Exhibit 99.1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is entered into as of
May 4, 2006, by and between Pathogenics, Inc., a Delaware corporation
("Pathogenics"), and Egenix, Inc., a Delaware corporation ("Egenix").
RECITALS
A. The parties intend that, subject to the terms and conditions of this
Agreement and the applicable provisions of the Delaware General Corporations Law
("DGL"), Egenix shall merge with and into Pathogenics (the "Merger") and
Pathogenics shall become the surviving corporation (the Surviving Corporation")
and shall change its name to Egenix, Inc.
B. Upon the effectiveness of the Merger, all of the outstanding capital
stock of Egenix will be converted into capital stock of Pathogenics (the
"Surviving Corporation Capital Stock") on a one-for-one basis. The Surviving
Corporation will assume all outstanding options, warrants and rights to purchase
shares of capital stock of Egenix. Pending consummation of the Merger,
Pathogenics shall use commercially reasonable efforts to register the Common
Stock of Surviving Corporation (the "Surviving Corporation Common Stock") issued
in the Merger pursuant to the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to a registration statement filed with and declared
effective by Securities and Exchange Commission (the "SEC") and either to effect
(i) a listing of the Surviving Corporation Common Stock on the American Stock
Exchange (the "Exchange") or (ii) the continuing quotation of the Surviving
Corporation Common Stock on the "Bulletin Board" and to prepare a disclosure
statement containing the necessary information to comply with Rule 15(c)2(11)
promulgated by the SEC pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and file such forms with one or more firms who are
members of the National Association of Securities Dealers, Inc. (the "NASD") and
with the NASD as are necessary to effect the foregoing. The shares of preferred
stock of the Surviving Corporation issued pursuant to the Merger into which
shares of preferred stock of Egenix have been converted will be "restricted
securities" within the meaning of the Securities Act.
C. For federal income tax purposes, the Merger is intended to be treated as
a tax-free reorganization pursuant to the provisions of Section 368(a)(1)(A) of
the Internal Revenue Code of 1986, as amended (the "Code") and that this
Agreement will constitute a plan of reorganization under Sections 354 and 361 of
the Code.
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
PLAN OF REORGANIZATION
1.1 THE MERGER. Subject to the terms and conditions of this Agreement,
Egenix shall merge with and into Pathogenics with Pathogenics being the
surviving corporation upon the effective date (the "Effective Date") of the
Merger pursuant to this Agreement and in accordance with applicable provisions
of the DGCL as follows:
(a) Conversion of Egenix Common Shares. Each share of common stock of
Egenix (the "Egenix Common Stock"), par value $.01 per share, will by virtue of
the Merger and at the Effective Time, and without any further action on the part
of Egenix or any holder of Egenix Common Stock, be converted into one share of
validly issued, fully paid and nonassessable Surviving Corporation Common Stock.
(b) Conversion of Egenix Preferred Shares. Each share of Series A Preferred
Stock of Egenix (the "Egenix Preferred Stock"), $.01 par value per share, issued
and outstanding immediately prior to the Effective Date, will by virtue of the
Merger and at the Effective Time, and without any further action on the part of
Egenix or any holder of Egenix Preferred Stock, be converted into one share of
validly issued, fully paid and nonassessable Surviving Corporation Series A
Preferred Stock (the "Series A Preferred Stock") with designation, rights,
preferences and privileges identical to the shares of Egenix Preferred Stock so
converted.
(c) Effective Time. The "Effective Time" shall mean the effective time and
date that a Certificate of Merger, in the form attached hereto as Exhibit 1.1(c)
(the "Merger Certificate") has been filed with the Secretary of State of the
State of Delaware in accordance with the relevant provisions of the DGCL.
(d) Changes to Surviving Corporation's Certificate of Incorporation. Upon
the filing of the Merger Certificate at the Effective Time and without any
further action by the stockholders of the Surviving Corporation: (i) the name of
the Surviving Corporation shall be changed to Egenix, Inc., a Delaware
corporation; (ii) the capitalization of the Surviving Corporation shall be
changed to reflect an authorized capital of 50,000,000 shares of Common Stock,
$.001 par value per share, 1,000,000 shares of Series A Preferred Stock, $.001
par value per share, and 14,000,000 shares of preferred stock, $.001 par value
per share, without designation, and such other changes as are set forth in the
Merger Certificate.
(e) Reverse Split. Immediately prior to the Effective Date, Pathogenics
shall effect an approximately 100-for-1 reverse split (the "Reverse Split") of
its outstanding capital stock such that the number of shares of Pathogenics
Common Stock outstanding immediately prior to the Effective Time shall equal six
percent (6%) of the issued and outstanding shares of Common Stock and common
equivalents of the Surviving Corporation outstanding immediately after the
effectiveness of the Merger after giving effect to any shares, or rights to
acquire shares, issued as a part of or in connection with any financings
contemplated in connection with the Merger, any shares of common stock
underlying the Series A preferred stock and all convertible debt on an as
converted to common stock basis, but not including options or warrants to
acquire shares of Egenix capital stock outstanding immediately prior to the
Effective Date or convertible debt incurred by Egenix from affiliates thereof
from and after the date hereof. The parties hereto agree that any convertible
debt incurred by Egenix from its affiliates from and after the date hereof will
be converted, if at all, at a price of not less than $2.00 per share of Egenix
Common Stock, or common stock equivalent, or Surviving Corporation Common Stock,
or common stock equivalent, as the case may be. If any such affiliate shall loan
funds to Egenix that are convertible into shares of its equity securities,
$50,000 of such amount shall be given by Egenix to Pathogenics specifically for
the payment of outstanding patent fees incurred pursuant to its Exclusive
License Agreement with Alpha Research Group, LLC and Xxxx X. Xxxxxx dated May
25, 2005.
1.2 ADJUSTMENTS FOR CAPITAL CHANGES. If, prior to the Effective Time and
otherwise than as contemplated pursuant to Section 1.1 hereof, either Egenix or
Pathogenics recapitalizes through a subdivision of its outstanding shares into a
greater number of shares, or a combination of its outstanding shares into a
lesser number of shares, or reorganizes, reclassifies or otherwise changes its
outstanding shares into the same or a different number of shares of other
classes, or declares a dividend on its outstanding shares payable in shares of
its capital stock or securities convertible into shares of its capital stock,
then the number of shares of capital stock of the Surviving Corporation to be
issued to the stockholders of Egenix will be adjusted appropriately so as to
maintain the relative proportionate interests of the holders of Pathogenics and
Egenix in the capital stock of the Surviving Corporation.
1.3 DISSENTING SHARES. The Merger shall not be consummated if holders of
Egenix Common Stock and Egenix Preferred Stock and Pathogenics Common Stock who
would have held an aggregate of fifty-one percent (51%) of the issued and
outstanding shares of Surviving Corporation Common Stock and Series A Preferred
Stock immediately after the Effective Time dissent from the Merger and demand
appraisal rights under the DGCL.
1.4 FRACTIONAL SHARES. No fractional shares of Surviving Corporation Common
Stock or Series A Preferred Stock will be issued in connection with the Merger.
If, as a consequence of the Reverse Split, a holder of Pathogenics Common Stock
would otherwise be entitled to receive a fractional share of Surviving
Corporation Common Stock, such holder shall receive one full share of Surviving
Corporation Common Stock in lieu of such fractional share.
1.5 EGENIX OPTIONS, WARRANTS AND RIGHTS. At the Effective Time, each of the
then outstanding options to purchase shares of Egenix Common Stock
(collectively, the "Egenix Options"), each of the then outstanding warrants to
purchase shares of Egenix Common Stock (the "Egenix Warrants") and each of the
then outstanding rights to purchase shares of Egenix Common Stock and Egenix
Preferred Stock ("Egenix Rights") will by virtue of the Merger, and without any
further action on the part of any holder thereof, be assumed and converted into
an option, warrant or right, as the case may be, to purchase a comparable number
of shares of Surviving Corporation Common Stock or Series A Preferred Stock, as
the case may be, at an exercise price per share equal to the per share exercise
price of the such Egenix Option, Egenix Warrant or Egenix Rights, as the case
may be, in effect immediately prior to the Effective Time. The term,
exercisability, vesting schedule, and all other terms and conditions of the
Egenix Options, Egenix Warrants and Egenix Rights will be unchanged and all
references in any option or warrant agreement governing such option or warrant
to Egenix shall be deemed to refer to the Surviving Corporation. Continuous
service as an employee or consultant with Egenix will be credited to an optionee
of Egenix for purposes of determining the number of shares of Surviving
Corporation Common Stock subject to exercise under a converted Egenix Option
after the Effective Time.
