EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
Dated as of June 12, 2001
Among
Axys Pharmaceuticals, Inc.,
Applera Corporation,
And
Angel Acquisition Sub, Inc.
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TABLE OF CONTENTS
Page
ARTICLE I THE MERGER..............................................................................................1
SECTION 1.01 The Merger..........................................................................1
SECTION 1.02 Closing.............................................................................2
SECTION 1.03 Effective Time of the Merger........................................................2
SECTION 1.04 Effects of the Merger...............................................................2
SECTION 1.05 Certificate of Incorporation; By-laws...............................................2
SECTION 1.06 Directors...........................................................................2
SECTION 1.07 Officers............................................................................3
SECTION 1.08 Effect on Capital Stock.............................................................3
SECTION 1.09 Exchange of Certificates............................................................4
SECTION 1.10 Treatment of Options................................................................6
SECTION 1.11 Treatment of Debt Securities, Convertible Notes and Company Warrants................7
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY..........................................................9
SECTION 2.01 Organization, Standing and Corporate Power..........................................9
SECTION 2.02 Subsidiaries and Minority Investments...............................................9
SECTION 2.03 Capital Structure..................................................................10
SECTION 2.04 Authority..........................................................................12
SECTION 2.05 Noncontravention...................................................................12
SECTION 2.06 SEC Documents; Financial Statements................................................13
SECTION 2.07 Undisclosed Liabilities............................................................14
SECTION 2.08 Information Supplied...............................................................14
SECTION 2.09 Absence of Certain Changes or Events...............................................14
SECTION 2.10 Litigation.........................................................................14
SECTION 2.11 Labor Matters......................................................................15
SECTION 2.12 Permits; Compliance with Laws......................................................15
SECTION 2.13 Employee Benefit Plans.............................................................16
SECTION 2.14 Taxes..............................................................................17
SECTION 2.15 Properties.........................................................................18
SECTION 2.16 Environmental Matters..............................................................18
SECTION 2.17 Contracts; Debt Instruments........................................................19
SECTION 2.18 Intellectual Property..............................................................21
SECTION 2.19 Brokers and Other Advisors.........................................................22
SECTION 2.20 Opinion of Financial Advisor.......................................................22
SECTION 2.21 Board Recommendation; State Antitakeover Law.......................................22
SECTION 2.22 Required Company Vote..............................................................22
SECTION 2.23 Rights Agreement...................................................................23
SECTION 2.24 Affiliate Transactions.............................................................23
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT.............................................................23
SECTION 3.01 Organization, Standing and Corporate Power.........................................23
SECTION 3.02 Capital Structure..................................................................23
SECTION 3.03 Authority..........................................................................25
SECTION 3.04 Noncontravention...................................................................25
SECTION 3.05 Parent SEC Documents; Financial Statements.........................................26
SECTION 3.06 Undisclosed Liabilities............................................................26
SECTION 3.07 Information Supplied...............................................................26
SECTION 3.08 Absence of Certain Changes or Events...............................................27
SECTION 3.09 Litigation; Compliance with Laws...................................................27
SECTION 3.10 Brokers............................................................................27
SECTION 3.11 Interim Operations of Merger Sub...................................................27
SECTION 3.12 Required Vote......................................................................27
ARTICLE IV COVENANTS RELATING TO CONDUCT OF BUSINESS PRIOR TO MERGER.............................................28
SECTION 4.01 Conduct of Business by the Company.................................................28
SECTION 4.02 Conduct of Business by Parent......................................................30
SECTION 4.03 Employment Arrangements............................................................30
SECTION 4.04 Tax Elections......................................................................31
SECTION 4.05 Tax-Free Reorganization Treatment..................................................31
SECTION 4.06 Other Actions......................................................................31
ARTICLE V ADDITIONAL AGREEMENTS..................................................................................32
SECTION 5.01 Preparation of Form S-4 and Proxy Statement; Stockholder Meeting...................32
SECTION 5.02 Access to Information; Confidentiality.............................................33
SECTION 5.03 Reasonable Best Efforts............................................................33
SECTION 5.04 Indemnification....................................................................33
SECTION 5.05 Public Announcements...............................................................35
SECTION 5.06 No Solicitation....................................................................35
SECTION 5.07 Benefit Matters....................................................................36
SECTION 5.08 Stock Exchange Listing.............................................................37
SECTION 5.09 Letters of the Company's Accountants...............................................37
SECTION 5.10 Rights Agreement...................................................................37
SECTION 5.11 Convertible Notes..................................................................37
SECTION 5.12 Non-solicitation of Employees......................................................37
SECTION 5.13 Stock Options......................................................................38
ARTICLE VI CONDITIONS PRECEDENT..................................................................................38
SECTION 6.01 Conditions to Each Party's Obligation To Effect the Merger.........................38
SECTION 6.02 Conditions to Obligations of Parent and Merger Sub.................................39
SECTION 6.03 Conditions to Obligation of the Company............................................40
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER....................................................................40
SECTION 7.01 Termination........................................................................40
SECTION 7.02 Effect of Termination..............................................................41
SECTION 7.03 Amendment..........................................................................41
SECTION 7.04 Extension; Waiver..................................................................42
SECTION 7.05 Procedure for Termination, Amendment, Extension or Waiver..........................42
ARTICLE VIII GENERAL PROVISIONS..................................................................................42
SECTION 8.01 Nonsurvival of Representations and Warranties......................................42
SECTION 8.02 Fees and Expenses..................................................................42
SECTION 8.03 Notices............................................................................43
SECTION 8.04 Interpretation.....................................................................44
SECTION 8.05 Counterparts.......................................................................44
SECTION 8.06 Entire Agreement; No Third-Party Beneficiaries.....................................44
SECTION 8.07 GOVERNING LAW......................................................................44
SECTION 8.08 Assignment.........................................................................44
SECTION 8.09 Enforcement........................................................................44
Index of Defined Terms
Term Section
---- -------
2000 Balance Sheet 2.07
AB Stock 3.02(a)
Action 5.04(a)
Acquisition Agreements 2.17(a)(vii)
Affiliate 2.20
Bylaws 2.01
Certificate of Incorporation 2.01
Certificate of Merger 1.03
Certificates 1.08(d)
Closing 1.02
Closing Date 1.02
Code Recitals
Company Preamble
Company Common Stock Recitals
Company Disclosure Schedule Article II
Company Insurance 5.04(b)
Company Material Adverse Effect 2.01
Company Permits 2.12
Company Plans 2.13(a)
Company SEC Documents 2.06
Company Stock Option 1.10(a)
Company Stock Plans 1.10(a)
Company Stockholder Approval Recitals
Company Warrants 1.11(b)
Confidentiality Agreement 5.02
Contract 2.17(a)
Control 2.20
Controlled Group 2.13(c)
Convertible Notes 1.11(a)
Convertible Notes Indenture 1.11(a)
DGCL Recitals
Effective Time 1.03
Environmental Laws 2.16(c)(i)
Environmental Report 2.16(c)(ii)
Equity Interest 2.02(b)(ii)
ERISA 2.13(a)
Exchange Act 2.05(b)
Exchange Agent 1.09(a)
Exchange Fund 1.09(a)
Exchange Ratio 1.08(c)
Final Offering Period 1.10(d)
Form S-4 2.08
GAAP 2.06(b)
Governmental Entity 2.05(b)
HSR Act 2.05(b)
Incentive stock options 1.10(a)
Indebtedness 2.03(c)
Indenture 1.11(a)
Indemnified Party 5.04(a)
Intellectual Property 2.18(a)
XX Xxxxxx 2.19
Knowledge of the Company 2.02(a)
Knowledge of Parent 3.09(a)
Laws 2.05(a)
Licensed Patent Intellectual Property 2.18(a)
Liens 2.02(a)
Material Contracts 2.17(a)
Material Intellectual Property 2.18(a)
Materials of Environmental Concern 2.16(c)(iii)
Merger Recitals
Merger Consideration 1.08(c)
Merger Sub Preamble
Minority Investment 2.02(b)(iii)
Minority Investment Documents 2.02(a)
Xxxxxx Xxxxxxx 3.10
NYSE 1.09(c)
Parent Preamble
Parent Common Stock 1.08(c)
Parent Common Stock Price 1.08(c)
Parent Disclosure Schedule Article III
Parent Material Adverse Effect 3.01
Parent Preferred Stock 3.02(a)
Parent SEC Documents 3.05
Parent Stock Option 1.10(a)
Parent Stock Plans 3.02(a)
Parent Subsidiaries 3.01
Person 1.09(g)
Proxy Statement 5.01(a)
Registered Intellectual Property 2.18(a)
Remedial Action 2.16(c)(iv)
Rights 1.09(d)
Rights Agreement 1.09(d)
SEC 2.05(b)
Securities Act 2.06(a)
Stock Purchase Plan 2.03
Stockholders Meeting 5.01(c)
Subsidiary 2.02(b)(i)
Subsidiary Documents 2.02(a)
Superior Proposal 5.06
Surviving Company 1.01
Taxes 2.14
Tax Return 2.14
Third Party 8.02(a)(i)(A)
Transaction Proposals 5.06
Transactions 1.02
Trustee 1.11(a)
Voting Debt 2.03(a)
WARN 2.11
AGREEMENT AND PLAN OF MERGER, dated as of June 12, 2001, among
Applera Corporation, a Delaware corporation ("Parent"), Angel Acquisition Sub,
Inc., a Delaware corporation and a direct wholly owned subsidiary of Parent
("Merger Sub"), and Axys Pharmaceuticals, Inc., a Delaware corporation (the
"Company").
W I T N E S S E T H:
WHEREAS, the respective boards of directors of Parent, Merger
Sub and the Company have determined that the merger of Merger Sub with and into
the Company (the "Merger"), upon the terms and subject to the conditions set
forth in this Agreement, would be fair and in the best interests of their
respective stockholders;
WHEREAS, such boards of directors have approved the Merger,
pursuant to which each share of common stock, par value $.001 per share, of the
Company (the "Company Common Stock," which term also refers to and includes,
unless the context otherwise requires, the associated Rights (as defined
below)), other than shares owned by the Company, Parent or Merger Sub, will be
converted into the right to receive the Merger Consideration (as defined below),
upon the terms and subject to the conditions set forth herein and in accordance
with the applicable provisions of the General Corporation Law of the State of
Delaware (the "DGCL") and Certificate of Incorporation (as defined below);
WHEREAS, the Merger and this Agreement require the vote of the
holders of a majority of the outstanding shares of the Company Common Stock for
the approval thereof (the "Company Stockholder Approval");
WHEREAS, Parent, Merger Sub and the Company desire to make
certain representations, warranties, covenants and agreements in connection with
the Merger and also to prescribe various conditions to the Merger; and
WHEREAS, for federal income tax purposes, it is intended that
the Merger shall qualify as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to be legally
bound hereby, the parties hereto hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01 The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the DGCL, Merger
Sub shall be merged with and into the Company at the Effective Time. At the
Effective Time, the separate corporate existence of Merger Sub shall cease, and
the Company shall continue as the surviving corporation (hereinafter sometimes
referred to as the "Surviving Company").
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SECTION 1.02 Closing. Unless this Agreement shall have been
terminated and the Merger and the other transactions contemplated by this
Agreement (collectively, the "Transactions") shall have been abandoned pursuant
to Section 8.01, and subject to the satisfaction or waiver of the conditions set
forth in Article VI, the closing of the Merger (the "Closing") will take place
at 10:00 a.m. on the second business day after satisfaction of the conditions
set forth in Section 6.01 (or as soon as practicable thereafter following
satisfaction or waiver of the conditions set forth in Sections 6.02 and 6.03)
(the "Closing Date"), at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx, 0000
Xxxxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, unless another date, time or place
is agreed to in writing by the parties hereto.
SECTION 1.03 Effective Time of the Merger. On the Closing
Date, the parties shall cause the Merger to be consummated by filing with the
Secretary of State of the State of Delaware a certificate of merger as
contemplated by the DGCL (the "Certificate of Merger") executed in accordance
with the relevant provisions of the DGCL and shall make all other filings or
recordings required under the DGCL to be filed on such date. The Merger shall
become effective at such time (the "Effective Time") as the Certificate of
Merger is duly filed with the Secretary of State of the State of Delaware, or at
such other time as is permissible in accordance with the DGCL and as Merger Sub
and the Company shall agree should be specified in the Certificate of Merger.
SECTION 1.04 Effects of the Merger. At the Effective Time, the
Merger shall have the effects set forth in this Agreement, the Certificate of
Merger and the applicable provisions of the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time (a) the
Surviving Company shall possess all rights, privileges, powers and franchises,
both public and private, and all of the property, real, personal, and mixed of
each of the Company and Merger Sub and all obligations belonging to or due to
Merger Sub or the Company, all of which shall be vested in the Surviving Company
without any further act or deed; and (b) the Surviving Company shall be liable
for all the obligations of Merger Sub and the Company.
SECTION 1.05 Certificate of Incorporation; By-laws. (a) At the
Effective Time, and without any further action on the part of the Company or
Merger Sub, the certificate of incorporation of the Company, as in effect at the
Effective Time, shall be the certificate of incorporation of the Surviving
Corporation until thereafter amended as provided therein or by the DGCL.
(b) At the Effective Time, and without any further action on
the part of the Company or Merger Sub, the by-laws of Merger Sub as in effect at
the Effective Time shall be the by-laws of the Surviving Corporation until
thereafter changed or amended as provided therein or by the DGCL.
SECTION 1.06 Directors. The directors of Merger Sub at the
Effective Time shall be the directors of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.
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SECTION 1.07 Officers. The officers of the Company at the
Effective Time shall be the officers of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.
SECTION 1.08 Effect on Capital Stock. As of the Effective
Time, by virtue of the Merger and without any action on the part of the Company,
Merger Sub or any holder of any shares of Company Common Stock or any shares of
capital stock of Merger Sub:
(a) Common Stock of Merger Sub. Each share of common stock of
Merger Sub issued and outstanding immediately prior to the Effective Time shall
be converted into one share of the common stock, par value $.01 per share, 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;
(b) Cancellation of Treasury Stock and Parent-Owned Company
Common Stock. Each share of Company Common Stock that is owned by the Company,
Parent or Merger Sub shall automatically be cancelled and retired and shall
cease to exist, and no cash, Parent Common Stock or other consideration shall be
delivered or deliverable in exchange therefore; and
(c) Conversion of Company Common Stock. Subject to the
provisions of Section 1.09(e) hereof, each issued and outstanding share of
Company Common Stock (other than shares cancelled pursuant to Section 1.08(b)
hereof) shall be converted into a fractional number of shares of Applera
Corporation -Celera Genomics Group Common Stock, par value $.01 per share
(including the rights associated with such shares pursuant to Parent's
Shareholders' Protection Rights Plan) (the "Parent Common Stock") equal to the
Exchange Ratio (the amount of Parent Common Stock into which each such share of
Company Common Stock is converted, together with the cash amount referenced in
Section 1.09(e) being referred to herein as the "Merger Consideration"). As used
herein, "Exchange Ratio" means the following:
(i) if the Parent Common Stock Price is equal to or greater
than $45.77 and less than or equal to $48.23 then the Exchange Ratio
will mean 0.1016;
(ii) if the Parent Common Stock Price is greater than $48.23
then the Exchange Ratio will mean $4.90 divided by the Parent Common
Stock Price, but in no event shall the Exchange Ratio be less than
0.0813;
(iii) if the Parent Common Stock Price is less than $45.77,
then the Exchange Ratio will mean $4.65 divided by the Parent Stock
Price, but in no event shall the Exchange Ratio be greater than
0.1355.
As used herein, "Parent Common Stock Price" means the average of the closing
sales prices of Parent Common Stock on the New York Stock Exchange (the "NYSE")
Composite Transactions Tape (as reported by The Wall Street Journal, or, if not
reported thereby, as reported by any other authoritative source) on each of the
10 consecutive trading days immediately preceding the second trading day prior
to the Effective Time.
