EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
KERYX BIOPHARMACEUTICALS, INC.,
AXO ACQUISITION CORP.,
AND
ACCESS ONCOLOGY, INC.
DATED AS OF JANUARY 7, 2004
TABLE OF CONTENTS
PAGE
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ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER.................................... 1
1.1 Merger.............................................................. 1
1.2 Time and Place of Closing........................................... 2
1.3 Effective Time...................................................... 2
ARTICLE 2 - TERMS OF MERGER..................................................... 2
2.1 Charter............................................................. 2
2.2 Bylaws.............................................................. 2
2.3 Directors and Officers.............................................. 2
ARTICLE 3 - MANNER OF CONVERTING SHARES......................................... 3
3.1 Conversion of Shares and Payment of Merger Consideration............ 3
3.2 Conversion of ACCESS Warrants....................................... 6
3.3 Anti-Dilution Provisions............................................ 7
3.4 Shares Held by ACCESS or Keryx...................................... 7
3.5 Dissenting Stockholders............................................. 7
3.6 Treatment of Stock Options.......................................... 8
3.7 Fractional Shares................................................... 8
ARTICLE 4 - EXCHANGE OF SHARES.................................................. 8
4.1 Exchange Procedures................................................. 8
4.2 Rights of Former ACCESS Stockholders................................ 10
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF ACCESS............................ 11
5.1 Organization, Standing, and Power................................... 11
5.2 Authority of ACCESS; No Breach By Agreement......................... 11
5.3 Capital Stock....................................................... 12
5.4 ACCESS Subsidiaries................................................. 13
5.5 Financial Statements................................................ 13
5.6 Absence of Undisclosed Liabilities.................................. 14
5.7 Absence of Certain Changes or Events................................ 14
5.8 Tax Matters......................................................... 14
5.9 Assets.............................................................. 16
5.10 Intellectual Property............................................... 16
5.11 Environmental Matters............................................... 17
5.12 Compliance with Laws................................................ 17
5.13 Labor Relations..................................................... 18
5.14 Employee Benefit Plans.............................................. 19
5.15 Material Contracts.................................................. 22
5.16 Privacy of Patient Information...................................... 23
5.17 Legal Proceedings................................................... 23
5.18 Statements True and Correct......................................... 23
5.19 State Takeover Laws................................................. 24
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5.20 Board Recommendation................................................ 24
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF KERYX............................. 24
6.1 Organization, Standing, and Power................................... 24
6.2 Authority; No Breach By Agreement................................... 24
6.3 Capital Stock....................................................... 25
6.4 SEC Filings; Financial Statements................................... 25
6.5 Absence of Undisclosed Liabilities.................................. 26
6.6 Absence of Certain Changes or Events................................ 26
6.7 Compliance with Laws................................................ 26
6.8 Legal Proceedings................................................... 27
6.9 Statements True and Correct......................................... 27
6.10 Authority of Mergersub.............................................. 27
6.11 Board Recommendation................................................ 28
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION............................ 28
7.1 Affirmative Covenants of ACCESS..................................... 28
7.2 Negative Covenants of ACCESS........................................ 28
7.3 Covenants of Keryx.................................................. 30
7.4 Adverse Changes in Condition........................................ 31
7.5 Reports............................................................. 31
ARTICLE 8 - ADDITIONAL AGREEMENTS............................................... 31
8.1 ACCESS Stockholder Approval......................................... 31
8.2 Keryx Stockholder Approval.......................................... 32
8.3 Other Offers, Etc................................................... 33
8.4 Registration Rights................................................. 34
8.5 Consents of Regulatory Authorities.................................. 37
8.6 Filings with State Offices.......................................... 37
8.7 Agreement as to Efforts to Consummate............................... 38
8.8 Investigation and Confidentiality................................... 38
8.9 Press Releases...................................................... 39
8.10 State Takeover Laws................................................. 39
8.11 Indemnification..................................................... 39
8.12 Development of ACCESS Products...................................... 40
8.13 Termination of ACCESS Options....................................... 40
8.14 Assumption of Certain Obligations................................... 40
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE................... 40
9.1 Conditions to Obligations of Each Party............................. 40
9.2 Conditions to Obligations of Keryx.................................. 41
9.3 Conditions to Obligations of ACCESS................................. 42
ARTICLE 10 - TERMINATION........................................................ 43
10.1 Termination......................................................... 43
10.2 Effect of Termination............................................... 44
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ARTICLE 11 - MISCELLANEOUS...................................................... 44
11.1 Definitions......................................................... 44
11.2 Expenses............................................................ 56
11.3 Brokers and Finders................................................. 56
11.4 Entire Agreement.................................................... 57
11.5 Amendments.......................................................... 57
11.6 Waivers............................................................. 57
11.7 Assignment.......................................................... 58
11.8 Notices............................................................. 58
11.9 Governing Law....................................................... 59
11.10 Counterparts........................................................ 59
11.11 Captions; Articles and Sections..................................... 59
11.12 Interpretations..................................................... 59
11.13 Enforcement of Agreement............................................ 59
11.14 Severability........................................................ 59
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of January 7, 2004, by and among KERYX BIOPHARMACEUTICALS, INC.
("Keryx"), a Delaware corporation; AXO ACQUISITION CORP. ("Mergersub"), a
Delaware corporation; and ACCESS ONCOLOGY, INC. ("ACCESS"), a Delaware
corporation.
PREAMBLE
The respective Boards of Directors of ACCESS, Mergersub and Keryx (in
the case of Keryx, acting on the recommendation of a special committee appointed
by the Board of Directors of Keryx (the "Keryx Special Committee")) are of the
opinion that the transactions described herein are in the best interests of the
Parties to this Agreement and their respective stockholders. This Agreement
provides for the acquisition of ACCESS by Keryx pursuant to the merger of
Mergersub with and into ACCESS. At the effective time of such Merger, the
outstanding shares of the capital stock of ACCESS and outstanding warrants to
purchase capital stock of ACCESS shall be converted into the right to receive
shares of the common stock of Keryx, or cash in lieu thereof, upon the
satisfaction of certain milestones following the closing of the transaction. As
a result, stockholders of ACCESS shall have the potential to become stockholders
of Keryx and ACCESS shall continue to conduct its business and operations as a
wholly-owned subsidiary of Keryx. The transactions described in this Agreement
are subject to (a) the approval of the holders of ACCESS Stock representing a
majority of the voting power of all of the outstanding ACCESS Stock, voting
together as a single class (the "ACCESS Stockholder Approval"), and (b) the
satisfaction of certain other conditions described in this Agreement.
This Agreement, originally executed by the parties on January 8, 2004,
and revised and restated on January 13, 2004, constitutes the final agreement
between the parties.
Certain capitalized terms used in this Agreement are defined in Section
11.1 of this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
Parties agree as follows:
ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER
1.1 MERGER.
Subject to the terms and conditions of this Agreement, at the Effective
Time, Mergersub shall be merged with and into ACCESS in accordance with the
provisions of Section 251 of the Delaware General Corporation Law ("DGCL") and
with the effect provided in Section 259 of the DGCL (the "Merger"). ACCESS shall
be the Surviving Corporation resulting from the Merger and shall become a
wholly-owned Subsidiary of Keryx and shall continue to be governed by the Laws
of the State of Delaware. The Merger shall be consummated pursuant to the terms
of this Agreement, which has been approved and adopted by the respective Boards
of Directors of ACCESS, Mergersub and Keryx and by Keryx, as the sole
stockholder of Mergersub.
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1.2 TIME AND PLACE OF CLOSING.
The closing of the Merger (the "Closing") will take place at 5:00 P.M.
on the date that the Effective Time occurs (or the immediately preceding day if
the Effective Time is earlier than 9:00 A.M.), or at such other time as the
Parties, acting through their authorized officers, may mutually agree. The
Closing shall be held at such location as may be mutually agreed upon by the
Parties.
1.3 EFFECTIVE TIME.
The Merger and other transactions contemplated by this Agreement shall
become effective on the date and at the time the Certificate of Merger
("Certificate of Merger") reflecting the Merger shall become effective with the
Secretary of State of the State of Delaware (the "Effective Time"). Subject to
the terms and conditions hereof, unless otherwise mutually agreed upon in
writing by the authorized officers of each Party, the Parties shall use their
reasonable efforts to cause the Effective Time to occur on the first business
day following the last to occur of (i) the effective date (including expiration
of any applicable waiting period) of the last required Consent of any Regulatory
Authority having authority over and approving or exempting the Merger and any
other Consents required as a condition to closing, and (ii) the date on which
ACCESS Stockholder Approval is obtained.
ARTICLE 2 - TERMS OF MERGER
2.1 CHARTER.
The certificate of incorporation of Mergersub in effect immediately
prior to the Effective Time shall be the certificate of incorporation of the
Surviving Corporation until duly amended or repealed; provided, however, that
such certificate of incorporation shall be amended to reflect that the name of
the Surviving Corporation shall be "ACCESS Oncology, Inc.," or such other name
as mutually agreed to by the Parties.
2.2 BYLAWS.
The bylaws of Mergersub in effect immediately prior to the Effective
Time shall be the bylaws of the Surviving Corporation until duly amended or
repealed; provided, however, that such bylaws shall be amended to reflect that
the name of the Surviving Corporation shall be "ACCESS Oncology, Inc.," or such
other name as mutually agreed to by the Parties.
2.3 DIRECTORS AND OFFICERS.
The directors of Mergersub in office immediately prior to the Effective
Time, together with such additional persons as may thereafter be elected, shall
serve as the directors of the Surviving Corporation from and after the Effective
Time in accordance with the bylaws of the Surviving Corporation. The officers of
Mergersub in office immediately prior to the Effective Time, together with such
additional persons as may thereafter be elected, shall serve as the officers of
the Surviving Corporation from and after the Effective Time in accordance with
the bylaws of the Surviving Corporation.
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ARTICLE 3 - MANNER OF CONVERTING SHARES
3.1 CONVERSION OF SHARES AND PAYMENT OF MERGER CONSIDERATION.
Subject to the provisions of this Article 3, at the Effective Time, by
virtue of the Merger and without any action on the part of Keryx, ACCESS,
Mergersub or the stockholders of any of the foregoing, the shares of the
constituent corporations shall be converted as follows:
(a) Each share of Mergersub Common Stock issued and outstanding
immediately prior to the Effective Time shall cease to be outstanding and shall
be converted into one share of ACCESS Common Stock.
(b) Each share of Participating Series A Preferred Stock shall cease to
be outstanding and shall be converted into the right to receive from Keryx a
portion of the Merger Consideration in an amount equal to the product of (i) the
Preferred Merger Consideration times (ii) a fraction, the numerator of which
shall be 1.50, and the denominator of which shall be the Preferred Amount.
(c) Each share of Participating Series B Preferred Stock shall cease to
be outstanding and shall be converted into the right to receive from Keryx a
portion of the Merger Consideration in an amount equal to the product of (i) the
Preferred Merger Consideration times (ii) a fraction, the numerator of which
shall be 2.00, and the denominator of which shall be the Preferred Amount.
(d) Each share of Participating Common Stock shall cease to be
outstanding and shall be converted into the right to receive from Keryx a
portion of the Common Merger Consideration in an amount equal to the product of
(i) the Common Merger Consideration times (ii) a fraction, the numerator of
which shall be 1, and the denominator of which shall be the ACCESS Outstanding
Shares. No Common Merger Consideration shall be distributed until the entire
amount of the Preferred Merger Consideration has been distributed in accordance
with the terms of this Agreement.
(e) Upon the achievement of each Milestone, the Merger Consideration
shall become due and payable to the holders of Participating Series A Preferred
Stock, Participating Series B Preferred Stock and Participating Common Stock in
accordance with Sections 3.1(b)-(d); provided, however, that the Merger
Consideration, or a portion thereof, shall become immediately due and payable
upon:
(i) the occurrence of a Qualifying Extraordinary
Transaction, in accordance with Section 3.1(i),
(ii) the occurrence of a Divesting Transaction, in
accordance with Section 3.1(j),
(iii) the occurrence of an initial public offering of
ACCESS, in accordance with Section 3.1(k)
(iv) the occurrence of a strategic alliance, corporate
partnership, disposition or Spin Off involving any of the ACCESS
Products, in accordance with Section 3.1(l).
Each Milestone and each of the events set forth in Sections 3.1(e)(i)-(iv) are
referred to herein as a "Triggering Event."
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(f) No shares of Keryx Common Stock shall be issued as Merger
Consideration until and unless such issuance is approved by the affirmative vote
of the stockholders of a majority of the shares of Keryx Common Stock issued and
outstanding and entitled to vote at the next annual meeting to be held by Keryx
(the "Keryx Annual Meeting") following the Effective Time, as further described
in Section 8.2 (the "Keryx Stockholder Approval"). If, for any reason, the Keryx
Stockholder Approval is not obtained at the Keryx Annual Meeting, or any
subsequent annual meeting of stockholders prior to the payment of any Merger
Consideration, each share of ACCESS Series A Preferred Stock, ACCESS Series B
Preferred Stock and ACCESS Common Stock shall instead be converted into the
right to receive cash having a value (as calculated in Section 3.1(g) below)
equal to the Keryx Common Stock otherwise due and owing pursuant to this
Agreement, such cash to be delivered in accordance with the terms of this
Agreement.
(g) For purposes of determining the value of Keryx Common Stock if (i)
issuable pursuant to the achievement of any Triggering Event, each share of
Keryx Common Stock shall be assigned a value equal to the average closing price
for a share of Keryx Common Stock as quoted on the Nasdaq Stock Market (or, if
the Keryx Common Stock is not traded on the Nasdaq Stock Market, by either (i)
the average closing price per share as reported by the exchange on which the
Keryx Common Stock is principally traded, or (ii) if not traded on any exchange,
the average mean between the bid and offered prices for the Keryx Common Stock
as quoted in the over-the-counter market) on the five consecutive trading days
the third of which is the relevant Milestone Evaluation Date; provided, that if
such Milestone Evaluation Date is not a trading day, such date shall be the next
occurring trading day and (ii) issuable upon the occurrence of a Qualifying
Extraordinary Transaction, Divesting Transaction, initial public offering of
ACCESS, Spin Off or strategic alliance, corporate partnership or disposition
involving any of the ACCESS Products, as set forth in Sections 3.1(i), (j), (k)
and (l), each share of Keryx Common Stock shall be assigned a value equal to the
closing price per share on the closing date of the transaction. Such valuation
shall be used, among other things, for purposes of determining the value of
Keryx Common Stock issued as Preferred Merger Consideration and for purposes of
determining the amount of any cash payments pursuant to Sections 3.1(f) and 3.7.
(h) Notwithstanding the foregoing provisions of this Section 3.1, no
Merger Consideration shall be due and owing under this Agreement after ten (10)
years from the date of this Agreement.
(i) In the event of a Qualifying Extraordinary Transaction at or after
the Effective Time, all of the Merger Consideration that has not previously been
distributed shall become immediately due and payable to the holders of
Participating Series A Preferred Stock, Participating Series B Preferred Stock,
and Participating Common Stock.
(j) In the event of a Divesting Transaction at or after the Effective
Time, the Merger Consideration shall become immediately due and payable to the
holders of Participating Series A Preferred Stock,
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Participating Series B Preferred Stock, and Participating Common Stock, in an
amount of shares of Keryx Common Stock equal to the quotient of (i) 50% of the
Aggregate Consideration, divided by (ii) the value of one share of Keryx Common
Stock calculated pursuant to Section 3.1(g); provided, that such amount shall
not cause Keryx to have to issue Merger Consideration in excess of the 4,000,000
shares of Keryx Common Stock (or cash in lieu thereof) payable by Keryx as
Merger Consideration pursuant to this Agreement and shall constitute the
satisfaction of any and all further obligations of Keryx for the payment of
Merger Consideration pursuant to this Agreement.
(k) In the event of an initial public offering of ACCESS, or such Keryx
Entity as shall own all or substantially all of any of the ACCESS Products,
after the Effective Time, the Merger Consideration shall become immediately due
and payable to the holders of Participating Series A Preferred Stock,
Participating Series B Preferred Stock, and Participating Common Stock, in an
amount of shares of Keryx Common Stock equal to the quotient of (i) 50% of the
aggregate value of the ACCESS Stock held by any Keryx Entity immediately after
such initial public offering (as calculated below), divided by (ii) the value of
one share of Keryx Common Stock (as calculated pursuant to Section 3.1(g));
provided, that such amount shall not cause Keryx to have to issue Merger
Consideration in excess of the 4,000,000 shares of Keryx Common Stock (or cash
in lieu thereof) payable by Keryx as Merger Consideration pursuant to this
Agreement. Subsequent Merger Consideration may be distributed with respect to
ACCESS Product(s) involved in the public offering based on subsequent
development of such ACCESS Product(s). For purposes of determining the value of
ACCESS Stock for purposes of this Section 3.1(k), each share of ACCESS Stock
shall be assigned a value equal to the average closing price for a share of
ACCESS Stock as quoted on the Nasdaq Stock Market (or, if the ACCESS Stock is
not traded on the Nasdaq Stock Market, by either (i) the average closing price
per share as reported by the exchange on which the ACCESS Stock is principally
traded, or (ii) if not traded on any exchange, the average mean between the bid
and offered prices for the ACCESS Stock as quoted in the over-the-counter
market) on the five consecutive trading days following the first trading day on
which the ACCESS Stock is so traded following the effective time of the initial
public offering.
(i) In the event of a strategic alliance, corporate partnership or
disposition involving any (but not all) of the ACCESS Products that includes an
up front payment to any Keryx Entity (including any ACCESS Entity), or a
purchase of an equity interest in any Keryx Entity (including any ACCESS
Entity), in either case equal to or in excess of $20 million in value, then
Merger Consideration of 1,000,000 shares of Keryx Common Stock that has not
previously been distributed shall become distributable to the holders of
Participating Series A Preferred Stock, Participating Series B Preferred Stock,
and Participating Common Stock irrespective of the subsequent achievement or
failure to achieve any Milestone. Subsequent Merger Consideration may be
distributed with respect to ACCESS Product(s) involved in the strategic
alliance, corporate partnership or other disposition based on subsequent
development of such ACCESS Product(s) by any Keryx Entity, ACCESS Entity,
corporate or strategic partner or purchaser of such ACCESS Product.
(ii) If a Spin Off is consummated at or after the Effective Time,
the Merger Consideration shall become immediately due and payable to the holders
of Participating Series A Preferred Stock, Participating Series B Preferred
Stock, and Participating Common Stock, in an amount of shares of Keryx Common
Stock equal to 50% of (i) the market capitalization of the entity the securities
of which are distributed in the Spin Off (the "Distributed Entity") (i.e., the
total number of outstanding securities of the Distributed Entity, whether or not
included in the public float, multiplied by the value per security determined as
set forth below) divided by (ii) the value of one share of Keryx Common Stock
(as calculated in Section 3.1(g)); provided, that such amount shall not cause
Keryx to have to issue Merger Consideration in excess of the 4,000,000 shares of
Keryx Common Stock (or cash in lieu thereof) payable by Keryx as Merger
Consideration pursuant to this Agreement. Following a Spin Off, no Merger
Consideration will be payable based on the development of the ACCESS Product(s)
involved in the Spin Off, but the Merger Consideration payable with respect to
other ACCESS Products will be unaffected. For purposes of determining the market
capitalization of the Distributed Entity, the distributed securities of the
Distributed Entity shall be assigned a value equal to by valuing such securities
based on their average closing price as quoted on the Nasdaq Stock Market (or,
if such securities are not traded on the Nasdaq Stock Market, by either (i) the
average closing price per share as reported by the exchange on which the such
securities are principally traded, or (ii) if not traded on any exchange, the
average mean between the bid and offered prices for such securities as quoted in
the over-the-counter market) on the five consecutive trading days following the
first trading day on which such securities are so traded following the effective
time of the Divesting Spin Off (or, if such securities are not quoted in the
over the counter market, based on their fair value as determined in good faith
by Keryx's Board of Directors). The record date for the Spin Off shall be deemed
to be immediately after the record date for distribution of the Merger
Consideration payable pursuant to this Section 3.1(l)(ii).
