary duties of the Board of
Directors under applicable law as advised in writing by Company Counsel,
recommend approval and adoption of this Agreement and the Merger by the
Company's stockholders. In connection with such meeting, the Company (i) will
promptly prepare and file with the SEC, will use its best efforts to have
cleared by the SEC and will thereafter mail to its stockholders as promptly as
practicable the Company Proxy Statement and all other proxy materials for such
meeting, (ii) will use its best efforts to obtain the necessary approvals by
its stockholders of this Agreement and the transactions contemplated hereby
and (iii) will otherwise comply with all legal requirements applicable to such
meeting.
Section 6.3. Access to Information. (a) From the date hereof
until the Effective Time, the Company will give Buyer, its counsel, financial
advisors, auditors and other authorized representatives full access during
normal business hours on reasonable notice to the offices, properties, books
and records of the Company and the Subsidiaries and such financial and
operating data and other information as such Persons may reasonably request
and will instruct the Company's employees, counsel and financial advisors to
cooperate with Buyer in its investigation of the business of the Company and
the Subsidiaries; provided that no investigation pursuant to this Section 6.3,
shall affect any representation or warranty given by the Company to Buyer
hereunder.
(b) The Company shall not be required to permit any inspection
or to disclose any information which, in the reasonable judgment of the
Company, would result in the disclosure of any trade secrets of third
parties or violate any obligation of the Company with respect to
confidentiality if the Company shall have used reasonable efforts to obtain
the consent of such third party for such inspection or disclosure. All
information exchanged pursuant to this Section 6.3 shall be subject to
existing confidentiality agreements between the Company and Buyer. All
requests for information pursuant to this Section 6.3 shall be directed to
an executive officer of the Company or such person as may be designated by
any such executive officer. Upon termination of the Agreement, Buyer will
collect and deliver to the Company all documents obtained by it or its
representatives then in its possession and any copies thereof.
Section 6.4. Other Offers. (a) Neither the Company nor any of
its Subsidiaries shall (whether directly or indirectly through advisors,
agents or other intermediaries), nor shall the Company or any of its
Subsidiaries authorize or permit any of its or their officers, directors,
agents, representatives, advisors or Subsidiaries to
(i) solicit, initiate or take any action knowingly to
facilitate the submission of inquiries, proposals or offers from any
Third Party (as defined below) (other than Buyer) which constitutes
or would reasonably be expected to lead to
(A) any acquisition or purchase of 20% or more of
the consolidated assets of the Company and its Subsidiaries
or of over 20% of any class of equity securities of the
Company or any of its Subsidiaries,
(B) any tender offer (including a self tender
offer) or exchange offer that if consummated would result in
any Third Party beneficially owning 20% or more of any class
of equity securities of the Company or any of its
Subsidiaries,
(C) any merger, consolidation, business
combination, sale of substantially all assets,
recapitalization, liquidation, dissolution or similar
transaction involving the Company or any of its Subsidiaries
whose assets, individually or in the aggregate, constitute
more than 20% of the consolidated assets of the Company
other than the transactions contemplated by this Agreement,
or
(D) any other transaction the consummation of
which would or could reasonably be expected to interfere
with, prevent or materially delay the Merger or which would
or could reasonably be expected to materially dilute the
benefits to Buyer of the transactions contemplated hereby
(collectively, "Acquisition Proposals"), or agree to or endorse any
Acquisition Proposal,
(ii) enter into or participate in any discussions or
negotiations regarding any of the foregoing, or furnish to any Third
Party any information with respect to its business, properties or
assets or any of the foregoing, or otherwise cooperate in any way
with, or knowingly assist or participate in, facilitate or encourage,
any effort or attempt by any Third Party (other than Buyer) to do or
seek any of the foregoing, or
(iii) except for the waiver referred to in Section 6.7,
grant any waiver or release under any standstill or similar agreement
with respect to any class of equity securities of the Company or any
of its Subsidiaries;
provided, however, that the foregoing shall not prohibit the Company
(either directly or indirectly through advisors, agents or other
intermediaries) from
(x) furnishing information pursuant to an appropriate
confidentiality letter (which letter shall not be less favorable to the
Company in any material respect (with respect to duration and standstill
provisions) than the Confidentiality Agreement, and a copy of which shall
be provided for informational purposes only to Buyer) concerning the
Company and its businesses, properties or assets to a Third Party who has
made or is seeking to initiate discussions with respect to a bona fide
Acquisition Proposal,
(y) engaging in discussions or negotiations with such a
Third Party who has made a bona fide Acquisition Proposal, and/or
(z) following receipt of a bona fide Acquisition
Proposal, taking and disclosing to its stockholders a position contemplated
by Rule 14e-2(a) under the Exchange Act or otherwise making disclosure to
its stockholders,
but in each case referred to in the foregoing clauses (x) through (z), only
to the extent that the Board of Directors of the Company shall have
concluded in good faith on the basis of written advice from Company Counsel
that such action by the Board of Directors is required in order to comply
with the fiduciary duties of the Board of Directors to the stockholders of
the Company under applicable law.