1.6 REGISTRATION, LISTING.
(a) Registration Statement. Pending consummation of the Merger, Pathogenics
shall undertake, and shall use its commercially reasonable efforts, and Egenix
shall cooperate therewith, to register the Common Stock of the Surviving
Corporation issued in the Merger pursuant to the Securities Act pursuant to a
registration statement on Form S-4, or such other form as shall then be in use
(the "Registration Statement"), a portion of which shall also function as a
joint information statement with respect to the respective meetings of the
stockholders of the parties hereto to approve the Merger. The parties shall
cause the Registration Statement to comply as to form in all material respects
with the applicable provisions of the Securities Act, the Exchange Act and the
rules and regulations promulgated thereunder. Pathogenics, with Egenix
cooperation, shall use commercially reasonable efforts to have the Registration
Statement declared effective by the SEC as promptly as practicable prior to the
Effective Date. Pathogenics shall use commercially reasonable efforts to respond
promptly to any comments of the SEC concerning the Registration Statement.
Pathogenics also shall take any action required to be taken under any applicable
state securities or "blue sky" laws and regulations of the Exchange in
connection with the issuance of the Surviving Corporation Common Stock pursuant
to the Merger. Egenix shall promptly furnish to Pathogenics all information
concerning Egenix and its stockholders as may be reasonably required in
connection with any action contemplated by this Section. Whenever any event
occurs which should be set forth in an amendment or supplement to the
Registration Statement or to such listing shall be required, Pathogenics shall
promptly effect any necessary filing with the SEC or its staff. The Registration
Statement, including the parties information statements and each amendment or
supplement thereto, at the time of mailing of such information statements, and
at the time of the respective meetings of the stockholders of the parties
hereto, and at the time the Registration Statement becomes effective, will not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. Each of
Pathogenics and Egenix agrees that the written information provided by it
specifically for inclusion in the Registration Statement and each of the
amendments and supplements thereto, and at the time of the mailing of the
parties' information statements and at the time of their respective stockholder
meetings, will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The parties covenant that the information statements to be
mailed to their respective stockholders shall include a recommendation of their
respective boards of directors the their respective stockholders approve the
Merger and other transactions contemplated by this Agreement; provided that such
recommendations may be excluded or may be withdrawn, modified or amended if
either party shall approve or recommend a Superior Proposal (as herein defined)
or enter into an agreement with respect to a Superior Proposal in accordance
with Section 9.16 hereof.
(b) Listing. The parties hereto agree to cooperate to effect either a
listing of the Surviving Corporation Common Stock on the Exchange or to prepare
and file such forms with the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") as are necessary to effect the continuing
quotation of the Surviving Corporation Common Stock on the "Bulletin Board". The
determination whether to pursue a listing on the Exchange or the Bulletin Board
shall be made by the parties jointly as promptly as practicable prior to the
Effective Date. The parties shall prepare a disclosure statement containing the
necessary information to comply with Rule 15(c)2(11) promulgated by the SEC
pursuant to the Exchange Act and, if applicable, to use commercially reasonable
efforts to respond promptly to any comments of the Exchange or NASDAQ, as
applicable, concerning such listing and to have such listing accomplished as
promptly as practicable. Pathogenics, on behalf of the Surviving Corporation
will file such forms and make such arrangements with one or more firms who are
members of the NASD and with the NASD in order to effect the trading of the
shares of Surviving Corporation Common Stock following the Effective Time.
1.7 EFFECTS OF THE MERGER. At the Effective Time: (a) the separate
existence of Egenix will cease and Egenix will be merged with and into
Pathogenics, with Pathogenics being the Surviving Corporation of the Merger
pursuant to the terms of this Agreement; (b) the Certificate of Incorporation of
Pathogenics immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation, subject to the changes set forth in
Section 1.1(d) hereof; (c) the Bylaws of Pathogenics immediately prior to the
Effective Time will be the Bylaws of the Surviving Corporation; (d) the
directors and officers of the Surviving Corporation shall be as set forth below:
Name Position
---- --------
Xxxxxx X. Xxxxxx Chairman of the Board and Chief Executive Officer
Xxxxxxx X. Xxxx Vice Chairman of the Board and Secretary
L. Xxxxxxxx Xxxxxxxx Director
Xxxxxxx Xxxxxxxx Director
Xx. Xxxx X. Xxxxxx President
Xxxx Xxxx, Ph.D. Vice President and Chief Scientific Officer
Xxxxxxxx X. Xxxxx President-Non-Cancer Drug Development Division
Xxxxxxx X. Xxxxxxx Vice President-Non-Cancer Drug Development
Division
Pending the Closing of the Merger, the parties hereto shall cooperate in the
hiring of a Chief Financial Officer.
(e) each share of Egenix Common Stock, each share of Egenix Preferred Stock,
each Egenix Option, each Egenix Warrant and each Egenix Right outstanding
immediately prior to the Effective Time will be converted into a share of
Surviving Corporation Common Stock, Series A Preferred Stock or an option,
warrant or right to purchase an identical share of Surviving Corporation Capital
Stock as provided in Sections 1.1 (a) and (b) and 1.5; and (f) the Merger will,
from and after the Effective Time, have all of the effects provided by
applicable law.
1.8 TAX FREE REORGANIZATION. The parties intend to adopt this Agreement and
the Merger as a tax-free plan of reorganization under Section 368(a)(1)(A) of
the Code. The Surviving Corporation Common Stock and Series A Preferred Stock
issued in the Merger will be issued solely in exchange for like shares of Egenix
Common Stock and Egenix Preferred Stock, and no other transaction other than the
Merger represents, provides for or is intended to be an adjustment to the
consideration paid for the Egenix Common Stock or Egenix Preferred Stock. No
consideration that could constitute "other property" within the meaning of
Section 356(b) of the Code is being transferred by the Surviving Corporation for
shares Egenix Common Stock or Egenix Preferred Stock. The parties shall not take
a position on any tax return inconsistent with this Section 1.8.
1.9 THE CLOSING. The closing of the Merger (the "Closing") shall occur at
the offices of Xxxxxxx Xxxxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx
Xxxx, Xxx Xxxx 00000, at 10:00 a.m. on a mutually agreeable date to be specified
by the parties hereto, which (subject to the satisfaction or waiver of all of
the conditions set froth in Articles V and VI) as promptly as possible following
the declaration of effectiveness of the Registration Statement, but in event
later than December 31, 2006 (the "Closing Date"), unless otherwise agreed to by
the parties hereto.
1.10 SHARE CONVERSION PROCEDURES.
(a) Prior to the Effective Time, Pathogenics shall appoint American Stock
Transfer & Trust Company, or another trust company reasonably acceptable to
Egenix (the "Exchange Agent"), to act as agent for the conversion of shares of
Egenix Common Stock into shares of the Surviving Corporation Common Stock. The
holders of Egenix Preferred Stock shall submit their certificates representing
their shares of Egenix Preferred Stock to the Surviving Corporation for
certificates representing Series A Preferred Stock.
(b) Provision of New Shares. Pathogenics shall provide to the Exchange
Agent on or before the Effective Time for the benefit of the holders of Egenix
Common Stock, a sufficient number of shares of Surviving Corporation Common
Stock issuable upon conversion of the issued and outstanding shares of Egenix
Common Stock pursuant to Section 1.1(a). Pathogenics shall provide to the
Surviving Corporation on or before the Effective Time for the benefit of the
holders of Egenix Preferred Stock, a sufficient number of shares of Series A
Preferred Stock issuable upon conversion of the issued and outstanding shares of
Egenix Preferred Stock pursuant to Section 1.1(b).
(c) Lost or Stolen Certificates. If any certificate representing shares of
Egenix Common Stock or shares of Egenix Preferred Stock shall have been lost,
stolen or destroyed, the Surviving Corporation, in the case of the Egenix
Preferred Stock, or the Exchange Agent, in the case of the Egenix Common Stock,
shall issue in exchange therefore, upon the making of an affidavit of that fact,
and, if the Surviving Corporation so requires, the delivery of reasonably
suitable bond or indemnity by the holder thereof, such shares of Surviving
Corporation Capital Stock as may be required pursuant to this Agreement.
1.11 WITHOLDING RIGHTS. The Exchange Agent or the Surviving Corporation
shall be entitled to deduct and withhold from the holders of Egenix Common Stock
and Egenix Preferred Stock otherwise payable pursuant to this Agreement to any
such holder such amounts as the Exchange Agent or the Surviving Corporation is
required to deduct and withhold with respect to the making of such payment under
the Code, or any provision of state, local or foreign tax law. To the extent the
amounts are so withheld by the Exchange Agent or the Surviving Corporation, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to such holder in respect of which such deduction and withholding was
made by the Exchange Agent of the Surviving Corporation.