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(m) Notwithstanding any other provision contained in this Agreement, in
no event shall Keryx deliver in excess of 4,000,000 shares of Keryx Common Stock
(or cash in lieu thereof) as Merger Consideration pursuant to this Agreement,
except as may be required pursuant to the anti-dilution provisions of Section
3.3.
3.2 CONVERSION OF ACCESS WARRANTS.
(a) The holders of ACCESS Warrants may exercise such warrants at any
time prior to the Effective Time in exchange for ACCESS Stock and in accordance
with the terms and conditions of the ACCESS Warrants.
(b) After the Effective Time, the ACCESS Warrants will remain
outstanding and entitle the holders thereof the right to receive, upon the
exercise of the ACCESS Warrants in accordance with their terms, the kind and
amount of Merger Consideration that the holders would have been entitled to
receive had such holders (i) in the case of Common Stock Warrants, exercised and
converted the Common Stock Warrants held by them into shares of ACCESS Common
Stock immediately prior to the Effective Time, and (ii) in the case of Series A
Warrants or Series B Warrants, exercised and converted into shares of Series A
Preferred Stock or Series B Preferred Stock, as applicable, and then converted
the Series A Preferred Stock or the Series B Preferred Stock into ACCESS Common
Stock. After the Effective Time, under no circumstances will the holders of
Series A Warrants or Series B Warrants be entitled to receive, upon the exercise
of the Series A Warrants or Series B Warrants, Series A Preferred Stock, Series
B Preferred Stock or Preferred Merger Consideration in lieu thereof.
(c) Not later than ten (10) business days after any Triggering Event,
Keryx shall send a written notice of the Triggering Event to all holders of the
ACCESS Warrants then outstanding. The notice shall state that the holders of the
ACCESS Warrants may elect to exercise their warrants in exchange for a portion
of the Common Merger Consideration, in accordance with the terms and conditions
set forth in the warrants held by such holders and as set forth herein. The
notice sent by Keryx also shall contain an exercise election form and other
instructions necessary for the holders to properly exercise the warrants and
tender the consideration due and owing upon such exercise to Keryx. The
procedures set forth in this Section 3.2(c) shall be repeated by Keryx upon the
occurrence of each Triggering Event.
(d) Until the latest date upon which any of the ACCESS Warrants may be
exercised in accordance with their terms, Keryx shall hold in escrow any Merger
Consideration issuable to any holder of unexercised ACCESS Warrants. Keryx shall
deliver the portion of such shares held in escrow underlying any ACCESS Warrants
as promptly as practicable upon exercise of the ACCESS Warrants in accordance
with their terms (or on any later date such Merger Consideration would otherwise
be required to be distributed in accordance with the terms of this Agreement).
Within 30 calendar days of the date after which none of the ACCESS Warrants are
exercisable, Keryx shall deliver (the "Unexercised Warrant Share Distribution")
any remaining amounts held in escrow, pro-rata, to the holders of Participating
Common Stock as additional Common Merger Consideration.
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3.3 ANTI-DILUTION PROVISIONS.
In the event Keryx changes the number of shares of Keryx Common Stock
issued and outstanding prior to the achievement of any Milestone as a result of
a stock split, stock dividend, or similar recapitalization with respect to such
stock, the Merger Consideration shall be proportionately adjusted.
3.4 SHARES HELD BY ACCESS OR KERYX.
Each of the shares of ACCESS Stock held by any ACCESS Entity or by any
Keryx Entity shall be canceled and retired at the Effective Time and no
consideration shall be issued in exchange therefor.
3.5 DISSENTING STOCKHOLDERS.
Any holder of shares of ACCESS Stock who perfects such holder's
dissenters' rights in accordance with and as contemplated by Section 262 of the
DGCL shall be entitled to receive from the Surviving Corporation the value of
such shares in cash as determined pursuant to such provision of Law; provided,
that no such payment shall be made to any dissenting stockholder unless and
until such dissenting stockholder has complied with the applicable provisions of
the DGCL and surrendered to ACCESS the certificate or certificates representing
the shares for which payment is being made. In the event that after the
Effective Time a dissenting stockholder of ACCESS fails to perfect, or
effectively withdraws or loses, such holder's right to appraisal of and payment
for such holder's shares, such stockholder shall be entitled to receive from
Keryx the Merger Consideration to which such holder of shares of ACCESS Stock is
entitled under this Article 3 upon surrender by such holder of the certificate
or certificates representing the shares of ACCESS Stock held by such holder. If
and only to the extent required by applicable Law, the Surviving Corporation
will establish (or cause to be established) an escrow account with an amount
sufficient to satisfy the maximum aggregate payment that may be required to be
paid to dissenting stockholders. Upon satisfaction of all claims of dissenting
stockholders, the remaining escrowed amount, reduced by payment of the fees and
expenses of the escrow agent, will be returned to the Surviving Corporation.
3.6 TREATMENT OF STOCK OPTIONS.
At the Effective Time, each option or other Equity Right to purchase
shares of ACCESS Stock pursuant to stock options, stock appreciation rights, or
otherwise, but excluding the ACCESS Warrants, Series A Preferred Stock and
Series B Preferred Stock (the "ACCESS Options"), outstanding at the Effective
Time that are held by individuals who are, as of the Effective Time, employed by
Keryx, or who are listed on a schedule of ACCESS employees who are to be
employed by any Keryx Entity (including ACCESS) immediately after the Effective
Time, whether or not exercisable, shall be cancelled in accordance with the
terms of the ACCESS Stock Plan (or other instrument or agreement governing the
Equity Right) and applicable Law, and shall not be assumed by the Surviving
Corporation and no consideration shall be delivered in exchange therefor.
Immediately prior to the Effective Time, ACCESS shall take all actions necessary
so that all other ACCESS Options then outstanding shall become fully vested and
exercisable (whether or not currently exercisable) and, at the Effective Time,
each
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such ACCESS Option not theretofore exercised shall be cancelled in accordance
with the terms of the ACCESS Stock Plan (or other instrument or agreement
governing the Equity Right) and applicable Law, and shall not be assumed by the
Surviving Corporation and no consideration shall be delivered in exchange
therefor. At the Effective Time, each of the ACCESS Options shall no longer
represent the right to purchase shares of ACCESS Stock and shall be null and
void.
3.7 FRACTIONAL SHARES.
No fraction of a share of Keryx Common Stock shall be issued by virtue
of the Merger, but in lieu thereof each holder of shares of ACCESS Stock who
would otherwise be entitled to a fraction of a share of Keryx Common Stock
(after aggregating all fractional shares of Keryx Common Stock that otherwise
would be received by such holder in any one distribution following a Milestone)
shall, upon surrender of such holders Certificate or Certificates, receive from
Keryx an amount of cash, without interest, equal to the product of (i) such
fraction, multiplied by (ii) the value of Keryx Common Stock as determined
pursuant to Section 3.1(g).
ARTICLE 4 - EXCHANGE OF SHARES
4.1 EXCHANGE PROCEDURES.
(a) At the Closing, Keryx or Keryx's transfer agent or other exchange
agent selected by Keryx (the "Exchange Agent") shall send to the holders of
ACCESS Stock immediately prior to the Effective Time a letter of transmittal
(the "Letter of Transmittal") which shall be completed and returned by such
holders and shall instruct such holders to tender to Keryx the certificate or
certificates which represented shares of ACCESS Stock held by all such holders
immediately prior to the Effective Time (the "Certificates"), together with
instructions for delivery, by United States registered mail, return receipt
requested, of any Merger Consideration. Keryx or the Exchange Agent, as
applicable, shall maintain a list of such delivery instructions. If any
Certificate shall have been lost, stolen, mislaid or destroyed, upon receipt of
(i) an affidavit of that fact from the holder claiming such Certificate to be
lost, mislaid, stolen or destroyed, (ii) such bond, security or indemnity as
Keryx and the Exchange Agent may reasonably require and (iii) any other
documents necessary to evidence and effect the bona fide exchange thereof, the
Exchange Agent shall issue to such holder the Merger Consideration into which
the shares represented by such lost, stolen, mislaid or destroyed Certificate
shall be converted as and when due in accordance with Article 3 of this
Agreement. In addition, Keryx or the Exchange Agent shall maintain a list of the
holders of ACCESS Warrants that have not been exercised prior to the Effective
Time which list shall be used for the purpose of sending the notices to the
holders of ACCESS Warrants, as provided in Section 3.2. The Exchange Agent may
establish such other reasonable and customary rules and procedures in connection
with its duties as it may deem appropriate. The Surviving Corporation shall pay
all charges and expenses, including those of the Exchange Agent, in connection
with the distribution of the consideration provided in Section 3.1.
(b) A holder of ACCESS Stock or ACCESS Warrants immediately preceding
the Effective Time may not transfer or assign the right to receive the Merger
Consideration to any other Person; provided, that, (a) any such former ACCESS
stockholder or holder of ACCESS
8
Warrants who is an individual may transfer or assign the right to receive the
Merger Consideration (i) in any transaction that is principally for estate
planning purposes, to (A) any of such holder's siblings, parents, issue, nephews
and nieces, (B) the spouse of the holder or any person listed in clause (A)
above, (C) any trust formed for estate planning purposes of which such holder
and/or any such person described in clause (A) and/or (B) above are collectively
the sole beneficiaries, or (D) any entity collectively wholly-owned by such
holder and/or one or more of the persons described in any of the preceding
clauses (A) through (C) or (ii) to any beneficiary, executor, trust, legal
guardian or legal representative upon the death or disability of such holder,
and (b) any such holder that is an entity may transfer or assign the right to
receive the Merger Consideration to a non-individual affiliate of such entity or
to the holders (whether or not individuals) of equity or profits interests in
such entity as a dividend or distribution, in each case if such holder or (in
the case of an individual) his or her duly authorized representative provides to
Keryx signed, written notice of the transfer or assignment with instructions
specifying to whom the Merger Consideration should be issued no later than the
record date for the relevant Distribution, such notice to be in a form
reasonably satisfactory to Keryx or the Exchange Agent.
(c) Within thirty (30) business days of the occurrence of any
Triggering Event, Keryx shall make available to the Exchange Agent for
distribution in accordance with this Section 4.1 the shares of Keryx Common
Stock, or, if Keryx Stockholder Approval is not timely obtained, cash in lieu
thereof, issuable pursuant to this Agreement; provided, however, that no
distribution shall be required to be made until thirty (30) business days after
the Keryx Annual Meeting. At such time, Keryx and ACCESS shall cause the
Exchange Agent to deliver to each holder of ACCESS Stock that has tendered the
Certificates and to each holder of ACCESS Warrants who has properly exercised
such warrants in accordance with Section 3.2, the Merger Consideration due and
owing pursuant to Section 3.1. Merger Consideration payable in cash may be
delivered by check representing immediately payable or next-day funds.
(d) Keryx shall notify the Exchange Agent upon the payment in full of
the Preferred Merger Consideration (and the allocation between Preferred and
Common Merger Consideration in the distribution that will include such payment
in full).
(e) Keryx shall not be obligated to deliver the Merger Consideration to
which any former holder of ACCESS Stock is entitled pursuant to this Agreement
until such holder surrenders such holder's Certificate or Certificates for
exchange as provided in this Section 4.1. In addition, Keryx shall not be
obligated to deliver the Merger Consideration to any holder of ACCESS Warrants
unless such holder has properly completed and returned the exercise election
form in accordance with the terms of the warrants.
(f) Each of Keryx, the Surviving Corporation and the Exchange Agent
shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of shares of ACCESS Stock, or
holder of ACCESS Warrants who properly exercises such warrants in accordance
with the terms hereof, such amounts, if any, as it is required to deduct and
withhold with respect to the making of such payment under the Internal Revenue
Code or any provision of state, local or foreign Tax Law. To the extent that any
amounts are so withheld by Keryx, the Surviving Corporation or the Exchange
Agent, as the case may be, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of
9
the shares of ACCESS Stock, or holder of ACCESS Warrants who properly exercises
such warrants in accordance with the terms hereof, in respect of which such
deduction and withholding was made by Keryx, the Surviving Corporation or the
Exchange Agent, as the case may be.
(g) Any other provision of this Agreement notwithstanding, none of
Keryx, the Surviving Corporation or the Exchange Agent shall be liable to a
holder of ACCESS Stock, or holder of ACCESS Warrants who properly exercises such
warrants in accordance with the terms hereof, for any amounts paid or property
delivered in good faith to a public official pursuant to any applicable
abandoned property, escheat or similar Law.
4.2 RIGHTS OF FORMER ACCESS STOCKHOLDERS.
At the Effective Time, the stock transfer books of ACCESS shall be
closed as to holders of ACCESS Stock immediately prior to the Effective Time and
no transfer of ACCESS Stock by any such holder shall thereafter be made or
recognized. Until surrendered for exchange in accordance with the provisions of
Section 4.1, each Certificate theretofore representing shares of ACCESS Stock
(other than shares to be canceled pursuant to Sections 3.4 or as to which
statutory dissenters' rights have been perfected as provided in Section 3.5)
shall from and after the Effective Time represent for all purposes only the
right to receive the consideration provided in Section 3.1 in exchange therefor,
subject, however, to the Surviving Corporation's obligation to pay any dividends
or make any other distributions with a record date prior to the Effective Time
which have been declared or made by ACCESS in respect of such shares of ACCESS
Stock in accordance with the terms of this Agreement and which remain unpaid at
the Effective Time. In the event that a dividend or other distribution is
declared by Keryx on the Keryx Common Stock, the record date for which is at or
after the occurrence of any Triggering Event, the declaration shall include
dividends or other distributions on all shares of Keryx Common Stock then
issuable pursuant to this Agreement as a result of the occurrence of such
Triggering Event, but no dividend or other distribution payable to the holders
of record of Keryx Common Stock as of any time subsequent to the Effective Time
shall be delivered to the holder of any Certificate until such holder surrenders
such Certificate for exchange as provided in Section 4.1. However, upon
surrender of such Certificate, any undelivered dividends and cash payments
payable hereunder (without interest) shall be delivered and paid with respect to
each share represented by such Certificate. No dividends or other distributions
declared by Keryx on the Keryx Common Stock, the record date for which is after
the Effective Time but prior to the occurrence of any Triggering Event, shall be
delivered and paid to the holders of ACCESS Stock with respect to any Keryx
Common Stock delivered in connection with such Triggering Event.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF ACCESS
ACCESS hereby represents and warrants to Keryx and Mergersub as
follows:
5.1 ORGANIZATION, STANDING, AND POWER.
ACCESS is a corporation duly organized, validly existing, and in good
standing under the Laws of the State of Delaware, and has the corporate power
and authority to carry on its business as now conducted and to own, lease and
operate its material Assets. ACCESS is duly
10
qualified or licensed to transact business as a foreign corporation in good
standing in the states of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, an ACCESS Material Adverse Effect. The minute book and other
organizational documents for ACCESS have been made available to Keryx for its
review and, except as disclosed in Section 5.1 of the ACCESS Disclosure
Memorandum, are true and complete in all material respects as in effect as of
the date of this Agreement and accurately reflect in all material respects all
amendments thereto and all proceedings of the Board of Directors (including any
committees of the Board of Directors) and stockholders thereof.
5.2 AUTHORITY OF ACCESS; NO BREACH BY AGREEMENT.
(a) ACCESS has the corporate power and authority necessary to execute,
deliver, and, other than with respect to the Merger, perform this Agreement, and
with respect to the Merger, upon the adoption and approval of this Agreement and
the Merger by ACCESS's stockholders in accordance with this Agreement and
Delaware law, to perform its obligations under this Agreement and to consummate
the transactions contemplated hereby. The execution, delivery, and performance
of this Agreement and the consummation of the transactions contemplated herein,
including the Merger, have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of ACCESS, subject to receipt of
the ACCESS Stockholder Approval, which is the only stockholder vote required for
approval of this Agreement and consummation of the Merger by ACCESS. Subject to
such requisite stockholder approval, this Agreement represents a legal, valid,
and binding obligation of ACCESS, enforceable against ACCESS in accordance with
its terms (except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other Laws affecting the enforcement
of creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceedings may be brought).
(b) Neither the execution and delivery of this Agreement by ACCESS, nor
the consummation by ACCESS of the transactions contemplated hereby, nor
compliance by ACCESS with any of the provisions hereof, will (i) conflict with
or result in a breach of any provision of ACCESS's certificate of incorporation
or bylaws or the certificate or articles of incorporation or bylaws of any
ACCESS Subsidiary or any resolution adopted by the board of directors or the
shareholders of any ACCESS Entity, or (ii) except as disclosed in Section 5.2 of
the ACCESS Disclosure Memorandum and subject to receipt of the requisite
Consents referred to in Section 9.1(c), constitute or result in a Default under,
or require any Consent pursuant to, or result in the creation of any Lien on any
Asset of any ACCESS Entity under, any Contract or Permit of any ACCESS Entity,
other than Defaults that are not reasonably likely to have, and Consents which,
if not obtained, are not reasonably likely to have, individually or in the
aggregate, an ACCESS Material Adverse Effect, or, (iii) subject to receipt of
the requisite Consents referred to in Section 9.1(b), constitute or result in a
Default under, or require any Consent pursuant to, any Law or Order applicable
to any ACCESS Entity or any of their respective material Assets, other than
Defaults that are not reasonably likely to have, and Consents which, if not
obtained, are not reasonably likely to have, individually or in the aggregate,
an ACCESS Material Adverse Effect.
11
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and other than
Consents required from Regulatory Authorities, and other than notices to or
filings with the Internal Revenue Service or the Pension Benefit Guaranty
Corporation with respect to any employee benefit plans, no notice to, filing
with, or Consent of, any public body or authority is necessary for the
consummation by ACCESS of the Merger and the other transactions contemplated in
this Agreement.
5.3 CAPITAL STOCK.
(a) The authorized capital stock of ACCESS consists of (i) 25,000,000
shares of ACCESS Common Stock, of which 10,877,516 shares are issued and
outstanding as of the date of this Agreement, (ii) 4,000,000 shares of Series A
Preferred Stock, of which 3,129,998 shares are issued and outstanding, and (iii)
900,000 shares of Series B Preferred Stock, of which 837,500 shares are issued
and outstanding, and (iv) 5,100,000 shares of undesignated preferred stock, par
value $0.001 per share, none of which are issued and outstanding. All of the
issued and outstanding shares of capital stock of ACCESS are duly and validly
issued and outstanding and are fully paid and nonassessable. None of the
outstanding shares of capital stock of ACCESS has been issued in violation of
any preemptive rights of the current or past stockholders of ACCESS.
(b) Except as set forth in Section 5.3(a), or as disclosed in Section
5.3(b) of the ACCESS Disclosure Memorandum, there are no shares of capital stock
or other equity securities of ACCESS outstanding and no outstanding Equity
Rights relating to the capital stock of ACCESS. Except as specifically
contemplated by this Agreement, no Person has any Contract or Equity Right for
the purchase, subscription or issuance of any securities of ACCESS.