(b) The Board of Directors of the Company shall not take
any of the foregoing actions referred to in clauses (x) through (z) of
subsection (a) above until after reasonable notice to Buyer with respect to
such action and that such Board of Directors shall continue to advise Buyer
after taking such action and, in addition, if the Board of Directors of the
Company receives an Acquisition Proposal, then the Company shall promptly
inform Buyer of the terms and conditions of such proposal and the identity
of the person making it.
(c) The Company will immediately cease and cause its
advisors, agents and other intermediaries to cease any and all existing
activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing, and shall use its
reasonable best efforts to cause any such parties in possession of
confidential information about the Company that was furnished by or on
behalf of the Company to return or destroy all such information in the
possession of any such party or in the possession of any agent or advisor
of any such party.
(d) As used in this Agreement, the term "Third Party" means
any person, corporation, entity or "group," as defined in Section 13(d) of the
Exchange Act, other than Buyer or any of its affiliates.
Section 6.5. Notices of Certain Events. The Company shall
promptly notify Buyer of:
(a) any notice or other communication from any Person
alleging that the consent of such Person is or may be required in
connection with the transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement; and
(c) any actions, suits, claims, investigations or proceedings
commenced or, to the best of its knowledge threatened against, relating to or
involving or otherwise affecting the Company or any Subsidiary which, if
pending on the date of this Agreement, would have been required to have been
disclosed pursuant to Section 4.12 or which relate to the consummation of the
transactions contemplated by this Agreement.
Section 6.6. Redemption of Rights Plan. The Company shall
take all necessary action to render the Rights Agreement inapplicable to the
Offer, the Merger, the Company Stock Option, this Agreement, the Stockholder
Agreement and any other transaction contemplated hereby and thereby.
Section 6.7. Waiver of Standstill Agreement. The Company
waives all of its rights and privileges under the Standstill Agreement with
respect to the Merger, the Offer, the Company Stock Option, the other
transactions contemplated hereby, the Stockholder Agreement and the
transactions contemplated thereby.
ARTICLE 7
Covenants of Buyer
Section 7.1. Obligations of Merger Subsidiary. Buyer will
take all action necessary to cause Merger Subsidiary to perform its
obligations under this Agreement and to consummate the Merger on the terms
and conditions set forth in this Agreement.
Section 7.2. Voting of Shares. Buyer agrees to vote all
Shares beneficially owned by it in favor of adoption of this Agreement at the
Company Stockholder Meeting.
Section 7.3. Director and Officer Liability. (a) From and
after the Effective Time, Buyer agrees that it will indemnify and hold
harmless each present and former director and officer of the Company and its
Subsidiaries, determined as of the Effective time (the "Indemnified Parties"),
against any costs or expenses (including attorneys' fees), judgments, fines,
losses, claims, damages or liabilities (collectively, "Costs") incurred in
connection with any claim, action, suit, proceeding or investigation, whether
civil, criminal, administrative or investigative, arising out of matters
existing or occurring at or prior to the Effective Time, whether asserted or
claimed prior to, at or after the Effective Time, to the fullest extent that
the Company would have been permitted under Delaware law and its Certificate
of Incorporation or Bylaws in effect on the date hereof to indemnify such
person, and Buyer shall also advance expenses as incurred to the fullest
extent permitted under the Company's By-Laws. For six years after the
Effective Time, Buyer will cause the Surviving Corporation to provide
officers' and directors' liability insurance in respect of acts or omissions
occurring prior to the Effective Time covering each such Person currently
covered by the Company's officers' and directors' liability insurance policy
on terms with respect to coverage and amount no less favorable than those of
such policy in effect on the date hereof, provided that in satisfying its
obligation under this Section, Buyer shall not be obligated to cause the
Surviving Corporation to pay premiums in excess of 125% of the amount per
annum the Company paid as of the date hereof, which amount has been disclosed
to Buyer (the "Maximum Premium"). If such insurance coverage cannot be
obtained at all, or can only be obtained at an annual premium in excess of the
Maximum Premium, Buyer shall cause the Surviving Corporation to maintain the
most advantageous policies of directors' and officers' liability insurance for
an annual premium equal to the Maximum Premium.
(b) This Section 7.3 is intended to be for the benefit of the
Indemnified Parties.