1.12 NO LIABILITY. None of Egenix, Pathogenics, the Surviving Corporation
or the Exchange Agent shall be liable to any person in respect of any
consideration to be paid hereunder for the conversion of shares of Egenix Common
Stock or Egenix Preferred Stock delivered to a public official pursuant to any
abandoned property, escheat or similar law. Any portion of the consideration to
be paid hereunder for the conversion of shares of Egenix Common Stock pursuant
to this Agreement that remains unclaimed for six (6) months after the Effective
Time shall be redelivered by the Exchange Agent to the Surviving Corporation,
upon demand, and any holders of Egenix Common Stock that have not been exchanged
as contemplated pursuant to Section 1.1 (a) shall thereafter look only to the
Surviving Corporation for delivery of share of Surviving Corporation Common
Stock, subject to applicable abandoned property, escheat and other similar laws.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF EGENIX
Except as set forth in the disclosure schedule to be delivered by Egenix to
Pathogenics prior to May 31, 2006 (the "Egenix Disclosure Schedule") which when
delivered shall be incorporated into this Agreement by this reference, Egenix
hereby represents and warrants to Pathogenics that:
2.1 ORGANIZATION. Egenix is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, has all necessary
corporate powers to own its properties and to carry on its business as now owned
and operated by it, and is duly qualified to do business and is in good standing
in each of the states where its business requires qualification, except where
the failure to be so organized, existing or in good standing or to have such
power, have not had, and could not reasonably be expected to have, individually
or in aggregate, a material adverse effect on Egenix.
2.2 CAPITAL.
(a) The authorized capital stock of Egenix consists solely of (i)
50,000,000 shares of Common Stock, $.01 par value per share, of which 3,781,268
shares are outstanding, validly issued, duly paid for and non-assessable; and
(ii) 15,000,000 shares of Preferred Stock, par value $.01 per share, of which
300,000 shares are designated Series A Preferred Stock of which 184,332 shares
are outstanding, validly issued, fully paid and non-assessable and 14,700,000
shares are without designation. In addition, Egenix has valid subscription
agreements to issue an aggregate of 125,000 shares to two persons.
(b) There are outstanding (i) warrants to purchase an aggregate of 323,754
shares of Egenix Common Stock in the amounts at the prices per share and
expiring on the dates set forth in the Egenix Disclosure Schedule; (ii) options
to purchase an aggregate of 806,899 shares of Egenix Common Stock in the amounts
at the prices per share and expiring on the dates set forth in the Egenix
Disclosure Schedule; (iii) and rights to convert an aggregate of $1,000,000 into
shares of Egenix Common Stock at a price of $2.00 per share; and (iv) 330,973
shares issuable pursuant to certain anti-dilution protections provisions as set
forth in the Egenix Disclosure Schedule.
2.3 SUBSIDIARIES. Egenix has no subsidiaries. Except for a fifty percent
(50%) membership interest in ABT-E LLC, a Delaware limited liability company,
Egenix does not own any interest in any other enterprise.
2.4 DIRECTORS AND OFFICERS. The names and titles of all directors and
officers of Egenix are as set forth below:
Name Position
---- --------
Xxxxxx X. Xxxxxx Chairman of the Board and Chief Executive Officer
Xxxxxxx X. Xxxx Vice Chairman of the Board and Secretary
L. Xxxxxxxx Xxxxxxxx Director
Xxxxxxx Xxxxxxxx Director
Xx. Xxxx X. Xxxxxx President
Xxxx Xxxx, Ph.D. Vice President and Chief Scientific Officer
2.5 FINANCIAL STATEMENTS. Egenix shall deliver to Pathogenics the audited
financial statements of Egenix as of December 31, 2005 and for the period then
ended and the unaudited financial statements as of March 31, 2006, when
prepared, but in no event later than May 31, 2006. The financial statements will
have been prepared in accordance with generally accepted accounting principles
and practices consistently followed by Egenix throughout the periods indicated,
and fairly present the financial position of Egenix as of the dates of the
balance sheets included in the financial statements and the results of
operations for the periods indicated.
2.6 ABSENCE OF CHANGES. There has not been any change in the financial
conditions or operations of Egenix, except for changes in the ordinary course of
business, which changes have not, in the aggregate, been materially adverse.
Pathogenics recognizes that Egenix has incurred operating losses to date and may
continue to incur such losses between the date hereof and the Effective Date.
Pathogenics hereby agrees that any such continuing operating losses by Egenix
shall not be deemed a material adverse change.
2.7 ABSENCE OF UNDISCLOSED LIABILITIES. As of the date of such financial
statements, Egenix does not have any material debt, liability or obligation of
any nature, whether accrued, absolute, contingent or otherwise, and whether due
or to become due, that will not be reflected in such financial statements as of
the dates thereof.
2.8 TAX RETURNS. Except as set forth in the Egenix Disclosure Schedule,
within the times and in the manner prescribed by law, Egenix has filed all
federal, state and local tax returns required by law and has paid all taxes,
assessments and penalties due and payable. The provisions for taxes, if any,
reflected in such financial statements are adequate for the period indicated.
There are no present disputes as to the taxes of any nature payable by Egenix.
2.9 INVESTIGATION OF FINANCIAL CONDITION. Without in any manner reducing or
otherwise mitigating the representations contained herein, Pathogenics and its
legal counsel and accountants shall have the opportunity to meet with the legal
counsel of Egenix and accountants of Egenix to discuss the financial condition
of Egenix. Egenix shall make available to Pathogenics all books and records of
Egenix.
2.10 PATENTS, TRADE NAMES AND RIGHTS. To the best of its knowledge, Egenix
owns and holds all necessary patents, franchise rights, trademarks, service
marks, trade names, inventions, processes, know-how, trade secrets, copyrights,
licenses and other rights necessary to its business as now conducted or proposed
to be conducted. To the best of its knowledge, Egenix is not infringing upon or
otherwise acting adversely to the right or claimed right of any person with
respect to any of the foregoing.
2.11 COMPLIANCE WITH LAWS. Egenix has complied with, and is not in
violation of, applicable material federal, state or local statutes, laws and
regulations (including, without limitation, any applicable building, zoning or
other law, ordinance or regulation) affecting its properties or the operation of
its businesses.
2.12 LITIGATION. Egenix is not a party to any suit, action, arbitration or
legal, administrative or other proceeding, or governmental investigation which
is pending or, except as set forth in the Egenix Disclosure Schedule to the best
knowledge of Egenix, threatened against or affecting Egenix or its businesses,
assets or financial condition. Egenix is not in default with respect to any
agreement or other instrument with any third party except as set forth in the
Egenix Disclosure Schedule or any order, writ, injunction or decree of any
federal, state, local or foreign court, department, agency or instrumentality
applicable to it. Egenix is not engaged in any material lawsuits to recover
monies due it.
2.13 AUTHORITY. The Board of Directors of Egenix has authorized the
execution of this Agreement and the consummation of transactions contemplated
hereby, and, subject to the approval of its stockholders having voting rights in
connection with the transactions contemplated hereby, Egenix has full power and
authority to execute, deliver and perform this Agreement, and this Agreement is
a legal, valid and binding obligation of Egenix and is enforceable in accordance
with its terms and conditions, subject to applicable bankruptcy, insolvency and
other laws affecting creditors' rights generally and to principles of equity and
public policy.
2.14 ABILITY TO CARRY OUT OBLIGATIONS. Except as set forth in the Egenix
Disclosure Schedule, the execution and delivery of this Agreement by Egenix and
the performance by Egenix of its obligations hereunder in the time and manner
contemplated will not cause, constitute or conflict with or result in (a) any
breach or violation of any of the provisions of or constitute a default under
any license, indenture, mortgage, instrument, article of incorporation, bylaw,
or other agreement or instrument to which Egenix is a party, or by which it may
be bound, nor will any consents or authorizations of any party other than those
hereto be required; (b) an event that would permit any party to any agreement or
instrument to terminate it or to accelerate the maturity of any indebtedness or
other obligation of Egenix; or (c) an event that would result in the creation or
imposition of any lien, charge or encumbrance on any asset of Egenix.
2.15 FULL DISCLOSURE. None of the representations and warranties made by
Egenix herein or in any exhibit, schedule, certificate or memorandum furnished
or to be furnished by Egenix, or on its behalf, contains or will contain any
untrue statement of material fact or omit any material fact the omission of
which would be misleading.
2.16 ASSETS. Except as set forth in the Egenix Disclosure Schedule, Egenix
has good and marketable title to all of its property, free and clear of all
liens, claims and encumbrances, except as otherwise indicated on its financial
statements.
2.17 MATERIAL CONTRACTS. Except as described in the Egenix Disclosure
Schedule, Egenix does not have any material contracts.