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(d) Cancellation and Retirement of Company Common Stock. As of
the Effective Time, all shares of Company Common Stock issued and outstanding
immediately prior to the Effective Time shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist, and each holder
of a certificate representing any such shares of Company Common Stock
(collectively, the "Certificates") shall, to the extent such Certificate
represents such shares, cease to have any rights with respect thereto, except
the right to receive the Merger Consideration (including cash in lieu of
fractional shares of Parent Common Stock pursuant to Section 1.09(e) hereof) to
be issued or paid in consideration therefor upon surrender of such certificate
in accordance with Section 1.09 hereof.
SECTION 1.09 Exchange of Certificates. (a) Exchange Agent. As
of or as soon as reasonably practicable after the Effective Time, Parent shall
enter into an agreement with such bank or trust company as may be designated by
Parent (the "Exchange Agent") which shall provide that Parent shall deposit with
the Exchange Agent, for the benefit of the holders of Certificates, for exchange
in accordance with this Article I, certificates representing the shares of
Parent Common Stock, together with any dividends or distributions with respect
thereto with a record date after the Effective Time, and any cash payable in
lieu of any fractional shares of Parent Common Stock (such shares of Parent
Common Stock and cash being hereinafter referred to as the "Exchange Fund")
issuable pursuant to Section 1.08 in exchange for outstanding shares of Company
Common Stock.
(b) Exchange Procedures. As soon as reasonably practicable
after the Effective Time, the Exchange Agent shall mail to each holder of record
of Certificates immediately prior to the Effective Time whose shares were
converted into shares of Parent Common Stock pursuant to Section 1.08, (i) a
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent, and which shall be in customary form and
have such other provisions as Parent may reasonably specify and be reasonably
acceptable to the Company) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for certificates representing shares
of Parent Common Stock. Upon surrender of a Certificate for cancellation to the
Exchange Agent together with such letter of transmittal, duly executed, the
holder of such Certificate shall be entitled to receive in exchange therefor a
certificate representing that number of whole shares of Parent Common Stock
which such holder has the right to receive in respect of the Certificate
surrendered pursuant to the provisions of this Article I (after taking into
account all shares of Company Common Stock then held by such holder), certain
dividends and other distributions in accordance with Section 1.09(c) hereof and
cash in lieu of any fractional shares in accordance with Section 1.09(e) hereof,
and the Certificate so surrendered shall forthwith be cancelled. In the event of
a transfer of ownership of shares of Company Common Stock which is not
registered in the transfer records of the Company, a certificate representing
the proper number of shares of Parent Common Stock may be issued to a transferee
if the Certificate is presented to the Exchange Agent, accompanied by all
documents required to evidence and effect such transfer and by evidence that any
applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 1.09 each Certificate shall be deemed at any time
after the Effective Time to represent only the right to receive upon such
surrender Parent Common Stock into which the shares of Company Common Stock
represented by such Certificate have been converted as provided in this Article
I and the right to
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receive upon such surrender cash in lieu of any fractional shares of Parent
Common Stock as contemplated by this Section 1.09.
(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions with respect to Parent Common Stock with a
record date after the Effective Time shall be paid to the holder of any
unsurrendered Certificate with respect to the shares of Parent Common Stock
represented thereby, and no cash payment in lieu of fractional shares shall be
paid to any such holder pursuant to Section 1.09(e) until the surrender of such
Certificate in accordance with this Article I. Subject to the effect of
applicable laws, following surrender of any such Certificate, there shall be
issued or paid to the holder of such certificate, a certificate representing the
number of whole shares of Parent Common Stock issued in exchange therefor
without interest, (i) at the time of such surrender, the amount of any cash
payable in lieu of a fractional share of Parent Common Stock to which such
holder is entitled pursuant to Section 1.09(e) and the amount of any dividends
or other distributions with a record date after the Effective Time theretofore
paid (but withheld pursuant to the immediately preceding sentence) with respect
to such whole shares of Parent Common Stock, and (ii) at the appropriate payment
date, the amount of any dividends or other distributions with a record date
after the Effective Time but prior to such surrender and a payment date
subsequent to such surrender payable with respect to such whole shares of Parent
Common Stock.
(d) No Further Ownership Rights in Company Common Stock. All
shares of Parent Common Stock issued upon conversion of shares of Company Common
Stock in accordance with the terms hereof, and all cash paid pursuant to
Sections 1.09(c) and 1.09(e) hereof, shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Company Common Stock
(including with respect to the rights to acquire one one-hundredth of a share of
Series A Junior Participating Preferred Stock of the Company (the "Rights")
issued pursuant to the Rights Agreement dated as of October 8, 1998, as amended,
between the Company and Computershare Investor Services, L.L.C., as rights agent
(the "Rights Agreement")), and there shall be no further registration of
transfers on the stock transfer books of the Surviving Corporation of the shares
of Company Common Stock that were outstanding prior to the Effective Time. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation for any reason, they shall be cancelled and exchanged as provided in
this Article I.
(e) No Fractional Shares. (i) No certificates or scrip
representing fractional shares of Parent Common Stock shall be issued upon the
surrender for exchange of Certificates, and such fractional share interests will
not entitle the owner thereof to vote or to any rights of a stockholder of
Parent. In lieu of such issuance of fractional shares, the Exchange Agent shall
pay each holder of Certificates an amount in cash equal to the product obtained
by multiplying (A) the fractional share interest to which such holder (after
taking into account all shares of Company Common Stock held immediately prior to
the Effective Time by such holder) would otherwise be entitled by (B) the Parent
Common Stock Price.
(ii) As soon as practicable after the determination of the
amount of cash, if any, to be paid to holders of Certificates with respect to
any fractional share interests, the Exchange Agent shall make available such
amounts to such holders of Certificates, subject to and in accordance with the
terms of Section 1.09(c).
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(f) Termination of Exchange Fund. Any portion of the Exchange
Fund deposited with the Exchange Agent pursuant to this Section 1.09 which
remains undistributed to the holders of the Certificates for six months after
the Effective Time shall be delivered to the Parent, upon demand, and any
holders of Certificates prior to the Merger who have not theretofore complied
with this Article I shall thereafter look only to the Parent and only as general
creditors thereof for payment of their claim for Parent Common Stock, cash in
lieu of fractional shares of Parent Common Stock and any dividends or
distributions with respect to Parent Common Stock to which such holders may be
entitled.
(g) No Liability. None of Parent, Merger Sub, the Company or
the Exchange Agent shall be liable to any individual, corporation, limited
liability company, partnership, association, trust, unincorporated organization,
other entity or group (as defined in Section 13(d)(3) of the Exchange Act) (a
"Person") in respect of any shares of Parent Common Stock (or dividends or
distributions with respect thereto) or cash from the Exchange Fund delivered to
a public official pursuant to any applicable abandoned property, escheat or
similar law. If any Certificates shall not have been surrendered prior to three
years after the Effective Time, or immediately prior to such earlier date on
which any Merger Consideration, or any dividends or distributions with respect
to Parent Common Stock would otherwise escheat to or become the property of any
Governmental Entity, any such Merger Consideration or cash shall, to the extent
permitted by applicable law, become the property of the Surviving Corporation,
free and clear of all claims or interest of any Person previously entitled
thereto.
(h) Investment of Exchange Fund. The Exchange Agent shall
invest any cash included in the Exchange Fund, as directed by Parent on a daily
basis. Any interest and other income resulting from such investments shall be
paid to Parent.
(i) Withholding of Tax. Parent or the Exchange Agent will be
entitled to deduct and withhold from the Merger Consideration otherwise payable
pursuant to this Agreement to any holder of Company Common Stock such amounts as
Parent (or any Affiliate thereof) or the Exchange Agent are required to deduct
and withhold with respect to the making of such payment under the Code, or any
applicable provision of U.S. federal, state, local or non-U.S. tax law. To the
extent that such amounts are properly withheld by Parent or the Exchange Agent,
such withheld amounts will be treated for all purposes of this Agreement as
having been paid to the holder of the Company Common Stock in respect of whom
such deduction and withholding were made by Parent or the Exchange Agent.
(j) Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon the making of any affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed, the
indemnification by such Person of the Surviving Company and, if required by the
Surviving Company, the posting by such Person of a bond in such reasonable
amount as the Surviving Company may direct as indemnity against any claim that
may be made against it with respect to such Certificate, the Exchange Agent will
deliver in exchange for such lost, stolen or destroyed Certificate the
applicable Merger Consideration with respect to the shares of Company Common
Stock formerly represented thereby.
SECTION 1.10 Treatment of Options. (a) At the Effective Time,
each outstanding option to purchase Company Common Stock (a "Company Stock
Option") issued
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pursuant to the Company's 1989 Stock Option Plan, 1997 Equity Incentive Plan and
1997 Non-Officer Equity Incentive Plan (collectively with the 1994 Non-Employee
Directors' Stock Option Plan, the "Company Stock Plans"), whether vested or
unvested, shall be converted into an option (a "Parent Stock Option") to
acquire, on the same terms and conditions as were applicable under such Company
Stock Option, a number of shares of Parent Common Stock equal to (1) the number
of shares of Company Common Stock subject to such Company Stock Option
multiplied by (2) the Exchange Ratio, rounded down to the nearest whole share,
at a price per share equal to (x) the exercise price per share for such Company
Stock Option divided by (y) the Exchange Ratio, rounded up to the nearest whole
cent; provided, however, that the exercise price per share of each Parent Stock
Option held by an individual who is an employee of or consultant to the Company
or any Subsidiary as of the Effective Time will not exceed the closing price of
a share of Parent Common Stock on the NYSE Composite Transaction Tape on the
date immediately prior to the Closing Date.
(b) Prior to the Effective Time, the board of directors of
Parent and its compensation committee, as applicable, shall take all necessary
action to assume and adopt, as of the Effective Time, the Company's 1997 Equity
Incentive Plan, and shall have the discretion to assume and adopt, as of the
Effective Time, each other Company Stock Plan in which a Parent Stock Option is
outstanding following the Effective Time and which has not terminated by its
terms. Within ten (10) business days after the Effective Time, Parent shall
deliver to the holders of Company Stock Options appropriate notices pursuant to
the Company Stock Plans. If necessary, Parent shall comply with the terms of the
Company Stock Plans and ensure, to the extent required by, and subject to the
provisions of, the Company Stock Plans and applicable law, that Company Stock
Options that qualified as incentive stock options prior to the Effective Time
continue to qualify as incentive stock options after the Effective Time.
(c) Parent shall take all corporate action necessary to
reserve for issuance a sufficient number of shares of Parent Common Stock for
delivery upon exercise of Parent Stock Options. No later than five business days
after the Effective Time, Parent shall file a registration statement on Form S-3
or Form S-8, as the case may be (or any successor or other appropriate forms),
or another appropriate form, with respect to the shares of Parent Common Stock
subject to such options to the fullest extent permitted by law and shall use its
reasonable best efforts to maintain the effectiveness of such registration
statement or registration statements (and maintain the current status of the
prospectus or prospectuses contained therein) for so long as such options remain
outstanding.
(d) Each outstanding purchase right under the Stock Purchase
Plan shall be exercised for the purchase of shares of Company Common Stock at
the price per share determined pursuant to the Stock Purchase Plan on the date
immediately prior to the Closing Date, pursuant to Section 12(b)(iii) of the
Stock Purchase Plan (the "Final Offering Period"). Immediately following the
Final Offering Period and upon or prior to the Effective Time, the Company shall
take all action necessary to provide that the Stock Purchase Plan shall be
terminated and that no Person has any further right to purchase Company Common
Stock under the Stock Purchase Plan.
SECTION 1.11 Treatment of Debt Securities, Convertible Notes
and Company Warrants. (a) All debt securities of the Company that are
outstanding as of the Effective Time
8
shall remain outstanding after the Effective Time in accordance with their
respective terms and provisions. Pursuant to the Indenture, dated as of
September 22, 2000 (the "Indenture") between the Company and U.S. Bank Trust
National Association, as trustee (the "Trustee") and to Section 8.04 of the
First Supplemental Indenture, dated as of September 22, 2000 (together with the
Indenture, the "Convertible Notes Indenture"), between the Company and the
Trustee relating to the Company's 8% Senior Secured Convertible Notes (the
"Convertible Notes"), prior to the Effective Time, the Company and Parent shall
enter into an agreement providing that (i) each holder of Convertible Notes
outstanding at the Effective Time shall have the right to convert such
Convertible Notes into the number of shares of Parent Common Stock which would
be receivable at the Effective Time by a holder of the number of shares of
Company Common Stock deliverable upon conversion of such Convertible Notes
immediately prior to the Effective Time, and subject to future adjustments of
the conversion price of the Convertible Notes as provided for in Section 8.03 of
the Supplemental Indenture and (ii) Parent shall be jointly and severally liable
with the Company for the payment and performance by the Company of all of the
Company's obligations under the Convertible Notes Indenture, the Notes, the
related note purchase agreements and warrants and the other agreements,
instruments and documents contemplated thereby.
(b) At the Effective Time, each of the warrants to purchase
shares of Company Common Stock (the "Company Warrants") which is outstanding and
unexercised immediately prior thereto shall, pursuant to the terms of such
Company Warrant, cease to represent a right to acquire shares of Company Common
Stock and shall be converted automatically into a warrant to purchase such
number of shares of Parent Common Stock as the holder of such Company Warrant
would have been entitled to receive pursuant to the Merger had such holder
exercised such warrant in full immediately prior to the Effective Time, at a
price per share equal to (y) the aggregate exercise price for the shares of
Company Common Stock otherwise purchasable pursuant to such Company Warrant
divided by (z) the number of full shares of Parent Common Stock deemed
purchasable pursuant to such Company Warrant, and subject to future adjustments
in accordance with the terms of such Company Warrant, provided however that with
respect to the Company Warrants issued to members of Reedland Capital Partners,
if the value of Parent Common Stock issuable with respect to one share of
Company Common Stock immediately prior to the Effective Time is greater than the
stock purchase price as defined in such Company Warrants effective at the
Effective Time (which price as defined in such Company Warrants is currently
$4.0625), such Company Warrants will expire unless exercised prior to the
Effective Time.
(c) Prior to the Effective Time, the Company shall deliver to
the holders of Convertible Notes and Company Warrants appropriate notices (in
form and substance reasonably satisfactory to Parent) setting forth such
holders' rights pursuant to the Convertible Notes Indenture and the applicable
warrant agreements with respect thereto to the extent required by the terms of
the Convertible Notes Indenture and the applicable warrant agreements.
(d) Parent shall take all corporate action necessary to
reserve for issuance a sufficient number of shares of Parent Common Stock for
delivery upon conversion of the Convertible Notes and exercise of the Company
Warrants.
9
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the written disclosure schedule dated
as of the date of this Agreement and previously delivered by the Company to
Parent (the "Company Disclosure Schedule") (it being understood that the Company
Disclosure Schedule shall be arranged in sections corresponding to the sections
contained in this Agreement, and the disclosures in any section of the Company
Disclosure Schedule shall qualify the representations in the corresponding
section of this Article II and all applicable representations in other sections
of this Article II to the extent that such qualification is readily apparent),
the Company hereby represents and warrants to Parent and Merger Sub as follows:
SECTION 2.01 Organization, Standing and Corporate Power. Each
of the Company and each of its Subsidiaries is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation and
has the requisite corporate and authority necessary to own, lease and operate
its properties and to carry on its business as it is now being conducted. Each
of the Company and each of its Subsidiaries is duly qualified or licensed as a
foreign corporation or entity to do business, and is in good standing, in each
jurisdiction where the character of its properties owned, leased or operated by
it or the nature of its activities makes such qualification or licensing
necessary, except where the failure to be so duly qualified or licensed and in
good standing would not, individually or in the aggregate, reasonably be
expected to have any materially adverse effect on the business, assets,
liabilities, financial condition or results of operations of the Company and its
Subsidiaries taken as a whole other than any such effect resulting from any
change, effect, event, occurrence, state of facts or development relating to the
industry in which the Company operates in general and not specifically relating
to the Company or on the ability of the Company to perform its obligations under
this Agreement (a "Company Material Adverse Effect"). Attached to Section 2.01
of the Company Disclosure Schedule are complete and correct copies of the
Company's certificate of incorporation, as amended (the "Certificate of
Incorporation"), and the Company's by-laws, as amended (the "By-Laws"), as
currently in effect.