5.4 ACCESS SUBSIDIARIES.
ACCESS has disclosed in Section 5.4 of the ACCESS Disclosure Memorandum
each of the ACCESS Subsidiaries that is a corporation (identifying its
jurisdiction of incorporation, each jurisdiction in which it is qualified and/or
licensed to transact business, and the number of shares owned and percentage
ownership interest represented by such share ownership) and each of the ACCESS
Subsidiaries that is a general or limited partnership, limited liability
company, or other non-corporate entity (identifying the Law under which such
entity is organized, each jurisdiction in which it is qualified and/or licensed
to transact business, and the amount and nature of the ownership interest
therein). Except as disclosed in Section 5.4 of the ACCESS Disclosure
Memorandum, ACCESS or one of its wholly-owned Subsidiaries owns all of the
issued and outstanding shares of capital stock (or other equity interests) of
each ACCESS Subsidiary. No capital stock (or other equity interest) of any
ACCESS Subsidiary is or may become required to be issued (other than to another
ACCESS Entity) by reason of any Equity Rights, and there are no Contracts by
which any ACCESS Subsidiary is bound to issue (other than to another ACCESS
Entity) additional shares of its capital stock (or other equity interests) or
Equity Rights or by which any ACCESS Entity is or may be bound to transfer any
shares of the capital stock (or other equity interests) of any ACCESS Subsidiary
(other than to another ACCESS Entity). There are no Contracts relating to the
rights of any ACCESS Entity to vote or to dispose of any shares of the capital
stock (or other equity interests) of any ACCESS Subsidiary. All of the shares of
capital stock (or other equity interests) of each ACCESS Subsidiary held by an
12
ACCESS Entity are fully paid and nonassessable and are owned by the ACCESS
Entity free and clear of any Lien. Except as disclosed in Section 5.4 of the
ACCESS Disclosure Memorandum, each ACCESS Subsidiary is a corporation and is
duly organized, validly existing, and in good standing under the Laws of the
jurisdiction in which it is incorporated or organized, and has the corporate
power and authority necessary for it to own, lease, and operate its Assets and
to carry on its business as now conducted. Each ACCESS Subsidiary is duly
qualified or licensed to transact business as a foreign entity in good standing
in the States of the United States and foreign jurisdictions where the character
of its Assets or the nature or conduct of its business requires it to be so
qualified or licensed, except for such jurisdictions in which the failure to be
so qualified or licensed is not reasonably likely to have, individually or in
the aggregate, an ACCESS Material Adverse Effect. The minute book and other
organizational documents for each ACCESS Subsidiary have been made available to
Keryx for its review, and, except as disclosed in Section 5.4 of the ACCESS
Disclosure Memorandum, are true and complete in all material respects as in
effect as of the date of this Agreement and accurately reflect in all material
respects all amendments thereto and all proceedings of the Board of Directors
and stockholders thereof.
5.5 FINANCIAL STATEMENTS.
ACCESS has disclosed in Section 5.5 of the ACCESS Disclosure Memorandum
all ACCESS Financial Statements for periods ended prior to the date hereof and
will deliver to Keryx copies of all ACCESS Financial Statements prepared
subsequent to the date hereof. The ACCESS Financial Statements (as of the dates
thereof and for the periods covered thereby) (i) are or, if dated after the date
of this Agreement, will be in accordance with the books and records of the
ACCESS Entities, which are or will be, as the case may be, complete and correct
and which have been or will have been, as the case may be, maintained in
accordance with good business practices, and (ii) present or will present, as
the case may be, fairly in all material respects the consolidated financial
position of the ACCESS Entities as of the dates indicated and consolidated
results or operations, changes in shareholders' equity, and cash flows of the
ACCESS Entities for the periods indicated, in accordance with GAAP (subject to
exceptions as to consistency specified therein or as may be indicated in the
notes thereto or, in the case of interim financial statements, to normal
recurring year-end adjustments that are not material in amount or effect).
5.6 ABSENCE OF UNDISCLOSED LIABILITIES.
No ACCESS Entity has any Liabilities that are reasonably likely to
have, individually or in the aggregate, an ACCESS Material Adverse Effect,
except Liabilities which are accrued or reserved against in the consolidated
balance sheets of ACCESS as of December 31, 2003, included in the ACCESS
Financial Statements delivered prior to the date of this Agreement, or reflected
in the notes thereto. No ACCESS Entity has incurred or paid any Liability since
December 31, 2003, except for such Liabilities incurred or paid (i) in the
ordinary course of business consistent with past business practice and which are
not reasonably likely to have, individually or in the aggregate, an ACCESS
Material Adverse Effect, (ii) as required by ACCESS' Contracts, or (iii) in
connection with the transactions contemplated by this Agreement.
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5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS.
Since December 31, 2003, except as disclosed in Section 5.7 of the
ACCESS Disclosure Memorandum, (i) there have been no events, changes, or
occurrences which have had, or are reasonably likely to have, individually or in
the aggregate, an ACCESS Material Adverse Effect, and (ii) none of the ACCESS
Entities has taken any action, or failed to take any action, which action or
failure, if taken after the date of this Agreement, would represent or result in
a material breach or violation of any of the covenants and agreements of ACCESS
provided in Article 7.
5.8 TAX MATTERS.
(a) All ACCESS Entities have timely filed with the appropriate Taxing
authorities all Tax Returns in all jurisdictions in which Tax Returns are
required to be filed, and such Tax Returns are correct and complete in all
respects. None of the ACCESS Entities is the beneficiary of any extension of
time within which to file any Tax Return. All Taxes of the ACCESS Entities
(whether or not shown on any Tax Return) have been fully and timely paid. There
are no Liens for any Taxes (other than a Lien for current real property or ad
valorem Taxes not yet due and payable) on any of the Assets of any of the ACCESS
Entities. No claim has ever been made by an authority in a jurisdiction where
any ACCESS Entity does not file a Tax Return that such ACCESS Entity may be
subject to Taxes by that jurisdiction.
(b) None of the ACCESS Entities has received any notice of assessment
or proposed assessment in connection with any Taxes, and there are no threatened
or pending disputes, claims, audits or examinations regarding any Taxes of any
ACCESS Entity or the Assets of any ACCESS Entity. None of the ACCESS Entities
has waived any statute of limitations in respect of any Taxes or agreed to a Tax
assessment or deficiency.
(c) Each ACCESS Entity has complied with all applicable Laws, rules and
regulations relating to the withholding of Taxes and the payment thereof to
appropriate authorities, including Taxes required to have been withheld and paid
in connection with amounts paid or owing to any employee or independent
contractor, and Taxes required to be withheld and paid pursuant to Sections 1441
and 1442 of the Internal Revenue Code or similar provisions under foreign Law.
(d) The unpaid Taxes of each ACCESS Entity (i) did not, as of the most
recent fiscal month end, exceed the reserve for Tax Liability (rather than any
reserve for deferred Taxes established to reflect timing differences between
book and Tax income) set forth on the face of the most recent balance sheet
(rather than in any notes thereto) for such ACCESS Entity and (ii) do not exceed
that reserve as adjusted for the passage of time through the Closing Date in
accordance with past custom and practice of the ACCESS Entities in filing their
Tax Returns.
(e) None of the ACCESS Entities is a party to any Tax allocation or
sharing agreement and none of the ACCESS Entities has been a member of an
affiliated group filing a consolidated federal income Tax Return (other than a
group the common parent of which was ACCESS) or has any Tax Liability of any
Person under Treasury Regulation Section 1.1502-6 or any similar provision of
state, local or foreign Law (other than the other members of the consolidated
group of which ACCESS is parent), or as a transferee or successor, by contract
or otherwise.
14
(f) During the five-year period ending on the date hereof, none of the
ACCESS Entities was a distributing corporation or a controlled corporation in a
transaction intended to be governed by Section 355 of the Internal Revenue Code.
(g) None of the ACCESS Entities has made any payments, is obligated to
make any payments, or is a party to any contract that could obligate it to make
any payments that could be disallowed as a deduction under Section 280G of the
Internal Revenue Code. ACCESS has not been a United States real property holding
corporation within the meaning of Internal Revenue Code Section
897(c)(1)(A)(ii).
(h) Each of the ACCESS Entities is in compliance with, and its records
contain all information and documents (including properly completed IRS Forms
W-9) necessary to comply with, all applicable information reporting and Tax
withholding requirements under federal, state, and local Tax Laws, and such
records identify with specificity all accounts subject to backup withholding
under Section 3406 of the Internal Revenue Code, except for such instances of
noncompliance and such omissions as are not reasonably likely to have,
individually or in the aggregate, an ACCESS Material Adverse Effect.
(i) No ACCESS Entity has or has had in any foreign country a permanent
establishment, as defined in any applicable tax treaty or convention between the
United States and such foreign country.
5.9 ASSETS.
(a) Except as disclosed in Section 5.9 of the ACCESS Disclosure
Memorandum or as disclosed or reserved against in the ACCESS Financial
Statements, the ACCESS Entities have good and marketable title, free and clear
of all Liens, to all of their respective Assets, except for any such Liens or
other defects of title which are not reasonably likely to have an ACCESS
Material Adverse Effect. All tangible properties used in the businesses of the
ACCESS Entities are in good condition, reasonable wear and tear excepted, and
are usable in the ordinary course of business consistent with ACCESS's past
practices.
(b) All Assets which are material to ACCESS's business on a
consolidated basis, held under leases or subleases by any of the ACCESS
Entities, are held under valid Contracts enforceable in accordance with their
respective terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or other Laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceedings may be brought), and
each such Contract is in full force and effect.
(c) The ACCESS Entities currently maintain the insurance described in
Section 5.9(c) of the ACCESS Disclosure Memorandum. None of the ACCESS Entities
has received notice from any insurance carrier that (i) any policy of insurance
will be canceled or that coverage thereunder will be reduced or eliminated, or
(ii) premium costs with respect to such policies of insurance will be
substantially increased. There are presently no claims pending under such
policies of insurance and no notices of claims in excess of such amounts have
been given by any ACCESS Entity under such policies.
15
5.10 INTELLECTUAL PROPERTY.
Each ACCESS Entity owns or has a license to use all of the Intellectual
Property used by such ACCESS Entity in the course of its business, including
sufficient rights in each copy possessed by each ACCESS Entity. Each ACCESS
Entity is the owner of or has a license, with the right to sublicense, to any
Intellectual Property sold or licensed to a third party by such ACCESS Entity in
connection with such ACCESS Entity's business operations, and such ACCESS Entity
has the right to convey by sale or license any Intellectual Property so
conveyed. Except as set forth in Section 5.10 of the ACCESS Disclosure
Memorandum, no ACCESS Entity is in Default under any of its Intellectual
Property licenses. No proceedings are pending or to the Knowledge of ACCESS
threatened, which challenge the rights of any ACCESS Entity with respect to
Intellectual Property used, sold or licensed by such ACCESS Entity in the course
of its business, nor, to the Knowledge of ACCESS, has any person claimed or
alleged any rights to such Intellectual Property in conflict with those of
ACCESS. To the Knowledge of ACCESS, the conduct of the business of the ACCESS
Entities does not infringe any Intellectual Property of any other person. Except
as disclosed in Section 5.10 of the ACCESS Disclosure Memorandum, no ACCESS
Entity is obligated to pay any recurring royalties to any Person with respect to
any such Intellectual Property. Except as disclosed in Section 5.10 of the
ACCESS Disclosure Memorandum, every officer or employee of any ACCESS Entity is
a party to a Contract which requires such officer or employee to assign any
interest in any Intellectual Property related to any ACCESS Entity to an ACCESS
Entity and to keep confidential any trade secrets, proprietary data, customer
information, or other business information of an ACCESS Entity, and, to the
Knowledge of ACCESS, after due inquiry, no such officer or employee is party to
any Contract with any Person other than an ACCESS Entity which requires such
officer or employee to assign any interest in any Intellectual Property related
to any ACCESS Entity to any Person other than an ACCESS Entity.
5.11 ENVIRONMENTAL MATTERS.
(a) Each ACCESS Entity, its Participation Facilities, and its Operating
Properties are, and have been, in compliance with all Environmental Laws, except
for violations which are not reasonably likely to have, individually or in the
aggregate, an ACCESS Material Adverse Effect.
(b) There is no Litigation pending or, to the Knowledge of ACCESS,
threatened before any court, governmental agency, or authority or other forum in
which any ACCESS Entity or any of its Operating Properties or Participation
Facilities (or ACCESS in respect of such Operating Property or Participation
Facility) has been or, with respect to threatened Litigation, may be named as a
defendant (i) for alleged noncompliance (including by any predecessor) with or
Liability under any Environmental Law or (ii) relating to the release,
discharge, spillage, or disposal into the environment of any Hazardous Material,
whether or not occurring at, on, under, adjacent to, or affecting (or
potentially affecting) a site currently or formerly owned, leased, or operated
by any ACCESS Entity or any of its Operating Properties or Participation
Facilities, except for such Litigation pending or threatened that is not
reasonably likely to have, individually or in the aggregate, an ACCESS Material
Adverse Effect, nor is there any reasonable basis for any Litigation of a type
described in this sentence, except such as is not reasonably likely to have,
individually or in the aggregate, an ACCESS Material Adverse Effect.
16
(c) During the period of (i) any ACCESS Entity's ownership or operation
of any of their respective current properties, (ii) any ACCESS Entity's
participation in the management of any Participation Facility, or (iii) any
ACCESS Entity's holding of a security interest in any Operating Property, there
have been no releases, discharges, spillages, or disposals of Hazardous Material
in, on, under, adjacent to, or affecting (or potentially affecting) such
properties, except such as are not reasonably likely to have, individually or in
the aggregate, an ACCESS Material Adverse Effect. Prior to the period of (i) any
ACCESS Entity's ownership or operation of any of their respective current
properties, (ii) any ACCESS Entity's participation in the management of any
Participation Facility, or (iii) any ACCESS Entity's holding of a security
interest in any Operating Property, to the Knowledge of ACCESS, there were no
releases, discharges, spillages, or disposals of Hazardous Material in, on,
under, or affecting any such property, Participation Facility or Operating
Property, except such as are not reasonably likely to have, individually or in
the aggregate, an ACCESS Material Adverse Effect.
5.12 COMPLIANCE WITH LAWS.
Each ACCESS Entity has in effect all Permits necessary for it to own,
lease, or operate its material Assets and to carry on its business as now
conducted, except for those Permits the absence of which are not reasonably
likely to have, individually or in the aggregate, an ACCESS Material Adverse
Effect, and there has occurred no Default under any such Permit, other than
Defaults are not reasonably likely to have, individually or in the aggregate, an
ACCESS Material Adverse Effect. Except as disclosed in Section 5.12 of the
ACCESS Disclosure Memorandum, none of the ACCESS Entities:
(a) is in Default under any of the provisions of its certificate or
articles of incorporation or bylaws (or other governing instruments);
(b) is in Default under any Laws, Orders, or Permits applicable to its
business or employees conducting its business, except for Defaults which are not
reasonably likely to have, individually or in the aggregate, an ACCESS Material
Adverse Effect; or
(c) since January 1, 1999, has received any notification or
communication from any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof (i) asserting that
any ACCESS Entity is not, or may not be, in compliance with any Laws or Orders,
where such noncompliance is reasonably likely to have, individually or in the
aggregate, an ACCESS Material Adverse Effect, (ii) threatening to revoke any
Permits, the revocation of which is reasonably likely to have, individually or
in the aggregate, an ACCESS Material Adverse Effect, or (iii) requiring any
ACCESS Entity to enter into or consent to the issuance of a cease and desist
order, injunction formal agreement, directive, commitment, or memorandum of
understanding, or to adopt any board resolution or similar undertaking, which
restricts materially the conduct of its business or in any manner relates to its
employment decisions, its employment or safety policies or practices; or
(d) has effectuated (i) a "plant closing" (as defined in the Worker
Adjustment and Retraining Notification Act (the "WARN Act")) affecting any site
of employment or one or more facilities or operating units within any site of
employment or facility of any ACCESS Entity; or (ii) a "mass layoff" (as defined
in the WARN Act) affecting any site of employment or facility of
17
any ACCESS Entity; and no ACCESS Entity has been affected by any transaction or
engaged in layoffs or employment terminations sufficient in number to trigger
application of any similar state or local Law. Except as set forth in Section
5.12 of the ACCESS Disclosure Memorandum, none of any ACCESS Entity's employees
has suffered an "employment loss" (as defined in the WARN Act) since six months
prior to the Closing Date.
(e) Each Person who is engaged by an ACCESS Entity as an independent
contractor meets the standards under all Laws (including Treasury Regulations
under the Internal Revenue Code and federal and state labor and employment Laws)
as independent contractors, except to the extent the failure to meet such
standards is not reasonably likely to have, individually or in the aggregate, an
ACCESS Material Adverse Effect. Copies of all material reports, correspondence,
notices and other documents relating to any inspection, audit, monitoring or
other form of review or enforcement action by a Regulatory Authority have been
made available to Keryx.
5.13 LABOR RELATIONS.
(a) No ACCESS Entity is the subject of any Litigation asserting that it
or any other ACCESS Entity has committed an unfair labor practice (within the
meaning of the National Labor Relations Act or comparable state Law) or other
violation of state or federal labor Law or seeking to compel it or any other
ACCESS Entity to bargain with any labor organization or other employee
representative as to wages or conditions of employment, nor is any ACCESS Entity
party to any collective bargaining agreement or subject to any bargaining order,
injunction or other Order relating to ACCESS's relationship or dealings with its
employees, any labor organization or any other employee representative. There is
no strike, slowdown, lockout or other job action or labor dispute involving any
ACCESS Entity pending or threatened and there has been no such actions or
disputes in the past five years. To the Knowledge of ACCESS, in the past five
years, there has not been any attempt by any ACCESS Entity employees or any
labor organization or other employee representative to organize or certify a
collective bargaining unit or to engage in any other union organization activity
with respect to the workforce of any ACCESS Entity. Except as disclosed in
Section 5.13 of the ACCESS Disclosure Memorandum, the employment of each
employee and the engagement of each independent contractor of each ACCESS Entity
is terminable at will by the relevant ACCESS Entity without any penalty,
liability or severance obligation incurred by any ACCESS Entity. No ACCESS
Entity will owe any amounts to any of its employees or independent contractors
as of the Closing Date, other than (i) wages payable for the payroll period
during which the Closing Date occurs, (ii) any regularly recurring contractual
payments to independent contractors for the contract period(s) during which the
Closing Date occurs and (iii) accrued vacation pay and sick leave in accordance
with ACCESS's policies.
(b) All of the employees employed in the United States are either
United States citizens or are legally entitled to work in the United States
under the Immigration Reform and Control Act of 1986, as amended, other United
States immigration Laws and the Laws related to the employment of non-United
States citizens applicable in the state in which the employees are employed.
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5.14 EMPLOYEE BENEFIT PLANS
(a) ACCESS has disclosed in Section 5.14 of the ACCESS Disclosure
Memorandum, and has delivered or made available to Keryx prior to the execution
of this Agreement, (i) copies of each Employee Benefit Plan currently adopted,
maintained by, sponsored in whole or in part by, or contributed to by any ACCESS
Entity or ERISA Affiliate thereof for the benefit of employees, former
employees, retirees, dependents, spouses, directors, independent contractors, or
other beneficiaries or under which employees, retirees, former employees,
dependents, spouses, directors, independent contractors, or other beneficiaries
are eligible to participate (collectively, the "ACCESS Benefit Plans") and (ii)
a list of each Employee Benefit Plan that is not identified in (i) above (e.g.,
former Employee Benefit Plans) but for which the ACCESS Entity or ERISA
Affiliate has or reasonably could have any obligation or Liability. Any of the
ACCESS Benefit Plans which is an "employee pension benefit plan," as that term
is defined in ERISA Section 3(2), is referred to herein as a "ACCESS ERISA
Plan." Each ACCESS ERISA Plan which is also a "defined benefit plan" (as defined
in Internal Revenue Code Section 414(j)) is referred to herein as a "ACCESS
Pension Plan."
(b) ACCESS has delivered to Keryx prior to the execution of this
Agreement (i) all trust agreements or other funding arrangements for all
Employee Benefit Plans, (ii) all determination letters, rulings, opinion
letters, information letters or advisory opinions issued by the United States
Internal Revenue Service ("IRS"), the United States Department of Labor ("DOL")
or the Pension Benefit Guaranty Corporation during this calendar year or any of
the preceding three calendar years, (iii) any filing or documentation (whether
or not filed with the IRS) where corrective action was taken in connection with
the IRS EPCRS program set forth in Revenue Procedure 2001-17 (or its predecessor
or successor rulings), (iv) annual reports or returns, audited or unaudited
financial statements, actuarial reports and valuations prepared for any Employee
Benefit Plan for the current plan year and the three preceding plan years, and
(v) the most recent summary plan descriptions and any material modifications
thereto.