Section 7.4. Employee Benefits. (a) During the period
commencing on the Effective Time and ending on the first anniversary thereof,
Buyer shall provide employees of the Company and its Subsidiaries with salary
and benefits reasonably comparable, in the aggregate, to the salary and
benefits provided such employees immediately prior to the Effective Time
(disregarding for this purpose any stock options of other equity-based
compensation provided such employees prior to the Effective Time). For
purposes of any employee benefit plan or arrangement maintained by Buyer,
Buyer shall recognize service with Seller as service for all purposes except
benefit accrual under any defined benefit pension plan maintained by Buyer.
(b) Buyer shall cause the Surviving Corporation to adopt, as
of the Effective Time, retention plans for the employees of the Company
which shall include the terms set forth in Exhibit A hereto.
ARTICLE 8
Covenants of Buyer and the Company
Section 8.1. Best Efforts. Subject to the terms and
conditions of this Agreement, each party will use its best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement.
Section 8.2. Certain Filings. The Company and Buyer shall
cooperate with one another (a) in connection with the preparation of the
Company Disclosure Documents and the Offer Documents, (b) in determining
whether any action by or in respect of, or filing with, any governmental body,
agency or official, or authority is required, or any actions, consents,
approvals or waivers are required to be obtained from parties to any material
contracts, in connection with the consummation of the transactions
contemplated by this Agreement and (c) in seeking any such actions, consents,
approvals or waivers or making any such filings, furnishing information
required in connection therewith or with the Company Disclosure Documents or
the Offer Documents and seeking timely to obtain any such actions, consents,
approvals or waivers.
Section 8.3. Public Announcements. The parties have agreed
upon the form of a joint press release announcing the execution of this
Agreement and the transactions contemplated hereby. Buyer and the Company
will consult with each other before issuing any press release or making any
public statement with respect to this Agreement and the transactions
contemplated hereby. Except as may be required by applicable law or any
listing agreement with any national securities exchange or automated quotation
system, the Company will not issue any such press release or make any such
public statement prior to receiving Buyer's approval.
Section 8.4. Further Assurances. At and after the Effective
Time, the officers and directors of the Surviving Corporation will be
authorized to execute and deliver, in the name and on behalf of the Company or
Merger Subsidiary, any deeds, bills of sale, assignments or assurances and to
take and do, in the name and on behalf of the Company or Merger Subsidiary,
any other actions and things to vest, perfect or confirm of record or
otherwise in the Surviving Corporation any and all right, title and interest
in, to and under any of the rights, properties or assets of the Company
acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger.
Section 8.5. Company Stock Option.
(a) Grant of Company Stock Option. Subject to Section
11.4(d), the Company hereby grants to the Buyer an irrevocable option (the
"Company Stock Option") to purchase for $20.50 per share in cash up to
1,750,000 Shares.
(b) Exercise of Stock Option. The Buyer may exercise the
Company Stock Option, in whole or in part, at any time or from time to time,
from the date on which an Acquisition Proposal shall have been made or occur,
as applicable, until the day (the "Option Termination Date") which is the
earlier of (i) the Effective Time or (ii) nine months after the termination of
this Agreement.
(c) Conditions to Purchase. The Buyer may purchase Shares
pursuant to the Company Stock Option only if all of the following conditions
are satisfied: (i) the Buyer is not at the time of purchase in material breach
of its obligations under this Agreement, (ii) no preliminary or permanent
injunction or other order, decree or ruling against the sale or delivery of
the Shares issued by any federal or state court of competent jurisdiction in
the United States is in effect at such time and (iii) any applicable waiting
period under the HSR Act shall have expired or been terminated at or prior to
such time.
(d) Exercise of Stock Option. If the Buyer wishes to exercise
the Company Stock Option, it shall do so by giving the Company notice to such
effect, specifying the number of Shares to be purchased and a place and date
not earlier than one business day nor later than ten business days from the
date such notice is given for the closing of the purchase. If any such
closing cannot be consummated on the date specified by the Buyer in its notice
of election to exercise the Company Stock Option because any condition to the
purchase of Shares has not been satisfied or as a result of any restriction
arising under any applicable law or regulation, the date for such closing
shall be on such date within five days following the satisfaction of all such
conditions and the cessation of all such restrictions as the Buyer may specify.
(e) Payment and Delivery of Shares. At any closing in
connection with the Company Stock Option, (i) the Buyer shall make payment to
the Company of the aggregate purchase price for the Shares to be purchased by
delivery to the Company of a certified, cashier's or bank check payable to the
order of the Company or, if mutually agreed, by wire transfer of funds to an
account designated by the Company and (ii) the Company shall deliver to the
Buyer a certificate or certificates representing the Shares and the associated
Rights so purchased, registered in the name of the Buyer or its designee.