SECTION 2.02 Subsidiaries and Minority Investments. (a)
Section 2.02 of the Company Disclosure Schedule sets forth a list of (i) all
Subsidiaries of the Company together with the jurisdiction of incorporation or
formation of each such Subsidiary and the percentage of each class or type of
each such Subsidiary's outstanding Equity Interests owned by the Company or
another Subsidiary of the Company and (ii) all Minority Investments of the
Company together with the percentage of each class or type of outstanding Equity
Interests owned by the Company or another Subsidiary of the Company. Section
2.02 of the Company Disclosure Schedule identifies (i) the certificates of
incorporation and by-laws (or equivalent organizational documents) of, and any
investor rights, voting, co-sale or other similar agreements applicable to, each
of its Subsidiaries (the "Subsidiary Documents") and (ii) any investor rights,
voting, co-sale or other agreements to which the Company or its Subsidiaries are
party and, to the Knowledge of the Company, the certificates of incorporation
and by-laws (or equivalent organizational documents), in each case with respect
to each of its Minority Investments (the "Minority Investment Documents"), and
the Company has heretofore made available to Parent a true and correct copy of
each such Subsidiary Document and Minority Investment Document. Such
10
Subsidiary Documents and Minority Investment Documents are in full force and
effect and no other charter or organizational documents or investor rights,
voting, co-sale or other similar agreements are applicable to or binding on the
Company or its Subsidiaries with respect to the Equity Interests of the
Subsidiaries or Minority Investments. None of the Company's Subsidiaries nor, to
the knowledge of the employees of the Company set forth on Schedule 2.02 hereto
(the "Knowledge of the Company"), any Minority Investment is in violation of any
provision of its certificate of incorporation of bylaws or equivalent
organizational documents. Neither the Company nor any Subsidiary owns any Equity
Interests in any Person other than the Subsidiaries and the Minority
Investments. All of the outstanding Equity Interests of the Company's
Subsidiaries owned by the Company or its Subsidiaries are duly authorized,
validly issued, fully-paid and nonassessable, and all such Equity Interests and
all of the Equity Interests of the Minority Investments owned or held by the
Company or its Subsidiaries are owned by the Company or another Subsidiary of
the Company, free and clear of all security interests, liens, claims, pledges,
charges or other encumbrances of any nature whatsoever ("Liens") or any
restriction on the right to vote, sell or otherwise dispose of such Equity
Interests and were issued in compliance with all applicable federal and state
securities Laws.
(b) As used herein: (i) "Subsidiary" of the Company or any
other Person means any corporation, limited liability company, partnership,
joint venture or other entity of which the Company or such other Person, as the
case may be (either alone or through or together with any other Subsidiaries),
(A) owns, directly or indirectly, 50% or more of the stock or other interests
the holders of which are generally entitled to vote for the election of the
board of directors or other governing body of such Person (or, if there are no
such voting interests, 50% or more of the Equity Interests) or (B) serves as a
general partner or managing member; (ii) "Equity Interest" means with respect to
any Person, any and all shares, interests, participations, rights in, or other
equivalents (however designated and whether voting or non-voting) of, such
Person's capital stock or other equity interests (including, without limitation,
partnership or membership interests in a partnership or limited liability
company or any other interest or participation that confers on a Person the
right to receive a share of the profits and loss, or distributions of assets, of
the issuing Person) whether outstanding on the date hereof or issued after the
date hereof, and any and all warrants, options or other rights to acquire
(including without limitation, any securities convertible into or exchangeable
for) any such Equity Interests; and (iii) "Minority Investment" of the Company
or any other Person means any corporation, limited liability company,
partnership, joint venture or other entity of which the Company or such other
Person, as the case may be (either alone or through or together with any other
Subsidiary), owns, directly or indirectly, more than 5% of the Equity Interests
but which is not a Subsidiary of the Company or such other Person.
SECTION 2.03 Capital Structure. (a) The authorized capital
stock of the Company consists of 100,000,000 shares of Company Common Stock, par
value $.001 per share, and 10,000,000 shares of Company Preferred Stock, par
value $.001 per share. As of the close of business on June 7, 2001, there were:
(i) 40,048,880 shares of Company Common Stock issued and outstanding; (ii) 9,886
shares of Company Common Stock held in the treasury of the Company and no shares
of Company Common Stock held by Subsidiaries of the Company; (iii) 10,644,566
shares of Company Common Stock reserved for issuance upon exercise of Company
Stock Options available for grant pursuant to the Company Stock Plans; (iv)
5,260,447 shares of Company Common Stock issuable upon exercise of awarded but
unexercised Company
11
Stock Options, with an exercise price per each awarded but unexercised Company
Stock Option as set forth in the Company Disclosure Schedule; (v) 289,532 shares
of Company Common Stock reserved for issuance pursuant to the Company's Employee
Stock Purchase Plan (the "Stock Purchase Plan"); (vi) 1,899,234 shares of
Company Common Stock issuable upon exercise of Company Warrants then outstanding
and with an exercise price for each such Company Warrant as is set forth in the
Company Disclosure Schedule; (vii) 3,682,720 shares of Company Common Stock
issuable upon conversion of the Convertible Notes (for which Convertible Notes
the conversion price under the Convertible Notes Indenture is $7.06); (viii) no
shares of Preferred Stock issued and outstanding; (ix) 500,000 shares of Series
A Junior Participating Preferred Stock reserved for issuance pursuant to the
Rights Agreement; and (x) no shares of Company Preferred Stock in the treasury
of the Company. Except as set forth above, as of June 7, 2001, there were no
shares of capital stock or other equity securities of the Company issued,
reserved for issuance or outstanding.
(b) All outstanding shares of capital stock of the Company
are, and all shares which may be issued pursuant to the Company Stock Plans and
the Company Warrants will be, when issued and paid for in accordance with the
terms of the Company Warrants and the Company Stock Plans, duly authorized,
validly issued, fully paid and nonassessable and not subject to preemptive
rights. All securities issued by the Company were issued in compliance in all
material respects with all applicable federal and state securities laws and all
applicable rules and regulations promulgated thereunder. No shares of capital
stock of the Company are owned by any Subsidiary of the Company.
(c) Except as set forth in Section 2.03(a), there is no
outstanding Indebtedness of the Company having the right to vote (or convertible
into, or exchangeable for, securities having the right to vote) on any matters
on which stockholders of the Company may vote (collectively, "Voting Debt"). As
used herein, "Indebtedness" means, with respect to any Person, without
duplication, (i) all obligations of such Person for borrowed money, or with
respect to deposits or advances of any kind to such Person, (ii) all obligations
of such Person evidenced by bonds, debentures, notes or similar instruments,
(iii) all obligations of such Person under conditional sale or other title
retention agreements relating to property purchased by such Person, (iv) all
obligations of such Person issued or assumed as the deferred purchase price of
property or services (excluding obligations of such Person to creditors for raw
materials, inventory, services and supplies incurred in the ordinary course of
such Person's business), (v) all capitalized lease obligations of such Person,
(vi) all obligations of others secured by any Lien on property or assets
(excluding encumbrances in the form of restrictions on use of Intellectual
Property contained in license agreements or scientific collaboration agreements)
owned or acquired by such Person, whether or not the obligations secured thereby
have been assumed, (vii) all obligations of such Person under interest rate or
currency hedging transactions (valued at the termination value thereof), (viii)
all letters of credit issued for the account of such Person and (ix) all
guarantees and arrangements having the economic effect of a guarantee of such
Person of any Indebtedness of any other Person. Except as set forth in Section
2.03(a), there are no options, warrants or other rights, agreements,
arrangements or commitments of any character binding on the Company or any of
its Subsidiaries relating to the issued or unissued Equity Interests of the
Company or any of its Subsidiaries or obligating the Company or any of its
Subsidiaries to issue, sell, repurchase, redeem or otherwise acquire or make any
payment with respect to any Equity Interests of the Company or any of its
Subsidiaries or any Minority
12
Interests held by the Company or any of its Subsidiaries. To the Knowledge of
the Company as of the date hereof, there are no irrevocable proxies with respect
to shares of capital stock of the Company or any of its Subsidiaries. There are
no agreements or arrangements pursuant to which the Company is or could be
required to register shares of Company Common Stock or other securities under
the Securities Act of 1933, as amended (the "Securities Act").
(d) Between June 7, 2001 and the date of this Agreement, the
Company has not issued or reserved for issuance any Company Common Stock,
Company Stock Options or other Equity Interests of the Company, except (i) the
issuance of Company Common Stock as a result of the exercise of Company Stock
Options outstanding at June 7, 2001 and (ii) upon conversion or exercise of
Convertible Notes or Company Warrants outstanding on the date of this Agreement.
Between December 31, 2000 and the date of this Agreement, neither the Company
nor any of its Subsidiaries has (A) repurchased, redeemed or otherwise acquired
any Equity Interests of the Company or any of its Subsidiaries or (B) declared,
set aside, made or paid any dividend or distribution in respect of any of its
Equity Interests and the board of directors of the Company has not resolved to
do any of the foregoing.
SECTION 2.04 Authority. The Company has all necessary
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder and to consummate the Transactions. The
execution and delivery of this Agreement by the Company and the consummation by
the Company of the Transactions have been duly and validly authorized by all
necessary corporate action of the Company other than the adoption of this
Agreement by the Company's stockholders in accordance with the DGCL and the
Certificate of Incorporation and Bylaws, and no other corporate proceedings on
the part of the Company are necessary to authorize this Agreement or to
consummate the Merger (other than the adoption of this Agreement by the
Company's stockholders in accordance with the DGCL and the Certificate of
Incorporation and Bylaws and the filing and recordation of the appropriate
documents with respect to the Merger in accordance with the DGCL). This
Agreement has been duly and validly executed and delivered by the Company and,
assuming the due authorization, execution and delivery hereof by Parent and
Merger Sub, constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except to the
extent limited by bankruptcy, insolvency, moratorium, fraudulent conveyance, or
other Laws affecting the rights of creditors generally, and to the extent that
the availability of equitable remedies may be limited by equitable principles.
SECTION 2.05 Noncontravention. (a) The execution and delivery
of this Agreement by the Company does not, and the performance of this Agreement
by the Company and the consummation of the Transactions will not, (i) conflict
with or violate the Certificate of Incorporation or Bylaws or the certificate of
incorporation or bylaws (or equivalent formation documents) of each of the
Subsidiaries of the Company, (ii) assuming that all consents, approvals and
authorizations contemplated by clauses (i)-(iv), inclusive, of Section 2.05(b)
hereof have been obtained and all filings described in such clauses have been
made (and declared effective, if applicable), conflict with or violate any law,
statute, ordinance, rule, regulation, order, judgment or decree (collectively,
"Laws") applicable to the Company or any of its Subsidiaries or, to the
Knowledge of the Company, any of its Minority Investments or by which any of
their respective properties is bound or affected, or (iii) result in any breach
of or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or
13
give to others any rights of termination, amendment, acceleration or
cancellation of, or alteration of rights under or require the consent or
approval of any Person under, or result in the creation of a Lien on any of the
properties or assets of the Company or any of its Subsidiaries pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise, joint venture, limited liability or partnership agreement or other
instrument to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries or any of their respective
properties is bound or affected, including any Subsidiary Document and any
Minority Investment Document, except, in the case of clauses (ii) and (iii) of
this Section 3.05(a), for any conflict, violation, breach, default, impairment,
right or lack of consent or approval that would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
(b) The execution and delivery of this Agreement by the
Company does not, and the performance of this Agreement by the Company and the
consummation of the Transactions by the Company will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
federal, state or local court or governmental or regulatory authority or agency,
domestic or foreign (each, a "Governmental Entity"), except (i) the filing of a
premerger notification and report form by the Company under the HSR Act, (ii)
the filing of the Certificate of Merger with the Secretary of State of the State
of Delaware and appropriate documents with the relevant authorities of other
states in which the Company is qualified to do business, (iii) the filing with
the Securities and Exchange Commission (the "SEC") of the Form S-4 and such
reports under the Securities Exchange Act of 1934, as amended, and the SEC rules
and regulations promulgated thereunder (the "Exchange Act") as may be required
in connection with this Agreement and the Transactions, (iv) consents,
approvals, authorizations, permits, filings or notifications which have
heretofore been obtained or made, as the case may be, by the Company and are in
full force and effect or (v) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect.
SECTION 2.06 SEC Documents; Financial Statements. (a) The
Company has filed on a timely basis all forms, reports and documents required to
be filed with the SEC since January 1, 1998 (all forms, reports and documents
filed by the Company with the SEC since January 1, 1998, in each case including
all exhibits and schedules thereto and documents incorporated by reference
therein, such documents together with any documents filed during such period by
the Company with the SEC on a voluntary basis on Current Reports on Form 8-K are
referred to herein as the "Company SEC Documents"). The Company SEC Documents
(i) complied as to form in all material respects with the requirements of the
Securities Act of 1933, as amended, and the SEC rules and regulations
promulgated thereunder (the "Securities Act") or the Exchange Act, as the case
may be, and the rules and regulations thereunder, each as in effect on the date
so filed or amended, and (ii) did not at the time they were filed (or if amended
or superseded by a filing then on the date of such filing, which filing must
have occurred prior to the date of this Agreement for the Company SEC Documents
otherwise filed prior to the date of this Agreement) contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
14
(b) Each of the audited and unaudited consolidated financial
statements (including, in each case, any related notes thereto) contained in the
Company SEC Documents were prepared in accordance with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved (except as may be indicated in the notes thereto or in the
Company SEC Documents), and each fairly presents the consolidated financial
position of the Company and its Subsidiaries at the respective dates thereof and
the consolidated results of their operations and cash flows for the periods
indicated, except that the unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments and do not contain all of
the footnote disclosures required by GAAP.
SECTION 2.07 Undisclosed Liabilities. Neither the Company nor
any of its Subsidiaries has any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) required by GAAP to be
recognized or disclosed on a consolidated balance sheet of the Company and its
Subsidiaries or in the notes thereto, except (i) liabilities reflected in the
consolidated audited balance sheet of the Company as of December 31, 2000 or the
notes thereto (the "2000 Balance Sheet") and (ii) liabilities incurred since
December 31, 2000 in the ordinary course of business consistent with past
practice that, individually or in the aggregate, would not reasonably be
expected to have a Company Material Adverse Effect.
SECTION 2.08 Information Supplied. None of the information
supplied or to be supplied by the Company for inclusion or incorporation by
reference in (i) the registration statement on Form S-4 to be filed with the SEC
by Parent in connection with the issuance of Parent Common Stock in the Merger
(the "Form S-4"), at the time the Form S-4 is filed with the SEC, at any time it
is amended or supplemented or at the time it becomes effective under the
Securities Act, or (ii) the Proxy Statement, at the date it is first mailed to
the Company's stockholders or at the time of the Stockholders Meeting, will
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading. The Proxy Statement will comply as to form in all material respects
with the requirements of the Exchange Act and the rules and regulations
promulgated thereunder, except that no representation is made by the Company
with respect to statements made or incorporated by reference therein based on
information supplied in writing by Parent or Merger Sub specifically for
inclusion or incorporation by reference therein.
SECTION 2.09 Absence of Certain Changes or Events. Since
December 31, 2000, the Company has conducted its business only in the ordinary
course consistent with past practice, and there is not and has not been: (a) any
condition, event or occurrence, individually or in the aggregate, resulting in a
Company Material Adverse Effect, (b) any condition, event or occurrence which,
individually or in the aggregate, would reasonably be expected to have or give
rise to a Company Material Adverse Effect; or (c) any action which, if it had
been taken or occurred after the execution of this Agreement, would have
required the consent of Parent pursuant to this Agreement.