2.18 INDEMNIFICATION. Except as otherwise provided herein, Egenix agrees to
indemnify, defend and hold Pathogenics, its officers and directors, employees,
shareholders, agents and representatives harmless against and in respect of any
and all claims, demands, losses, costs, expenses, obligations, liabilities,
damages, recoveries and deficiencies, including interest, penalties and
reasonable attorney fees and disbursements, that it shall incur or suffer, which
arise out of, result or relate to any breach of, or failure by Egenix, as the
case may be, to perform any of its representations, warranties, covenants or
agreements in this Agreement or in any schedule, certificate, exhibit or other
instrument furnished or to be furnished by Egenix under this Agreement. Egenix
represents that the indemnification of this section shall inure to the benefit
of Pathogenics and its shareholders in all respects.
2.19 FEES AND EXPENSES. Egenix has not paid or become obligated to pay any
fee or commission to any broker, finder or intermediary in connection with the
consummation of the Merger.
2.20 INSURANCE. Egenix presently has or will maintain fire and casualty,
general liability, business interruption, product liability and other insurance
that Egenix believes to be reasonably prudent for its business. Correct and
complete copies of all such insurance policies presently in effect are included
in the Egenix Disclosure Schedule.
2.21 INTERESTED PARTY TRANSACTIONS. Except as disclosed in the Egenix
Disclosure Schedule, no officer or director of Egenix or any "affiliate" or
"associate" (as those terms are defined in Rule 405 promulgated under the
Securities Act) of any such person has had, either directly or indirectly, a
material interest in: (i) any person or entity which purchases from or sells to
Egenix any goods, property, technology or intellectual or other property rights
or services; or (ii) any contract or agreement to which Egenix is a party or by
which it may be bound or affected.
2.22 EMPLOYEE PLANS. Egenix does not maintain any employee benefit plans,
as such term is defined in Section 3(3) of the Employee Income Retirement
Security Act of 1974, as amended, for the benefit of its employees, other than
the medical benefit and insurance plans listed in the Egenix Disclosure
Schedule.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PATHOGENICS
Except as set forth in the disclosure schedule to be delivered by
Pathogenics to Egenix prior to May 31, 2006 (the "Pathogenics Disclosure
Schedule") which when delivered shall be incorporated into this Agreement by
this reference, Pathogenics represents and warrants to Egenix that:
3.1 ORGANIZATION. Pathogenics is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, has all
necessary corporate powers to own its properties and to carry on its business as
now owned and operated by it, and is duly qualified to do business and is in
good standing in each of the states where its business requires qualification,
except where the failure to be so organized, existing or in good standing or to
have such power, have not had, and could not reasonably be expected to have,
individually or in aggregate, a material adverse effect on Pathogenics.
3.2 CAPITAL. The authorized capital stock of Pathogenics consists of
100,000,000 shares of common stock, $.001 par value per share, of which
46,977,960 shares are currently issued and outstanding, and 10,000,000 shares of
preferred stock without designation, $,001 par value per share, none of which
are outstanding. There are no outstanding subscriptions, options, rights,
debentures, instruments, convertible securities or other agreements, commitments
or obligations of Pathogenics to issue or to transfer from treasury any
additional shares of its capital stock of any class.
3.3 SUBSIDIARIES. Pathogenics has two wholly owned subsidiaries, Tyrol
Therapeutics, LLC and First Coventry Corporation and does not have any interest
in any other enterprise.
3.4 DIRECTORS AND OFFICERS. The names and titles of all directors and
officers of Pathogenics are as set forth below:
Xxxxxxxx X. Xxxxx, CEO/President/Secretary/Treasurer/Director
Xxxxxxx X. Xxxxxxx, Vice President/Director
Xxxxxxx X. Xxxxx, Director
3.5 FINANCIAL STATEMENTS. The audited financial statements of Pathogenics,
as of December 31, 2005 and for the period then ended will be promptly submitted
to Egenix when prepared, but in no event later than May 31, 2006. The financial
statements will have been prepared in accordance with generally accepted
accounting principles and practices consistently followed by Pathogenics
throughout the period indicated, and fairly present the financial position of
Pathogenics as of the date of the balance sheets included in the financial
statements and the results of operations for the periods indicated.
3.6 ABSENCE OF UNDISCLOSED LIABILITIES. As of the date of such financial
statements, Pathogenics does not have any material debt, liability or obligation
of any nature, whether accrued, absolute, contingent or otherwise, and whether
due or to become due, will not be reflected in such financial statements as of
the dates thereof.
3.7 TAX RETURNS. Except as set forth in the Pathogenics Disclosure
Schedule, within the times and in the manner prescribed by law, Pathogenics has
filed all federal, state and local tax returns required by law and has paid all
taxes, assessments and penalties due and payable. The provisions for taxes, if
any, reflected in such financial statements are adequate for the period
indicated. Upon consummation of the Merger, the Surviving Corporation's
management will prepare and file all appropriate subsequent returns. Current
management of Pathogenics, subsequent to their resignations upon the Merger,
shall render reasonable assistance in providing information necessary for
preparation and filing of appropriate returns. There are no present disputes as
to taxes of any nature payable to or by Pathogenics.
3.8 INVESTIGATION OF FINANCIAL CONDITION. Without in any manner reducing or
otherwise mitigating the representations contained herein, Egenix and its legal
counsel and accountants shall have the opportunity to meet with legal counsel of
Pathogenics and accountants of Pathogenics to discuss the financial condition of
Pathogenics. Pathogenics shall make available to Egenix all books and records of
Pathogenics.
3.9 PATENTS, TRADE NAMES AND RIGHTS. To the best of its knowledge,
Pathogenics owns and holds all necessary patents, franchise rights, trademarks,
service marks, trade names, inventions, processes, know-how, trade secrets,
copyrights, licenses and other rights necessary to its business as now conducted
or proposed to be conducted. To the best of its knowledge, Pathogenics is not
infringing upon or otherwise acting adversely to the right or claimed right of
any person with respect to any of the foregoing.
3.10 COMPLIANCE WITH LAWS. Pathogenics has complied with, and is not in
violation of, applicable material federal, state or local statutes, laws and
regulations (including, without limitation, any applicable building, zoning or
other law, ordinance or regulation) affecting its properties or the operation of
its businesses.
3.11 LITIGATION. Pathogenics is not a party to any suit, action,
arbitration or legal, administrative or other proceeding, or governmental
investigation which is pending or, except as set forth in the Pathogenics
Disclosure Schedule, to the best knowledge of Pathogenics, threatened against or
affecting Pathogenics or its businesses, assets or financial condition.
Pathogenics is not in default with respect to any agreement or other instrument
with any third party except as set forth in such disclosure schedule or any
order, writ, injunction or decree of any federal, state, local or foreign court,
department, agency or instrumentality applicable to it. Pathogenics is not
engaged in any material lawsuits to recover monies due it.
3.12 AUTHORITY. The Board of Directors of Pathogenics has authorized the
execution of this Agreement and the consummation of transactions contemplated
hereby, and, subject to the approval of its stockholders having voting rights in
connection with the transactions contemplated hereby, Pathogenics has full power
and authority to execute, deliver and perform this Agreement, and this Agreement
is a legal, valid and binding obligation of Pathogenics and is enforceable in
accordance with its terms and conditions, subject to applicable bankruptcy,
insolvency and other laws affecting creditors' rights generally and to
principles of equity and public policy.
3.13 ABILITY TO CARRY OUT OBLIGATIONS. Except as set forth in the
Pathogenics Disclosure Schedule, the execution and delivery of this Agreement by
Pathogenics of its obligations hereunder in the time and manner contemplated
will not cause, constitute or conflict with or result in (a) any breach or
violation of any of the provisions of or constitute a default under any license,
indenture, mortgage, instrument, article of incorporation, bylaw, or other
agreement or instrument to which Pathogenics is a party, or by which it may be
bound, nor will any consents or authorizations of any party other than those
hereto be required; (b) an event that would permit any party to any agreement or
instrument to terminate it or to accelerate the maturity of any indebtedness or
other obligation of Pathogenics; or (c) an event that would result in the
creation or imposition of any lien, charge or encumbrance on any asset of
Pathogenics.
3.14 FULL DISCLOSURE. None of the representations and warranties made by
Pathogenics herein or in any exhibit, certificate or memorandum furnished or to
be furnished by Pathogenics, or on its behalf, contains or will contain any
untrue statement of material fact or omit any material fact the omission of
which would be misleading.
3.15 ASSETS. Except as set forth in the Pathogenics Disclosure Schedule,
Pathogenics has good and marketable title to all of its property, free and clear
of all liens, claims and encumbrances, except as otherwise indicated on its
financial statements.