(f) Certain Adjustments. In the event of any change in the
Company's capital stock by reason of stock dividends, stock splits, mergers,
consolidations, recapitalizations, combinations, conversions, exchanges of
Shares, extraordinary or liquidating dividends, or other changes in the
corporate or capital structure of the Company which would have the effect of
diluting or changing the Buyer's rights hereunder, the number and kind of
Shares subject to the Company Stock Option and the purchase price per Share
(but not the total purchase price) shall be appropriately and equitably
adjusted so that the Buyer shall receive upon exercise of the Company Stock
Option the number and class of Shares or other securities or property that the
Buyer would have received in respect of the Shares purchasable upon exercise
of the Company Stock Option if the Company Stock Option had been exercised
immediately prior to such event.
(g) Acquisition Proposals. At any time or from time to time
after the making of any Acquisition Proposal, in connection with the
anticipated consummation of an Acquisition Proposal the Buyer may, at its
election, upon two days' notice to the Company, surrender all or a part of the
Company Stock Option to the Company, in which event the Company shall pay to
the Buyer, on the day of each such surrender and in consideration thereof,
against tender by the Buyer of an instrument evidencing such surrender, an
amount in cash per Share the rights to which are surrendered equal to the
excess of (i) the price per Share to be paid in such Acquisition Proposal over
(ii) the price per Share offered in connection with the Offer. Such surrender
and payment shall be subject to, and occur substantially concurrently with, the
consummation of the Acquisition Proposal. If all or a portion of the price
per Share to be paid in such Acquisition Proposal consists of non-cash
consideration, then price per Share referred to in clause (i) above shall be
the cash consideration per Share, if any, plus the fair market value of the
non-cash consideration per Share as set forth in such Acquisition Proposal or,
if not so set forth, as determined by the Buyer's investment bankers. Upon
exercise of its right to surrender the Company Stock Option or any portion
thereof and the receipt by the Buyer of cash pursuant to this Section, any and
all rights of the Buyer to purchase Shares with respect to the portion of the
Company Stock Option surrendered pursuant to this Section shall be terminated.
(h) Listing and Reservation of Shares; Notification of Record
Dates. (i) Promptly after the date hereof, and from time to time
thereafter if necessary, the Company will apply to list all of the Shares
subject to the Company Stock Option on the Nasdaq National Market System
and will use its best efforts to obtain approval of such listing as soon as
practicable.
(ii) The Company has taken all necessary corporate and
other action to authorize and reserve and to permit it to issue, and at all
times from the date hereof until such time as the obligation to deliver
Shares upon the exercise of the Company Stock Option terminates, will have
reserved for issuance, upon any exercise of the Company Stock Option, the
number of Shares subject to the Company Stock Option (less the number of
Shares previously issued upon any partial exercise of the Company Stock
Option or as to which the Company Stock Option may no longer be exercised).
(iii) The Company shall give the Buyer at least ten
days' prior written notice before setting the record date for determining
the holders of record of Shares entitled to notice of, or to vote on, any
matter, to receive any dividend or distribution or to participate in any
rights offering or other matter, or to receive any other benefit or right,
with respect to Shares.
(i) Registration of the Shares. (i) If the Buyer
requests the Company in writing to register under the Securities Act of
1933, as amended (the "Securities Act"), any of the Shares owned by the
Buyer, the Company will use its best efforts to cause the offering of the
Shares so specified in such request to be registered as soon as practicable
so as to permit the sale or other distribution by the Buyer of the Shares
specified in its request (and to keep such registration in effect for a
period of at least 90 days), and in connection therewith prepare and file
as promptly as reasonably possible (but in no event later than 60 days from
receipt of the Buyer's request) a registration statement under the
Securities Act to effect such registration on an appropriate form, which
would permit the sale of the Shares by the Buyer in the manner specified by
the Buyer in its request. The Company shall not be obligated to make
effective more than three registration statements pursuant to the foregoing
sentence. Upon written notice to Buyer, the Company may postpone effecting
a registration pursuant to this Section 8.5 on one occasion during any
period of six consecutive months for a reasonable time specified in the
notice but not exceeding 90 days (which period may not be extended or
renewed), if (1) an investment banking firm of recognized national standing
shall advise the Company and Buyer in writing that effecting the
registration would materially and adversely affect an offering of
securities of the Company the preparation of which had then been commenced
or (2) the Company is in possession of material non-public information the
disclosure of which during the period specified in such notice the Company
believes, in its reasonable judgment, would not be in the best interests of
the Company.