SECTION 2.10 Litigation.There is no suit, claim, action,
proceeding or investigation pending or, to the Knowledge of the Company,
threatened against the Company or any of its Subsidiaries, or against or
involving any properties or rights of the Company or any of its Subsidiaries,
which would, individually or in the aggregate, reasonably be expected to result
15
in a Company Material Adverse Effect. Section 2.10 of the Company Disclosure
Schedule sets forth as of the date of this Agreement the suits, claims, actions,
proceedings and investigations pending, or to the Knowledge of the Company,
threatened against the Company or any of its Subsidiaries which if adversely
determined would result in a liability to the Company in excess of $500,000. To
the Knowledge of the Company, neither the Company nor any of its Subsidiaries
nor any of their respective properties is or are subject to any order, writ,
judgment, injunction, decree, determination or award having, or which would
reasonably be expected to have a Company Material Adverse Effect. To the
Knowledge of the Company, as of the date of this Agreement, no officer or
director of the Company or any of its Subsidiaries has been served with or
otherwise has written notice of a written complaint naming such officer or
director as a defendant in any litigation commenced by stockholders of the
Company or any of its Subsidiaries with respect to the performance of his or her
duties as an officer and/or director of the Company or any of its Subsidiaries
under any federal or state Law (including litigation under federal and state
securities Laws).
SECTION 2.11 Labor Matters. Neither the Company nor any of its
Subsidiaries is a party to, or bound by, any collective bargaining agreement,
contract or other agreement or understanding with a labor union or labor
organization. To the Knowledge of the Company, neither the Company nor any of
its Subsidiaries is the subject of any proceeding asserting that it or any
Subsidiary has committed an unfair labor practice or seeking to compel it to
bargain with any labor organization as to wages or conditions of employment.
There is no strike, work stoppage, lock-out or other similar labor dispute
involving it or any of its Subsidiaries pending or, to the Knowledge of the
Company, threatened; and no employee grievance pending or, to the Knowledge of
the Company, threatened against the Company or any of its Subsidiaries which,
individually or in the aggregate, would reasonably be expected to have a Company
Material Adverse Effect. The Company and each Subsidiary is in compliance with
all applicable Laws, agreements, contracts, and policies relating to employment,
employment practices, wages, hours, and terms and conditions of employment
except for failures so to comply, if any, that individually or in the aggregate
would not reasonably be expected to have a Company Material Adverse Effect. The
Company and its Subsidiaries have complied in all material respects with their
payment obligations to all employees of the Company and its Subsidiaries in
respect of all wages, salaries, commissions, bonuses, benefits and other
compensation due and payable to such employees under any Company policy,
practice, agreement, plan, program or any Law. The Company and its Subsidiaries
are not liable for any severance pay or other payments to any employee or former
employee arising from the termination of employment under any benefit or
severance policy, practice, agreement, plan, or program of the Company or any of
its Subsidiaries, nor to the Knowledge of the Company will the Company or any of
its Subsidiaries have any liability which exists or arises, or may be deemed to
exist or arise, under any applicable law or otherwise, as a result of the
Transactions. The Company and its Subsidiaries are in compliance with its
obligations pursuant to the Worker Adjustment and Retraining Notification Act of
1988 ("WARN"), to the extent applicable. Each employee of the Company or any of
its Subsidiaries has signed an agreement with respect to confidentiality,
nonsolicitation and assignment of inventions with the Company or such
Subsidiary, which agreements are each in the form heretofore provided to Parent.
SECTION 2.12 Permits; Compliance with Laws. (a) The Company
and its Subsidiaries hold all permits, licenses, variances, exemptions, orders
and approvals of all
16
Governmental Entities other than those the failure of which to hold would not
reasonably be expected to have a Company Material Adverse Effect (the "Company
Permits"). The Company and its Subsidiaries are in material compliance with the
terms of the Company Permits.
(b) The businesses of the Company and its Subsidiaries are not
being conducted in violation of any law (domestic or foreign), ordinance or
regulation of any Governmental Entity, except for possible violations that,
individually or in the aggregate, do not and would not reasonably be expected to
have a Company Material Adverse Effect.
SECTION 2.13 Employee Benefit Plans. (a) The Company
Disclosure Schedule contains a true and complete list of each "employee benefit
plan" (within the meaning of section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) (including, without limitation,
multiemployer plans within the meaning of Section 3(37) of ERISA)), stock
purchase, stock option, severance, employment, change-in-control, fringe
benefit, collective bargaining, bonus, incentive, deferred compensation and all
other employee benefit plans, agreements, programs, policies or other
arrangements relating to compensation, benefits or entitlements, whether or not
subject to ERISA (including any funding mechanism therefor now in effect or
required in the future as a result of the Transactions or otherwise), whether
formal or informal, oral or written, legally binding or not under which any
employee or former employee or director or former director of the Company or any
of its Subsidiaries, or any consultant or independent contractor to the Company
or any of its Subsidiaries, has any present or future right to benefits or under
which the Company or any of its Subsidiaries has any present or future
liability. All such plans, agreements, programs, policies and arrangements are
herein collectively referred to as the "Company Plans."
(b) With respect to each Company Plan, the Company has
delivered or made available to Parent a current, accurate and complete copy (or,
to the extent no such copy exists, an accurate description) thereof and, to the
extent applicable, (i) any related trust agreement, annuity contract or other
funding instrument; (ii) the most recent IRS determination letter; (iii) the
current summary plan description and other written communications (or a
description of any oral communications) by the Company to its employees
concerning the extent of the benefits provided under a Company Plan; and (iv)
for the three most recent years (A) the Form 5500 and attached schedules; (B)
audited financial statements; (C) actuarial valuation reports; and (D)
attorney's response to an auditor's request for information.
(c) Each Company Plan has been established and administered in
material compliance with its terms and with the applicable provisions of ERISA,
the Code and other applicable laws, rules and regulations (including the
applicable laws, rules and regulations of any foreign jurisdiction), in each
case, in all material respects. Each Company Plan that is intended to be
qualified within the meaning of Code Section 401(a) is so qualified and has
received a favorable determination letter as to its qualification and to the
Knowledge of the Company nothing has occurred, whether by action or failure to
act, which would cause the loss of such qualification. With respect to any
Company Plan, no actions, suits or claims (other than routine claims for
benefits in the ordinary course) are pending or, to the best Knowledge of the
Company, threatened; to the Knowledge of the Company no facts or circumstances
exist which could give rise to any such actions, suits or claims and the Company
will promptly notify Parent in writing of any pending claims or, to the
Knowledge of the Company, any threatened claims
17
arising between the date hereof and the Effective Time. Neither the Company nor,
to the Knowledge of the Company, any other party has engaged in a non-exempt
prohibited transaction, as such term is defined under Code Section 4975 or ERISA
Section 406, which would subject the Company or Parent or its Subsidiaries to
any material taxes, penalties or other liabilities under the Code or ERISA. To
the Knowledge of the Company, no event has occurred and no condition exists that
would subject the Company, either directly or by reason of its affiliation with
any member of its "Controlled Group" (defined as any organization which is a
member of a controlled group of organizations within the meaning of Code
Sections 414(b), (c), (m) or (o)), to any material tax, fine or penalty imposed
by ERISA, the Code or other applicable laws, rules and regulations (including
the applicable laws, rules and regulations of any foreign jurisdiction). All
insurance premiums required to be paid and all contributions required to be made
under the terms of any Company Plan, the Code, ERISA or other applicable laws,
rules and regulations (including the applicable laws, rules and regulations of
any foreign jurisdiction) as of the Effective Time have been or will be timely
paid or made prior thereto and adequate reserves have been provided for on the
Company's balance sheet for any premiums (or portions thereof) and for all
benefits attributable to service on or prior to the Effective Time. For each
Company Plan with respect to which a Form 5500 has been filed, no material
change has occurred with respect to the matters covered by the most recent Form
since the date thereof. No Company Plan provides for an increase in benefits on
or after the Effective Time.
(d) No Company Plan is subject to Title IV of ERISA, and no
Company Plan is a multiemployer plan as defined in Section 4001(A)(3) of ERISA.
The Company has never contributed to or sponsored any multiemployer plan or any
plan subject to Title IV of ERISA. No Company Plan or related trust is intended
to meet the requirements for tax-favored treatment under Code Section 501(c)(9).
(e) No unfunded Company Plan exists that must be accounted for
in accordance with SFAS No. 87, 106 or 112.
(f) No Company Plan exists which could result in the payment
to any Company employee of any money or other property or rights or accelerate
or provide any other rights or benefits to any Company employee as a result of
the Transactions, whether or not such payment would constitute a parachute
payment within the meaning of Code section 280G, and there is no contract, plan
or arrangement (written or otherwise) covering any employee or former employee
of the Company or any of its Subsidiaries that, individually or collectively,
could give rise to the payment of any amount or receipt of any other rights or
benefits that would not be deductible pursuant to the terms of Code section 280G
or limitations on deductibility under Code section 162(m).
SECTION 2.14 Taxes. Each of the Company and each of its
Subsidiaries has timely filed or had filed on its behalf all Tax Returns
required to be filed by it and all such returns are true, complete and correct,
or requests for extensions to file such Tax Returns have been timely filed,
granted and have not expired and has paid all Taxes shown as due on such
returns. The Company has provided adequate reserves in its financial statements
for any Taxes that have not been paid, whether or not shown as being due on such
Tax Returns. No claim for unpaid Taxes has been asserted in writing by a Tax
authority or has become a lien against the property of the Company or any of its
Subsidiaries (other than with respect to Taxes not yet due
18
and payable). No audit or other proceeding with respect to any Taxes due from or
with respect to the Company or any of its Subsidiaries or any Tax Return filed
by the Company or any of its Subsidiaries is being conducted by any Governmental
Entity or Tax authority and the Company and its Subsidiaries have not received
notification in writing that any such audit or other proceeding with respect to
Taxes or any Tax Return is pending. No extension of the statute of limitations
on the assessment of any Taxes has been granted by the Company or any of its
Subsidiaries. Neither the Company nor any of its Subsidiaries is subject to
liability for Taxes of any Person (other than the Company or its Subsidiaries),
arising from the application of Treasury Regulation section 1.1502-6 or any
analogous provision of state, local or foreign law, or as a transferee or
successor, by contract, or otherwise. None of the Company or any of its
Subsidiaries is a party to, is bound by or has any obligation under any Tax
sharing or Tax indemnity agreement or similar contract or arrangement. None of
the Company or any of its Subsidiaries has been a party to any distribution
occurring during the last two years in which the parties to such distribution
treated the distribution as one to which Section 355 of the Code is applicable.
All Taxes required to be withheld, collected or deposited by or with respect to
the Company and each Subsidiary have been timely withheld, collected or
deposited as the case may be, and to the extent required, have been paid to the
relevant taxing authority. As used herein: (i) "Taxes" shall mean all taxes of
any kind, including, without limitation, those on or measured by or referred to
as income, gross receipts, sales, use, ad valorem, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
value added, property or windfall profits taxes, customs, duties or similar
fees, assessments or charges of any kind whatsoever, together with any interest
and any penalties, additions to tax or additional amounts imposed by any
Governmental Entity, and (ii) "Tax Return" shall mean any return, declaration,
report, claim for refund, information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any amendment
thereof.
SECTION 2.15 Properties. Except where the failure to have good
and valid title would not interfere in any material respect with the conduct of
the business of the Company and its Subsidiaries as currently conducted, the
Company and each of its Subsidiaries have good title to, or valid leasehold
interests in, or otherwise the right to use all their material properties and
assets, and such assets and properties at the Effective Time will be free and
clear of any Liens except for (a) Liens for current Taxes which are not
delinquent, or are being contested in good faith, (b) mechanics', workers',
materialmen's and other like Liens arising in the ordinary course of business,
(c) zoning ordinances, rights of way, easements, licenses, reservations,
covenants, conditions or restrictions on the use of any of the real property
which do not, individually or in the aggregate, materially interfere with the
use of such real property and (d) encumbrances in the form of restrictions on
use of Intellectual Property contained in license agreements or scientific
collaboration agreements. Neither the Company nor any of its Subsidiaries is
obligated under or bound by any option, right of first refusal, purchase
contract, or other contractual right to sell or dispose of any real or personal
tangible property or any portions thereof or interests therein which property,
portions and interests, either individually or in the aggregate, are material to
the Company.
SECTION 2.16 Environmental Matters. (a) Except as could not,
individually or in the aggregate, reasonably be expected to result in a Company
Material Adverse Effect: (i) the Company and each of its Subsidiaries are in
compliance with all applicable
19
Environmental Laws, and during all applicable statute of limitations periods
have complied with all applicable Environmental Laws; and (ii) neither the
Company nor any of its Subsidiaries has, nor would reasonably be expected to
have, any obligation to undertake any Remedial Activity, at any property owned
or leased by any of them or at any other property.
(b) The Company has furnished, or made available to Buyer, or
to its representatives, true and complete copies of all material Environmental
Reports in the possession or control of the Company or of its Subsidiaries, or
fairly described to Buyer or to its representatives the contents of such
reports.
(c) As used herein: (i) "Environmental Laws" means any and all
Laws or other legally enforceable requirements (including, without limitation,
common law) of any Governmental Entity, regulating, relating to or imposing
liability or standards of conduct concerning protection of the environment or of
human health, or employee health and safety; (ii) "Environmental Report" means
any report, study, assessment or audit that addresses any issue of actual or
potential noncompliance with, actual or potential liability under or cost
arising out of, or actual or potential impact on the business of the Company or
any of its Subsidiaries in connection with, any Environmental Law or any
proposed or anticipated change in or addition to any Environmental Law relating
to the Company or any of its Subsidiaries or any entity for which any of them
may be liable; (iii) "Materials of Environmental Concern" means any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants,
contaminants and radioactivity that is regulated pursuant to or could result in
liability under any Environmental Law; and (iv) "Remedial Action" means any
action to (A) investigate, clean up, remove or treat any Materials of
Environmental Concern, or (B) prevent the release or threat of release of any
Materials of Environmental Concern.
SECTION 2.17 Contracts; Debt Instruments. (a) Section 2.17(a)
of the Company Disclosure Schedule accurately lists as of the date hereof the
following contracts, agreements, commitments, arrangements, leases, licenses,
policies and instruments, whether written or oral (a "Contract") to which the
Company or any of its Subsidiaries is a party or by which it or any of its
Subsidiaries is bound (collectively, "Material Contracts"):
(i) (A) any Contract relating to any direct or indirect
Indebtedness (including but not limited to loan or credit agreements,
notes, bonds, mortgages, indentures, lease-purchase arrangements,
guarantees, agreements to purchase goods or services or to supply
funds or other undertakings on which others rely in extending credit)
in an aggregate principal amount in excess of $250,000 is outstanding
or may be incurred, or (B) any conditional sales contracts, chattel
mortgages, equipment lease agreements, and other security arrangements
with respect to personal property with a value in excess of $250,000
in each instance used or owned by the Company or any of its
Subsidiaries;
(ii) any Contract containing covenants limiting the ability of
the Company or any of its Subsidiaries to compete in any line of
business with any Person or in any area or territory or which would so
limit the Surviving Company or Parent or any of their respective
Subsidiaries after the Effective Time;
(iii) any lease for real property;
20
(iv) any Contract involving commitments to others to make
capital expenditures involving an aggregate amount in excess of
$250,000 or more in any one case, except Contracts that may be
terminated without liability, obligation or penalty by the Company or
its Subsidiary on not more than 30 days' notice;
(v) any material licenses, assignments, consents, royalty,
development, research or other similar agreements concerning any
Intellectual Property owned or used by the Company or any of its
Subsidiaries, other than licenses generally commercially available on
standard terms, and any agreements concerning the enforcement or
waiver of any rights with respect to any Intellectual Property owned
or used by the Company or any of its Subsidiaries, other than
confidentiality or non-disclosure agreements entered into in the
ordinary course of the Company's business;
(vi) any joint venture, limited liability, partnership,
limited partnership or similar agreements relating to the formation,
creation, operation, management or control of any corporation,
company, partnership or joint venture, and any investor rights,
voting, co-sale or other shareholder agreements, including the
Subsidiary Documents and the Minority Investment Documents, with
respect to any Equity Interests of the Company or any of its
Subsidiaries or to which the Company or any of its Subsidiaries is a
party or by which their respective properties are bound;
(vii) any agreements entered into since January 1, 1999
relating to the acquisition or disposition of any business or any
corporation, partnership, joint venture, association or other business
organization or division thereof by the Company or any of its
Subsidiaries, whether by merger, sale of Equity Interests, sale of
assets or otherwise and any other such agreements under which the
Company or any of its Subsidiaries currently have indemnification
obligations or similar liabilities, whether entered into prior to or
since January 1, 1999 (collectively, "Acquisition Agreements");
(viii) any joint development, collaboration, research or
material similar agreements involving the Company or any of its
Subsidiaries or their respective properties;
(ix) any Contract not covered by any of the other items of
this Section 2.17 that (i) provides for payments by the Company or any
of its Subsidiaries, whether in cash or Equity Interests, in excess of
$250,000, (ii) is not in the ordinary course of business or (iii) is
material to the business, operations, properties, liabilities or
condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole.