(c) Each ACCESS Benefit Plan is in compliance with the terms of such
ACCESS Benefit Plan, in compliance with the applicable requirements of the
Internal Revenue Code, in material compliance with the applicable requirements
of ERISA, and in compliance with any other applicable Laws the breach or
violation of which are reasonably likely to have, individually or in the
aggregate, an ACCESS Material Adverse Effect. Each ACCESS ERISA Plan which is
intended to be qualified under Section 401(a) of the Internal Revenue Code has
received a favorable determination letter from the IRS that is still in effect
and applies to the ACCESS ERISA Plan as amended and as administered or, within
the time permitted under Internal Revenue Code Section 401(b), has timely
applied for a favorable determination letter which when issued will apply
retroactively to the ACCESS ERISA Plan as amended and as administered. ACCESS is
not aware of any circumstances likely to result in revocation of any such
favorable determination letter. ACCESS has not received any communication
(written or unwritten) from any government agency questioning or challenging the
compliance of any ACCESS Benefit Plan with applicable Laws. No ACCESS Benefit
Plan is currently being audited by a governmental agency for compliance with
applicable Laws or has been audited with a determination by the governmental
agency that the Employee Benefit Plan failed to comply with applicable Laws.
19
(d) There has been no oral or written representation or communication
with respect to any aspect of the Employee Benefit Plans made to employees of
ACCESS which is not in accordance with the written or otherwise preexisting
terms and provisions of such plans other than representations and communications
that are not reasonably likely to have, individually or in the aggregate, an
ACCESS Material Adverse Effect. Neither ACCESS nor any administrator or
fiduciary of any ACCESS Benefit Plan (or any agent of any of the foregoing) has
engaged in any transaction, or acted or failed to act in any manner, which could
subject ACCESS or Keryx to any direct or indirect Liability (by indemnity or
otherwise) for breach of any fiduciary, co-fiduciary or other duty under ERISA.
There are no unresolved claims or disputes under the terms of, or in connection
with, the ACCESS Benefit Plans other than claims for benefits which are payable
in the ordinary course of business and no action, proceeding, prosecution,
inquiry, hearing or investigation has been commenced with respect to any ACCESS
Benefit Plan.
(e) All ACCESS Benefit Plan documents and annual reports or returns,
audited or unaudited financial statements, actuarial valuations, summary annual
reports, and summary plan descriptions issued with respect to the ACCESS Benefit
Plans are correct and complete, have been timely filed with the IRS, the DOL or
distributed to participants of the ACCESS Benefit Plans (as required by Law),
and there have been no changes in the information set forth therein.
(f) To the Knowledge of ACCESS, no "party in interest" (as defined in
ERISA Section 3(14)) or "disqualified person" (as defined in Internal Revenue
Code Section 4975(e)(2)) of any ACCESS Benefit Plan has engaged in any nonexempt
"prohibited transaction" (described in Internal Revenue Code Section 4975(c) or
ERISA Section 406).
(g) For any ACCESS Pension Plan, the fair market value of such ACCESS
Pension Plan's assets equals or exceeds the present value of all benefits
(whether vested or not) accrued to date by all present or former participants in
such ACCESS Pension Plan. For this purpose the assumptions prescribed by the
Pension Benefit Guaranty Corporation for valuing plan assets or liabilities upon
plan termination shall be applied and the term "benefits" shall include the
value of all benefits, rights and features protected under Internal Revenue Code
Section 411(d)(6) or its successors and any ancillary benefits (including
disability, shutdown, early retirement and welfare benefits) provided under any
such employee pension benefit plan and all "benefit liabilities" as defined in
ERISA Section 4001(a)(16). Since the date of the most recent actuarial
valuation, there has been (i) no material change in the financial position of
the ACCESS Pension Plan, (ii) no change in the actuarial assumptions with
respect to any ACCESS Pension Plan, and (iii) no increase in benefits under any
ACCESS Pension Plan as a result of ACCESS Pension Plan amendments or changes in
any applicable Law which is reasonably likely to have, individually or in the
aggregate, a material adverse effect on the funding status of such ACCESS
Pension Plan. All contributions with respect to an Employee Benefit Plan of
ACCESS, or any of its ERISA Affiliates that is subject to Internal Revenue Code
Section 412 or ERISA Section 302 have or will be timely made and, with respect
to any such Employee Benefit Plan, there is no Lien nor is there expected to be
a Lien under Internal Revenue Code Section 412(n) or ERISA Section 302(f) or Tax
under Internal Revenue Code Section 4971. No ACCESS Pension Plan has a
"liquidity shortfall" as defined in Internal Revenue Code Section 412(m)(5).
Neither ACCESS nor any of its ERISA Affiliates is subject to or can reasonably
be expected to become subject to a Lien under Internal Revenue Code Section
401(a)(29). All premiums required to be paid under ERISA Section 4006 have been
timely paid by ACCESS and by its ERISA Affiliates.
20
(h) No Liability under Title IV of ERISA has been or is expected to be
incurred by ACCESS or its ERISA Affiliates and no event has occurred that could
reasonably result in Liability under Title IV of ERISA being incurred by ACCESS
or its ERISA Affiliates with respect to any ongoing, frozen, or terminated
single-employer plan of ACCESS or the single-employer plan of any ERISA
Affiliate, which Liability is reasonably likely to have an ACCESS Material
Adverse Effect. There has been no "reportable event," within the meaning of
ERISA Section 4043 for which the 30-day reporting requirement has not been
waived by any ongoing, frozen, or terminated single employer plan of ACCESS or
of an ERISA Affiliate.
(i) Except as disclosed in Section 5.14 of the ACCESS Disclosure
Memorandum, no ACCESS Entity has any Liability for retiree health and life
benefits under any of the ACCESS Benefit Plans and there are no restrictions on
the rights of such ACCESS Entity to amend or terminate any such retiree health
or benefit Plan without incurring any Liability thereunder except to the extent
required under Part 6 of Title I of ERISA or Internal Revenue Code Section
4980B. No Tax under Internal Revenue Code Sections 4980B or 5000 has been
incurred with respect to any ACCESS Benefit Plan and no circumstance exists
which could give rise to such Taxes.
(j) Except as disclosed in Section 5.14 of the ACCESS Disclosure
Memorandum, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute, or
otherwise) becoming due to any director or any employee of any ACCESS Entity
from any ACCESS Entity under any ACCESS Benefit Plan or otherwise, (ii) increase
any benefits otherwise payable under any ACCESS Benefit Plan, or (iii) result in
any acceleration of the time of payment or vesting of any such benefit.
(k) The actuarial present values of all accrued deferred compensation
entitlements (including entitlements under any executive compensation,
supplemental retirement, or employment agreement) of employees and former
employees of any ACCESS Entity and their respective beneficiaries, other than
entitlements accrued pursuant to funded retirement plans subject to the
provisions of Internal Revenue Code Section 412 or ERISA Section 302, have been
fully reflected on the ACCESS Financial Statements to the extent required by and
in accordance with GAAP.
(l) All individuals who render services to any ACCESS Entity and who
are authorized to participate in an ACCESS Benefit Plan pursuant to the terms of
such ACCESS Benefit Plan are in fact eligible to and authorized to participate
in such ACCESS Benefit Plan. All individuals participating in (or eligible to
participate in) any ACCESS Benefit Plan are common-law employees of an ACCESS
Entity.
(m) On or after September 26, 1980, neither ACCESS nor any of its ERISA
Affiliates has had an "obligation to contribute" (as defined in ERISA Section
4212) to a "multiemployer plan" (as defined in ERISA Sections 4001(a)(3) and
3(37)(A)).
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5.15 MATERIAL CONTRACTS.
Except as disclosed in Section 5.15 of the ACCESS Disclosure Memorandum
or otherwise reflected in the ACCESS Financial Statements, none of the ACCESS
Entities, nor any of their respective Assets, businesses, or operations, is a
party to, or is bound by: (i) any employment, severance, termination,
consulting, or retirement Contract providing for aggregate payments to any
Person in any calendar year in excess of $50,000, (ii) any Contract relating to
the borrowing of money by any ACCESS Entity or the guarantee by any ACCESS
Entity of any such obligation (other than Contracts evidencing trade payables
and Contracts relating to borrowings or guarantees made in the ordinary course
of business), (iii) any Contract which prohibits or restricts any ACCESS Entity
from engaging in any business activities in any geographic area, line of
business or otherwise in competition with any other Person, (iv) any Contract
between or among ACCESS Entities, (v) any Contract involving Intellectual
Property (other than Contracts entered into in the ordinary course with
customers and commercially available "off the shelf" software licenses), (vi)
any Contract relating to the purchase or sale of any goods or services (other
than Contracts entered into in the ordinary course of business and involving
payments under any individual Contract not in excess of $100,000), and (vii) any
other Contract (other than a lease of real property) or amendment thereto that
would be required to be filed as an exhibit to a Form 10-K filed by ACCESS with
the SEC as of the date of this Agreement if ACCESS were subject to the reporting
requirements of the Exchange Act (together with all Contracts referred to in
Sections 5.10 and 5.14(a) and all Contracts for the lease of real property by
any ACCESS Entity, the "ACCESS Contracts"). With respect to each ACCESS Contract
and except as disclosed in Section 5.15 of the ACCESS Disclosure Memorandum: (A)
the Contract is in full force and effect; (B) no ACCESS Entity is in Default
thereunder, unless such Default is not reasonably likely to have, individually
or in the aggregate, an ACCESS Material Adverse Effect; (C) no ACCESS Entity has
repudiated or waived any material provision of any such Contract; and (D) no
other party to any such Contract is, to the Knowledge of ACCESS, in Default or
has repudiated or waived any material provision thereunder. All of the
indebtedness of any ACCESS Entity for money borrowed is prepayable at any time
by such ACCESS Entity without penalty or premium.
5.16 PRIVACY OF PATIENT INFORMATION
(a) ACCESS is the sole owner of all individually identifiable personal
information ("IIPI") relating to patients and clinical data collected with
respect to the ACCESS Products that will be transferred to Keryx pursuant to
this Agreement. For purposes of this Section 5.16, "IIPI" means any information
relating to an identified or identifiable natural Person.
(b) ACCESS's collection and use of such IIPI and the use of such IIPI
by the Surviving Corporation as contemplated by this Agreement complies with
ACCESS's privacy policy, the Fair Credit Reporting Act, the Xxxxx-Xxxxx-Xxxxxx
Act, the Health Insurance Portability and Accountability Act of 1996 and all
other applicable state, federal and foreign privacy Laws, and any Contract or
industry standard relating to privacy.
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5.17 LEGAL PROCEEDINGS.
There is no Litigation instituted or pending, or, to the Knowledge of
ACCESS, threatened (or unasserted but considered probable of assertion and which
if asserted would have at least a reasonable possibility of an unfavorable
outcome) against any ACCESS Entity, or against any director, officer or employee
in their capacities as such or Employee Benefit Plan of any ACCESS Entity, or
against any Asset of any of them, that is reasonably likely to have,
individually or in the aggregate, an ACCESS Material Adverse Effect, nor are
there any Orders outstanding against any ACCESS Entity, that are reasonably
likely to have, individually or in the aggregate, an ACCESS Material Adverse
Effect. Section 5.17(a) of the ACCESS Disclosure Memorandum contains a summary
of all Litigation as of the date of this Agreement to which any ACCESS Entity is
a party and which names an ACCESS Entity as a defendant or cross-defendant.
Section 5.17(b) of the ACCESS Disclosure Memorandum contains a summary of all
Orders to which any ACCESS Entity is subject.
5.18 STATEMENTS TRUE AND CORRECT.
(a) No statement, certificate, instrument, or other writing furnished
or to be furnished by any ACCESS Entity or any Affiliate thereof to Keryx
pursuant to this Agreement or any other document, agreement, or instrument
referred to herein contains or will contain any untrue statement of material
fact or will omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(b) All documents that any ACCESS Entity or any Affiliate thereof is
responsible for filing with any Regulatory Authority in connection with the
transactions contemplated hereby will comply as to form in all material respects
with the provisions of applicable Law.
5.19 STATE TAKEOVER LAWS.
Each ACCESS Entity has taken all necessary action to exempt the
transactions contemplated by this Agreement from, or if necessary to challenge
the validity or applicability of, any applicable "moratorium," "fair price,"
"business combination," "control share," or other anti-takeover Laws, including
Section 203 of the DGCL (collectively, "Takeover Laws").
5.20 BOARD RECOMMENDATION.
The Board of Directors of ACCESS, at a meeting duly called and held,
has by unanimous vote of the independent directors, acting in accordance with
Section 144 of the DGCL, (i) determined that this Agreement and the transactions
contemplated hereby, including the Merger, and the transactions contemplated
thereby, taken together, are fair to and in the best interests of the
stockholders and (ii) resolved to recommend that the holders of the shares of
ACCESS Stock approve and adopt this Agreement.
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF KERYX
Keryx and Mergersub hereby represent and warrant to ACCESS as follows:
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6.1 ORGANIZATION, STANDING, AND POWER.
Keryx is a corporation duly organized, validly existing, and in good
standing under the Laws of the State of Delaware, and has the corporate power
and authority to carry on its business as now conducted and to own, lease and
operate its material Assets. Keryx is duly qualified or licensed to transact
business as a foreign corporation in good standing in the states of the United
States and foreign jurisdictions where the character of its Assets or the nature
or conduct of its business requires it to be so qualified or licensed, except
for such jurisdictions in which the failure to be so qualified or licensed is
not reasonably likely to have, individually or in the aggregate, a Keryx
Material Adverse Effect.
6.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) Keryx has the corporate power and authority necessary to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated herein,
including the Merger, have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of Keryx. This Agreement
represents a legal, valid, and binding obligation of Keryx, enforceable against
Keryx in accordance with its terms.
(b) Neither the execution and delivery of this Agreement by Keryx, nor
the consummation by Keryx of the transactions contemplated hereby, nor
compliance by Keryx with any of the provisions hereof, will (i) conflict with or
result in a breach of any provision of Keryx's certificate of incorporation or
bylaws, or (ii) subject to receipt of the requisite Consents referred to in
Sections 9.1(b) and 9.1(c), constitute or result in a Default under, or require
any Consent pursuant to, or result in the creation of any Lien on any Asset of
any Keryx Entity under, any Contract or Permit of any Keryx Entity, where such
Default or Lien, or any failure to obtain such Consent, is reasonably likely to
have, individually or in the aggregate, a Keryx Material Adverse Effect, or,
(iii) subject to receipt of the requisite Consents referred to in Sections
9.1(b) and 9.1(c), constitute or result in a Default under, or require any
Consent pursuant to, any Law or Order applicable to any Keryx Entity or any of
their respective material Assets (including any Keryx Entity or any ACCESS
Entity becoming subject to or liable for the payment of any Tax or any of the
Assets owned by any Keryx Entity or any ACCESS Entity being reassessed or
revalued by any Regulatory Authority ).
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and the rules
of Nasdaq, and other than Consents required from Regulatory Authorities, and
other than notices to or filings with the IRS or the Pension Benefit Guaranty
Corporation with respect to any employee benefit plans no notice to, filing
with, or Consent of, any public body or authority is necessary for the
consummation by Keryx of the Merger and the other transactions contemplated in
this Agreement.
6.3 CAPITAL STOCK.
(a) The authorized capital stock of Keryx consists of (i) 40,000,000
shares of Keryx Common Stock, of which 24,980,773 shares are issued and
outstanding as of the date of this
24
Agreement, and (ii) 5,000,000 shares of Keryx Preferred Stock, none of which is
issued and outstanding. All of the issued and outstanding shares of Keryx
capital stock are, and all of the shares of Keryx Common Stock, when issued in
accordance with the terms of this Agreement, will be, duly and validly issued
and outstanding and fully paid and nonassessable. None of the outstanding shares
of Keryx capital stock has been, and none of the shares of Keryx Common Stock,
when issued in accordance with the terms of this Agreement, will be, issued in
violation of any preemptive rights of the current or past stockholders of Keryx.
(b) Except as set forth in Section 6.3(a), or as disclosed in Section
6.3 of the Keryx Disclosure Memorandum, there are no shares of capital stock or
other equity securities of Keryx outstanding and no outstanding Equity Rights
relating to the capital stock of Keryx.
6.4 SEC FILINGS; FINANCIAL STATEMENTS.
Keryx has timely filed and made available to ACCESS all SEC Documents
required to be filed by Keryx since December 31, 1999 (together with all such
SEC Documents filed, whether or not required to be filed, from and after
December 31, 1999 until the Effective Time, the "Keryx SEC Reports"). The Keryx
SEC Reports (i) at the time filed, complied or will comply in all material
respects with the applicable requirements of the Securities Laws and other
applicable Laws and (ii) did not or will not, at the time they were or are filed
(or, if amended or superseded by a filing prior to the date of this Agreement,
then on the date of such filing or, in the case of registration statements, at
the effective date thereof) contain any untrue statement of a material fact or
omit to state a material fact required to be stated in such Keryx SEC Reports or
necessary in order to make the statements in such Keryx SEC Reports, in light of
the circumstances under which they were made, not misleading. No Keryx
Subsidiary is required to file any SEC Documents.
(a) Each of the Keryx Financial Statements (including, in each case,
any related notes) contained in the Keryx SEC Reports, including any Keryx SEC
Reports filed after the date of this Agreement until the Effective Time,
complied or will comply as to form in all material respects with the applicable
published rules and regulations of the SEC with respect thereto, was or will be
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes to such financial
statements or, in the case of unaudited interim statements, as permitted by Form
10-Q of the SEC), and fairly presented or will fairly present in all material
respects the consolidated financial position of Keryx and its Subsidiaries as at
the respective dates and the consolidated results of 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
which were not or are not expected to be material in amount or effect.
6.5 ABSENCE OF UNDISCLOSED LIABILITIES.
No Keryx Entity has any Liabilities that are reasonably likely to have,
individually or in the aggregate, a Keryx Material Adverse Effect, except
Liabilities which are accrued or reserved against in the consolidated balance
sheets of Keryx as of December 31, 2002 and September 30, 2003, included in the
Keryx Financial Statements delivered prior to the date of this Agreement or
reflected in the notes thereto. No Keryx Entity has incurred or paid any
Liability since
25
September 30, 2003, except for such Liabilities incurred or paid (i) in the
ordinary course of business consistent with past business practice and which are
not reasonably likely to have, individually or in the aggregate, a Keryx
Material Adverse Effect or (ii) in connection with the transactions contemplated
by this Agreement.
6.6 ABSENCE OF CERTAIN CHANGES OR EVENTS.
Since September 30, 2003, except as disclosed in Section 6.6 of the
Keryx Disclosure Memorandum, (i) there have been no events, changes or
occurrences which have had, or are reasonably likely to have, individually or in
the aggregate, a Keryx Material Adverse Effect, and (ii) none of the Keryx
Entities has taken any action, or failed to take any action, prior to the date
of this Agreement, which action or failure, if taken after the date of this
Agreement, would represent or result in a material breach or violation of any of
the covenants and agreements of Keryx provided in Article 7.
6.7 COMPLIANCE WITH LAWS.
Each Keryx Entity has in effect all Permits necessary for it to own,
lease or operate its material Assets and to carry on its business as now
conducted, except for those Permits the absence of which are not reasonably
likely to have, individually or in the aggregate, a Keryx Material Adverse
Effect, and there has occurred no Default under any such Permit, other than
Defaults which could not reasonably be anticipated to have, individually or in
the aggregate, a Keryx Material Adverse Effect. Except as disclosed in Section
6.7 of the Keryx Disclosure Memorandum or in the Keryx SEC Reports filed prior
to the date of this Agreement, none of the Keryx Entities:
(a) is in Default under its articles or certificate of incorporation or
bylaws (or other governing instruments); or
(b) is in Default under any Laws, Orders or Permits applicable to its
business or employees conducting its business, except for Defaults which could
not reasonably be anticipated to have, individually or in the aggregate, a Keryx
Material Adverse Effect; or
(c) since January 1, 1999, has received any notification or
communication from any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof (i) asserting that
any Keryx Entity is not, or may not be, in compliance with any Laws or Orders,
where such noncompliance is reasonably likely to have, individually or in the
aggregate, a Keryx Material Adverse Effect, (ii) threatening to revoke any
Permits, or (iii) requiring any Keryx Entity to enter into or consent to the
issuance of a cease and desist order, formal agreement, directive, commitment or
memorandum of understanding, or to adopt any board resolution or similar
undertaking, which restricts materially the conduct of its business, or in any
manner relates to its employment decisions, its employment or safety policies or
practices.