(ii) The Company shall notify the Buyer in writing not
less than ten days prior to filing a registration statement under the
Securities Act (other than a filing on Form S-4 or S-8) with respect to any
Shares of the Company's intention so to file. If the Buyer wishes to have
any portion of its Shares included in such registration statement, it shall
advise the Company in writing to that effect within two business days
following receipt of such notice, and the Company will thereupon include
the number of Shares indicated by the Buyer under such Registration
Statement. If such registration involves an underwritten public offering
and the managing underwriter shall advise the Company and the Buyer that in
its view the number of Shares requested to be included in such registration
(including any securities which the Company proposes to be included)
exceeds the largest number of shares which can be sold without having an
adverse effect on such offering, including the price at which such shares
can be sold (the "Maximum Offering Size"), the Company will include in such
registration, up to the Maximum Offering Size: first, all securities
proposed to be registered by the Company, and second, Shares requested to
be registered by Buyer.
(iii) The Company shall pay all fees and expenses in
connection with any registration pursuant to this Section other than
underwriting discounts and commissions to brokers or dealers and shall
indemnify the Buyer, its officers, directors, agents, other controlling
persons and any underwriters retained by the Buyer in connection with such
sale of such Shares in the customary way, and agree to customary
contribution provisions with such persons, with respect to claims, damages,
losses and liabilities (and any expenses relating thereto) arising (or to
which the Buyer, its officers, directors, agents, other controlling persons
or underwriters may be subject) in connection with any such offer or sale
under the federal securities laws or otherwise, except for information
furnished in writing by the Buyer or its underwriters to the Company. The
Buyer and its underwriters, respectively, shall indemnify the Company to
the same extent with respect to information furnished in writing to the
Company by the Buyer and such underwriters.
ARTICLE 9
Conditions to the Merger
Section 9.1. Conditions to the Obligations of Each Party. The
obligations of the Company, Buyer and Merger Subsidiary to consummate the
Merger are subject to the satisfaction of the following conditions:
(a) if required by Delaware Law, this Agreement shall have been
adopted by the stockholders of the Company in accordance with such law;
(b) any applicable waiting period under the HSR Act relating
to the Merger shall have expired or been terminated;
(c) no provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation of
the Merger; and
(d) Buyer shall have purchased Shares pursuant to the Offer.
ARTICLE 10
Termination
Section 10.1. Termination. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time
(notwithstanding any approval of this Agreement by the stockholders of the
Company):
(a) by mutual written consent of the Company and Buyer;
(b) by either the Company or Buyer,
(i) if Merger Subsidiary shall not have accepted for
payment any Shares pursuant to the Offer prior to October 31, 1998;
provided, however, that the right to terminate this Agreement pursuant
to this subparagraph (i) shall not be available to any party whose
failure to perform any of its obligations under this Agreement results
in the failure of any Offer condition set forth in Annex I hereto;
(ii) if there shall be any law or regulation that makes
consummation of the Offer or the Merger illegal or otherwise
prohibited or if any judgment, injunction, order or decree enjoining
Buyer or the Company from consummating the Offer or the Merger is
entered and such judgment, injunction, order or decree shall become
final and nonappealable;
(c) by Buyer,
(i) if the Board of Directors of the Company shall or
shall resolve to (x) not recommend, or withdraw its approval or
recommendation of, the Offer, the Merger, this Agreement or any of the
transactions contemplated hereby, (y) modify such approval or
recommendation in a manner adverse to Buyer or Merger Subsidiary, or
(z) approve, recommend or fail to take a position that is adverse to
any proposed Acquisition Proposal;
(ii) in the event of a material breach or failure to
perform in a material respect by the Company of any representation,
warranty, covenant or other agreement contained in this Agreement
which cannot be cured, or has not been cured within 30 days after the
Company receives written notice from Buyer of such breach or failure
to perform;
(d) by the Company,
(i) if, in order to permit the Company to consummate an
Acquisition Proposal which the Board of Directors of the Company has
determined to be on terms more favorable to the Company's stockholders
from a financial point of view, the Board of Directors of the Company
shall or shall resolve to (x) not recommend, or withdraw its approval
or recommendation of, the Offer, the Merger, this Agreement or any of
the transactions contemplated hereby, (y) modify such approval or
recommendation in a manner adverse to Buyer or Merger Subsidiary, or
(z) approve, recommend or fail to take a position that is adverse to
any proposed Acquisition Proposal; or
(ii) if Merger Subsidiary shall have failed to perform
its obligations set forth in Section 1.01(a) (unless such failure
shall result from a breach by the Company of its obligations under
this Agreement) and such breach cannot be cured, or has not been cured
within 30 days after Buyer or Merger Subsidiary receive notice from
the Company of such breach.
(e) The party desiring to terminate this Agreement pursuant to
clauses (b), (c) or (d) shall give written notice of such termination to the
other party in accordance with Section 11.1.