(b) Neither the Company nor any of its Subsidiaries is, and to
the Knowledge of the Company no other party is, in default or breach of any
Material Contract, except for those defaults which would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse Effect,
and there has not occurred any event that with the lapse of time or the giving
of notice or both would constitute such a default, except for those defaults
which would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect. Each Material Contract constitutes the
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms,
21
except to the extent limited by bankruptcy, insolvency, moratorium, fraudulent
conveyance, or other Laws affecting the rights of creditors generally, and to
the extent that the availability of equitable remedies may be limited by
equitable principles, and no Person has the right to terminate or repudiate any
Material Contract on less than 30 days prior notice or, to the Knowledge of the
Company as of the date hereof, has repudiated any provision of any Material
Contract. No claim of a breach of any representation, warranty or covenant and
no other claim for indemnification has been made by or against the Company or
any of its Subsidiaries under any Acquisition Agreement prior to the date hereof
that has not been fully resolved prior to the date hereof. The Company is not a
party to any Material Contract that is required to be disclosed as an exhibit to
the SEC Documents in accordance with the rules and regulations of the SEC that
has not been so disclosed.
SECTION 2.18 Intellectual Property. (a) Section 2.18(a) of the
Company Disclosure Schedule sets forth all Intellectual Property owned by the
Company or its Subsidiaries that is registered or filed with any Governmental
Entity (the "Registered Intellectual Property"), all licenses of patented
Intellectual Property to or from third parties (the "Licensed Patent
Intellectual Property") and all other licenses of Intellectual Property other
than licenses generally commercially available on standard terms to or from
third parties by the Company or any of its Subsidiaries that are material to the
business of the Company and its Subsidiaries (together with the Registered
Intellectual Property and the Licensed Patent Intellectual Property, the
"Material Intellectual Property"). As used herein, "Intellectual Property" means
all rights, privileges and priorities provided under federal, state, foreign and
multinational law relating to intellectual property, including without
limitation all (i) (A) inventions, discoveries, processes, formulae, designs,
methods, techniques, procedures, concepts, developments, technology, new and
useful improvements thereof and know-how relating thereto, whether or not
patented or eligible for patent protection; (B) copyrights and copyrightable
works, including computer applications, programs, software, databases and
related items; (C) trademarks, service marks, trade names, brand names,
corporate names, logos and trade dress, the goodwill of any business symbolized
thereby, and all common-law rights relating thereto; (D) trade secrets and other
confidential information; and (ii) all registrations, applications, recordings,
and licenses or other similar agreements related to the foregoing.
(b) The Company and its Subsidiaries own or have the right to
use all Intellectual Property necessary for the Company and its Subsidiaries to
conduct their business substantially as it is currently conducted and consistent
with past practice.
(c) All of the Registered Intellectual Property owned by the
Company or any of its Subsidiaries is subsisting and unexpired, has not been
abandoned and, to the Knowledge of the Company, does not infringe or otherwise
impair the intellectual property rights of any third party. To the Knowledge of
the Company, all of the Registered Intellectual Property licensed or used by the
Company or any of its Subsidiaries is subsisting and unexpired, has not been
abandoned and, to the Knowledge of the Company, does not infringe or otherwise
impair the intellectual property rights of any third party. None of the Material
Intellectual Property owned by the Company or any of its Subsidiaries is the
subject of any license, security interest, Lien or other agreement granting
rights therein to any third party other than the Material Contracts. To the
Knowledge of the Company, the Company has not misappropriated the trade secrets,
technology, know-how, inventions or the like of any third party. No judgment,
decree,
22
injunction, rule or order has been rendered by any Governmental Entity which
would limit, cancel or question the validity of, or the Company's or its
Subsidiaries' rights in and to any Intellectual Property in any respect that
could reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect. The Company has not received written notice,
and does not otherwise have knowledge, of any pending or threatened suit, action
or proceeding that seeks to limit, cancel or question the validity of, or the
Company's or its Subsidiaries' rights in and to any Intellectual Property,
which, if adversely determined, could reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. The Company
and its Subsidiaries have taken reasonable steps to protect, maintain and
safeguard their material Intellectual Property, including any Material
Intellectual Property for which improper or unauthorized disclosure would impair
its value or validity, and have executed appropriate nondisclosure agreements
and made appropriate filings and registrations in connection with the foregoing.
SECTION 2.19 Brokers and Other Advisors. No broker, investment
banker, financial advisor or other Person, other than XX Xxxxxx Xxxxx & Co. ("XX
Xxxxxx"), the fees and expenses of which will be paid by the Company (pursuant
to fee agreements, copies of which have been provided to Parent), is entitled to
any broker's, finder's, financial advisor's or other similar fee or commission
in connection with the Transactions based upon arrangements made by or on behalf
of the Company or any of its Subsidiaries.
SECTION 2.20 Opinion of Financial Advisor. The Company has
received as of the date of this Agreement the opinion of XX Xxxxxx to the effect
that, as of such date, the Merger Consideration is fair, from a financial point
of view, to the holders of Company Common Stock (other than Parent and its
Affiliates). As used herein, (i) "Affiliate" means a Person that directly or
indirectly, through one or more intermediaries, Controls, is controlled by, or
is under common control with, the first mentioned Person; and (ii) "Control"
(including the terms "controlled by" and "under common control with") means the
possession, directly or indirectly or as trustee or executor, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of stock, as trustee or executor, by contract or credit
arrangement or otherwise.
SECTION 2.21 Board Recommendation; State Antitakeover Law. The
board of directors of the Company, at a meeting duly called and held, has by
unanimous vote of those directors present (i) determined that this Agreement and
the Transactions, including the Merger, are fair to and in the best interests of
the stockholders of the Company and has taken all actions necessary on the part
of the Company to render the restrictions on business combinations contained in
Section 203 of the DGCL inapplicable to this Agreement and the Merger, and (ii)
resolved to recommend that the holders of the shares of Company Common Stock
approve this Agreement and the Transactions, including the Merger.
Section 2.22 Required Company Vote. The Company Stockholder
Approval, being the affirmative vote of a majority of the outstanding shares of
the Company Common Stock, is the only vote of the holders of any class or series
of the Company's securities necessary to approve this Agreement, the Merger and
the other Transactions.
23
SECTION 2.23 Rights Agreement. The Rights Agreement has been
amended so as to provide that neither Parent nor Merger Sub will become an
"Acquiring Person" or a "Principal Party" and that no "Shares Acquisition Date"
or "Distribution Date" (as such terms are defined in the Rights Agreement) will
occur as a result of the approval, execution, delivery or performance of this
Agreement or the consummation of the Merger. A true and correct copy of the
Rights Agreement as so amended has been delivered to Parent.
SECTION 2.24 Affiliate Transactions. As of the date hereof,
there are no existing Contracts, transactions, indebtedness or other
arrangements, or any related series thereof, between the Company or any of its
Subsidiaries, on the one hand, and any of the directors, officers or other
Affiliates of the Company and its Subsidiaries, on the other hand.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT
Except as set forth in the written disclosure schedule dated
as of the date of this Agreement and previously delivered by Parent to the
Company (the "Parent Disclosure Schedule") (it being understood that the Parent
Disclosure Schedule shall be arranged in sections corresponding to the sections
contained in this Agreement, and the disclosures in any section of the Parent
Disclosure Schedule shall qualify all of the representations in the
corresponding section of this Article III and all applicable representations in
other sections of this Article III to the extent that such qualification is
readily apparent ), Parent hereby represents and warrants to the Company as
follows:
SECTION 3.01 Organization, Standing and Corporate Power. Each
of Parent, Merger Sub and each of Parent's "significant Subsidiaries" (within
the meaning of Rule 1-02 of Regulation S-X of the SEC) (collectively, the
"Parent Subsidiaries") is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation and has the
requisite corporate or other power and authority necessary to own, lease and
operate its properties and to carry on its business as it is now being
conducted. Each of Parent, Merger Sub and each of the Parent Subsidiaries is
duly qualified or licensed as a foreign corporation or entity to do business,
and is in good standing, in each jurisdiction where the character of its
properties owned, leased or operated by it or the nature of its activities makes
such qualification or licensing necessary, except where the failure to be so
duly qualified or licensed and in good standing would not, individually or in
the aggregate, reasonably be expected to have any materially adverse effect on
the business, assets, liabilities, financial condition or results of operations
of Applera Corporation-Celera Genomics Group, taken as a whole, other than any
such effect resulting from any change, effect, event, occurrence, state of facts
or development relating to the industry in which Parent operates in general and
not specifically relating to Parent or on the ability of Parent and Merger Sub
to perform its obligations under this Agreement (a "Parent Material Adverse
Effect"). Parent has made available to the Company complete and correct copies
of its certificate of incorporation and by-laws and the certificate of
incorporation and by-laws of Merger Sub.
SECTION 3.02 Capital Structure. (a) As of the date of this
Agreement, the authorized capital stock of Parent consists of 1,255,000,000
shares of common stock of Parent
24
(consisting of 1,000,000,000 shares of Parent Common Stock and 225,000,000
shares of Applera Corporation--Applied Biosystems Group Common Stock, par value
$.01 per share ("AB Stock")) and 10,000,000 shares of preferred stock of Parent
(the "Parent Preferred Stock"). As of the close of business on June 11, 2001,
there were: (i) 61,561,502.74 shares of Parent Common Stock issued and
outstanding; (ii) 13,717 shares of Parent Common Stock held in the treasury of
Parent; (iii) 14,127,347.26 shares of Parent Common Stock reserved for issuance
pursuant to Parent's stock option plans, Parent's employee stock purchase plans
and Parent's Director Stock Purchase and Deferred Compensation Plan
(collectively, the "Parent Stock Plans"); (iv) 13,018,883 shares of Parent
Common Stock issuable upon exercise of awarded but unexercised stock options;
(v) 56,350 shares of Parent Common Stock issuable upon exercise of currently
outstanding warrants to purchase Parent Common Stock; (vi) 1,432,200 shares of
Parent Common Stock issuable upon exercise of an option held by a third party;
(vii) 211,265,745.85 shares of AB Stock issued and outstanding; (viii) 5,105
shares of AB Stock held in the treasury of Parent; (ix) 31,613,807.05 shares of
AB Stock reserved for issuance pursuant to Parent Stock Plans; (x) 27,811,815
shares of AB Stock issuable upon exercise of awarded but unexercised stock
options; (xi) 214,794 shares of AB Stock issuable upon exercise of currently
outstanding warrants to purchase AB Stock; and (xii) no shares of Parent
Preferred Stock outstanding. Except as set forth above and except for shares of
participating junior preferred stock issuable pursuant to the Shareholders'
Protection Rights Plan, dated as of April 28, 1999 between Parent and
BankBoston, N.A., as of the close of business on June 11, 2001, there were no
shares of capital stock or other equity securities of Parent issued, reserved
for issuance or outstanding.
(b) All outstanding shares of capital stock of Parent are, and
all shares which may be issued as described above will be, when issued, duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights.
(c) There is no outstanding Voting Debt of Parent. Except as
set forth above, there are no options, warrants or other rights, agreements,
arrangements or commitments of any character binding on Parent relating to the
issued or unissued Equity Interests of Parent or obligating Parent to issue,
sell, repurchase, redeem or otherwise acquire or make any payment with respect
to any Equity Interests of Parent or any of its Subsidiaries.
(d) Between June 11, 2001 and the date of this Agreement,
Parent has not issued or reserved for issuance any Parent Common Stock or other
Equity Interests of Parent, except pursuant to or as permitted by the terms of
the Parent Stock Plans. Between December 31, 2000 and the date of this
Agreement, Parent has not (A) repurchased, redeemed or otherwise acquired any
Equity Interests of Parent or (B) declared, set aside, made or paid any dividend
or distribution in respect of any of its Equity Interests (other than regular
quarterly cash dividends on AB Stock), and the board of directors of Parent has
not resolved to do any of the foregoing.
(e) As of the date hereof, the authorized capital stock of
Merger Sub consists of 1,000 shares of common stock, par value $.01 per share,
all of which have been validly issued, are fully paid and nonassessable and are
owned by Parent, free and clear of any Lien, and as of the Closing Date, all the
issued and outstanding shares of the common stock of Merger Sub will be owned by
Parent free and clear of any Lien.
25
SECTION 3.03 Authority. Parent and Merger Sub have all
necessary corporate power and authority to execute and deliver this Agreement
and to perform their respective obligations hereunder and to consummate the
Transactions. The execution and delivery of this Agreement by Parent and Merger
Sub and the consummation by Parent and Merger Sub of the Transactions have been
duly and validly authorized by all necessary corporate action on the part of
Parent and Merger Sub. This Agreement has been duly and validly executed and
delivered by each of Parent and Merger Sub and, assuming the due authorization,
execution and delivery hereof by the Company, constitutes the legal, valid and
binding obligation of each of Parent and Merger Sub, enforceable against such
parties in accordance with its terms, except to the extent limited by
bankruptcy, insolvency, moratorium, fraudulent conveyance, or other Laws
affecting the rights of creditors generally, and to the extent that the
availability of equitable remedies may be limited by equitable principles. All
shares of Parent Common Stock that may be issued pursuant to the Agreement shall
when issued in accordance with this Agreement be duly authorized, validly
issued, fully paid and nonassessable and not be subject to preemptive rights.
The board of directors of Parent has made a determination that as of the
Effective Time the assets, business and liabilities of the Company shall be for
the benefit of the Celera Genomics Group of Parent and shall be attributed in
their entirety to the Celera Genomics Group of Parent as of the Effective Time,
in accordance with the provisions of Sections 2.5(a)(i) and 2.6(f) of Parent's
certificate of incorporation, as in effect as of the date hereof.
SECTION 3.04 Noncontravention. (a) The execution and delivery
of this Agreement by each of Parent and Merger Sub does not, and the performance
of this Agreement by Parent and Merger Sub and the consummation of the
Transactions will not, (i) conflict with or violate the respective certificates
of incorporation and by-laws of Parent and Merger Sub, (ii) assuming that all
consents, approvals and authorizations contemplated by clauses (i)-(v),
inclusive, of Section 3.04(b) hereof have been obtained and all filings
described in such clauses have been made (and declared effective, if
applicable), conflict with or violate any Laws applicable to Parent or any
Parent Subsidiaries or by which any of their respective properties is bound or
affected, or (iii) result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or give
to others any rights of termination, amendment, acceleration or cancellation of,
or alteration of rights under or require the consent or approval of any Person
under, or result in the creation of a Lien on any of the properties or assets of
Parent or any Parent Subsidiaries pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise, joint
venture, limited liability or partnership agreement or other instrument to which
Parent or any of its Subsidiaries is a party or by which Parent or any Parent
Subsidiaries or any of their respective properties is bound or affected, except,
in the case of clauses (ii) and (iii) of this Section 3.04(a), for any conflict,
violation, breach, default, impairment, right or lack of consent or approval
that would not, individually or in the aggregate, reasonably be expected to have
a Parent Material Adverse Effect.