3.16 MATERIAL CONTRACTS. Except as set forth in the Pathogenics Disclosure
Schedule, Pathogenics does not have any material contracts.
3.17 INDEMNIFICATION. Except as otherwise provided herein, Pathogenics
agrees to indemnify, defend and hold Egenix, its officers, directors, employees,
shareholders, agents and representatives harmless against and in respect of any
and all claims, demands, losses, costs, expenses, obligations, liabilities,
damages, recoveries and deficiencies, including interest, penalties and
reasonable attorney fees and disbursements, that it shall incur or suffer, which
arise out of, result or relate to any breach of, or failure by Pathogenics, as
the case may be, to perform any of its representations, warranties, covenants or
agreements in this Agreement or in any schedule, certificate, exhibit or other
instrument furnished or to be furnished by Pathogenics under this Agreement.
Pathogenics represents that the indemnification of this section shall inure to
the benefit of Egenix and its shareholders in all respects.
3.18 SUBSEQUENT FILINGS. Upon consummation of the Merger, management of the
Surviving Corporation shall prepare and file all required filings before federal
and state authorities as it shall determine, including the SEC, the Exchange and
state "blue sky" regulatory authorities. Such filings may include, without
limitation and in addition to Form 10-SB, Forms 10-KSB, 10-QSB, 8-K, if any, as
such management may deem appropriate.
3.19 FEES AND EXPENSES. Pathogenics has not paid or become obligated to pay
any fee or commission to any broker, finder or intermediary in connection with
the consummation of the Merger.
3.20 INSURANCE. Pathogenics maintains fire and casualty, general liability,
business interruption, directors and officers and product liability insurance
that Pathogenics believes to be reasonably prudent for its business. Correct and
complete copies of all such insurance policies presently in effect are attached
to the Pathogenics Disclosure Schedule.
3.21 INTERESTED PARTY TRANSACTIONS. Except as disclosed in the Pathogenics
Disclosure Schedule, no officer or director of Pathogenics or any "affiliate" or
"associate" (as those terms are defined in Rule 405 promulgated under the
Securities Act) of any such person has had, either directly or indirectly, a
material interest in: (i) any person or entity which purchases from or sells to
Pathogenics any goods, property, technology or intellectual or other property
rights or services; or (ii) any contract or agreement to which Pathogenics is a
party or by which it may be bound or affected.
3.22 EMPLOYEE PLANS. Pathogenics does not maintain any employee benefit
plans, as such term is defined in Section 3(3) of the Employee Income Retirement
Security Act of 1974, as amended, for the benefit of its employees, other than
the medical benefit and insurance plans listed in the Pathogenics Disclosure
Schedule.
3.23 ABSENCE OF CHANGES. There has not been any change in the financial
conditions or operations of Pathogenics, except for changes in the ordinary
course of business, which changes have not, in the aggregate, been materially
adverse. Egenix recognizes that Pathogenics has incurred operating losses to
date and may continue to incur such losses between the date hereof and the
Effective Date. Egenix hereby agrees that any such continuing operating losses
by Pathogenics shall not be deemed a material adverse change.
ARTICLE IV
COVENANTS
4.1 EGENIX COVENANTS.
(A) ADVICE OF CHANGES. During the period from the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement in
accordance with its terms, Egenix will promptly advise Pathogenics in writing,
(i) of any event occurring subsequent to the date of this Agreement that would
reasonably be likely to render any representation or warranty of Egenix
contained in this Agreement, if made on or as of the date of such event or the
Effective Date, untrue or inaccurate in any material respect, (ii) of any event
that would reasonably be likely to have a material adverse effect on Egenix and
(iii) of any material breach by Egenix of any covenant or agreement contained in
this Agreement.
(B) MAINTENANCE OF BUSINESS. During the period from the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement in accordance with its terms, Egenix will use its best efforts (i) to
carry on and preserve its business and its relationships with licensors,
licensees, strategic partners, customers, suppliers, employees and others in
substantially the same manner as it has prior to the date hereof and, (ii) to
execute on its existing operating plan through the Effective Date. If Egenix
becomes aware of any material deterioration in the relationship with any
licensor, licensee, strategic partner, customer, supplier or key employee, it
will promptly bring such information to the attention of Pathogenics in writing
and, if requested by Pathogenics, will exert its reasonable best efforts to
restore the relationship.
(C) CONDUCT OF BUSINESS. During the period from the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement in
accordance with its terms, Egenix will continue to conduct its business and
maintain its business relationships in the ordinary and usual course and, except
as otherwise disclosed herein, it will not, without the prior written consent of
the Chief Executive Officer of Pathogenics, which consent shall not be
unreasonably withheld:
(i) except as contemplated in Section 5.8 hereof, borrow any money except for
amounts that are not in the aggregate material to the financial condition of
Egenix, except pursuant to existing agreements;
(ii) except as set forth in the Disclosure Schedule, enter into any transaction
not in the ordinary course of its business;
(iii) encumber or permit to be encumbered any of its assets except in the
ordinary course of its business consistent with past practice;
(iv) dispose of any of its assets except in the ordinary course of business,
consistent with past practice;
(v) enter into any material lease or contract for the purchase or sale or
license of any property, real or personal, except in the ordinary course of
business, consistent with past practice;
(vi) fail to maintain its equipment and other assets in good working condition
and repair according to the standards it has maintained to the date of this
Agreement, subject only to ordinary wear and tear;
(vii) except as set forth in the Egenix Disclosure Schedule, pay (or make any
oral or written commitments or representations to pay) any bonus, increased
salary or special remuneration to any officer, employee or consultant (except
for bonuses in amounts consistent with past practices and normal salary
increases consistent with past practices and except pursuant to existing
arrangements) or enter into or vary the terms of any employment, consulting or
severance agreement with any such person, pay any severance or termination pay
(other than payments in amounts consistent with past practice or made in
accordance with plans or agreements existing on the date hereof), grant any
stock option (except for normal grants to employees consistent with past
practices) or issue any restricted stock, or enter into or modify any agreement
or plan or increase benefits of the type;
(viii) except as required by GAAP, change accounting methods;
(ix) declare, set aside or pay any cash or stock dividend or other distribution
in respect of capital stock, or redeem or otherwise acquire any of its capital
stock (other than pursuant to existing obligations and to arrangements with
terminated employees or consultants in the ordinary course of business,
consistent with past practice);
(x) amend or terminate any contract, agreement or license to which it is a party
except those amended or terminated in the ordinary course of its business,
consistent with past practice, and which are not material in amount or effect;
(xi) lend any amount to any person or entity, other than advances for travel and
expenses which are incurred in the ordinary course of business, consistent with
past practice, not material in amount and documented by receipts for the claimed
amounts;
(xii) guarantee or act as a surety for any obligation except in the ordinary
course of its business, consistent with past practices;
(xiii) waive or release any right or claim except for the waiver or release of
non-material claims in the ordinary course of business, consistent with past
practice;
(xiv) except as contemplated is Sections 2.2, 5.7 and 5.8 of this Agreement and
as otherwise disclosed in the Egenix Disclosure Schedule, issue or sell any
shares of its capital stock of any class (except upon the exercise of an option,
stock purchase right or warrant currently outstanding) or any other of its
securities, or issue or create any warrants, obligations, subscriptions,
options, convertible securities or other commitments to issue shares of capital
stock, or accelerate the vesting or change any other term of any outstanding
option or other security;
(xv) split or combine the outstanding shares of its capital stock of any class
or enter into any recapitalization or agreement affecting the number or rights
of outstanding shares of its capital stock of any class or affecting any other
of its securities;
(xvi) except as contemplated herein or by the transactions contemplated by this
Agreement, merge, consolidate or reorganize with, or acquire any entity;
(xvii) except as contemplated herein or by the transactions contemplated by this
Agreement, amend its Certificate of Incorporation or Bylaws;
(xviii) materially change any insurance coverage or issue any certificates of
insurance except in the ordinary course of business consistent with past
practice;
(xix) take any action, or permit any action within Egenix' control, which would
prevent the Merger from qualifying as a tax-free reorganization under Section
368(a)(1)(A) of the Code;
(xx) provide or publish to its stockholders any material which might constitute
an unauthorized "prospectus" within the meaning of the Securities Act; or
(xxi) agree to take, or enter into negotiations with respect to, any of the
actions described in the preceding clauses in this Section 4.1(c).
(D) STOCKHOLDER APPROVAL. As promptly as practicable after the execution of
this Agreement, Egenix shall call a special meeting of its stockholders entitled
to vote on the Merger to be held as promptly as possible following the execution
of this Agreement to approve the Merger and related matters. Ratification of
this Agreement by a majority of the stockholders shall be a condition to closing
of this Agreement. Such meeting will be called, held and conducted in compliance
with applicable law. In the alternative, this Agreement may be approved by the
written consent of the persons holding a majority of the votes represented by
shares of Egenix Common Stock and Preferred Stock entitled to vote thereon.