Section 10.2. Effect of Termination. If this Agreement is
terminated pursuant to Section 10.1, this Agreement shall become void and of
no effect with no liability on the part of any party hereto, except that
termination of this Agreement shall be without prejudice to any rights any
party may have hereunder against any other party for wilful breach of this
Agreement. The agreements contained in Sections 8.5, 10.2, 11.4 and 11.6 shall
survive the termination hereof.
ARTICLE 11
Miscellaneous
Section 11.1. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including telecopy
or similar writing) and shall be given,
if to Buyer or Merger
Subsidiary to: Amersham Pharmacia Biotech, Inc.
000 Xxxxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000-0000
Facsimile: 000-000-0000
Att: Xxxxxxx X. Xxxxxxxx
with copies to: Nycomed Amersham plc
Xxxxxxxx Xxxxx, Xxxxxx Xxxxxxxx
Xxxxxxxxxxxxxxx, Xxxxxxx
Facsimile: 011-44-1494-542-266
Att: Xxxxxx Xxxxxxx
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: 000-000-0000
Att: Xxxx X. Xxxxxxxx
if to the Company, to: Molecular Dynamics, Inc.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Facsimile: 000-000-0000
Att: Xxx Xxxxxxx
with a copy to: Venture Law Group
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Facsimile: 000-000-0000
Att: Xxxxxx Xxxxxxxxx
Xxxxxxx Xxxx
or such other address or telecopy number as such party may hereafter specify
for the purpose by notice to the other parties hereto. Each such notice,
request or other communication shall be effective (a) if given by telecopy,
when such telecopy is transmitted to the telecopy number specified in this
Section and the appropriate telecopy confirmation is received or (b) if given
by any other means, when delivered at the address specified in this Section.
Section 11.2. Survival of Representations and Warranties. The
representations and warranties and agreements contained herein and in any
certificate or other writing delivered pursuant hereto shall not survive the
Effective Time or the termination of this Agreement except for the agreements
set forth in Section 6.4, 7.1, 7.3, 7.4, 8.5, 10.2, 11.4 and 11.6.
Section 11.3. Amendments; No Waivers. (a) Any provision of
this Agreement may be amended or waived prior to the Effective Time if, and
only if, such amendment or waiver is in writing and signed, in the case of an
amendment, by the Company, Buyer and Merger Subsidiary or in the case of a
waiver, by the party against whom the waiver is to be effective; provided that
after the adoption of this Agreement by the stockholders of the Company, no
such amendment or waiver shall, without the further approval of such
stockholders, alter or change (i) the amount or kind of consideration to be
received in exchange for any shares of capital stock of the Company, (ii) any
term of the certificate of incorporation of the Surviving Corporation or (iii)
any of the terms or conditions of this Agreement if such alteration or change
would adversely affect the holders of any shares of capital stock of the
Company.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
Section 11.4. Fees and Expenses. (a) Except as provided in
this Section, all costs and expenses incurred in connection with this
Agreement shall be paid by the party incurring such cost or expense.
(b) If a Payment Event (as hereinafter defined) occurs, the
Company shall pay to Buyer, within two business days following such Payment
Event, a fee of $7,000,000 (the "Termination Fee").
"Payment Event" means
(i) the termination of this Agreement by the Buyer pursuant to
Section 10.1(c)(i) or by the Company pursuant to Section 10.1(d)(i);
(ii) this Agreement shall have been terminated in accordance
with 10.1(b)(i) and (x) the Company shall have failed to observe or
perform in any material respect any of its obligations under Section
6.4 of this Agreement or (y) an Acquisition Proposal is received
prior to the termination of this Agreement and not publicly rejected
by the Company's Board of Directors; or
(iii) the consummation of any Acquisition Proposal within nine
months of the termination of this Agreement pursuant to Section
10.1(b)(i) provided that any Acquisition Proposal shall have been
made prior to the termination of this Agreement.
(c) If a Payment Event occurs, the Company shall reimburse
Buyer and its affiliates not later than two business days after submission
of reasonable documentation thereof for 100% of their documented out-of-pocket
fees and expenses (including the reasonable fees and expenses of counsel)
up to $2,000,000 (plus any applicable VAT), in each case, actually incurred
by any of them or on their behalf in connection with this Agreement and the
transactions contemplated hereby.