(b) The execution and delivery of this Agreement by Parent and
Merger Sub do not, and the performance of this Agreement by Parent and Merger
Sub and the consummation of the Transactions by Parent and Merger Sub will not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Entity, except (i) the filing of a premerger
notification and report form by Parent under the HSR Act, (ii) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware and
26
appropriate documents with the relevant authorities of other states in which the
Company is qualified to do business, (iii) the filing with the SEC of the Form
S-4 and such reports under the Exchange Act as may be required in connection
with this Agreement and the Transactions, (iv) consents, approvals, orders,
authorizations, registrations, declarations, filings or notices as may be
required under the "takeover" or "blue sky" laws of various states, (v)
consents, approvals, authorizations, permits, filings or notifications which
have heretofore been obtained or made, as the case may be, by Parent and are in
full force and effect or (vi) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not, individually or in the aggregate, reasonably be expected to have a
Parent Material Adverse Effect.
SECTION 3.05 Parent SEC Documents; Financial Statements. (a)
Parent and its predecessors have filed on a timely basis all forms, reports and
documents required to be filed with the SEC since January 1, 1998 (all forms,
reports and documents filed by Parent and its predecessors with the SEC since
January 1, 1998, in each case including all exhibits and schedules thereto and
documents incorporated by reference therein, such documents together with any
documents filed during such period by Parent with the SEC on a voluntary basis
on Current Reports on Form 8K are referred to herein as the "Parent SEC
Documents"). The Parent SEC Documents (i) complied as to form in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, and the rules and regulations thereunder, each as in effect on the
date so filed or amended, and (ii) did not at the time they were filed (or if
amended or superseded by a filing, which filing must have occurred prior to the
date of this Agreement for the Parent SEC Documents otherwise filed prior to the
date of this Agreement, then on the date of such filing) contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(b) Each of the audited and unaudited consolidated financial
statements (including, in each case, any related notes thereto) contained in the
Parent SEC Documents were prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be indicated in
the notes thereto or in the Parent SEC Documents), and each fairly presents the
consolidated financial position of Parent and the Parent Subsidiaries at the
respective dates thereof and the consolidated results of their operations and
cash flows for the periods indicated, except that the unaudited interim
financial statements were or are subject to normal and recurring year-end
adjustments and do not contain all of the footnote disclosures required by GAAP.
SECTION 3.06 Undisclosed Liabilities. Neither Parent nor any
Parent Subsidiary has any liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) required by GAAP to be recognized or
disclosed on a consolidated balance sheet of Parent and its Subsidiaries or in
the notes thereto, except (i) liabilities reflected in the audited consolidated
balance sheet of the Parent as of June 30, 2000, and (iii) liabilities incurred
since June 30, 2000 in the ordinary course of business consistent with past
practice that, individually or in the aggregate, would not reasonably be
expected to have a Parent Material Adverse Effect.
SECTION 3.07 Information Supplied. None of the information
supplied or to be supplied by Parent or Merger Sub for inclusion or
incorporation by reference in (i) the Form
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S-4 will, at the time the Form S-4 is filed with the SEC, at any time it is
amended or supplemented or at the time it becomes effective under the Securities
Act, or (ii) the Proxy Statement will, at the date it is first mailed to the
Company's stockholders or at the time of the Stockholders Meeting, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they are made, not misleading. The
Form S-4 will comply as to form in all material respects with the requirements
of the Securities Act and the rules and regulations promulgated thereunder,
except that no representation is made by Parent or Merger Sub with respect to
statements made or incorporated by reference therein based on information
supplied in writing by the Company specifically for inclusion or incorporation
by reference therein.
SECTION 3.08 Absence of Certain Changes or Events. Since
December 31, 2000, there is not and has not been: (a) any condition, event or
occurrence, individually or in the aggregate, resulting in a Parent Material
Adverse Effect; (b) any condition, event or occurrence which, individually or in
the aggregate, would reasonably be expected to have or give rise to a Parent
Material Adverse Effect; or (c) any action which, if it had been taken or
occurred after the execution of this Agreement, would have required the consent
of the Company pursuant to this Agreement.
SECTION 3.09 Litigation; Compliance with Laws. (a) There is no
suit, action, arbitration, proceeding or investigation pending, or, to the
knowledge of the employees of Parent set forth on Schedule 3.09 hereto (the
"Knowledge of Parent"), threatened against Parent or any of its Subsidiaries
that, individually or in the aggregate, would reasonably be expected to have a
Parent Material Adverse Effect. To the Knowledge of Parent, neither Parent nor
any of its Subsidiaries nor any of their respective properties is or are subject
to any order, writ, judgment, injunction, decree, determination or award having,
or which would reasonably be expected to have, a Parent Material Adverse Effect.
(b) The businesses of Parent and its Subsidiaries are not
being conducted in violation of any law (domestic or foreign), ordinance or
regulation of any Governmental Entity, except for possible violations that,
individually or in the aggregate, do not and could not reasonably be expected to
have a Parent Material Adverse Effect.
SECTION 3.10 Brokers. No broker, investment banker, financial
advisor or other Person, other than Xxxxxx Xxxxxxx and Co. Incorporated ("Xxxxxx
Xxxxxxx"), the fees and expenses of which will be paid by Parent, is entitled to
any broker's, finder's, financial advisor's or other similar fee or commission
in connection with the Transactions based upon arrangements made by or on behalf
of Parent or Merger Sub.
SECTION 3.11 Interim Operations of Merger Sub. Merger Sub was
formed on June 8, 2001 solely for the purpose of engaging in the Transactions,
has engaged in no other business activities and has conducted its operations
only as contemplated hereby.
SECTION 3.12 Required Vote. This Agreement has been approved
by Parent, as the sole stockholder of Merger Sub. No other vote of holders of
any class or series of securities of Parent or Merger Sub is necessary to
approve this Agreement and the Transactions.
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ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS PRIOR TO MERGER.
SECTION 4.01 Conduct of Business by the Company. During the
period from the date of this Agreement to the Effective Time, the Company shall,
and shall cause its Subsidiaries to, act and carry on their respective
businesses in the ordinary course of business consistent with past practice and
use its and their respective reasonable best efforts to preserve substantially
intact their current business organizations, keep available the services of
their current officers and employees and preserve their relationships with
customers, suppliers, licensors, licensees, development partners, and others
having significant business dealings with them. Without limiting the generality
of the foregoing, during the period from the date of this Agreement to the
Effective Time, except as provided in Section 4.01 of the Company Disclosure
Schedule and except as expressly provided in this Agreement (but excluding for
this purpose any provisions of the Company Disclosure Schedule other than those
contained in Section 4.01 or 4.03 thereof) the Company shall not, and shall not
permit any of its Subsidiaries to:
(a) (i) declare, set aside or pay any dividends on, or make
any other distributions in respect of, any of its capital stock, (ii) split,
combine or reclassify any capital stock of the Company or any Subsidiary or
issue or authorize the issuance of any other Equity Interests in respect of, in
lieu of or in substitution for shares of capital stock of the Company or any
Subsidiary, or (iii) purchase, redeem or otherwise acquire any Equity Interests
of the Company or any of its Subsidiaries;
(b) authorize for issuance, issue, deliver, sell, pledge or
otherwise encumber any Equity Interest of the Company or any of its
Subsidiaries, other than (i) the issuance of Company Common Stock upon the
exercise of Company Warrants outstanding on the date of this Agreement in
accordance with their present terms, (ii) the issuance of Company Common Stock
upon the exercise of Company Stock Options awarded prior to the date of this
Agreement but unexercised on the date of this Agreement (or granted after the
date hereof in accordance with Section 4.03 hereof) in accordance with their
present terms, (iii) the issuance of Company Common Stock pursuant to the
Company's Employee Stock Purchase Plan in accordance with its present terms,
(iv) the conversion of the Convertible Notes in accordance with their present
terms, (v) the issuance of Company Common Stock in order to pay interest on the
Convertible Notes, should the Company so elect, in accordance with their present
terms and (vi) the sale of shares of capital stock of Akkadix Corporation, DNA
Sciences, Inc. or Discovery Partners International, Inc. upon the exercise of
options outstanding as of the date hereof pursuant to the 1999 Key Personnel
Stock Option Plan;
(c) amend (i) the Certificate of Incorporation or By-Laws or
the comparable charter or organizational documents of any Subsidiary of the
Company or (ii) the Rights Agreement;
(d) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the stock or assets of, or by
any other manner, any business or any corporation, partnership, joint venture,
association or other business organization or division thereof;
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(e) sell, lease, license, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of (i) any of its properties or assets,
other than any such properties or assets the value of which do not exceed
$50,000 individually and $250,000 in the aggregate, except the granting of
purchase money security interests in the ordinary course of business consistent
with past practice or (ii) any Minority Investments or other Equity Interests in
any other Person (other than as set forth in Section 4.01(b)(vi));
(f) (i) incur any Indebtedness for borrowed money or guarantee
any such Indebtedness of another Person, issue or sell any debt securities or
warrants or other rights to acquire any debt securities of the Company or any of
its Subsidiaries, guarantee any debt securities of another Person, enter into
any "keep well" or other agreement to maintain any financial statement condition
of another Person or enter into any arrangement having the economic effect of
any of the foregoing, except for short-term borrowings incurred in the ordinary
course of business consistent with past practice and other than pursuant to
equipment lease financing not to exceed $250,000, in the aggregate, or (ii) make
any loans, advances or capital contributions to, or Minority Investments or
other investments in, any other Person, other than to the Company;
(g) make or agree to make any capital expenditures, except
capital expenditures described in the capital expenditure budget attached as
Annex A to Section 4.01(g) of the Company Disclosure Schedule and such
additional capital expenditures as do not exceed $50,000 individually and
$250,000 in the aggregate; or acquire or agree to acquire any other assets,
other than inventory and supplies in the ordinary course of business consistent
with past practice;
(h) (i) waive, release, grant, or transfer any rights of
material value or modify or change in any material respect any existing material
license, lease, contract or other document, other than in the ordinary course of
business consistent with past practice, (ii) pay, discharge or satisfy any
claims (including claims of stockholders), liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the
payment, discharge or satisfaction of liabilities or obligations in the ordinary
course of business consistent with past practice or in accordance with their
terms as in effect on the date hereof or (iii) settle or compromise any
litigation or claim other than settlements or compromises of litigation or
claims that do not relate to this Agreement or the Transactions and do not
provide for injunctive or similar relief and where the amount paid (after giving
effect to insurance proceeds actually received) in settlement or compromise does
not exceed $50,000 individually or $250,000 in the aggregate;
(i) adopt a plan of complete or partial liquidation or
resolutions providing for or authorizing such a liquidation or a dissolution,
merger, consolidation, restructuring, recapitalization or reorganization;
(j) enter into or amend any collective bargaining agreement;
(k) enter into or amend in any material respect any Material
Contract of the type specified in clause (iii), (v), (vi), (vii) or (viii) of
Section 2.17(a) hereof, or any Contract, transaction, indebtedness or other
arrangement of the type described in Section 2.24 hereof; or enter into or amend
any Material Contract of the type specified in Section 2.17(a)(ii) hereof;
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(l) change any accounting principle used by it, except as
required by GAAP;
(m) transfer to any Person any rights to its Intellectual
Property other than the granting of end-user licenses and the right to grant
end-user sublicenses in the ordinary course of business consistent with past
practice to customers of the Company or its Subsidiaries to the extent such
licenses are necessary to permit such customers to use products purchased from
the Company or such Subsidiaries;
(n) enter into or amend any agreement pursuant to which any
other party is granted exclusive development, marketing or other exclusive
rights of any type or scope with respect to any of its research, products,
Intellectual Property or other technology; or
(o) authorize, or commit or agree to take, any of the
foregoing actions.
SECTION 4.02 Conduct of Business by Parent. During the period
from the date of this Agreement to the Effective Time, Parent shall not (a)
declare, set aside or pay any dividends on, or make any other distributions in
respect of, Parent Common Stock or (b) split, combine or reclassify the Parent
Common Stock or issue or authorize the issuance of any other Equity Interests in
lieu of or in substitution for shares of Parent Common Stock.
SECTION 4.03 Employment Arrangements. Except as set forth in
Section 4.03 of the Company Disclosure Schedule or as expressly provided in this
Agreement (but excluding for this purpose any provisions of the Company
Disclosure Schedule other than those contained in Section 4.01 or 4.03 thereof):
(a) Except as may be required by applicable law, neither the
Company nor any of its Subsidiaries shall (i) adopt or amend (except as may be
required by law) any bonus, profit sharing, compensation, stock option, pension,
retirement, deferred compensation, employment or other employee benefit plan,
agreement, trust, fund or other arrangement for the benefit or welfare of any
employee, director or former director or employee or (ii) increase the
compensation or fringe benefits of any director, employee or former director or
employee or pay any benefit not required by any existing plan, arrangement or
agreement, in the case of clause (ii) other than increases for individuals
(other than officers and directors) in the ordinary course of business
consistent with past practice.
(b) neither the Company nor any of its Subsidiaries shall hire
or terminate any employee or consultant, except in the ordinary course of
business consistent with past practice, and except to the extent required under
applicable law or under existing Company Plans.
(c) Except pursuant to the terms of this Agreement, neither
the Company nor any of its Subsidiaries shall grant any new or modified change
in control, incentive, severance or termination arrangement or increase or
accelerate any benefits payable under its change in control, incentive,
severance or termination pay policies in effect on the date hereof.
(d) Neither the Company nor any of its Subsidiaries shall
effectuate a "plant closing" or "mass layoff," as those terms are defined in
WARN, affecting in whole or in part any site of employment, facility, operating
unit or employee of the Company or any Subsidiary,
31
without notifying Merger Sub or its Affiliates in advance and without complying
with the notice requirements and other provisions of WARN.
(e) Recognizing that the retention of the employees of the
Company and its Subsidiaries is to the material benefit of Parent, in the event
that the human resources manager, the vice presidents of human resources,
medicinal chemistry or biology, the senior vice president of research and
pre-clinical development or any other officer of the Company more senior than
such senior vice president, receives any written or oral indication from any
employee at level 22 or above that such employee intends to terminate his or her
employment with the Company or any of its Subsidiaries within sixty (60) days,
the Company shall notify Parent within three (3) business days in order that
Parent may meet with such employee, provided that in the event any such
indication is in the form of a formal written notice of resignation, the Company
shall notify Parent by the next business day.
SECTION 4.04 Tax Elections. Neither the Company nor any of its
Subsidiaries shall make or change any Tax election, settle or compromise any
material federal, state, local or foreign Tax liability, change any annual Tax
accounting period, change any method of Tax accounting, file any amended
material Tax Return, enter into any closing agreement relating to any material
Tax, surrender any right to claim a material Tax refund, or consent to any
extension or waiver of the statute of limitations period applicable to any
material Tax claim or assessment.
SECTION 4.05 Tax-Free Reorganization Treatment. (a) Neither
Company nor Parent shall, nor shall they permit any of their respective
Subsidiaries to, take or cause to be taken any action that would disqualify the
Merger as a reorganization within the meaning of Section 368(a) of the Code.
(b) Each of the Company and Parent shall report the Merger as
a reorganization within the meaning of Section 368 of the Code, unless otherwise
required pursuant to a "determination" within the meaning of Section 1313(a) of
the Code.
SECTION 4.06 Other Actions. Neither the Company nor Parent
shall, or shall permit any of their respective Subsidiaries to, (a)
intentionally take any action that, if taken on or prior to the date of this
Agreement, would have resulted in any of its representations and warranties set
forth in this Agreement being untrue in any material respect, or (b)
intentionally take any action that would or reasonably might be expected to,
result in any of the conditions to the Merger set forth in Article VI not being
satisfied. The Company and Parent shall promptly advise the other party orally
and in writing of (i) any action of the type set forth in clause (a) above, (ii)
the failure by such party to comply with any covenant, condition or agreement
hereunder and (iii) any event which could reasonably be expected to cause the
conditions set forth in Article VI not being satisfied; provided, however, that
no such notice shall affect the representations, warranties, covenants and
agreements of the parties or the conditions to their obligations hereunder.