6.8 LEGAL PROCEEDINGS.
Except as disclosed in Section 6.8 of the Keryx Disclosure Memorandum
or in the Keryx SEC Reports filed prior to the date of this Agreement, there is
no Litigation instituted or pending,
26
or, to the Knowledge of Keryx, threatened (or unasserted but considered probable
of assertion and which if asserted would have at least a reasonable possibility
of an unfavorable outcome) against any Keryx Entity, or against any director,
employee or employee benefit plan of any Keryx Entity, or against any Asset,
interest, or right of any of them, nor are there any Orders outstanding against
any Keryx Entity.
6.9 STATEMENTS TRUE AND CORRECT.
(a) No statement, certificate, instrument or other writing furnished or
to be furnished by any Keryx Entity or any Affiliate thereof to ACCESS pursuant
to this Agreement or any other document, agreement or instrument referred to
herein contains or will contain any untrue statement of material fact or will
omit to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(b) All documents that any Keryx Entity or any Affiliate thereof is
responsible for filing with any Regulatory Authority in connection with the
transactions contemplated hereby will comply as to form in all material respects
with the provisions of applicable Law.
6.10 AUTHORITY OF MERGERSUB.
Mergersub is a corporation duly organized, validly existing and in good
standing under the Laws of the State of Delaware as a wholly owned Subsidiary of
Keryx. The authorized capital stock of Mergersub shall consist of 1,000 shares
of Mergersub Common Stock, 100 shares of which are validly issued and
outstanding, fully paid and nonassessable and is owned by Keryx free and clear
of any Lien. Mergersub has the corporate power and authority necessary to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein, including the Merger, have been duly and validly authorized
by all necessary corporate action in respect thereof on the part of Mergersub.
This Agreement represents a legal, valid, and binding obligation of Mergersub,
enforceable against Mergersub in accordance with its terms (except in all cases
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought). Keryx, as the sole
stockholder of Mergersub, has voted prior to the Effective Time the shares of
Mergersub Common Stock in favor of adoption and approval of this Agreement, as
and to the extent required by applicable Law.
6.11 BOARD RECOMMENDATION.
The Board of Directors of Keryx, at a meeting duly called and held, and
the Keryx Special Committee, by unanimous vote of its members, have each
determined that this Agreement and the transactions contemplated hereby,
including the Merger, and the transactions contemplated thereby, taken together,
are fair to and in the best interests of the stockholders.
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ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 AFFIRMATIVE COVENANTS OF ACCESS.
From the date of this Agreement until the earlier of the Effective Time
or the termination of this Agreement, unless the prior written consent of Keryx
shall have been obtained, and except as otherwise expressly contemplated herein,
ACCESS shall, and shall cause each of its Subsidiaries to (a) operate its
business only in the usual, regular, and ordinary course, (b) preserve intact
its business organization and Assets and maintain its rights and franchises
(including, without limitation all Licensed Intellectual Property) and (c) take
no action which would (i) adversely affect the ability of any Party to obtain
any Consents required for the transactions contemplated hereby, or (ii)
adversely affect the ability of any Party to perform its covenants and
agreements under this Agreement.
7.2 NEGATIVE COVENANTS OF ACCESS.
From the date of this Agreement until the earlier of the Effective Time
or the termination of this Agreement, unless the prior written consent of Keryx
shall have been obtained, and except as otherwise expressly contemplated herein,
ACCESS covenants and agrees that it will not do or agree or commit to do, or
permit any of its Subsidiaries to do or agree or commit to do, any of the
following:
(a) amend the certificate of incorporation, bylaws or other governing
instruments of any ACCESS Entity; or
(b) incur any additional debt obligation or other obligation for
borrowed money (other than indebtedness of an ACCESS Entity to another ACCESS
Entity), except (i) in the ordinary course of the business of the ACCESS
Entities consistent with past practices and (ii) in connection with any
extensions and refinancings of existing debt obligations, or impose, or suffer
the imposition, on any material Asset of any ACCESS Entity of any Lien or permit
any such Lien to exist (other than in connection with Liens in effect as of the
date hereof that are disclosed in the ACCESS Disclosure Memorandum); or
(c) repurchase, redeem, or otherwise acquire or exchange (other than
exchanges in the ordinary course under employee benefit plans), directly or
indirectly, any shares, or any securities convertible into any shares, of the
capital stock of any ACCESS Entity, or declare or pay any dividend or make any
other distribution in respect of the ACCESS Stock; or
(d) except for this Agreement, or pursuant to the exercise of ACCESS
Options outstanding as of the date hereof or the conversion of any ACCESS
Warrants, Series A Preferred Stock or Series B Preferred Stock outstanding as of
the date hereof, and pursuant to the terms of such ACCESS Options or ACCESS
Warrants in existence on the date hereof, issue, sell, pledge, encumber,
authorize the issuance of, enter into any Contract to issue, sell, pledge,
encumber, or authorize the issuance of, or otherwise permit to become
outstanding, any additional shares of ACCESS Stock or any other capital stock of
any ACCESS Entity, or any stock appreciation rights, or any option, warrant, or
other Equity Right; or
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(e) adjust, split, combine or reclassify any capital stock of any
ACCESS Entity or issue or authorize the issuance of any other securities in
respect of or in substitution for shares of ACCESS Stock, or sell, lease,
mortgage or otherwise dispose of or place any Lien on (i) any shares of capital
stock of any ACCESS Subsidiary (unless any such shares of stock are sold or
otherwise transferred to another ACCESS Entity) or (ii) any material Asset other
than in the ordinary course of business for reasonable and adequate
consideration; or
(f) except for purchases of U.S. Treasury securities or U.S. Government
agency securities, which in either case have maturities of three years or less,
or purchases of interests in money market or comparable funds, purchase any
securities or make any material investment, either by the purchase of
securities, contributions to capital, Asset transfers, or the purchase of any
Assets, in any Person other than a wholly owned ACCESS Subsidiary, or otherwise
acquire direct or indirect control over any Person, other than in connection
with (i) foreclosures in the ordinary course of business or (ii) the creation of
new wholly owned Subsidiaries organized to conduct or continue activities
otherwise permitted by this Agreement; or
(g) grant any increase in compensation or benefits to the employees or
officers of any ACCESS Entity, except in accordance with past practice, as
disclosed in Section 7.2(g) of the ACCESS Disclosure Memorandum, or as required
by Law; pay any severance or termination pay or any bonus other than pursuant to
written policies or written Contracts in effect on the date of this Agreement,
as disclosed in Section 7.2(g) of the ACCESS Disclosure Memorandum; enter into
or amend any severance agreements with officers of any ACCESS Entity, except as
contemplated by Section 9.1(f); grant any material increase in fees or other
increases in compensation or other benefits to directors of any ACCESS Entity
except in accordance with past practice, as disclosed in Section 7.2(g) of the
ACCESS Disclosure Memorandum; or waive any stock repurchase rights, accelerate,
amend or change the period of exercisability of any Equity Rights or restricted
stock, or reprice Equity Rights granted under the ACCESS Stock Plans or
authorize cash payments in exchange for any Equity Rights; or
(h) enter into or amend any employment Contract between any ACCESS
Entity and any Person (unless such amendment is required by Law) such that,
under the terms of the new or amended Contract, the ACCESS Entity does not have
the unconditional right to terminate without Liability (other than Liability for
services already rendered), at any time on or after the Effective Time; or
(i) adopt any new employee benefit plan of any ACCESS Entity or
terminate or withdraw from, or make any material change in or to, any existing
employee benefit plans of any ACCESS Entity other than any such change that is
required by Law or that, in the opinion of counsel, is necessary or advisable to
maintain the tax qualified status of any such plan, or make any distributions
from such employee benefit plans, except as required by Law, the terms of such
plans or consistent with past practice; or
(j) make any significant change in any Tax or accounting methods or
systems of internal accounting controls, except as may be appropriate to conform
to changes in Tax Laws or regulatory accounting requirements or GAAP; or
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(k) commence any Litigation other than in accordance with past
practice, settle any Litigation involving any Liability of any ACCESS Entity for
material money damages or restrictions upon the operations of any ACCESS Entity;
or
(l) except in the ordinary course of business, enter into, modify,
amend or terminate any material Contract (except as contemplated by Section
9.1(f)) or waive, release, compromise or assign any material rights or claims;
or
(m) except in the ordinary course of business, abandon, cancel, sell or
transfer any Intellectual Property.
7.3 COVENANTS OF KERYX.
From the date of this Agreement until the earlier of the Effective Time
or the termination of this Agreement, unless the prior written consent of ACCESS
shall have been obtained, and except as otherwise expressly contemplated herein,
Keryx covenants and agrees that it shall (a) continue to conduct its business
and the business of its Subsidiaries in a manner designed, in its reasonable
judgment, to enhance the long-term value of the Keryx Common Stock and the
business prospects of the Keryx Entities and, to the extent consistent
therewith, use all reasonable efforts to preserve intact the Keryx Entities'
core businesses and goodwill with their respective employees and the communities
they serve, and (b) take no action which would (i) materially adversely affect
the ability of any Party to obtain any Consents required for the transactions
contemplated, or (ii) materially adversely affect the ability of any Party to
perform its covenants and agreements under this Agreement. Keryx further
covenants and agrees that it will not, without the prior written consent of
ACCESS, amend the certificate of incorporation or bylaws of Keryx or, except as
expressly contemplated by this Agreement, in each case, in any manner adverse to
the holders of ACCESS Stock as compared to rights of holders of Keryx Common
Stock generally as of the date of this Agreement.
7.4 ADVERSE CHANGES IN CONDITION.
Each Party agrees to give written notice promptly to the other Party
upon becoming aware of the occurrence or, to the Knowledge of each Party,
impending occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, an ACCESS Material Adverse Effect or a Keryx Material Adverse Effect,
as applicable, or (ii) would cause or constitute a material breach of any of its
representations, warranties, or covenants contained herein, and to use its
reasonable efforts to prevent or promptly to remedy the same.
7.5 REPORTS.
Each Party and its Subsidiaries shall file all reports required to be
filed by it with Regulatory Authorities between the date of this Agreement and
the Effective Time and shall deliver to the other Party copies of all such
reports promptly after the same are filed. If financial statements are contained
in any such reports filed with the SEC, such financial statements will fairly
present the consolidated financial position of the entity filing such statements
as of the dates indicated and the consolidated results of operations, changes in
shareholders' equity, and
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cash flows for the periods then ended in accordance with GAAP (subject in the
case of interim financial statements to normal recurring year-end adjustments
that are not material). As of their respective dates, such reports filed with
the SEC will comply in all material respects with the Securities Laws and will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Any financial statements contained in any other reports to another
Regulatory Authority shall be prepared in accordance with Laws applicable to
such reports.
ARTICLE 8 - ADDITIONAL AGREEMENTS
8.1 ACCESS STOCKHOLDER APPROVAL.
(a) ACCESS shall use reasonable efforts to obtain, no later than thirty
(30) days after the date of this Agreement, the ACCESS Stockholder Approval by
execution of a written consent, in accordance with the DGCL and the certificate
of incorporation and bylaws of ACCESS, approving and adopting this Agreement and
the transactions contemplated hereby (the "Stockholder Consent"). As promptly as
practicable after the execution of the Stockholder Consent and the receipt of
the ACCESS Stockholder Approval, ACCESS shall deliver to each stockholder of
ACCESS that did not execute the Stockholder Consent any notice(s) required by
Section 228(f) of the DCGL and other applicable Law. None of the information to
be supplied by ACCESS or any ACCESS Entity for inclusion in the Stockholder
Consent or notice required by Section 228(f) of the DGCL will, at the respective
time such documents are first sent or given to the ACCESS stockholders, 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 light of the circumstances under which they were made, not
misleading. As promptly as practicable after the execution of this Agreement,
and in any event no later than as required by Section 262(d) of the DGCL and
other applicable Law, ACCESS shall deliver to each stockholder of the Company
that did not execute the Stockholder Consent the notice of such stockholder's
appraisal rights required by Section 262(d) of the DGCL and other applicable
Law.
(b) In addition to or in lieu of the Stockholder Consent, if it is
determined by Keryx to be necessary or appropriate, at the request of Keryx,
ACCESS shall duly call, give notice of, convene and hold a meeting of its
stockholders, to be held as soon as reasonably practicable after such notice by
Keryx, but in no event more than thirty (30) days thereafter, on a date
reasonably acceptable to Keryx, for the purpose of voting upon approval and
adoption of this Agreement or such other related matters as Keryx deems
appropriate.
(c) In connection with the Stockholder Consent and, if necessary, the
meeting of the ACCESS stockholders, (i) the Parties shall furnish to each other
all information concerning them that they may reasonably request in connection
with any materials to be distributed to the stockholders of ACCESS in connection
therewith, (ii) the Board of Directors of ACCESS shall recommend to its
stockholders the approval and adoption of this Agreement, (iii) the Board of
Directors and officers of ACCESS shall use reasonable efforts to obtain the
ACCESS Stockholder Approval, (iv) Keryx shall cooperate in the preparation and
distribution of any proxy statement, information statement or other disclosure
document circulated to ACCESS stockholders and shall furnish all information
concerning it as ACCESS may reasonably request.
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Each Party agrees promptly to supplement, update and correct any information
provided by it for use in any such disclosure document to the extent that it is
or shall have become incomplete, false or misleading.
8.2 KERYX STOCKHOLDER APPROVAL.
(a) In connection with the Keryx Annual Meeting to be held in
accordance with Section 3.1(f), Keryx shall prepare and file with the SEC, no
later than May 31, 2004, a proxy statement (together with any amendments thereof
or supplements thereto, the "Proxy Statement") that shall include a request for
the approval by the holders of the Keryx Common Stock of the issuance of the
Keryx Common Stock as Merger Consideration to the ACCESS Stockholders, as
contemplated by this Agreement. ACCESS shall cooperate in the preparation and
filing of the Proxy Statement and shall furnish all information concerning it as
Keryx may reasonably request. Keryx shall cause the Proxy Statement to comply as
to form in all material respects with the applicable provisions of the Exchange
Act and will use all reasonable efforts to respond to any comments made by the
SEC with respect to the Proxy Statement. None of the information to be supplied
by Keryx or any Keryx Entity for inclusion in the Proxy Statement will, at the
respective time such document is filed with the SEC and first mailed to the
Keryx stockholders, 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 light of the circumstances under which they were
made, not misleading. Each Party agrees promptly to supplement, update and
correct any information provided by it for use in the Proxy Statement to the
extent that it is or shall have become incomplete, false or misleading.
(b) As promptly as practicable after the clearance of the Proxy
Statement by the SEC, Keryx shall mail the Proxy Statement to its stockholders
(or, if the SEC chooses not to review the Proxy Statement, within 10 days after
the SEC notifies Keryx that it will not review the Proxy Statement). The Proxy
Statement shall include the recommendation of the Board of Directors of Keryx
and the Keryx Special Committee thereof that the approval of the issuance of the
Keryx Common Stock as Merger Consideration by the stockholders of Keryx is
advisable.
(c) In accordance with Keryx' certificate of incorporation and bylaws,
Keryx shall duly call, give notice of, convene and hold the Keryx Annual
Meeting, to be held as soon as reasonably practicable after the Proxy Statement
is cleared by the SEC, for the purpose, among other things, of voting upon the
issuance of the Keryx Common Stock as Merger Consideration and such other
related matters as it deems appropriate and shall, through its Board of
Directors and the Keryx Special Committee thereof, recommend to its stockholders
the approval of the issuance of the Merger Consideration and use its reasonable
efforts to obtain the Keryx Stockholder Approval.
8.3 OTHER OFFERS, ETC.
(a) No ACCESS Entity shall, nor shall it authorize or permit any of its
Affiliates or Representatives to, directly or indirectly (i) solicit, initiate
or Knowingly encourage the making, submission or announcement of any Acquisition
Proposal or, (ii) participate in any discussions or negotiations regarding, or
furnish to any Person or "Group" (as such term is defined in Section 13(d) under
the Exchange Act) any nonpublic information with respect to, or take any other
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action Knowingly to facilitate any inquiries or the making of any proposal that
constitutes or may reasonably be expected to lead to, any Acquisition Proposal.
Notwithstanding the foregoing, if, at any time prior to the Effective Time, the
Board of Directors of ACCESS determines in good faith, after consulting with and
considering advice from its outside counsel, that the failure to do so would
create a reasonable likelihood of a breach of their duties as directors to the
ACCESS stockholders under applicable Law, ACCESS may, in response to an
unsolicited bona fide Acquisition Proposal, (x) furnish information with respect
to the ACCESS Entities to such Person or Group and (y) participate in
negotiations regarding such Acquisition Proposal.
(b) Neither the Board of Directors of ACCESS nor any committee thereof
shall (i) withdraw, qualify or modify, or propose publicly to withdraw, qualify
or modify, in a manner adverse to Keryx, the approval or recommendation of such
Board of Directors or such committee of the Merger or this Agreement, (ii)
approve or recommend, or propose publicly to approve or recommend, any
Acquisition Proposal, or (iii) cause ACCESS to enter into any letter of intent,
agreement in principle, acquisition agreement or other similar agreement related
to any Acquisition Proposal (each, an "Acquisition Agreement"). Notwithstanding
the foregoing or any other provision contained in this Agreement, in the event
that prior to the Effective Time, ACCESS receives a Superior Proposal and the
Board of Directors of ACCESS determines in good faith, after consulting with and
considering advice from its outside counsel, that the failure to do so would
create a reasonable likelihood of a breach of their duties as directors to the
ACCESS stockholders under applicable Law, the Board of Directors may (x)
withdraw or modify its approval or recommendation of this Agreement or the
Merger or (y) approve or recommend a Superior Proposal, but in each case, only
at a time that is at least 48 hours following delivery to Keryx of a written
notice advising Keryx that the Board of Directors of ACCESS has received a
Superior Proposal, specifying the material terms and conditions of such Superior
Proposal and identifying the Person making such Superior Proposal and during
which 48 hour period ACCESS will in good faith cooperate and negotiate with
Keryx, on a non-exclusive basis, with the intent of enabling the parties hereto
to agree to a modification of the terms and conditions of this Agreement so that
the transactions contemplated hereby may be consummated.
(c) In addition to the obligations of ACCESS set forth in Section
8.3(a), as promptly as practicable, and in any event within one business day
after any of the executive officers of ACCESS become aware thereof, ACCESS shall
advise Keryx of any Acquisition Proposal, the material terms and conditions of
such request or Acquisition Proposal, and the identity of the Person or Group
making any such request or Acquisition Proposal. ACCESS shall keep Keryx
informed promptly of material amendments or modifications to any such request or
Acquisition Proposal.
(d) Subject to the preceding provisions of this Section 8.3, ACCESS and
its Subsidiaries shall immediately cease any and all existing activities,
discussions or negotiations with any Persons conducted heretofore with respect
to any Acquisition Proposal and will use their respective reasonable efforts to
enforce any confidentiality or similar agreement relating to any Acquisition
Proposal. Without limiting the foregoing, it is agreed that any violation of the
restrictions set forth in this Section 8.3, by any Representative of any ACCESS
Entity shall be deemed to be a breach of this Section 8.3 by ACCESS.
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8.4 REGISTRATION RIGHTS.