(d) Notwithstanding any provision of this Agreement to the
contrary, the "Total Profit" (as hereinafter defined) that Buyer shall be
permitted to realize in respect of the Termination Fee and the Company
Stock Option shall not exceed $10,000,000. In the event Buyer's Total
Profit would exceed such amount, Buyer shall, at its sole election, (a)
reduce the number of Shares subject to the Company Stock Option, (b)
deliver Shares received upon an exercise of the Company Stock Option to the
Company for cancellation, (c) pay an amount of cash to the Company or (d)
do any combination of the foregoing so that Buyer's actual realized Total
Profit shall not exceed $10,000,000. "Total Profit" shall mean the
aggregate (before taxes) of (i) any amount received pursuant to the
Company's repurchase of the Company Stock Option (or any portion thereof),
(ii) any amount received pursuant to the Company's repurchase of the Shares
(less the purchase price for such Shares), (iii) any net cash received
pursuant to the sale of Shares received by Buyer in any exercise of the
Company Stock Option to any third party (less the purchase price of such
Shares), (iv) any amounts received on transfer of the Company Stock Option
or any portion thereof to a third party, (v) any equivalent amounts
received with respect to the Option adjusted pursuant to Section 8.5(f) and
(vi) the Termination Fee.
(e) The Company acknowledges that the agreements contained
in this Section are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements, Buyer would not enter
into this Agreement. Accordingly, if the Company fails to promptly pay any
amount due pursuant to this Section and, in order to obtain such payment,
the other party commences a suit which results in a judgment against the
Company for the fee or fees and expenses set forth in this Section, the
Company shall also pay to Buyer its costs and expenses incurred in
connection with such litigation.
Section 11.5. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit only of the parties
hereto and their respective successors and assigns (except as expressly
provided herein), provided that no party may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without the
consent of the other parties hereto except that Buyer may transfer or assign,
in whole or from time to time in part, to one or more of its affiliates, the
right to purchase Shares pursuant to the Offer or the Company Stock Option,
but any such transfer or assignment will not relieve Buyer of its obligations
hereunder or prejudice the rights of tendering stockholders to receive payment
for Shares validly tendered and accepted for payment pursuant to the Offer.
Section 11.6. Governing Law. This Agreement shall be
construed in accordance with and governed by the laws of the State of Delaware.
Section 11.7. Counterparts; Effectiveness. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the
same instrument. This Agreement shall become effective when each party hereto
shall have received counterparts hereof signed by all of the other parties
hereto.
Section 11.8. Entire Agreement. This Agreement constitutes
the entire agreement among Buyer, Merger Subsidiary and the Company with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, both written and oral, among Buyer, Merger Subsidiary and the
Company with respect to the subject matter hereof.
Section 11.9. Severability. If any term or provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect. Upon such a determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by the applicable law in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
Section 11.10. Definitions. Each of the following terms is
defined in the Section set forth opposite such term:
Term Section
_____________________________ _____________
Acquisition Proposals 6.4(a)(i)(D)
Balance Sheet 4.8(a)
Balance Sheet Date 4.8(a)
Buyer Recitals
Certificate of Merger 2.1(b)
Common Stock 1.1(a)
Company Recitals
Company Counsel 1.2(a)(iii)
Company Disclosure Documents 4.9(a)
Company Options 4.14(h)
Company Proxy Statement 4.9(a)
Company Securities 4.5
Company Stockholder Meeting 6.2
Company Stock Option 8.5(a)
Company Stock Purchase Plan 2.5(a)(i)
Company 10-K 4.6(a)
Company 10-Q 4.7(a)
Continuing Directors 1.3(a)
Costs 7.3(a)
Delaware Law 1.2(a)(ii)
Effective Time 2.1(b)
Employee Plans 4.14(a)
ERISA 4.14(a)
Exchange Act 4.3
Exchange Agent 2.3(a)
HSR Act 4.3
Indemnified Parties 7.3(a)
Intellectual Property 4.17(b)
Interim Financial Statements 4.8(b)
Lien 4.4
Material Adverse Effect 4.1
Maximum Offering Size 8.5(i)
Maximum Premium 7.3(a)
Merger 2.1(a)
Merger Subsidiary Recitals
Merger Consideration 2.2(c)
Minimum Condition 1.1(a)
Nycomed 5.4
Offer 1.1(a)
Offer Documents 1.1(b)
Option Termination Date 8.5(b)
Payment Event 11.4(b)
Person 2.3(c)
Pension Plans 4.14(a)
Replacement Award 2.5(a)(ii)
Rights 1.1(a)
Rights Agreement 1.1(a)
Schedule 14D-9 1.2(b)
SEC 1.1(a)
Securities Act 8.5(i)
Shares 1.1(a)
Standstill Agreement 5.4
Stockholder Option Agreement 4.20
Subsidiary 4.6(a)
Subsidiary Securities 4.6(b)
Surviving Corporation 2.1(a)
Termination Fee 11.4(b)
Third Party 6.4(d)
Unvested Option 2.5(a)(ii)
Vesting Date 2.5(a)(ii)
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
MOLECULAR DYNAMICS, INC.