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ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01 Preparation of Form S-4 and Proxy Statement;
Stockholder Meeting. (a) Promptly following the date of this Agreement, the
Company shall prepare the proxy statement with respect to the vote by the
Company's stockholders with respect to the Transactions (the "Proxy Statement"),
and Parent shall prepare and file with the SEC the Form S-4, in which the Proxy
Statement will be included. Parent and the Company shall each use its reasonable
best efforts to have the Form S-4 declared effective under the Securities Act as
promptly as practicable after such filing. The Company will use its reasonable
best efforts to cause the Proxy Statement to be mailed to the Company's
stockholders as promptly as practicable after the Form S-4 is declared effective
under the Securities Act. Parent shall also take any action (other than
qualifying to do business in any state in which it is not now so qualified or
filing a general consent to service of process) required to be taken under any
applicable state securities laws in connection with the registration and
qualification of the Parent Common Stock to be issued in the Merger, and the
Company shall furnish all information relating to the Company and its
stockholders as may be reasonably requested in connection with any such action.
The information provided and to be provided by Parent, Merger Sub and the
Company, respectively, (i) for use in the Form S-4, at the time the Form S-4
becomes effective, shall be true and correct in all material respects and shall
not omit to state a material fact required to be stated therein or necessary to
make such information not misleading and (ii) for use in the Proxy Statement, on
the date the Proxy Statement is mailed to the Company's stockholders and on the
date of the Stockholders Meeting referred to below, shall be true and correct in
all material respects and shall not omit to state any material fact required to
be stated therein or necessary in order to make such information, in the light
of the circumstances under which the statements therein were made, not
misleading, and the Company and Parent each agree to correct any information
provided by it for use in the Form S-4 and the Proxy Statement which shall have
become false or misleading.
(b) All mailings to the Company's stockholders in connection
with the Merger, including the Proxy Statement, shall be subject to the prior
review, comment and approval of Parent (such approval not to be unreasonably
withheld or delayed).
(c) The Company will, as promptly as practicable following the
date of this Agreement and in consultation with Parent, duly call, give notice
of, convene and hold a meeting of its stockholders (the "Stockholders Meeting")
for the purpose of approving this Agreement and the Transactions to the extent
required by the DGCL. The Company will, through its board of directors,
recommend to its stockholders approval of the foregoing matters, as set forth in
Section 2.21; provided, however, that, subject to compliance with the provisions
of Section 5.06 hereof, the board of directors of the Company may fail to make
or withdraw or modify such recommendation to the extent permitted by Section
5.06. Any such recommendation, together with a copy of the opinion referred to
in Section 2.20, shall be included in the Proxy Statement. The Company will use
its best efforts to hold such meeting as soon as practicable after the Form S-4
shall have been declared effective.
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SECTION 5.02 Access to Information; Confidentiality. The
Company shall, and shall cause its Subsidiaries, officers, employees, counsel,
financial advisors and other representatives to, afford to Parent and its
representatives reasonable access during normal business hours, during the
period prior to the Effective Time to its properties, books, contracts,
commitments, personnel and records, and, during such period, the Company shall,
and shall cause its Subsidiaries, officers, employees and representatives to,
furnish or make available promptly to Parent (i) a copy of each report,
schedule, registration statement and other document filed by it during such
period pursuant to the requirements of federal or state securities laws and (ii)
all other information concerning its business, properties, financial condition,
operations and personnel as Parent may from time to time reasonably request.
Each of the Company and Parent will hold, and will cause their respective
directors, officers, employees, accountants, counsel, financial advisors and
other representatives and Affiliates to hold, any nonpublic information with
respect to the other party in confidence to the extent required by, and in
accordance with, the provisions of the confidentiality agreement, dated April 2,
2001, between Parent and the Company (the "Confidentiality Agreement"). No
investigation pursuant to this Section 5.02 shall affect any representations or
warranties of the parties herein or the conditions to the obligations of the
parties hereto.
SECTION 5.03 Reasonable Best Efforts. Upon the terms and
subject to the conditions set forth in this Agreement, each of the parties
hereto agrees to use its reasonable best efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, and to assist and cooperate with
the other parties hereto in doing, all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective, in the
most expeditious manner practicable, the Merger and the other Transactions,
including (i) obtaining all consents, approvals, waivers, licenses, permits or
authorizations as are required to be obtained (or, which if not obtained, would
result in an event of default, termination or acceleration of any agreement or
any put right under any agreement) under any applicable law or regulation or
from any Governmental Entities or third parties in connection with the
Transactions and (ii) defending any lawsuits or other proceedings challenging
this Agreement. Notwithstanding anything to the contrary contained herein, no
party hereto nor any of their Affiliates shall be required to make any
disposition of or enter into any agreement to hold separate, any Subsidiary,
asset or business, or take any other action that Parent determines could
significantly reduce the value of the Company or the benefits that Parent
expects to derive from the Merger, and the Company and its Subsidiaries shall
not agree to take any such action without the prior written consent of Parent.
SECTION 5.04 Indemnification. (a) To the fullest extent
permitted under applicable law Parent shall, and shall cause the Surviving
Company to indemnify and hold harmless, each present and former director or
officer of the Company or any of its Subsidiaries and their respective estates,
heirs, personal representatives successors and assigns (each, an "Indemnified
Party," and collectively, the "Indemnified Parties ") against any costs or
expenses (including reasonable fees and expenses of counsel) as incurred,
judgments, fines, losses, claims, damages, liabilities and amounts paid in
settlement in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative
(collectively, an "Action") (x) arising out of or pertaining to the
Transactions, or (y) in whole or in part on or arising in whole or in part out
of the fact that such Person is or was a director, officer or employee of the
Company, with respect to any acts or omissions occurring at or prior to the
Effective Time, to the same extent as provided in the Certificate of
Incorporation or By-laws as
34
in effect on the date hereof, or the Company's indemnification contracts with
the Indemnified Parties (to the extent such contracts have been disclosed to
Parent and are identified in Section 5.04 of the Company Disclosure Schedule),
to the extent permitted by applicable Law in each case for a period of six years
after the date hereof. In the event of any such Action, (whether arising before
or after the Effective Time) and subject to the specific terms of any
indemnification contract, (i) any counsel retained by the Indemnified Parties
for any period after the Effective Time shall be reasonably satisfactory to the
Surviving Company (it being understood that Xxxxxx & Xxxxxxx is acceptable to
Parent and the Surviving Corporation), (ii) after the Effective Time, the
Surviving Company shall pay the reasonable fees and expenses of such counsel,
promptly after statements therefor are received, and (iii) the Surviving Company
will cooperate in the defense of any such Action; provided, however, that in the
event any claim or claims for indemnification are made within such six year
period, all rights to indemnification in respect of any such claim or claims
shall continue until the disposition of any and all such claims; provided,
further, that: (A) promptly after receipt by an Indemnified Party of notice of
any such Action, the Indemnified Party shall, if a claim in respect thereof is
to be made against the Surviving Company notify the Surviving Company in writing
of this claim or the commencement of that Action and shall deliver to Parent and
the Surviving Corporation the undertaking, if any, required by Section 145(e) of
the DGCL; (B) the Surviving Company shall be entitled to participate in the
defense of any such Action, and, to the extent it wishes, assume the defense
thereof with counsel reasonably satisfactory to the Indemnified Party or
Indemnified Parties, as the case may be; (C) the Surviving Company shall not, in
connection with any one such Action or separate but substantially similar or
related Actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys at any time for all such Indemnified
Parties as a group unless there is, under applicable standards of professional
conduct, a conflict between the positions of any two or more Indemnified Parties
that would preclude or render inadvisable joint or multiple representation of
such parties; (D) no Indemnified Party may settle any such Action, without the
prior written consent of the Surviving Company; and (E) the Surviving Company
shall not settle any such Action, unless the Indemnified Party that is subject
of such action is fully released as a result thereof.
(b) Parent shall cause to be maintained in effect for six
years from the Effective Time directors' and officers' liability insurance
coverage covering Persons who are directors and officers of the Company on the
date of this Agreement, with respect to matters occurring prior to the Effective
Time, and containing terms and conditions which are not less advantageous to
such Persons than the policies of the Company in effect on the date hereof (the
"Company Insurance"); provided that Parent shall not be required to spend
annually in excess of 200% of the annual premium for the Company Insurance paid
by the Company as of the date of this Agreement.
(c) Nothing in this Agreement is intended to, shall be
construed to or shall release, waive or impair any rights to directors' and
officers' insurance claims under any policy that is or has been in existence
with respect to the Company or any of its officers, directors or employees, it
being understood and agreed that the indemnification provided for in this
Section 5.04 is not prior to or in substitution for any such claims under such
policies.
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SECTION 5.05 Public Announcements. Neither Parent and Merger
Sub, on the one hand, nor the Company, on the other hand, will issue any press
release or public statement with respect to the Transactions without the other
party's prior consent (such consent not to be unreasonably withheld or delayed),
except as may be required by applicable law, court process or by obligations
pursuant to any agreement with any securities exchange or quotation system on
which securities of the disclosing party are listed or quoted. In addition to
the foregoing, Parent, Merger Sub and the Company will consult with each other
before issuing, and provide each other the opportunity to review and comment
upon, any such press release or other public statements with respect to such
transactions. The parties agree that the initial press release or releases to be
issued with respect to the Transactions shall be mutually agreed upon prior to
the issuance thereof. The provisions of this Section 5.05 shall not affect the
obligations of the parties under Section 5.02 hereof or under the
Confidentiality Agreement.
SECTION 5.06 No Solicitation. 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, (a) solicit, initiate or take any
action knowingly to facilitate the submission of inquiries, proposals or offers
from any Person (other than Merger Sub or Parent) relating to (i) any
acquisition or purchase of 15% or more of the consolidated assets of the Company
and its Subsidiaries or of over 15% of any class of equity securities of the
Company or any of its Subsidiaries, (ii) any tender offer (including a self
tender offer) or exchange offer that if consummated would result in any Person
beneficially owning 15% or more of any class of equity securities of the Company
or any of its Subsidiaries, or (iii) 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 15% of the consolidated assets of the Company other than the Transactions
(collectively, "Transaction Proposals"), or agree to or endorse any Transaction
Proposal, or (b) enter into or participate in any discussions or negotiations
regarding any actual or potential Transaction Proposal (other than with Merger
Sub or Parent), or furnish to any other Person (other than Merger Sub or
Parent), any non-public information with respect to its business, properties or
assets in connection with any actual or potential Transaction Proposal, or
otherwise knowingly assist or participate in, cooperate with, facilitate or
encourage, any effort or attempt by any other Person (other than Merger Sub or
Parent) to do or seek any of the foregoing; provided, however, that neither the
foregoing nor any provision of this Agreement shall prohibit the Company (either
directly or indirectly through advisors, agents or other intermediaries), from
taking any of the following actions in the event a Third Party has made a bona
fide Transaction Proposal that the Company's board of directors determines in
good faith could result in a Superior Proposal, subject in each case to
compliance with the other provisions of this Section 5.06: (A) furnishing
information pursuant to an appropriate confidentiality letter (which letter
shall not be less favorable to the Company in any material respect than the
Confidentiality Agreement) concerning the Company and its businesses, properties
or assets to such Third Party, (B) engaging in discussions or negotiations with
such Third Party, (C) taking and disclosing to its stockholders a position as
required by Rule 14d-9 or Rule 14e-2(a) under the Exchange Act, or (D) failing
to make or withdrawing or modifying its recommendation referred to in Sections
2.21 and 5.01(c), but in each case referred to in clauses (A) through (D) only
to the extent that the board of directors of the Company shall have concluded in
good faith in consultation with
36
outside counsel that the failure to take such action would violate the fiduciary
duties of the board of directors of the Company to the stockholders of the
Company under applicable law; provided, further, that the board of directors of
the Company shall not take any of the foregoing actions referred to in clauses
(A) through (D) until after reasonable notice to Parent with respect to such
action. If the board of directors of the Company receives a Transaction
Proposal, then the Company shall promptly inform Parent of all of the material
terms and conditions of such proposal and the identity of the Person making it
and shall keep Parent informed on a prompt and current basis of the status,
terms and content of any discussions regarding such Transaction Proposal,
including any changes to the terms of such Transaction Proposal. 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 actual or potential Transaction
Proposal, 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. As used herein, a "Superior Proposal" means any of the transactions
described in clause (i), (ii) or (iii) of the definition of Transaction Proposal
(with all of the percentages included in the definition of such term raised to
50% for purposes of this definition) with respect to which the board of
directors of the Company shall have concluded in good faith, after consultation
with its outside legal counsel and its financial advisor(s), is reasonably
capable of being completed (including the presence of financing commitments, if
applicable) and represents a financially superior transaction for the holders of
Company Common Stock to the Merger. Notwithstanding anything to the contrary
contained in this Section 5.06 or elsewhere in this Agreement, prior to the
Effective Time, the Company may, in connection with a possible Acquisition
Proposal, refer any third party to this Section 5.06, Section 7.01 and Section
8.02 and make a copy of such sections available to a Third Party.
SECTION 5.07 Benefit Matters. (a) During the period from the
Effective Time until July 1, 2002, employees of the Company shall participate in
employee benefit plans (as defined in Section 3(3) of ERISA), but including any
vacation or paid time off benefits and excluding any stock compensation plans,
programs and arrangements (collectively, "Included Benefits") maintained by
Parent or the Surviving Corporation providing benefits no less favorable, in the
aggregate, than those benefits provided under the Included Benefits of the
Company in effect on the date hereof. Notwithstanding the foregoing, the
standard for maintenance of benefits shall apply to the Company's Holiday Bonus
Plan only until December 31, 2001.
(b) Parent will cause the Surviving Corporation to (i) waive
all limitations as to preexisting conditions, exclusions and waiting periods
with respect to participation and coverage requirements applicable to the
employees of the Company under any Parent welfare plan that such employees may
be eligible to participate in after the Effective Time and (ii) provide each
employee of the Company with credit for any co-payments and deductibles paid
prior to the Effective Time in satisfying any applicable deductible or
out-of-pocket requirements under any Parent welfare plans that such employees
are eligible to participate in after the Effective Time.
37
(c) On and after the Effective Time, Parent shall cause the
Surviving Company and any employee benefit plans maintained by Parent or the
Surviving Company in which employees of the Company and Subsidiaries participate
to recognize the service with the Company and Subsidiaries of each such employee
for purposes of determining entitlement to vacation and vacation pay and for
purposes of vesting and eligibility under any employee benefit plan, but not for
purposes of benefit accrual under any "employee pension benefit plan" as defined
in Section 3(2) of ERISA. Such service shall be determined in accordance with
the practices and procedures of the Company and the Company Plans in effect
immediately prior to the Effective Time, as if such service had been rendered to
Parent.
SECTION 5.08 Stock Exchange Listing. Parent shall use all
reasonable efforts to cause the shares of Parent Common Stock to be issued in
the Merger and the shares of Parent Common Stock to be reserved for issuance
upon exercise of Company Stock Options, Company Warrants and the Convertible
Notes to be approved for listing on the NYSE.
SECTION 5.09 Letters of the Company's Accountants. The Company
shall use its reasonable best efforts to cause to be delivered to Parent a
comfort letter of Ernst & Young LLP, the Company's independent public
accountants, dated a date within two business days before the Form S-4 shall
become effective and a comfort letter of Ernst & Young LLP dated a date within
two business days before the Closing Date, each addressed to Parent, in form and
substance reasonably satisfactory to Parent and customary in scope and substance
for letters delivered by independent public accountants in connection with
registration statements similar to the Form S-4.
SECTION 5.10 Rights Agreement. The board of directors of the
Company shall take all action (in addition to that referred to in Section 2.23
hereof) necessary or desirable (including amending the Rights Agreement) in
order to render the Rights inapplicable to the Merger and the other
Transactions. Except in connection with the foregoing sentence, the board of
directors of the Company shall not, without the prior written consent of Parent,
(a) amend the Rights Agreement or (b) take any action with respect to, or make
any determination under, the Rights Agreement, in each case in order to
facilitate any Transaction Proposal.