(a) On or before the 45th day after each Distribution (but in no event
prior to the 45th day after the Keryx Annual Meeting), Keryx shall prepare and
file with the SEC a Registration Statement covering the resale of all the
Registrable Securities issued in such Distribution for an offering to be made on
a continuous or delayed basis pursuant to Rule 415. The Registration Statement
shall be on Form S-3 (unless Keryx is not then eligible to use Form S-3, in
which case the Registration Statement shall be on another appropriate form which
will effect an offering pursuant to Rule 415) and shall comply as to form in all
material respects with the Securities Act. None of the information to be
supplied by Keryx or any Keryx Entity for inclusion in the Registration
Statement will, when the Registration Statement becomes effective, 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, not
misleading. Keryx shall use its best efforts to cause the Registration Statement
to be declared effective under the Securities Act as promptly as possible after
the filing thereof, and shall use its best efforts to keep the Registration
Statement effective until the date which is two years after the date the
Registration Statement is declared effective or such earlier date when the
distribution of the Registrable Securities contemplated in such Registration
Statement has been completed. Keryx shall notify the holders of the Registrable
Securities of the effectiveness of the Registration Statement as promptly as
practicable thereafter. Keryx shall bear all "Registration Expenses", as
traditionally defined (including up to $15,000 per Registration Statement for a
single counsel to represent holders of Registrable Securities).
(b) In connection with the filing of any Registration Statement as
described in Section 8.4(a), Keryx shall:
(i) promptly notify each holder of Registrable Securities
of the effectiveness thereof and of any stop order issued or threatened
by the SEC and take all reasonable actions required to prevent the
entry of such stop order or to remove it if entered and promptly notify
such holder of such lifting or withdrawal of such order;
(ii) prepare and file with the SEC such amendments,
supplements and post-effective amendments to such Registration
Statement and the prospectus used in connection with such Registration
Statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all the Registrable
Securities covered by such Registration Statement;
(iii) furnish to the holders of the Registrable Securities
such numbers of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Act, and such
other documents as they may reasonably request in order to facilitate
the disposition of Registrable Securities owned by them;
(iv) use its reasonable efforts to register and qualify
the Registrable Securities covered by such Registration Statement under
such other securities or blue sky Laws of such jurisdictions as shall
be reasonably requested by the holders and do any and all other acts
and things which may be necessary or advisable to enable such holders
to consummate the disposition in each such jurisdiction of such
Registrable Securities;
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provided that Keryx shall not be required in connection therewith or as
a condition thereto to qualify to do business or to file a general
consent to service of process in any such states or jurisdictions;
(v) immediately notify each holder of the Registrable
Securities covered by such Registration Statement at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event which comes to Keryx'
attention if as a result of such event the prospectus included in such
Registration Statement contains an untrue statement of a material fact
or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and Keryx shall
promptly prepare and furnish to such holder a supplement or amendment
to such prospectus so that, as may thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not
contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading;
(vi) use its reasonable efforts to cause all such
Registrable Securities covered by the Registration Statement to be
listed on each securities exchange on which similar securities issued
by Keryx are then listed, and enter into such customary agreements
including a listing application as necessary, and to provide for a
transfer agent for such Registrable Securities covered by such
Registration Statement no later than the effective date of such
Registration Statement;
(vii) comply, and continue to comply during the period that
such Registration Statement is effective under the Securities Act, in
all material respects with the Securities Act and the Exchange Act and
with all applicable rules and regulations of the SEC with respect to
the disposition of the Registrable Securities covered by such
Registration Statement, and make available to its security holders, as
soon as reasonably practicable, an earnings statement covering the
period of at least twelve (12) months, beginning with the first full
calendar month after the effective date of such Registration Statement,
which earnings statement shall satisfy the provisions of Section 11(a)
of the Securities Act; and
(viii) enter into an indemnification and contribution
agreement with the holders of Registrable Securities containing
customary terms.
(c) Keryx shall have the right to delay the filing of any Registration
Statement otherwise required to be prepared and filed by Keryx pursuant to this
Section 8.4, or to suspend the use of any Registration Statement, for a period
not in excess of ninety (90) days (a "Blackout Period") if Keryx, in the good
faith judgment of its Board of Directors, determines (because of the existence
of, or in anticipation of, any acquisition, financing activity, or other
transaction involving Keryx, or the unavailability for reasons beyond Keryx'
control of any required financial statements, disclosure of information which is
in its best interest not to publicly disclose, or any other event or condition
of similar significance to Keryx) that the registration and distribution of the
Registrable Securities to be covered by such Registration Statement would be
seriously detrimental to Keryx and its stockholders; provided, that the Blackout
Period shall earlier terminate on the second business day following the
completion or abandonment of the relevant financing, acquisition or other
transaction or upon public disclosure by Keryx or public
35
admission by Keryx of such material nonpublic information or such time as such
material nonpublic information shall be publicly disclosed. Keryx will promptly
give the holders of the Registrable Securities written notice of such Blackout
Period and an approximation of the period of the anticipated delay; provided,
however, that the aggregate number of days included in all Blackout Periods
during any consecutive twelve (12) months shall not exceed ninety (90) days.
Keryx shall provide written notice to the Holders of the end of each Blackout
Period.
(d) It shall be a condition precedent to the obligations of Keryx to
take any action pursuant to this Section 8.4 with respect to the Registrable
Securities of any holder unless such holder agrees in the Letter of Transmittal
(i) to cease all disposition efforts under such Registration Statement with
respect to Registrable Securities held by such holder immediately upon receipt
of notice of the beginning of any Blackout Period until such time as Keryx shall
provide written notice to the Holders of the end of each Blackout Period, (ii)
to furnish to Keryx such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such holder's Registrable
Securities pursuant to any Registration Statement and (iii) to enter into any
indemnification and contribution agreement with Keryx in customary form as
contemplated by clause (viii) of paragraph (b) above.
(e) Notwithstanding the foregoing obligations of Keryx in this Section
8.4, with a view to making available to the holders of Registrable Securities
the benefits of Rule 144 promulgated under the Securities Act and any other rule
or regulation of the SEC that may at any time permit a holder to sell securities
of Keryx to the public without registration or pursuant to a registration
statement on Form S-3, Keryx agrees to:
(i) make and keep public information available, as those
terms are understood and defined in Rule 144 promulgated under the
Securities Act, at all times after ninety (90) days after the effective
date of the first registration statement filed by Keryx for the
offering of its securities to the general public;
(ii) file with the SEC in a timely manner all reports and
other documents required of Keryx under the Securities Act and the
Exchange Act; and
(iii) furnish to any holder, so long as the holder owns any
Registrable Securities, forthwith upon request (A) a written statement
by Keryx that it has complied with the reporting requirements of Rule
144 promulgated under the Securities Act, the Securities Act and the
Exchange Act, or that it qualifies as a registrant whose securities may
be resold pursuant to Form S-3, (B) a copy of the most recent annual or
quarterly report of Keryx and such other reports and documents so filed
by Keryx, and (iii) such other information as may be reasonably
requested in availing any holder of any rule or regulation of the SEC
(including Rule 144A) which permits the selling of any such securities
without registration or pursuant to such form.
8.5 CONSENTS OF REGULATORY AUTHORITIES.
The Parties hereto shall cooperate with each other and use their
commercially reasonable efforts to determine whether any filings are required to
be made with, or Consents are required to
36
be obtained from, any third party, the United States government or any agency,
departments or instrumentalities thereof or other governmental or regulatory
bodies or authorities of any federal, states, local and foreign jurisdictions in
connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and promptly prepare and
file all necessary documentation, to effect all such applications, notices,
petitions and filings, and to obtain as promptly as practicable all other
Consents of all Regulatory Authorities and other Persons which are necessary or
advisable to consummate the transactions contemplated by this Agreement
(including the Merger). The Parties agree that they will consult with each other
with respect to the obtaining of all such Consents of all Regulatory Authorities
and other Persons necessary or advisable to consummate the transactions
contemplated by this Agreement and each Party will keep the other apprised of
the status of matters relating to contemplation of the transactions contemplated
herein. Each Party also shall promptly advise the other upon receiving any
communication from any Regulatory Authority whose Consent is required for
consummation of the transactions contemplated by this Agreement which causes
such Party to believe that there is a reasonable likelihood that any requisite
Consent will not be obtained or that the receipt of any such Consent will be
materially delayed.
8.6 FILINGS WITH STATE OFFICES.
Upon the terms and subject to the conditions of this Agreement, ACCESS
shall execute and file the Certificate of Merger with the Secretary of State of
the State of Delaware in connection with the Closing.
8.7 AGREEMENT AS TO EFFORTS TO CONSUMMATE.
Subject to the terms and conditions of this Agreement, each Party
agrees to use, and to cause its Subsidiaries to use, its reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary, proper, or advisable under applicable Laws to consummate and
make effective, as soon as reasonably practicable after the date of this
Agreement, the transactions contemplated by this Agreement, including using its
reasonable efforts to lift or rescind any Order adversely affecting its ability
to consummate the transactions contemplated herein and to cause to be satisfied
the conditions referred to in Article 9; provided, that nothing herein shall
preclude either Party from exercising its rights under this Agreement.
8.8 INVESTIGATION AND CONFIDENTIALITY.
(a) (i) Prior to the Effective Time, each Party shall keep the other
Party advised of all material developments relevant to its business and to
consummation of the Merger and shall permit the other Party to make or cause to
be made such investigation of the business and properties of it and its
Subsidiaries and of their respective financial and legal conditions as the other
Party reasonably requests, provided that such investigation shall be reasonably
related to the transactions contemplated hereby and shall not interfere
unnecessarily with normal operations. No investigation by a Party shall affect
the ability of such Party to rely on the representations and warranties of the
other Party.
(ii) Notwithstanding anything herein to the contrary, each Party
(and any of its employees, representatives and other agents) shall be permitted
to disclose to any and all
37
persons, without limitation of any kind (a) any information with respect to U.S.
federal and state income tax treatment of the transaction contemplated herein
and any facts that may be relevant to understanding such tax treatment, which
facts shall not include for this purpose the names of the Parties or any other
Person named herein, or information that would permit identification of the
Parties or such other Persons, or any pricing terms (including purchase price or
purchase rate) or other nonpublic business or financial information that is
unrelated to such tax treatment or facts, and (b) all materials of any kind
(including opinions or other tax analyses) relating to such tax treatment or
facts that are provided to any of the Persons referred to above.
(b) In addition to the Parties' respective obligations under Section 7
of the Letter of Intent, which is hereby reaffirmed and adopted, and
incorporated by reference herein, each Party shall, and shall cause its advisers
and agents to, maintain the confidentiality of all confidential information
furnished to it by the other Party concerning its and its Subsidiaries'
businesses, operations, and financial positions and shall not use such
information for any purpose except in furtherance of the transactions
contemplated by this Agreement. If this Agreement is terminated prior to the
Effective Time, each Party shall promptly return or certify the destruction of
all documents and copies thereof, and all work papers containing confidential
information received from the other Party.
(c) Each Party agrees to give the other Party notice as soon as
practicable after any determination by it of any fact or occurrence relating to
the other Party which it has discovered through the course of its investigation
and which represents, or is reasonably likely to represent, either a material
breach of any representation, warranty, covenant or agreement of the other Party
or which has had or is reasonably likely to have an ACCESS Material Adverse
Effect or a Keryx Material Adverse Effect, as applicable.
8.9 PRESS RELEASES.
Prior to the Effective Time, ACCESS and Keryx shall consult with each
other as to the form and substance of any press release or other public
disclosure materially related to this Agreement or any other transaction
contemplated hereby; provided, that nothing in this Section 8.9 shall be deemed
to prohibit any Party from making any disclosure which its counsel deems
necessary or advisable in order to satisfy such Party's disclosure obligations
imposed by Law.
8.10 STATE TAKEOVER LAWS.
Each ACCESS Entity shall take all necessary steps to exempt the
transactions contemplated by this Agreement from, or if necessary to challenge
the validity or applicability of, any applicable Takeover Law.
8.11 INDEMNIFICATION.
(a) For a period of six years after the Effective Time, Keryx shall,
and shall cause the Surviving Corporation to, indemnify, defend and hold
harmless the present and former directors, officers, employees and agents of the
ACCESS Entities (each, an "Indemnified Party") against all Liabilities arising
out of actions or omissions arising out of the Indemnified Party's service or
services as directors, officers, employees or agents of ACCESS or, at ACCESS's
request, of
38
another corporation, partnership, joint venture, trust or other enterprise
occurring at or prior to the Effective Time (including the transactions
contemplated by this Agreement) to the fullest extent permitted under Delaware
Law and by ACCESS' certificate of incorporation and bylaws as in effect on the
date hereof, including provisions relating to advances of expenses incurred in
the defense of any Litigation and whether or not any Keryx Entity is insured
against any such matter. Without limiting the foregoing, in any case in which
approval by the Surviving Corporation is required to effectuate any
indemnification, the Surviving Corporation shall direct, at the election of the
Indemnified Party, that the determination of any such approval shall be made by
independent counsel mutually agreed upon between Keryx and the Indemnified
Party.
(b) Any Indemnified Party wishing to claim indemnification under
paragraph (a) of this Section 8.11, upon learning of any such Liability or
Litigation, shall promptly notify Keryx and the Surviving Corporation thereof.
In the event of any such Litigation (whether arising before or after the
Effective Time), (i) Keryx or the Surviving Corporation shall have the right to
assume the defense thereof and neither Keryx nor the Surviving Corporation shall
be liable to such Indemnified Parties for any legal expenses of other counsel or
any other expenses subsequently incurred by such Indemnified Parties in
connection with the defense thereof, except that if Keryx or the Surviving
Corporation elects not to assume such defense or counsel for the Indemnified
Parties advises that there are substantive issues which raise conflicts of
interest between Keryx or the Surviving Corporation and the Indemnified Parties,
the Indemnified Parties may retain counsel satisfactory to them, and Keryx or
the Surviving Corporation shall pay all reasonable fees and expenses of such
counsel for the Indemnified Parties promptly as statements therefor are
received; provided, that Keryx and the Surviving Corporation shall be obligated
pursuant to this paragraph (c) to pay for only one firm of counsel for all
Indemnified Parties in any jurisdiction; (ii) the Indemnified Parties will
cooperate in the defense of any such Litigation; and (iii) neither Keryx nor the
Surviving Corporation shall be liable for any settlement effected without its
prior written consent, which consent shall not be unreasonably withheld; and
provided, further, that neither Keryx nor the Surviving Corporation shall have
any obligation hereunder to any Indemnified Party when and if a court of
competent jurisdiction shall determine, and such determination shall have become
final, that the indemnification of such Indemnified Party in the manner
contemplated hereby is prohibited by applicable Law.
8.12 DEVELOPMENT OF ACCESS PRODUCTS.
Following the Merger, Keryx shall have the right, in its sole
discretion, to direct and control the development of the ACCESS Products. This
Agreement shall not be construed to impose upon Keryx any obligation to the
former holders of ACCESS Stock to develop, pursue, test, market, or otherwise
advance any ACCESS Product.
8.13 TERMINATION OF ACCESS OPTIONS.
The Board of Directors of ACCESS shall take all action required and
necessary to terminate the ACCESS Stock Plans prior to the Effective Time and to
effectuate the transactions contemplated by Section 3.6.
39
8.14 ASSUMPTION OF CERTAIN OBLIGATIONS.
It shall be a condition to any transaction involving a change in
control of Keryx or any of its successors or assigns, a merger or consolidation
in which Keryx or any such successor or assign is not the surviving entity or a
sale, transfer, assignment or conveyance of substantially all of Keryx's or any
such successor's or assign's assets that the party succeeding to Keryx's or such
successor's or assign's principal assets or business activities shall have (i)
assumed all of Keryx's remaining obligations under Sections 8.11 and (ii) to the
extent Merger Consideration may be payable thereafter, to issue in lieu thereof
the securities or other property that would have been deliverable to a holder of
the shares of Keryx Common Stock issuable as such Merger Consideration, in
accordance with the terms of this Agreement. The Indemnitees and the holders of
Registrable Securities shall be third party beneficiaries of this Agreement.
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY.
The respective obligations of each Party to perform this Agreement and
consummate the Merger and the other transactions contemplated hereby are subject
to the satisfaction of the following conditions, unless waived by both Parties
pursuant to Section 11.6:
(a) Stockholder Approval. This Agreement, and the consummation of the
transactions contemplated hereby, including the Merger, shall have received the
ACCESS Stockholder Approval.
(b) Regulatory Approvals. All Consents of, filings and registrations
with, and notifications to, all Regulatory Authorities required for consummation
of the Merger shall have been obtained or made and shall be in full force and
effect and all waiting periods required by Law shall have expired.
(c) Consents and Approvals. Each Party shall have obtained any and all
Consents required for consummation of the Merger (other than those referred to
in Section 9.1(b)) or for the preventing of any Default under any Contract or
Permit of such Party which, if not obtained or made, is reasonably likely to
have, individually or in the aggregate, an ACCESS Material Adverse Effect or a
Keryx Material Adverse Effect, as applicable. Without limitation of the
foregoing, ACCESS shall have received the Consents of the holders of the Series
A Warrants, Series B Warrants to the treatment of such warrants as set forth in
Section 3.2.
(d) Legal Proceedings. No court or governmental or Regulatory Authority
of competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any Law or Order (whether temporary, preliminary or permanent) or taken
any other action which prohibits, restricts or makes illegal consummation of the
transactions contemplated by this Agreement.
(e) Fairness Opinion. The Keryx Special Committee shall have received
from the Special Committee Financial Advisor a letter, dated the date of this
Agreement, to the effect that, in the opinion of such firm, the consideration to
be offered by Keryx in connection with the
40
Merger is, as of the date of this Agreement, fair, from a financial point of
view, to Keryx's stockholders who are not Affiliates of ACCESS.
(f) Termination of Employment Agreements. Each of Xxxxxxx Xxxxx and
Xxxxx Xxxxxxxxx shall have entered into a termination agreement with respect to
his employment agreement with ACCESS on terms satisfactory to ACCESS and Keryx.
(g) Appraisal Rights. Appraisal rights shall not have been exercised
pursuant to Section 262 of the DGCL with respect to more than 7.5% of the ACCESS
Stock.
9.2 CONDITIONS TO OBLIGATIONS OF KERYX.
The obligations of Keryx to perform this Agreement and consummate the
Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by Keryx pursuant to
Section 11.6(a):
(a) Representations and Warranties. For purposes of this Section
9.2(a), the accuracy of the representations and warranties of ACCESS set forth
in this Agreement shall be assessed as of the date of this Agreement and as of
the Effective Time with the same effect as though all such representations and
warranties had been made on and as of the Effective Time (provided that
representations and warranties which are confined to a specified date shall
speak only as of such date). The representations and warranties set forth in
Section 5.3 shall be true and correct (except for inaccuracies which are de
minimus in amount). There shall not exist inaccuracies in the representations
and warranties of ACCESS set forth in this Agreement (including the
representations and warranties set forth in Sections 5.3) such that the
aggregate effect of such inaccuracies has, or is reasonably likely to have, an
ACCESS Material Adverse Effect; provided that, for purposes of this sentence
only, those representations and warranties which are qualified by references to
"material" or "Material Adverse Effect" or to the "Knowledge" of any Person
shall be deemed not to include such qualifications.
(b) Performance of Agreements and Covenants. Each and all of the
agreements and covenants of ACCESS to be performed and complied with pursuant to
this Agreement and the other agreements contemplated hereby prior to the
Effective Time shall have been duly performed and complied with in all material
respects.
(c) Certificates. ACCESS shall have delivered to Keryx (i) a
certificate, dated as of the Effective Time and signed on its behalf by its
chief executive officer, to the effect that the conditions set forth in Section
9.1 as relates to ACCESS and in Sections 9.2(a) and 9.2(b) have been satisfied,
and (ii) certified copies of resolutions duly adopted by ACCESS' Board of
Directors and stockholders evidencing the taking of all corporate action
necessary to authorize the execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby, all in
such reasonable detail as Keryx and its counsel shall request.
(d) Material Adverse Effect. No ACCESS Material Adverse Effect shall
have occurred since the date hereof and be continuing.