(E) NECESSARY CONSENTS. Egenix will use its reasonable best efforts to
obtain such written consents and to take such other actions as may be necessary
or appropriate to allow the consummation of the transactions contemplated hereby
and to allow the Surviving Corporation to carry on its business after the
Effective Time.
(F) ACCESS TO INFORMATION. Egenix will allow Pathogenics and its agents
reasonable access to the files, books, records, technology and offices of Egenix
and its subsidiary. Egenix will use its reasonable best efforts to cause its
accountants to cooperate with Pathogenics and its agents in making available to
Pathogenics all financial information reasonably requested, including, without
limitation, the right to examine all working papers pertaining to all tax
returns and financial statements prepared or audited by such accountants.
(G) SATISFACTION OF CONDITIONS PRECEDENT. Egenix will use its reasonable
best efforts to satisfy or cause to be satisfied all the conditions precedent
that are set forth herein and to cause the Merger and the other transactions
contemplated by this Agreement to be consummated.
(H) INDEMNIFICATION OF OFFICERS AND DIRECTORS. Egenix acknowledges and
agrees that prior to execution of this Agreement, it has adopted resolutions and
bylaws, and its certificate of incorporation contains provisions, affording
indemnification, to the fullest extent permitted by law, of all officers,
directors, employees and agents, past or present, which arises out of or
pertains to any action or omission taken in good faith while serving in such
capacity on behalf of such party. Egenix hereby agrees that it shall, to the
fullest extent permitted by law, retain and maintain such indemnification
provisions with respect to its officers, directors, employees and agents and
that it shall hereafter continuously maintain the fullest indemnification of its
officers, directors, employees and agents as permitted by law.
4.2 PATHOGENICS COVENANTS.
(A) ADVICE OF CHANGES. During the period from the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement in
accordance with its terms, Pathogenics will promptly advise Egenix in writing,
(i) of any event occurring subsequent to the date of this Agreement that would
reasonably be likely to render any representation or warranty of Pathogenics
contained in this Agreement, if made on or as of the date of such event or the
Effective Date, untrue or inaccurate in any material respect, (ii) of any event
that would reasonably be likely to have a material adverse effect on Pathogenics
and (iii) of any material breach by Pathogenics of any covenant or agreement
contained in this Agreement.
(B) MAINTENANCE OF BUSINESS. During the period from the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement in accordance with its terms, Pathogenics will use its best efforts
(i) to carry on and preserve its business and its relationships with licensors,
licensees, strategic partners, customers, suppliers, employees and others in
substantially the same manner as it has prior to the date hereof and, (ii) to
execute on its existing operating plan through the Effective Date. If
Pathogenics becomes aware of any material deterioration in the relationship with
any licensor, licensee, strategic partner, customer, supplier or key employee,
it will promptly bring such information to the attention of Egenix in writing
and, if requested by Egenix, will exert its reasonable best efforts to restore
the relationship.
(C) CONDUCT OF BUSINESS. During the period from the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement in
accordance with its terms, Pathogenics will continue to conduct its business and
maintain its business relationships in the ordinary and usual course and, except
as otherwise disclosed herein, it will not, without the prior written consent of
the Chief Executive Officer of Egenix which consent shall not be unreasonably
withheld:
(i) encumber or permit to be encumbered any of its assets except in the ordinary
course of its business consistent with past practice;
(ii) dispose of any of its assets except in the ordinary course of business,
consistent with past practice;
(iii) except as set forth in the Pathogenics Disclosure Schedule, pay (or make
any oral or written commitments or representations to pay) any bonus, increased
salary or special remuneration to any officer, employee or consultant (except
for bonuses in amounts consistent with past practices and normal salary
increases consistent with past practices and except pursuant to existing
arrangements) or enter into or vary the terms of any employment, consulting or
severance agreement with any such person, pay any severance or termination pay
(other than payments in amounts consistent with past practice or made in
accordance with plans or agreements existing on the date hereof), grant any
stock option (except for normal grants to employees consistent with past
practices) or issue any restricted stock, or enter into or modify any agreement
or plan or increase benefits of the type;
(iv) except as required by GAAP, change accounting methods;
(v) except as contemplated herein or by the transactions contemplated by this
Agreement declare, set aside or pay any cash or stock dividend or other
distribution in respect of capital stock, or redeem or otherwise acquire any of
its capital stock (other than pursuant to arrangements with terminated employees
or consultants in the ordinary course of business, consistent with past
practice);
(vi) amend or terminate any contract, agreement or license to which it is a
party except those amended or terminated in the ordinary course of its business,
consistent with past practice, and which are not material in amount or effect;
(vii) lend any amount to any person or entity, other than advances for travel
and expenses which are incurred in the ordinary course of business, consistent
with past practice, not material in amount and documented by receipts for the
claimed amounts;
(viii) guarantee or act as a surety for any obligation except in the ordinary
course of its business, consistent with past practices;
(ix) waive or release any right or claim except for the waiver or release of
non-material claims in the ordinary course of business, consistent with past
practice;
(x) except as contemplated herein or by the transactions contemplated by this
Agreement, issue or sell any shares of its capital stock of any class (except
upon the exercise of an option, stock purchase right or warrant currently
outstanding) or any other of its securities, or issue or create any warrants,
obligations, subscriptions, options, convertible securities or other commitments
to issue shares of capital stock, or accelerate the vesting or change any other
term of any outstanding option or other security;
(xi) except as contemplated herein or by the transactions contemplated by this
Agreement, split or combine the outstanding shares of its capital stock of any
class or enter into any recapitalization or agreement affecting the number or
rights of outstanding shares of its capital stock of any class or affecting any
other of its securities;
(xii) except as contemplated herein or by the transactions contemplated by this
Agreement, merge, consolidate or reorganize with, or acquire any entity;
(xiii) except as contemplated herein or by the transactions contemplated by this
Agreement, amend its Certificate of Incorporation or Bylaws;
(xiv) materially change any insurance coverage or issue any certificates of
insurance except in the ordinary course of business consistent with past
practice;
(xv) take any action, or permit any action within Pathogenics' control, which
would prevent the Merger from qualifying as a tax-free reorganization under
Section 368(a)(1)(A) of the Code;
(xvi) provide or publish to its stockholders any material which might constitute
an unauthorized "prospectus" within the meaning of the Securities Act; or
(xvii) agree to take, or permit any subsidiary to take or agree to take, or
enter into negotiations with respect to, any of the actions described in the
preceding clauses in this Section 4.2(c).
(D) STOCKHOLDER APPROVAL. As promptly as practicable after the execution of
this Agreement, Pathogenics shall call a special meeting of its stockholders
entitled to vote on the Merger to be held as promptly as possible following the
execution of this Agreement to approve the Merger and related matters.
Ratification of this Agreement by a majority of the stockholders shall be a
condition to closing of this Agreement as shall approval of an amendment to the
Certificate of Incorporation of Pathogenics to approve the Reverse Split which
shall be effective immediately prior to the Effective Date. Such meeting will be
called, held and conducted in compliance with applicable law. In the
alternative, this Agreement may be approved by the written consent of the
persons holding a majority of the votes represented by shares of Pathogenics
Common Stock entitled to vote thereon.
(E) NECESSARY CONSENTS. Pathogenics will use its reasonable best efforts to
obtain such written consents and to take such other actions as may be necessary
or appropriate to allow the consummation of the transactions contemplated hereby
and to allow the Surviving Corporation to carry on its business after the
Effective Time.
(F) ACCESS TO INFORMATION. Pathogenics will allow Egenix and its agents
reasonable access to the files, books, records, technology and offices of
Pathogenics and its subsidiaries. Pathogenics will use its reasonable best
efforts to cause its accountants to cooperate with Egenix and its agents in
making available to Egenix all financial information reasonably requested,
including, without limitation, the right to examine all working papers
pertaining to all tax returns and financial statements prepared or audited by
such accountants.
(G) SATISFACTION OF CONDITIONS PRECEDENT. Pathogenics will use its
reasonable best efforts to satisfy or cause to be satisfied all the conditions
precedent that are set forth herein and to cause the Merger and the other
transactions contemplated by this Agreement to be consummated.
(H) STATE SECURITIES LAW COMPLIANCE. Pathogenics shall use its reasonable
best efforts to (i) qualify the Surviving Corporation Common Stock to be issued
pursuant to the Merger under the state securities or "blue sky" laws of every
jurisdiction of the United States in which (a) any registered stockholder of
Egenix has an address on the records of Egenix' transfer agent on the record
date for determining the Egenix stockholders entitled to notice of and to vote
on the Merger.