SECTION 5.11 Convertible Notes. Prior to the Effective Time,
the board of directors of the Company shall take all action necessary to
determine that the provisions referred to in Sections 1.11(a)(i) and 1.11(a)(ii)
hereof shall constitute all such provisions as are necessary to protect the
interest of the holders of the Convertible Notes pursuant to the terms thereof,
including without limitation pursuant to Section 8.04(a) of the Convertible
Notes Indenture.
SECTION 5.12 Non-solicitation of Employees. Each of Parent and
the Company agrees that for a period of one (1) year following a termination of
this Agreement, such party shall not, and shall cause its Subsidiaries not to,
raid the employees employed by the other party or its Subsidiaries, in violation
of California legal principles. For the avoidance of doubt, the foregoing
provision will not prevent a party from hiring any employee (a) as a result of a
general public solicitation or a solicitation conducted through a third-party
recruiter or similar agent to whom the soliciting party has not identified such
employee, (b) who contacts
38
such soliciting party on his or her own initiative without any solicitation from
the soliciting party, or (c) who has not been employed by the other party during
the preceding six (6) months.
SECTION 5.13 Stock Options. In the event the Parent or any of
its Subsidiaries terminates the employment of any employee of the Company
without cause within ninety (90) days after the Effective Time, Parent will
cause all vested Parent Stock Options issued pursuant to Section 1.10 hereof
held by such terminated employee to be amended to provide that the exercise
period for such vested Parent Stock Options shall be extended so as to permit
their exercise by such terminated employee for a period of twelve (12) months
after the date of his or her termination of employment; provided, however, that
any such amendment to a Parent Stock Option intended to qualify as an "incentive
stock option" within the meaning of Section 421 of the Code shall be subject to
the consent of such terminated employee. For the avoidance of doubt, this
Section 5.13 does not provide for any changes to the vesting provisions
contained in any Parent Stock Option.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.01 Conditions to Each Party's Obligation To Effect
the Merger. The respective obligation of each party to effect the Merger is
subject to the satisfaction or waiver on or prior to the Closing Date of the
following conditions:
(a) Company Stockholder Approval. The Company Stockholder
Approval shall have been obtained.
(b) Antitrust. All waiting periods applicable to the
consummation of the Merger under the HSR Act shall have expired or been
terminated, and all clearances and approvals required to be obtained in respect
of the Merger prior to the Effective Time under any other similar applicable Law
shall have been obtained;
(c) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect; provided, however, that the
parties hereto shall use their best efforts to have any such injunction, order,
restraint or prohibition vacated.
(d) Form S-4. The Form S-4 shall have become effective under
the Securities Act and shall not be the subject of any stop order or proceedings
seeking a stop order, and any material "blue sky" and other state securities
laws applicable to the registration and qualification of the Parent Common Stock
issuable or required to be reserved for issuance pursuant to this Agreement
shall have been complied with.
(e) NYSE Listing. The shares of Parent Common Stock to be
issued in the Merger and reserved for issuance upon exercise of Company Stock
Options, Company Warrants and the Convertible Notes shall have been approved for
listing on the NYSE.
39
(f) Tax Opinion. Parent shall have received from Xxxxxxx
Xxxxxxx & Xxxxxxxx, counsel to Parent, and the Company shall have received from
Xxxxxx & Xxxxxxx, counsel to the Company, on the Closing Date opinions that the
Merger will qualify for United States federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code. The issuance of
such opinions shall be conditioned upon the receipt by such tax counsel of
customary representation letters from each of the Company, Parent and Sub dated
as of the Closing Date and as of the date that the Form S-4 filed with the SEC
becomes effective, substantially in the forms attached hereto as Exhibits
6.01(f)-A and 6.01(f)-B.
SECTION 6.02 Conditions to Obligations of Parent and Merger
Sub. The obligations of Parent and Merger Sub to effect the Merger are further
subject to the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company contained in this Agreement (i) that are qualified as
to Company Material Adverse Effect shall be true and correct and (ii) that are
not so qualified shall be true and correct in all material respects, as of the
date of this Agreement and as of the Effective Time, with the same force and
effect as if made on and as of the Effective Time, except for those
representations and warranties which address matters only as of a particular
date (which shall have been so true and correct as of such date). Parent shall
have received a certificate signed on behalf of the Company by the chief
financial officer of the Company to the effect set forth in this Section
6.02(a).
(b) Performance of Obligations of the Company. The Company
shall have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date. Parent
shall have received a certificate signed on behalf of the Company by the chief
executive officer, the president and the chief financial officer of the Company
to the effect set forth in this Section 6.02(b).
(c) Consents, etc. Parent and Merger Sub shall have received
evidence, in form and substance reasonably satisfactory to it, that such
licenses, permits, consents, approvals, authorizations, qualifications and
orders of (i) any Governmental Entities and (ii) any other Governmental Entities
or third parties as are necessary in connection with the Transactions have been
obtained, except in the case of clause (ii) where the failure to obtain such
licenses, permits, consents, approvals, authorizations, qualifications and
orders could not, individually or in the aggregate with all other failures,
reasonably be expected to have a Company Material Adverse Effect.
(d) No Litigation. There shall not be pending or threatened by
any Governmental Entity any suit, action or proceeding (i) challenging or
seeking to restrain or prohibit the consummation of the Transactions or seeking
to obtain from the Company, Parent, Merger Sub or any of their Affiliates any
damages that would reasonably be expected to have a Company Material Adverse
Effect, (ii) seeking to prohibit or limit the ownership or operation by the
Company, Parent or any of their respective Subsidiaries of any material portion
of the business or assets of the Company and its Subsidiaries taken as a whole
or to dispose of or hold separate any material portion of the business or assets
of the Company and its Subsidiaries taken as a whole, as a result of the
Transactions, (iii) seeking to impose limitations on the ability of Parent to
acquire or hold, or exercise full rights of ownership of, any shares of the
common stock
40
of the Surviving Corporation, including, without limitation, the right to vote
such common stock on all matters properly presented to the stockholders of the
Surviving Corporation or (iv) seeking to prohibit Parent or any of its
Subsidiaries from effectively controlling in any material respect the business
or operations of the Company and its Subsidiaries taken as a whole.
(e) Rights Agreement. None of the events described in Section
3 of the Rights Agreement shall have occurred, and the Rights shall not have
become nonredeemable and shall not become nonredeemable upon consummation of the
Merger.
Section 6.03 Conditions to Obligation of the Company. The
obligation of the Company to effect the Merger is further subject to the
following conditions:
(a) Representations and Warranties. The representations and
warranties of the Parent and Merger Sub contained in this Agreement (i) that are
qualified as to Parent Material Adverse Effect shall be true and correct and
(ii) that are not so qualified shall be true and correct in all material
respects, as of the date of this Agreement and as of the Effective Time, with
the same force and effect as if made on and as of the Effective Time, except for
those representations and warranties which address matters only as of a
particular date (which shall have been true and correct as of such date). The
Company shall have received a certificate signed on behalf of Parent and Merger
Sub by an authorized officer of Parent and Merger Sub to the effect set forth in
this Section 6.03(a).
(b) Performance of Obligations of Parent and Merger Sub.
Parent and Merger Sub shall have performed in all material respects all
obligations required to be performed by each of them under this Agreement at or
prior to the Closing Date. The Company shall have received a certificate signed
on behalf of Parent and Merger Sub by an authorized officer of Parent and Merger
Sub to the effect set forth in this Section 6.03(b).
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.01 Termination. This Agreement may be terminated and
abandoned at any time prior to the Effective Time, whether before or after the
Company Stockholder Approval:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company if any Governmental Entity
shall have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the Merger and such
order, decree, ruling or other action shall have become final and nonappealable;
(c) by either Parent or the Company if the Merger shall not
have been consummated on or before December 31, 2001 (other than due to the
failure of the party seeking to terminate this Agreement to perform its
obligations under this Agreement required to be performed at or prior to the
Effective Time);
41
(d) by either Parent or the Company if at the duly held
meeting of the stockholders of the Company (including any adjournment thereof)
held for the purpose of voting on the Merger, this Agreement and the
consummation of the Transactions, the holders of a majority of the outstanding
shares of Company Common Stock shall not have approved the Merger, this
Agreement and the consummation of the Transactions;
(e) by Parent, if the Company or its board of directors shall
have (i) withdrawn, modified or amended in any respect adverse to Parent its
approval or recommendation of this Agreement or any of the Transactions, (ii)
failed as promptly as practicable after the Form S-4 is declared effective to
mail the Proxy Statement to its stockholders or failed to include in such
statement such recommendation, (iii) approved or recommended any Transaction
Proposal from a Third Party, (iv) resolved to do any of the foregoing or (v) in
response to the commencement of any tender offer or exchange offer for more than
15% of the outstanding shares of Company Common Stock, not recommended rejection
of such tender offer or exchange offer;
(f) by the Company, if, pursuant to and in compliance with
Section 5.06 hereof, the board of directors of the Company concludes in good
faith, in consultation with outside counsel, that in order to avoid violating
the fiduciary duties of the board of directors of the Company to the
stockholders of the Company under the DGCL, the board of directors must not make
or must withdraw or modify its recommendation referred to in Section 2.21 and
the board of directors does not make or withdraws or modifies such
recommendation, provided that the Company shall give Parent three (3) business
days irrevocable written notice prior to such termination taking effect; or
(g) (i) by the Company, if Parent breaches any of its
representations, warranties, covenants or agreements contained in this Agreement
the result of which breach is that the conditions in Section 6.03 would not be
satisfied and, with respect to any such breach that is reasonably capable of
being remedied, the breach is not remedied within 30 days after the Company has
furnished Parent with written notice of such breach or (ii) by Parent, if the
Company breaches any of its representations, warranties, covenants or agreements
contained in this Agreement the result of which breach is that the conditions in
Section 6.02 would not be satisfied and, with respect to any such breach that is
reasonably capable of being remedied, the breach is not remedied within 30 days
after Parent has furnished the Company with written notice of such breach.
SECTION 7.02 Effect of Termination. In the event of
termination of this Agreement by either the Company or Parent as provided in
Section 7.01, this Agreement shall forthwith become void and have no effect,
without any liability or obligation on the part of Parent, Merger Sub or the
Company, other than the provisions of Sections 2.19, 3.10, the penultimate
sentence of 5.02, 5.12, 8.02 and 8.07 hereof, and this Section 7.02. Nothing
contained in this Section shall relieve any party for any breach of the
representations, warranties, covenants or agreements set forth in this
Agreement.
SECTION 7.03 Amendment. This Agreement may be amended by the
parties at any time before or after any required approval of matters presented
in connection with the Merger by the stockholders of the Company; provided,
however, that after any such approval,
42
there shall be made no amendment that by law requires further approval by such
stockholders without the further approval of such stockholders. This Agreement
may not be amended except by an instrument in writing signed on behalf of each
of the parties.
SECTION 7.04 Extension; Waiver. At any time prior to the
Effective Time, the parties may (a) extend the time for the performance of any
of the obligations or other acts of the other parties, (b) waive any
inaccuracies in the representations and warranties contained in this Agreement
or in any document delivered pursuant to this Agreement or (c) subject to the
proviso contained in Section 7.03 hereof, waive compliance with any of the
agreements or conditions contained in this Agreement. Any agreement on the part
of a party to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such party. The failure of any
party to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of such rights.
SECTION 7.05 Procedure for Termination, Amendment, Extension
or Waiver. A termination of this Agreement pursuant to Section 7.01, an
amendment of this Agreement pursuant to Section 7.03 or an extension or waiver
pursuant to Section 7.04 shall, in order to be effective, require in the case of
Parent, Merger Sub or the Company, action by its board of directors or the duly
authorized designee of its board of directors.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.01 Nonsurvival of Representations and Warranties.
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective Time
and all such representations and warranties will be extinguished on consummation
of the Merger and neither the Company, the Parent, Merger Sub, nor any officer,
director or employee or shareholder of any of them shall be under any liability
whatsoever with respect to any such representation or warranty after such time.
This Section 8.01 shall not limit any covenant or agreement of the parties that
by its terms contemplates performance after the Effective Time.
SECTION 8.02 Fees and Expenses. (a) (i) If this Agreement
shall have been terminated by either party pursuant to Section 7.01(d) or by
Parent pursuant to Section 7.01(g)(ii) as a result of a willful breach by the
Company of this Agreement following the occurrence of any event specified in
clause (x) below) and the following shall have occurred:
(x) prior to such termination, any Person (or group of
Persons) other than Parent and its Affiliates (a "Third Party") shall
have made, or proposed, communicated or disclosed in a manner which is
or otherwise becomes public a bona fide intention to make a Transaction
Proposal (including by making or effecting such a Transaction Proposal)
and
(y) on or prior to twelve (12) months after the date of such
termination, a Third Party consummates a transaction the proposal of
which would otherwise qualify as a Transaction Proposal under Section
5.06 or the Company enters into a definitive
43
agreement with a Third Party setting forth the terms of a transaction
the proposal of which would otherwise qualify as a Transaction Proposal
under Section 5.06 hereof (whether or not such Person is the Person
referred to in clause (x) above); or
(ii) if this Agreement is terminated pursuant to Section
7.01(e) or Section 7.01(f);
then the Company shall, (1) in the case of clause (a)(ii) above, promptly, but
in no event later than one (A) business day after the termination of this
Agreement pursuant to Section 7.01(e) or (B) the date of termination in the case
of a termination under Section 7.01(f) and (2) in the case of clause (a)(i)
above, promptly, but in no event later than one business day after an event
specified in subclause (y) thereof shall have occurred, pay Parent a fee in cash
of $5,600,000 plus out-of-pocket fees and expenses incurred by Parent not
exceeding $900,000, which amount shall be payable in same day funds. No
termination of this Agreement shall be effective until such fee is paid. For
purposes of clauses (a)(i)(y) above, the term "Takeover Proposal" shall have the
same meaning assigned to such term in Section 5.06 except that all references
therein to "15%" shall be deemed to be references to "35%."
(b) Except as provided otherwise in Section 7.02(a) above, all
costs and expenses incurred in connection with this Agreement and the
Transactions shall be paid by the party incurring such expenses, except that the
cost of filing, printing and distributing the Proxy Statement and the Form S-4
shall be borne seventy-five percent (75%) by Parent and twenty-five percent
(25%) the Company.
SECTION 8.03 Notices. All notices, requests, claims, demands
and other communications under this Agreement shall be in writing and shall be
deemed given if delivered personally or sent by overnight courier (providing
proof of delivery) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Parent or Merger Sub, to
Applera Corporation
000 Xxxxxx 0
Xxxxxxx, XX 00000-0000
Attention: General Counsel
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx, Esq.
44
(b) if to the Company, to
Axys Pharmaceuticals, Inc.
000 Xxxxxxx Xxx
Xxxxx Xxx Xxxxxxxxx, XX 00000
Attention: General Counsel
with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Attention: Xxx X. Xxxxxx, Esq.
SECTION 8.04 Interpretation. When a reference is made in this
Agreement to a Section, Exhibit or Schedule, such reference shall be to a
Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation".
SECTION 8.05 Counterparts. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.
SECTION 8.06 Entire Agreement; No Third-Party Beneficiaries.
This Agreement and the Confidentiality Agreement and the other agreements
referred to herein constitute the entire agreement, and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter of this Agreement. This Agreement, other than
Article I and Section 5.04, is not intended to confer upon any Person other than
the parties any rights or remedies.
SECTION 8.07 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE,
REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES
OF CONFLICTS OF LAWS.
SECTION 8.08 Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by any of the parties without
the prior written consent of the other parties. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and assigns.
SECTION 8.09 Enforcement.The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement.
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have
caused this Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
APPLERA CORPORATION
By: /s/ Xxxxx Xxxxxxx
---------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
ANGEL ACQUISITION SUB, INC.
By: /s/ Xxxxx Xxxxxxx
---------------------------
Name: Xxxxx Xxxxxxx
Title: President and Chief
Executive Officer
AXYS PHARMACEUTICALS, INC.
By: /s/ Xxxx X. Xxxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxxx
Title: President and Chief
Executive Officer