41
9.3 CONDITIONS TO OBLIGATIONS OF ACCESS.
The obligations of ACCESS to perform this Agreement and consummate the
Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by ACCESS pursuant to
Section 11.6(b):
(a) Representations and Warranties. For purposes of this Section
9.3(a), the accuracy of the representations and warranties of Keryx set forth in
this Agreement shall be assessed as of the date of this Agreement and as of the
Effective Time with the same effect as though all such representations and
warranties had been made on and as of the Effective Time (provided that
representations and warranties which are confined to a specified date shall
speak only as of such date). There shall not exist inaccuracies in the
representations and warranties of Keryx set forth in this Agreement such that
the aggregate effect of such inaccuracies has, or is reasonably likely to have,
a Keryx Material Adverse Effect; provided, that, for purposes of this sentence
only, those representations and warranties which are qualified by references to
"material" or "Material Adverse Effect" or to the "Knowledge" of any Person
shall be deemed not to include such qualifications.
(b) Performance of Agreements and Covenants. Each and all of the
agreements and covenants of Keryx to be performed and complied with pursuant to
this Agreement and the other agreements contemplated hereby prior to the
Effective Time shall have been duly performed and complied with in all material
respects.
(c) Certificates. Keryx shall have delivered to the ACCESS (i) a
certificate, dated as of the Effective Time and signed on its behalf by its
chief executive officer and its principal financial officer, to the effect that
the conditions set forth in Section 9.1 as relates to Keryx and in Sections
9.3(a) and 9.3(b) have been satisfied, and (ii) certified copies of resolutions
duly adopted by Keryx's Board of Directors and Mergersub's Board of Directors
and sole stockholder evidencing the taking of all corporate action necessary to
authorize the execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, all in such reasonable
detail as ACCESS and its counsel shall request.
(d) Material Adverse Effect. No Keryx Material Adverse Effect shall
have occurred since the date hereof and be continuing.
ARTICLE 10 - TERMINATION
10.1 TERMINATION.
Notwithstanding any other provision of this Agreement, and
notwithstanding the approval of this Agreement by the stockholders of ACCESS,
this Agreement may be terminated and the Merger abandoned at any time prior to
the Effective Time:
(a) By mutual written agreement of Keryx and ACCESS; or
(b) By either Party (provided that the terminating Party is not then in
material breach of any representation, warranty, covenant, or other agreement
contained in this Agreement) in the event of a material breach by the other
Party of any representation or warranty contained in this
42
Agreement which cannot be or has not been cured within fifteen (15) days after
the giving of written notice to the breaching Party of such breach and which
breach is reasonably likely, in the opinion of the non-breaching Party, to
permit such Party to refuse to consummate the transactions contemplated by this
Agreement pursuant to the standard set forth in Section 9.2 or 9.3 as
applicable; or
(c) By either Party (provided that the terminating Party is not then in
material breach of any representation, warranty, covenant, or other agreement
contained in this Agreement) in the event of a material breach by the other
Party of any covenant or agreement contained in this Agreement which cannot be
or has not been cured within ten (10) days after the giving of written notice to
the breaching Party of such breach; or
(d) By either Party in the event (i) any Consent of any Regulatory
Authority required for consummation of the Merger and the other transactions
contemplated hereby shall have been denied by final nonappealable action of such
authority or if any action taken by such authority is not appealed within the
time limit for appeal, (ii) any Law or Order permanently restraining, enjoining
or otherwise prohibiting the consummation of the Merger shall have become final
and nonappealable, or (iii) the stockholders of ACCESS fail to vote their
approval of the matters relating to this Agreement and the transactions
contemplated hereby; or
(e) By either Party in the event that the Merger shall not have been
consummated by March 31, 2004, if the failure to consummate the transactions
contemplated hereby on or before such date is not caused by any breach of this
Agreement by the Party electing to terminate pursuant to this Section 10.1(e);
or
(f) By Keryx in the event that (i) the Board of Directors of ACCESS
shall have affirmed, recommended or authorized entering into any Acquisition
Transaction other than the Merger, or (ii) the Board of Directors of ACCESS
negotiates or authorizes the conduct of negotiations (and five business days
have elapsed without such negotiations being discontinued) with a third party
(it being understood and agreed that "negotiate" shall not be deemed to include
the provision of information to, or the request and receipt of information from,
any Person that submits an Acquisition Proposal or discussions regarding such
information for the sole purpose of ascertaining the terms of such Acquisition
Proposal and determining whether the board of directors will in fact engage in,
or authorize, negotiations) regarding an Acquisition Proposal other than the
Merger, other than as permitted by, and in accordance with, Section 8.3, or
(iii) any Person (other than a Keryx Entity or an existing ACCESS
securityholder) shall have acquired beneficial ownership (determined pursuant to
Rule 13d-3 promulgated under the Exchange Act) of 5% of the outstanding shares
of ACCESS Stock; or
(g) By either Party (provided that the terminating Party is not then in
material breach of any representation, warranty, covenant, or other agreement
contained in this Agreement) in the event that any of the conditions precedent
to the obligations of such Party to consummate the Merger cannot be satisfied or
fulfilled by the date specified in Section 10.1(e).
(h) By Keryx, if ACCESS shall have had an ACCESS Material Adverse
Effect;
(i) By ACCESS, if Keryx shall have had a Keryx Material Adverse Effect.
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10.2 EFFECT OF TERMINATION.
In the event of the termination and abandonment of this Agreement
pursuant to Section 10.1, this Agreement shall become void and have no effect,
except that (i) the provisions of this Section 10.2, Section 8.8, and Section
11.2, shall survive any such termination and abandonment, and (ii) no such
termination shall relieve the breaching Party from Liability resulting from any
breach by that Party of this Agreement.
ARTICLE 11 - MISCELLANEOUS
11.1 DEFINITIONS.
(a) Except as otherwise provided herein, the capitalized terms set
forth below shall have the following meanings:
"ACCESS COMMON STOCK" means the $0.001 par value common stock of
ACCESS.
"ACCESS DISCLOSURE MEMORANDUM" means the document entitled "ACCESS
Oncology, Inc. Disclosure Memorandum" delivered prior to the date of this
Agreement to Keryx describing in reasonable detail the matters contained therein
and, with respect to each disclosure made therein, specifically referencing each
Section of this Agreement under which such disclosure is being made. Information
disclosed with respect to one Section shall not be deemed to be disclosed for
purposes of any other Section not specifically referenced with respect thereto.
"ACCESS ENTITIES" means, collectively, ACCESS and all ACCESS
Subsidiaries.
"ACCESS FINANCIAL STATEMENTS" means (i) the unaudited consolidated
balance sheet (including related notes and schedules, if any) as of the fiscal
year ended December 31, 2003, (ii) the unaudited consolidated statement of
income (including related notes and schedules, if any) for the nine months ended
September 30, 2003, (iii) the unaudited consolidated balance sheet (including
related notes and schedules, if any) and the related statement of income and
cash flows (including related notes and schedules, if any) as of and for the
fiscal year ended December 31, 2002, and (iv) the audited consolidated balance
sheets (including related notes and schedules, if any) and the related
statements of operations, stockholders' equity and cash flows (including related
notes and schedules, if any) as of and for the fiscal years ended December 31,
2001 and 2000 and for the period May 13, 1999 through December 31, 1999.
"ACCESS MATERIAL ADVERSE EFFECT" means an event, change or occurrence
which, individually or together with any other event, change or occurrence, has
a material adverse impact on (i) the financial position, business, or results of
operations of ACCESS and its Subsidiaries, taken as a whole, or (ii) the ability
of ACCESS to perform its obligations under this Agreement or to consummate the
Merger or the other transactions contemplated by this Agreement, provided that
"Material Adverse Effect" shall not be deemed to include the impact of (A)
changes in Laws of general applicability or interpretations thereof by courts or
governmental authorities, (B) changes in generally accepted accounting
principles, (C) actions and omissions of ACCESS (or any of its Subsidiaries)
taken in accordance with the terms of this
44
Agreement or with the prior informed written Consent of Keryx in contemplation
of the transactions contemplated hereby, or (D) the direct effects of compliance
with this Agreement on the operating performance of ACCESS, including expenses
incurred by ACCESS in consummating the transactions contemplated by this
Agreement.
"ACCESS OUTSTANDING SHARES" means the number of shares of ACCESS Common
Stock issued and outstanding as of the Effective Time plus any Common Warrant
Shares.
"ACCESS PRODUCT" means any of Perifosine, 06-Benzylguanine (also known
as 06-BG) or anhydrovinblastine sulfate (also known as AVLB), which shall be
collectively referred to as the "ACCESS Products."
"ACCESS STOCK" means, collectively, the ACCESS Common Stock, the Series
A Preferred Stock, and the Series B Preferred Stock, each having a par value of
$0.001 per share.
"ACCESS STOCK PLANS" means the existing stock option and other
stock-based compensation plans of ACCESS designated as follows: ACCESS Oncology,
Inc. 2000 Equity Incentive Plan.
"ACCESS SUBSIDIARIES" means the Subsidiaries of ACCESS, which shall
include the ACCESS Subsidiaries described in Section 5.4 and any corporation,
limited liability company, limited partnership, limited liability partnership or
other organization acquired as a Subsidiary of ACCESS in the future and held as
a Subsidiary by ACCESS at the Effective Time.
"ACCESS WARRANTS" means, collectively, the Common Stock Warrants, the
Series A Warrants and the Series B Warrants.
"ACQUISITION PROPOSAL" means any proposal (whether communicated to
ACCESS or publicly announced to ACCESS' shareholders) by any Person (other than
Keryx or any of its Affiliates) for an Acquisition Transaction involving ACCESS
or any of its present or future consolidated Subsidiaries, or any combination of
such Subsidiaries.
"ACQUISITION TRANSACTION" means any transaction or series of related
transactions (other than the transactions contemplated by this Agreement)
involving: (i) any acquisition or purchase from ACCESS by any Person or "Group"
(other than Keryx or any of its Affiliates) of 10% or more in interest of the
total outstanding voting securities of ACCESS or any of its Subsidiaries, or any
tender offer or exchange offer that if consummated would result in any Person or
"Group" (other than Keryx or any of its Affiliates) beneficially owning 10% or
more in interest of the total outstanding voting securities of ACCESS or any of
its Subsidiaries, or any merger, consolidation, business combination or similar
transaction involving ACCESS; or (ii) any sale or lease (other than in the
ordinary course of business), exchange, transfer, license (other than in the
ordinary course of business), acquisition or disposition of 10% or more of the
assets of ACCESS.
"AFFILIATE" of a Person means: (i) any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by or
under common control with such Person; (ii) any officer, director, partner,
employer, or direct or indirect beneficial owner of any 10% or greater equity or
voting interest of such Person; or (iii) any other Person for which a Person
described in clause (ii) acts in any such capacity.
45
"AGGREGATE CONSIDERATION" means, with respect to a Divesting
Transaction, the value, measured as of the date of such closing, of all cash,
securities and other property actually received by the Keryx Entities in such
Divesting Transactions, including, but not limited to: (A) any indebtedness for
money borrowed or other liabilities or obligations assumed or paid by the
acquiring party to the Keryx Entities in connection therewith, and (B)
contingent payments actually received by the Keryx Entities or paid to Keryx
upon release from escrow.
"ASSETS" of a Person means all of the assets, properties, businesses
and rights of such Person of every kind, nature, character and description,
whether real, personal or mixed, tangible or intangible, accrued or contingent,
or otherwise relating to or utilized in such Person's business, directly or
indirectly, in whole or in part, whether or not carried on the books and records
of such Person, and whether or not owned in the name of such Person or any
Affiliate of such Person and wherever located.
"CLOSING DATE" means the date on which the Closing occurs.
"COMMON MERGER CONSIDERATION" means that portion of the Merger
Consideration whose value is in excess of the Preferred Amount, which shall be
distributed pro-rata to the holders of Participating Common Stock.
"COMMON STOCK WARRANTS" means those warrants, other than the Series A
Warrants and Series B Warrants, issued by ACCESS that have not been exercised
prior to the Effective Time and that provide for the issuance of ACCESS Common
Stock upon the exercise thereof.
"COMMON WARRANT SHARES" means the number of shares of ACCESS Common
Stock issuable to any holder of Series A Warrants, Series B Warrants, or Common
Stock Warrants.
"CONSENT" means any consent, approval, authorization, clearance,
exemption, waiver, or similar affirmation by any Person pursuant to any
Contract, Law, Order, or Permit.
"CONTRACT" means any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease, license,
obligation, plan, practice, restriction, understanding, or undertaking of any
kind or character, or other document to which any Person is a party or that is
binding on any Person or its capital stock, Assets or business.
"DEFAULT" means (i) any breach or violation of, default under,
contravention of, or conflict with, any Contract, Law, Order, or Permit, (ii)
any occurrence of any event that with the passage of time or the giving of
notice or both would constitute a breach or violation of, default under,
contravention of, or conflict with, any Contract, Law, Order, or Permit, or
(iii) any occurrence of any event that with or without the passage of time or
the giving of notice would give rise to a right of any Person to exercise any
remedy or obtain any relief under, terminate or revoke, suspend, cancel, or
modify or change the current terms of, or renegotiate, or to accelerate the
maturity or performance of, the effect of which would be to increase, or impose
or accelerate any Liability under, any Contract, Law, Order, or Permit.
"DISTRIBUTION" means a distribution of Merger Consideration upon the
occurrence of any Triggering Event, or as a result of the Unexercised Warrant
Share Distribution.
46
"DIVESTING TRANSACTION" means any transaction or series of related
transactions other than a Qualifying Extraordinary Transaction or a Spin Off
involving the direct or indirect sale, transfer, assignment, conveyance or
pledge (whether by merger or consolidation, transfer of securities, transfer of
assets, relinquishment or intentional default of license rights or otherwise) of
all or substantially all of the ACCESS Products, excluding any such pledge made
to a bank, savings and loan association or other financial institution in
connection with an extension of credit to a Keryx Entity.
"EMPLOYEE BENEFIT PLAN" means each pension, retirement, profit-sharing,
deferred compensation, stock option, employee stock ownership, share purchase,
severance pay, vacation, bonus, retention, change in control or other incentive
plan, medical, vision, dental or other health plan, any life insurance plan,
flexible spending account, cafeteria plan, vacation, holiday, disability or any
other employee benefit plan or fringe benefit plan, including any "employee
benefit plan," as that term is defined in Section 3(3) of ERISA and any other
plan, fund, policy, program, practice, custom understanding or arrangement
providing compensation or other benefits, whether or not such Employee Benefit
Plan is or is intended to be (i) covered or qualified under the Code, ERISA or
any other applicable Law, (ii) written or oral, (iii) funded or unfunded or (iv)
arrived at through collective bargaining or otherwise.
"ENVIRONMENTAL LAWS" means all Laws relating to pollution or protection
of human health or the environment (including ambient air, surface water, ground
water, land surface, or subsurface strata) including the Comprehensive
Environmental Response Compensation and Liability Act, as amended, 42 U.S.C.
9601 et seq. ("CERCLA"), the Resource Conservation and Recovery Act, as amended,
42 U.S.C. 6901 et seq. ("RCRA"), and other Laws relating to emissions,
discharges, releases, or threatened releases of any Hazardous Material, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of any Hazardous Material.
"EQUITY RIGHTS" means all arrangements, calls, commitments, Contracts,
options, rights to subscribe to, scrip, understandings, warrants, or other
binding obligations of any character whatsoever relating to, or securities or
rights convertible into or exchangeable for, shares of the capital stock of a
Person or by which a Person is or may be bound to issue additional shares of its
capital stock or other Equity Rights.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" means any entity which together with an ACCESS Entity
would be treated as a single employer under Code Section 414.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"EXTRAORDINARY TRANSACTION" means (a) any change in control with
respect to Keryx (whether or not resulting from a transaction approved by the
Board of Directors of Keryx and including, without limitation, (i) any
acquisition or purchase, in one or more related transactions, by any Person or
Group (other than Affiliates of Keryx as of the Effective Time) of 50% or more
of the total outstanding voting securities of Keryx, and (ii) a change in
control resulting from a
47
hostile tender offer for Keryx securities), (b) any direct or indirect sale,
transfer, assignment or conveyance of substantially all of Keryx's assets, and
(c) a liquidation or winding up with respect to Keryx.
"FDA" means the United States Food and Drug Administration.
"FIFTH MILESTONE" means $250,000,000 in gross sales of all ACCESS
Products in any trailing twelve-month period.
"FIRST MILESTONE" means the date on which the first patient is enrolled
in a Keryx-sponsored Phase III (or other Pivotal) clinical trial of any ACCESS
Product.
"FORM S-3" means such form under the Securities Act as in effect on the
date of this Agreement, or any registration form under the Securities Act that
is subsequently adopted by the SEC, which permits inclusion or incorporation of
substantial information by reference to other documents filed by Keryx with the
SEC.
"FOURTH MILESTONE" means $100,000,000 in gross sales of all ACCESS
Products in any trailing twelve-month period.
"GAAP" means generally accepted accounting principles, consistently
applied during the periods involved.
"HAZARDOUS MATERIAL" means (i) any hazardous substance, hazardous
material, hazardous waste, regulated substance, or toxic substance (as those
terms are defined by any applicable Environmental Laws) and (ii) any chemicals,
pollutants, contaminants, petroleum, petroleum products, or oil,
asbestos-containing materials and any polychlorinated biphenyls.
"INTELLECTUAL PROPERTY" means copyrights, patents, trademarks, service
marks, service names, trade names, domain names, together with all goodwill
associated therewith, registrations and applications therefor, technology rights
and licenses, computer software (including any source or object codes therefor
or documentation relating thereto), trade secrets, franchises, know-how,
inventions, and other intellectual property rights.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder.
"KERYX COMMON STOCK" means the 0.001 par value common stock of Keryx.
"KERYX DISCLOSURE MEMORANDUM" means the written information entitled
"Keryx Biopharmaceuticals, Inc. Disclosure Memorandum" delivered prior to the
date of this Agreement to ACCESS describing in reasonable detail the matters
contained therein and, with respect to each disclosure made therein,
specifically referencing each Section of this Agreement under which such
disclosure is being made. Information disclosed with respect to one Section
shall not be deemed to be disclosed for purposes of any other Section not
specifically referenced with respect thereto.
"KERYX ENTITIES" means, collectively, Keryx and all Keryx Subsidiaries.
48
"KERYX FINANCIAL STATEMENTS" means (i) the consolidated balance sheets
(including related notes and schedules, if any) of Keryx as of June 30 and
September 30, 2003, and as of December 31, 2002, and the related statements of
income, changes in shareholders' equity, and cash flows (including related notes
and schedules, if any) for the 9 months ended September 30, 2003, and for each
of the three fiscal years ended December 31, 2000, 2001 and 2002, as filed by
Keryx in SEC Documents, and (ii) the consolidated balance sheets of Keryx
(including related notes and schedules, if any) and related statements of
income, changes in shareholders' equity, and cash flows (including related notes
and schedules, if any) included in SEC Documents filed with respect to periods
ended subsequent to September 30, 2003.
"KERYX MATERIAL ADVERSE EFFECT" means an event, change or occurrence
which, individually or together with any other event, change or occurrence, has
a material adverse impact on (i) the financial position, business, or results of
operations of Keryx and its Subsidiaries, taken as a whole, or (ii) the ability
of Keryx to perform its obligations under this Agreement or to consummate the
Merger or the other transactions contemplated by this Agreement, provided that
"Keryx Material Adverse Effect" shall not be deemed to include the impact of (A)
changes in Laws of general applicability or interpretations thereof by courts or
governmental authorities, (B) changes in generally accepted accounting
principles, (C) actions and omissions of Keryx (or any of its Subsidiaries)
taken with the prior informed written Consent of ACCESS in contemplation of the
transactions contemplated hereby, (D) the direct effects of compliance with this
Agreement on the operating performance of Keryx, including expenses incurred by
Keryx in consummating the transactions contemplated by this Agreement, (E)
effects demonstrably shown to have been proximately caused by the public
announcement of, and the response or reaction of customers, vendors, licensors,
investors or employees of Keryx to, this Agreement or any of the transactions
contemplated by this Agreement, (F) failure of Keryx to meet the revenue or
earnings predictions of equity analysts (as reflected in the First Call
consensus estimate), or any other published revenue or earnings predictions or
expectations, for any period ending on or after the date of this Agreement, or
(G) changes in the market price or trading volume of Keryx Common Stock.