(I) INDEMNIFICATION OF OFFICERS AND DIRECTORS. Pathogenics acknowledges and
agrees that prior to execution of this Agreement, it has adopted resolutions and
bylaws, [and its certificate of incorporation contains provisions], affording
indemnification, to the fullest extent permitted by law, of all officers,
directors, employees and agents, past or present, which arises out of or
pertains to any action or omission taken in good faith while serving in such
capacity on behalf of such party. Pathogenics hereby agrees that it shall, to
the fullest extent permitted by law, retain and maintain such indemnification
provisions with respect to its officers, directors, employees and agents and
that it shall hereafter continuously maintain the fullest indemnification of its
officers, directors, employees and agents as permitted by law.
ARTICLE V.
CONDITIONS PRECEDENT TO PATHOGENICS' PERFORMANCE
5.1 CONDITIONS. Pathogenics' obligations hereunder shall be subject to the
satisfaction at or before the Effective Time of all the conditions set forth in
this Article V. Pathogenics may waive any or all of these conditions in whole or
in part without prior notice; provided, however, that no such waiver of a
condition shall constitute a waiver by Pathogenics of any other condition of or
any of Pathogenics' other rights or remedies, at law or in equity, if Egenix
shall be in default of any of its representations, warranties or covenants under
this Agreement.
5.2 ACCURACY OF REPRESENTATIONS. Except as otherwise permitted by this
Agreement, all representations and warranties by Egenix in this Agreement or in
any written statement that shall be delivered to Pathogenics by Egenix under
this Agreement shall be true and accurate on and as of the Effective Date as
though made at that time.
5.3 PERFORMANCE. Egenix shall have performed, satisfied and complied with
all covenants, agreements and conditions required by this Agreement to be
performed or complied with by it on or before the Effective Date.
5.4 ABSENCE OF LITIGATION. No action, suit or proceeding before any court
or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against Egenix on or before the Effective Date.
5.5 OFFICER'S CERTIFICATE. Egenix shall have delivered to Pathogenics a
certificate dated the Effective Date and signed by the Chief Executive Officer
of Egenix certifying that each of the conditions specified herein applicable to
Egenix has been fulfilled.
5.6 LEGAL OPINION. Egenix shall have delivered to Pathogenics the legal
opinion of its counsel substantially in the form set forth in Exhibit 5.6.
5.7 INTERIM FINANCING. (a) As soon as possible between the date hereof and
until successful completion of one or more bridge financing(s) as described in
Section 5.8 herein, Egenix shall use commercially reasonable efforts to obtain
financing by calling in its currently outstanding warrants to purchase common
stock ("Warrant Call"). The proceeds of such Warrant Call shall be used to
finance the continuing activities of the parties hereto prior to the successful
completion of such bridge financings. As soon as practicable after the proceeds
from the Warrant Call are available, Egenix shall receive the lesser of 71.5% or
$250,000 of the proceeds of the Warrant Call, and Pathogenics shall receive the
lesser of 28.5% or $100,000 of the proceeds of the Warrant Call.
(b) Upon successful completion of one or more pre-Merger Bridge
Financing(s) by the parties as described in Section 5.8 and as soon as
practicable after the proceeds are available, Pathogenics shall receive the
lesser of 28.5% of the proceeds or $100,000 per month until the Closing, plus
the sum of $50,000 as required for the payment of Registration Statement legal
fees, and Egenix shall receive the lesser of 71.5% of the proceeds or $250,000
per month until the Closing. Payment of the parties' transaction costs
associated with the Letter of Intent, the Merger, the Warrant Call, the Bridge
Financing and the PIPE (as such terms are hereinafter defined) shall be in
addition to the aforementioned sums.
5.8 BRIDGE FINANCINGS. (a) As soon as possible between the date hereof and
prior to ninety (90) days after the execution of this Agreement, Egenix and/or
Pathogenics shall use commercially reasonable efforts to obtain financings in
the form of sales of equity securities or debt instruments for an aggregate of
$5,000,000 ("Bridge Financing"). Any debt instruments will, subject to market
conditions, require interest thereon payable in kind in the form of the
Surviving Corporation's common stock. In addition to financing the parties'
continuing activities prior to the Closing and as otherwise described in Section
5.7 hereof, up to $600,000 of proceeds of such Bridge Financing may be used
immediately to repay and retire certain of Egenix' then outstanding current
liabilities, and up to $150,000 of proceeds of such Bridge Financing may used
immediately to repay and retire certain of Pathogenics then outstanding current
liabilities.
(b) Prior to or contemporaneously with the effectiveness of the Merger, the
Surviving Corporation will privately offer and sell up to $10,000,000 -
$15,000,000 of its capital stock (the "PIPE").
ARTICLE VI.
CONDITIONS PRECEDENT TO EGENIX' PERFORMANCE
6.1 CONDITIONS. Egenix' obligations hereunder shall be subject to the
satisfaction at or before the Closing of all the conditions set forth in this
Article VI. Egenix may waive any or all of these conditions in whole or in part
without prior notice; provided, however, that no such waiver of a condition
shall constitute a waiver by Egenix of any other condition of or any of Egenix'
other rights or remedies, at law or in equity, if Pathogenics shall be in
default of any of its representations, warranties or covenants under this
Agreement.
6.2 ACCURACY OF REPRESENTATIONS. Except as otherwise permitted by this
Agreement, all representations and warranties by Pathogenics in this Agreement
or in any written statement that shall be delivered to Egenix by Pathogenics
under this Agreement shall be true and accurate on and as of the Effective Date
as though made at that time.
6.3 PERFORMANCE. Pathogenics shall have performed, satisfied and complied
with all covenants, agreements and conditions required by this Agreement to be
performed or complied with by it on or before the Effective Date.
6.4 ABSENCE OF LITIGATION. No action, suit or proceeding before any court
or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against Pathogenics on or before the Effective Date.
6.5 DIRECTORS OF PATHOGENICS. Immediately prior to consummation of the
Merger, Pathogenics shall have fixed the size of its Board of Directors of not
less than three or more than ten directors and providing that at the Effective
Time the size of the Board of the Surviving Corporation shall be fixed at four
directors.
Effective on the consummation of the Merger, and thereafter (until
otherwise determined by the shareholders of the Surviving Corporation) the Board
of Directors of the Surviving Corporation shall consist of the persons named in
Section 1.7 hereof, each of whom shall hold office until the next annual meeting
of the shareholders of the Surviving Corporation, and until his successor shall
have been duly elected and shall have qualified, or until his earlier death,
resignation, or removal.
6.6 OFFICERS OF THE SURVIVING CORPORATION. Immediately after the Effective
Time, the Board of Directors of the Surviving Corporation shall elect as
officers of the Surviving Corporation the persons named in Section 1.7 thereof
the their respective positions set forth therein.
6.7 OFFICER'S CERTIFICATE. Pathogenics shall have delivered to Egenix a
certificate dated the Effective Date and signed by an authorized officer of
Pathogenics certifying that each of the conditions specified herein applicable
to Pathogenics has been fulfilled.
6.8 LEGAL OPINION. Pathogenics shall have delivered to Egenix the legal
opinion of its counsel substantially in the form set forth in Exhibit 6.8.
ARTICLE VII.
CLOSING
7.1 CLOSING. The Closing of this transaction shall be held at the offices
of Xxxxxxx Xxxxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx,
00000, on the Effective Date which presently is intended to be not later than
December 31, 2006, or at such other place and time as is mutually agreeable to
the parties (the "Closing Date"). At the Closing:
(a) Promptly after the Effective Time, the Surviving Corporation shall
deposit with the Exchange Agent, for the benefit of the holders of shares of
Egenix Common Stock for exchange in accordance with this Agreement and holders
of Pathogenics Common Stock subject to the Reverse Split, certificates
representing the shares of Surviving Corporation Stock (such shares of Surviving
Corporation Common Stock, together with any dividends or distributions with
respect thereto being hereinafter referred to as the "Exchange Fund") issuable
pursuant to this Agreement or the Reverse Split, in exchange for outstanding
shares of Egenix Common Stock and Pathogenics Common Stock subject to the
Reverse Split as set froth in Section 1.10.
(b) As soon as practicable after the Effective Time, the Surviving
Corporation shall cause the Exchange Agent to mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented issued and outstanding shares of Egenix Common Stock or Pathogenics
Common Stock, as the case may be (collectively, the "Certificates"), (i) a
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have such other
provisions as Pathogenics and Egenix may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for certificates representing Surviving Corporation Common Stock. Upon surrender
of a Certificate for cancellation to the Exchange Agent, together with a duly
executed letter of transmittal and such other documents as may be reasonably
required by the Exchange Agent, the holder of such Certificate shall be entitled
to receive in exchange therefor a certificate representing that number of whole
shares of Surviving Corporation Common Stock which such holder has the right to
receive pursuant to the provisions of this Agreement or such reverse split, as
the case may by, and the Certificate so surrendered shall forthwith be canceled.