By: /s/ Xxx Xxxxxxx
------------------------------
Name: Xxx Xxxxxxx
Title: President and Chief
Executive Officer
AMERSHAM PHARMACIA BIOTECH INC.
By: /s/ Xxxxx X. X. Xxxxx
------------------------------
Name: Xxxxx X. X. Xxxxx
Title: Vice President
APB ACQUISITION CORP.
By: /s/ Xxxxx X. X. Xxxxx
______________________________
Name: Xxxxx X. X. Xxxxx
Title: President
ANNEX I
Notwithstanding any other provision of the Offer, Buyer shall
not be required to accept for payment or pay for any Shares, and may
terminate the Offer, if (i) the Minimum Condition (as defined in the Merger
Agreement) has not been satisfied by October 31, 1998, (ii) the applicable
waiting period under the HSR Act shall not have expired or been terminated
by the expiration date of the Offer, or (iii) at any time on or after
________, 1998 and prior to the acceptance for payment or payment of
Shares, any of the following conditions exist:
(a) there shall be instituted or pending any action, suit,
investigation or proceeding by any government or governmental authority or
agency, domestic or foreign, or by any other person, domestic or foreign,
before any court or governmental authority or agency, domestic or foreign, (i)
challenging or seeking to make illegal, to delay materially or otherwise
directly or indirectly to restrain or prohibit the making of the Offer, the
acceptance for payment of or payment for some of or all the Shares pursuant to
the Offer or the consummation of the Merger, seeking to obtain material
damages or otherwise directly or indirectly relating to the transactions
contemplated by the Offer or the Merger, (ii) seeking to restrain, prohibit
or materially restrict Buyer's ownership or operation (or that of its
respective subsidiaries or affiliates) of all or any material portion of the
business or assets of the Company and the Subsidiaries, taken as a whole, or
(based on claims arising out of or relating to the Offer, the Merger or the
transactions contemplated by the Merger Agreement) of Buyer and its
subsidiaries, taken as a whole, or to compel Buyer or any of its subsidiaries
or affiliates to dispose of or hold separate all or any material portion of
the business or assets of the Company and the Subsidiaries, taken as a whole,
or (based on claims arising out of or relating to the Offer, the Merger or the
transactions contemplated by the Merger Agreement) of Buyer and its
subsidiaries, taken as a whole, (iii) seeking to impose or confirm material
limitations on the ability of Buyer or any of its subsidiaries or affiliates
effectively to exercise full rights of ownership of the Shares, including,
without limitation, the right to vote any Shares acquired or owned by Buyer or
any of its subsidiaries or affiliates on all matters properly presented to the
Company's stockholders, or (iv) seeking to require divestiture by Buyer or any
of its subsidiaries or affiliates of any Shares, or (v) that otherwise is
reasonably likely to have a Material Adverse Effect.
(b) there shall be any action taken, or any statute, rule,
regulation, injunction, order or decree enacted, enforced, promulgated,
issued or deemed applicable to the Offer or the Merger, by any court,
government or governmental authority or agency, domestic or foreign other
than the application of the waiting period provisions of the HSR Act to the
Offer or the Merger that is reasonably likely, directly or indirectly, to
result in any of the consequences referred to in clauses (i) through (v) of
paragraph (a) above; or
(c) the Company shall have breached or failed to perform in
any material respect any of its covenants or agreements under the Merger
Agreement, or any of the representations and warranties of the Company set
forth in the Merger Agreement shall not be true when made or at any time
prior to consummation of the Offer as if made at and as of such time
(except as to any representation or warranty which speaks as of a specific
date, which must be untrue as of such date), except for such inaccuracies
which, when taken together (in each case without regard to any
qualifications as to materiality or Material Adverse Effect contained in
the applicable representations and warranties) would not be likely to have
a Material Adverse Effect; or
(d) the Company shall have entered into, or shall have
publicly announced its intention to enter into, an agreement or an
agreement in principle with respect to any Acquisition Proposal or the
Board of Directors of the Company shall have withdrawn or materially
modified in a manner adverse to Buyer the Board's approval or
recommendation of the Offer or the Merger; or
(e) the Merger Agreement shall have been terminated in
accordance with its terms;
which, in the reasonable judgment of Buyer in any such case, and regardless of
the circumstances giving rise to any such condition, makes it inadvisable to
proceed with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Buyer and Merger
Subsidiary and may, subject to the terms of the Agreement, be waived by Buyer
and Merger Subsidiary in whole or in part at any time and from time to time in
their discretion. The failure by Buyer or Merger Subsidiary at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances, and each such right shall be deemed an ongoing right that may
be asserted at any time and from time to time prior to the Effective Time.