"KNOWLEDGE" as used with respect to a Person (including references to
such Person being aware of a particular matter) means those facts that are known
by any executive officer of such Person.
"LAW" means any code, law (including common law), ordinance,
regulation, reporting or licensing requirement, rule, or statute applicable to a
Person or its Assets, Liabilities, or business, including those promulgated,
interpreted or enforced by any Regulatory Authority.
"LETTER OF INTENT" means the letter of intent dated December 9, 2003 by
and between Keryx and ACCESS.
"LIABILITY" means any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost or expense (including costs
of investigation, collection and defense), claim, deficiency, guaranty or
endorsement of or by any Person (other than endorsements of notes, bills,
checks, and drafts presented for collection or deposit in the ordinary course of
business) of any type, whether accrued, absolute or contingent, liquidated or
unliquidated, matured or unmatured, or otherwise.
49
"LICENSED INTELLECTUAL PROPERTY" means Intellectual Property used,
sold, licensed or sublicensed by any ACCESS Entity pursuant to a license
agreement between the ACCESS Entity and any Person.
"LIEN" means any conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title retention
or other security arrangement, or any adverse right or interest, charge, or
claim of any nature whatsoever of, on, or with respect to any property or
property interest, other than (i) Liens for current property Taxes not yet due
and payable, and (ii) Liens which do not materially impair the use of or title
to the Assets subject to such Lien.
"LITIGATION" means any action, arbitration, cause of action, lawsuit,
claim, complaint, criminal prosecution, governmental or other examination or
investigation, audit (other than regular audits of financial statements by
outside auditors), compliance review, inspection, hearing, administrative or
other proceeding relating to or affecting a Party, its business, its records,
its policies, its practices, its compliance with Law, its actions, its Assets
(including Contracts related to it), or the transactions contemplated by this
Agreement.
"MATERIAL" or "MATERIAL" for purposes of this Agreement shall be
determined in light of the facts and circumstances of the matter in question;
provided that any specific monetary amount stated in this Agreement shall
determine materiality in that instance.
"MERGER CONSIDERATION" means the right to receive either shares of
Keryx Common Stock, or cash in lieu thereof as set forth in Section 3.1(f), in
the following amounts upon the achievement of the following Milestones:
(a) 500,000 shares of Keryx Common Stock upon the achievement of the
First Milestone;
(b) 750,000 shares of Keryx Common Stock upon the achievement of the
Second Milestone;
(c) 1,750,000 shares of Keryx Common Stock upon the achievement of the
Third Milestone;
(d) 500,000 shares of Keryx Common Stock upon the achievement of the
Fourth Milestone; and
(e) 500,000 shares of Keryx Common Stock upon the achievement of the
Fifth Milestone.
"MERGERSUB COMMON STOCK" means the $0.001 par value common stock of
Mergersub.
"MILESTONE" means any of the First Milestone, the Second Milestone, the
Third Milestone, the Fourth Milestone or the Fifth Milestone and shall be
collectively referred to as the "Milestones." For the avoidance of doubt, each
Milestone may be achieved with respect to any of the ACCESS Products, however,
the achievement of any Milestone by more than one ACCESS Product shall not
result in any additional Merger Consideration being due upon
50
achievement of such Milestone. The exact date of the achievement of a given
Milestone shall be determined by the Board of Directors of Keryx in good faith.
"MILESTONE EVALUATION DATE" means:
(a) with respect to the First Milestone, the earlier of (i) ninety (90)
days after the date on which the first patient is enrolled in a Keryx-sponsored
Phase III (or other Pivotal) clinical trial of any ACCESS Product or (ii) the
public announcement by Keryx of the commencement of such clinical trial;
(b) with respect to the Second Milestone, the earlier of (i) ninety
(90) days after the date Keryx receives written notice that the FDA has accepted
the filing of the first New Drug Application for any ACCESS Product or (ii) the
public announcement by Keryx of such acceptance by the FDA of the filing of a
New Drug Application;
(c) with respect to the Third Milestone, the earlier of (i) ninety (90)
days after the date of the receipt of an approval letter from the FDA with
respect to any ACCESS Product or (ii) the public announcement by Keryx of the
receipt of such approval letter from the FDA; and
(d) with respect to each of the Fourth Milestone and the Fifth
Milestone, shall be the last business day of the fiscal quarter in which the
twelve-month period ends during which such sales occurred.
"NASDAQ" means Nasdaq Stock Market, Inc.
"NASDAQ STOCK MARKET" means the electronic securities market comprised
of two distinct market tiers, the Nasdaq National Market and The Nasdaq SmallCap
Market; The Nasdaq Stock Market is operated by The Nasdaq Stock Market, Inc.
"OPERATING PROPERTY" means any property owned, leased, or operated by
the Party in question or by any of its Subsidiaries or in which such Party or
Subsidiary holds a security interest or other interest (including an interest in
a fiduciary capacity), and, where required by the context, includes the owner or
operator of such property, but only with respect to such property.
"ORDER" means any administrative decision or award, decree, injunction,
judgment, order, quasi-judicial decision or award, ruling, or writ of any
federal, state, local or foreign or other court, arbitrator, mediator, tribunal,
administrative agency, or Regulatory Authority.
"PARTICIPATING COMMON STOCK" means all shares of ACCESS Common Stock
issued and outstanding as of the Effective Time plus any Common Warrant Shares,
but excluding (i) any shares of ACCESS Common Stock held by stockholders who
perfect (and do not withdraw
51
or lose) their statutory dissenters' rights as provided in Section 3.5, and (ii)
any shares of ACCESS Common Stock held by any ACCESS Entity or Keryx immediately
prior to the Effective Time.
"PARTICIPATING SERIES A PREFERRED STOCK" means all shares of Series A
Preferred Stock issued and outstanding as of the Effective Time, but excluding
(i) any shares of Series A Preferred Stock held by stockholders who perfect
their statutory dissenters' rights as provided in Section 3.5, and (ii) any
shares of Series A Preferred Stock held by any ACCESS Entity or Keryx
immediately prior to the Effective Time.
"PARTICIPATING SERIES B PREFERRED STOCK" means all shares of Series B
Preferred Stock issued and outstanding as of the Effective Time, but excluding
(i) any shares of Series B Preferred Stock held by stockholders who perfect
their statutory dissenters' rights as provided in Section 3.5, and (ii) any
shares of Series B Preferred Stock held by any ACCESS Entity or Keryx
immediately prior to the Effective Time.
"PARTICIPATION FACILITY" means any facility or property in which the
Party in question or any of its Subsidiaries participates in the management and,
where required by the context, said term means the owner or operator of such
facility or property, but only with respect to such facility or property.
"PARTY" means any of ACCESS, Mergersub or Keryx, and "PARTIES" means
ACCESS, Mergersub and Keryx.
"PERMIT" means any federal, state, local, and foreign governmental
approval, authorization, certificate, easement, filing, franchise, license,
notice, permit, or right to which any Person is a party or that is or may be
binding upon or inure to the benefit of any Person or its securities, Assets, or
business.
"PERSON" means a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
limited liability partnership, trust, business association, group acting in
concert, or any person acting in a representative capacity.
"PREFERRED AMOUNT" means the sum of (i) the number of shares of
Participating Series A Preferred Stock outstanding as of the Effective Time
multiplied by the Series A Preferred Stock liquidation preference of $1.50 per
share and (ii) the number of shares of Participating Series B Preferred Stock
outstanding as of the Effective Time multiplied by the Series B Preferred Stock
liquidation preference of $2.00 per share.
"PREFERRED MERGER CONSIDERATION" means that initial portion of the
Merger Consideration having a value not in excess of the Preferred Amount, which
shall be distributed to the holders of the Participating Series A Preferred
Stock and Participating Series B Preferred Stock ratably in accordance with
their respective liquidation preferences of $1.50 per share and $2.00 per share.
"QUALIFYING EXTRAORDINARY TRANSACTION" means any Extraordinary
Transaction that involves either the direct or indirect transfer of any of the
ACCESS Products.
52
"REGISTRABLE SECURITIES" means, with respect to each Distribution, all
shares of Keryx Common Stock issued to the stockholders of ACCESS as Merger
Consideration in each such Distribution, together with any shares of Keryx
Common Stock issued pursuant to Section 3.2(d) prior to or as part of the
relevant Distribution, provided that the Keryx Stockholder Approval has been
obtained.
"REGISTRATION STATEMENT" means the registration statement required to
be filed with the SEC by Keryx under the Securities Act with respect to the
Registrable Securities, including the prospectus included therein, and any
pre-effective or post-effective amendments or supplements to the Registration
Statement or prospectus, all exhibits thereto, and all material incorporated by
reference in the Registration Statement.
"REGULATORY AUTHORITIES" means, collectively, the SEC, the Nasdaq Stock
Market, the FTC, the DOJ, and all other federal, state, county, local or other
governmental or regulatory agencies, authorities (including taxing and
self-regulatory authorities), instrumentalities, commissions, boards or bodies
having jurisdiction over the Parties and their respective Subsidiaries.
"REPRESENTATIVE" means any investment banker, financial advisor,
attorney, accountant, consultant, or other representative engaged by a Person.
"RULE 415" means Rule 415 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC having substantially the same
purpose and effect as such Rule.
"SEC" means the United States Securities and Exchange Commission. ---
"SEC DOCUMENTS" means all forms, proxy statements, registration
statements, reports, schedules, and other documents filed, or required to be
filed, by a Party or any of its Subsidiaries with any Regulatory Authority
pursuant to the Securities Laws.
"SECOND MILESTONE" means the date of the receipt of the first notice
from the FDA accepting as complete the filing of a New Drug Application for any
ACCESS Product.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"SECURITIES LAWS" means the Securities Act, the Exchange Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act of 1940,
as amended, the Trust Indenture Act of 1939, as amended, and the rules and
regulations of any Regulatory Authority promulgated thereunder.
"SERIES A PREFERRED STOCK" means the Series A Convertible Preferred
Stock of ACCESS, having a par value of $0.001 per share.
"SERIES A WARRANTS" means those warrants issued by ACCESS that have not
been exercised prior to the Effective Time and that provide for the issuance of
Series A Preferred Stock upon the exercise of the Series A Warrants by the
holders thereof.
53
"SERIES B PREFERRED STOCK" means the Series B Convertible Preferred
Stock of ACCESS, having a par value of $0.001 per share.
"SERIES B WARRANTS" means those warrants issued by ACCESS that have not
been exercised prior to the Effective Time and that provide for the issuance of
Series B Preferred Stock upon the exercise of the Series B Warrants by the
holders thereof.
"SPECIAL COMMITTEE FINANCIAL ADVISOR" shall mean Xxxx Xxxx & Co., Inc.
"SPIN OFF" means a dividend or distribution of a significant portion
of the shares of capital stock (or securities exercisable for or exchangeable
for or convertible into capital stock) of a Keryx Entity (other than the
ultimate parent entity of the Keryx Entities) that owns, directly or
indirectly, all or substantially all of the interests in any ACCESS Product.
"SUBSIDIARIES" means all those corporations, associations, or other
business entities of which the entity in question either (i) owns or controls
50% or more of the outstanding equity securities either directly or through an
unbroken chain of entities as to each of which 50% or more of the outstanding
equity securities is owned directly or indirectly by its parent (provided, there
shall not be included any such entity the equity securities of which are owned
or controlled in a fiduciary capacity), (ii) in the case of partnerships, serves
as a general partner, (iii) in the case of a limited liability company, serves
as a managing member, or (iv) otherwise has the ability to elect a majority of
the directors, trustees or managing members thereof.
"SUPERIOR PROPOSAL" means any Acquisition Proposal which the Board of
Directors of ACCESS determines (after consultation with their advisors) would,
if consummated, be more favorable to ACCESS's shareholders (taking into account
any factors relating to such proposed transaction deemed relevant by the Board
of Directors, including, without limitation, the financing thereof and all other
conditions thereto).
"SURVIVING CORPORATION" means ACCESS as the surviving corporation
resulting from the Merger.
"TAX" or "TAXES" means any federal, state, county, local, or foreign
taxes, charges, fees, levies, imposts, duties, or other assessments, including
income, gross receipts, excise, employment, sales, use, transfer, recording
license, payroll, franchise, severance, documentary, stamp, occupation, windfall
profits, environmental, federal highway use, commercial rent, customs duties,
capital stock, paid-up capital, profits, withholding, Social Security, single
business and unemployment, disability, real property, personal property,
registration, ad valorem, value added, alternative or add-on minimum, estimated,
or other tax or governmental fee of any kind whatsoever, imposed or required to
be withheld by the United States or any state, county, local or foreign
government or subdivision or agency thereof, including any interest, penalties,
and additions imposed thereon or with respect thereto.
"TAX RETURN" means any report, return, information return, or other
information required to be supplied to a Regulatory Authority in connection with
Taxes, including any return of an affiliated or combined or unitary group that
includes a Party or its Subsidiaries.
"THIRD MILESTONE" means the date of the first approval by the FDA of a
New Drug Application for any ACCESS Product, such date to be the date of the New
Drug Application approval letter or similar notification from the FDA.
(b) The terms set forth below shall have the meanings ascribed thereto
in the referenced sections:
54
TERM PAGE
ACCESS........................................ 1
ACCESS Benefit Plans.......................... 19
ACCESS Contracts.............................. 22
ACCESS ERISA Plan............................. 19
ACCESS Options................................ 8
ACCESS Pension Plan........................... 19
ACCESS Stockholder Approval................... 1
Acquisition Agreement......................... 33
Agreement..................................... 1
Blackout Period............................... 36
Certificate of Merger......................... 2
Certificates.................................. 9
Closing....................................... 2
DGCL.......................................... 1
DOL........................................... 19
Effective Time................................ 2
Exchange Agent................................ 8
Group......................................... 33
IIPI.......................................... 23
Indemnified Party............................. 39
IRS........................................... 19
Keryx......................................... 1
Keryx Annual Meeting.......................... 4
Keryx SEC Reports............................. 25
Keryx Special Committee....................... 1
Keryx Stockholder Approval.................... 4
Letter of Transmittal......................... 8
Merger........................................ 1
Mergersub..................................... 1
Proxy Statement............................... 32
Stockholder Consent........................... 31
Takeover Laws................................. 24
Unexercised Warrant Share Distribution........ 7
WARN Act...................................... 18
(c) Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."
11.2 EXPENSES.
Each of the Parties shall bear and pay all direct costs and expenses
incurred by it or on its behalf in connection with the transactions contemplated
hereunder, including filing, registration and application fees, printing fees,
and fees and expenses of its own financial or other consultants, investment
bankers, accountants, and counsel.
11.3 BROKERS AND FINDERS.
Each of the Parties represents and warrants that neither it nor any of
its officers, directors, employees, or Affiliates has employed any broker or
finder or incurred any Liability for any financial advisory fees, investment
bankers' fees, brokerage fees, commissions, or finders' fees in connection with
this Agreement or the transactions contemplated hereby except for the fees of
the Special Committee Financial Advisor employed by Keryx. In the event of a
claim by any broker or finder based upon such broker's representing or being
retained by or allegedly representing or being retained by ACCESS or by Keryx,
each of ACCESS and Keryx, as the case may be, agrees to indemnify and hold the
other Party harmless of and from any Liability in respect of any such claim.
55
11.4 ENTIRE AGREEMENT.
Except as otherwise expressly provided herein, this Agreement
(including the documents and instruments referred to herein) constitutes the
entire agreement between the Parties with respect to the transactions
contemplated hereunder and supersedes all prior arrangements or understandings
with respect thereto, written or oral (except as to Section 7 of the Letter of
Intent). Nothing in this Agreement expressed or implied, is intended to confer
upon any Person, other than the Parties or their respective successors, any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement.
11.5 AMENDMENTS.
To the extent permitted by Law, this Agreement may be amended by a
subsequent writing signed by each of the Parties upon the approval of each of
the Parties, whether before or after stockholder approval of this Agreement has
been obtained; provided, that after any such approval by the holders of ACCESS
Stock, there shall be made no amendment that requires further approval by such
stockholders.
11.6 WAIVERS.
(a) Prior to or at the Effective Time, Keryx, acting through its Board
of Directors, chief executive officer or other authorized officer, shall have
the right to waive any Default in the performance of any term of this Agreement
by ACCESS, to waive or extend the time for the compliance or fulfillment by
ACCESS of any and all of its obligations under this Agreement, and to waive any
or all of the conditions precedent to the obligations of Keryx under this
Agreement, except any condition which, if not satisfied, would result in the
violation of any Law. No such waiver shall be effective unless in writing signed
by a duly authorized officer of Keryx.
(b) Prior to or at the Effective Time, ACCESS, acting through its Board
of Directors, chief executive officer or other authorized officer, shall have
the right to waive any Default in the performance of any term of this Agreement
by Keryx or Mergersub, to waive or extend the time for the compliance or
fulfillment by Keryx or Mergersub of any and all of its obligations under this
Agreement, and to waive any or all of the conditions precedent to the
obligations of ACCESS under this Agreement, except any condition which, if not
satisfied, would result in the violation of any Law. No such waiver shall be
effective unless in writing signed by a duly authorized officer of ACCESS.
(c) The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
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11.7 ASSIGNMENT.
Except as expressly contemplated hereby, neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any Party
hereto (whether by operation of Law or otherwise) without the prior written
consent of the other Party. 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.
11.8 NOTICES.
All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if delivered by hand, by facsimile
transmission, by registered or certified mail, postage pre-paid, or by courier
or overnight carrier, to the persons at the addresses set forth below (or at
such other address as may be provided hereunder), and shall be deemed to have
been delivered as of the date so delivered:
ACCESS: ACCESS Oncology, Inc.
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile Number: 000-000-0000
Attention: Chief Executive Officer
Copy to Counsel: Law Office of Xxxxxxx X. Xxxxxxxxxx
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile Number: 000-000-0000
Attention: Xxxxxxx X. Xxxxxxxxxx
Keryx: Keryx Biopharmaceuticals, Inc.
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile Number: (000) 000-0000
Attention: Chief Executive Officer
Copy to Counsel: Xxxxxx & Bird LLP
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile Number: 000- 000-0000
Attention: Xxxx X. XxXxxxxxx
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11.9 GOVERNING LAW.
Regardless of any conflict of law or choice of law principles that
might otherwise apply, the Parties agree that this Agreement shall be governed
by and construed in all respects in accordance with the laws of the State of New
York. The Parties all expressly agree and acknowledge that the State of New York
has a reasonable relationship to the Parties and/or this Agreement.
11.10 COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
11.11 CAPTIONS; ARTICLES AND SECTIONS.
The captions contained in this Agreement are for reference purposes
only and are not part of this Agreement. Unless otherwise indicated, all
references to particular Articles or Sections shall mean and refer to the
referenced Articles and Sections of this Agreement.
11.12 INTERPRETATIONS.
Neither this Agreement nor any uncertainty or ambiguity herein shall be
construed or resolved against any Party, whether under any rule of construction
or otherwise. No Party to this Agreement shall be considered the draftsman. The
Parties acknowledge and agree that this Agreement has been reviewed, negotiated,
and accepted by all Parties and their attorneys and shall be construed and
interpreted according to the ordinary meaning of the words used so as fairly to
accomplish the purposes and intentions of all Parties hereto.
11.13 ENFORCEMENT OF AGREEMENT.
The Parties hereto agree that irreparable damage would occur in the
event that any of the provisions of this Agreement was not performed in
accordance with its specific terms or was 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 hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which they are
entitled at law or in equity.
11.14 SEVERABILITY.
Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction. If any provision of this
- 58 -
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf by its duly authorized officers as of the day and year
first above written.
KERYX BIOPHARMACEUTICALS, INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Xxxxxxx X. Xxxxx
Chairman and Chief Executive Officer
AXO ACQUISITION CORP.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Xxxxxxx X. Xxxxx
President
ACCESS ONCOLOGY, INC.
By: /s/ I. Xxxxx Xxxxxxxxx
-------------------------------------
I. Xxxxx Xxxxxxxxx, M.D.
President and Chief Executive Officer
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