In the event of a transfer of ownership of shares of Egenix Common Stock or
Pathogenics Common Stock which is not registered on the transfer records of
Egenix or Pathogenics, as the case may be, a certificate representing the proper
number of shares of Surviving Corporation Common Stock may be issued to a
transferee if the Certificate representing such Egenix Common Stock or
Pathogenics Common Stock is presented to the Exchange Agent, accompanied by all
documents required to evidence and effect such transfer and by evidence that any
applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 7.1, each Certificate shall be deemed, on and after
the Effective Time, to evidence the ownership of the number of full shares of
Surviving Corporation Common Stock into which such shares of Egenix Common Stock
or Pathogenics Common Stock, as the case may be, shall have been so converted.
Similarly, the holders of Egenix Preferred Stock shall surrender their
certificates representing such shares of Egenix Preferred Stock to the Surviving
Corporation in exchange for certificates representing shares of Series A
Preferred Stock. Until surrendered as contemplated by this Section 7.1, each
certificate representing shares of Egenix Preferred Stock shall be deemed, on
and after the Effective Time, to evidence the ownership of an identical number
of shares of Series A Preferred Stock into which such shares of Egenix Preferred
Stock shall have been so converted.
(c) All shares of Surviving Corporation Common Stock and Series A Preferred
Stock issued upon the surrender for exchange of shares of Egenix Common Stock or
Egenix Preferred Stock, as the case may be, in accordance with the terms of this
Agreement shall be deemed to have been issued in full satisfaction of all rights
pertaining to such shares of Egenix Common Stock or Egenix Preferred Stock, as
the case may be.
(d) Pathogenics shall deliver signed consents and/or minutes of the
meetings of its Board of Directors and stockholders approving this Agreement and
each matter to be approved by the directors and/or stockholders thereof under
this Agreement;
(e) Egenix shall deliver a signed consent and/or minutes of the directors
and stockholders of Egenix approving this Agreement and each matter to be
approved by the directors and/or stockholders of Egenix under this Agreement;
7.2 ADDITIONAL CONDITIONS PRECEDENT TO CLOSING. The Closing shall be
contingent upon the following:
(a) Satisfactory examination and verification of the adequacy and accuracy
of all representations and warranties of the respective parties, including those
contained in the financial statements;
(b) Satisfactory verification that neither the transactions contemplated
herein nor any other material aspect of the respective companies shall, in the
opinion of counsel, be reasonably likely to cause any stop-order, litigation,
breach of contract, federal, state or local administrative proceeding, or
similar default or defalcation;
(c) Satisfactory evidence that all pre-closing conditions or obligations
have been fulfilled or complied with;
(d) Satisfactory evidence that there are no rights of dissent or appraisal
in favor of any holder of Egenix Common Stock, Egenix Preferred Stock or
Pathogenics Common Stock except as permitted hereby, no preemptive rights with
respect to any shares or class of shares, no requirement for fairness hearings,
fairness opinions, or similar regulatory processes, and no rights to rescission
or injunctive relief, unless the above rights have been waived or released in
accordance with applicable law; and
(e) Necessary approvals, if any, of administrative agencies, or state level
corporate commissioners have been obtained.
ARTICLE VIII.
TERMINATION OF AGREEMENT
8.1 TERMINATION. This Agreement may be terminated at any time prior to the
Effective Time, whether before or after approval of the Merger by the
stockholders of Pathogenics or Egenix:
(a) by mutual written agreement of Pathogenics and Egenix;
(b) by Egenix if there has been a breach by Pathogenics of any
representation or warranty set forth in this Agreement on the part of
Pathogenics and, as a result of such breach, the conditions set forth in
Articles VI and VII of this Agreement would not then be satisfied, and which
Pathogenics fails to cure within ten (10) business days after notice thereof
from Egenix (except that no cure period shall be provided for a breach by
Pathogenics which by its nature cannot be cured) or there has been a material
adverse change in the business or assets of Pathogenics between the date hereof
and the Closing;
(c) by Pathogenics if there has been a breach by Egenix of any
representation or warranty set forth in this Agreement on the part of Egenix,
and as a result of such breach, the conditions set forth in Articles V and VII
would not then be satisfied, and which Egenix fails to cure within ten (10)
business days after notice thereof from Pathogenics (except that no cure period
shall be provided for a breach by Egenix which by its nature cannot be cured) or
there has been a material adverse change in the business or assets of Egenix
between the date hereof and the Closing;
(d) subject to the provisions of Section 9.3 hereof other than as a result
of a breach of this Agreement by the terminating party;
(e) by Egenix or Pathogenics, if a permanent injunction or other order by
any federal or state court which would make illegal or otherwise restrain or
prohibit the consummation of the Merger shall have been issued and shall have
become final and nonappealable;
(f) by Egenix or Pathogenics , if the stockholders of either party do not
approve the Merger contemplated by this Agreement at their respective meetings;
and
(g) by Egenix or Pathogenics if either of their respective boards of
directors approves or recommends another offer or an agreement to effect a
Superior Proposal, and, in the case of Pathogenics, paid the sums set forth in
Section 8.3 hereof.
8.2 NOTICE OF TERMINATION. Any termination of this Agreement under Section
9.1 above will be effective by the delivery of notice of the terminating party
to the other party hereto.
8.3 NO LIABILITY. Any termination of this Agreement in accordance with this
Section 8 will be without further obligation or liability upon any party in
favor of the other parties hereto; provided, however, that nothing herein will
relieve any party from liability for any willful breach of this Agreement;
provided, however, that if Pathogenics terminates this Agreement because, in the
judgment of its Board of Directors, it is obligated to consider, and ultimately
accepts, an unsolicited third party offer to engage in a merger, consolidation,
sale of all or substantially all of its assets or a similar transaction, then
Pathogenics shall be obligated immediately to repay Egenix for any amounts
advanced to it by Egenix pursuant to Sections 5.7 and 5.8 hereof.
ARTICLE IX.
MISCELLANEOUS
9.1 CAPTIONS AND HEADINGS. The article and paragraph headings throughout
this Agreement are for convenience and reference only and shall not define,
limit or add to the meaning of any provision of this Agreement.
9.2 AMENDMENTS. This Agreement and any provision hereof may not be waived,
amended, changed, modified or discharged orally, but only by an agreement in
writing signed by the party against whom enforcement of any such amended waiver,
change, modification or discharge is sought.
9.3 NON-WAIVER. The failure of any party to insist in any one or more cases
upon the performance of any of the provisions, covenants or conditions of this
Agreement or to exercise any option herein contained shall not be construed as a
waiver or relinquishment for the future of any such provisions, covenants or
conditions. No waiver by any party of one breach by another party shall be
construed as a waiver with respect to any other subsequent breach.
9.4 ENTIRE AGREEMENT. This Agreement, including the exhibits and schedules
hereto, contains the entire Agreement and understanding between the parties
hereto and supersedes all prior agreements and understandings.
9.5 CHOICE OF LAW. This Agreement and its application shall be governed by
the laws of the State of Delaware.
9.6 COUNTERPARTS. This Agreement may be executed simultaneously in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.7 NOTICES. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
on the date of service if served personally on the party to whom notice is to be
given, of on the date received by such party as indicated on the receipt for
delivery is delivered by Express Mail or other recognized overnight courier
service, or on the third day after mailing if mailed to the party to whom notice
is given, by first class mail, registered or certified, postage prepaid, or by
facsimile, and properly addressed as follows, or to such other address or
facsimile number as any party hereto may provide to the others in accordance
with the provisions of this Section 9.8:
Egenix, Inc.
00 Xxxxx Xxxxx Xxxx Xxxx
Xxx. X
Xxxxxxxxx, XX 00000
Attention: Chief Executive Officer
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to:
Xxxxx Xxxxxx, Esq.
Harley & Deickler LLP
000 Xxxx Xxxx Xxxx Xxxx
X.X. Xxx 000
Xxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
and
Pathogeincs, Inc.
00 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
With a copy to:
Counsel to be named
9.9 BINDING EFFECT. This Agreement shall inure to and be binding upon the
heirs, executors, personal representatives, successors and permitted assigns of
each of the parties to this Agreement.
9.10 MUTUAL COOPERATION.
(a) Subject to the terms and conditions hereof, the parties hereto shall
cooperate with each other using commercially reasonable efforts to achieve the
purposes of this Agreement and shall execute such other and further documents
and take such other and further actions as may be necessary or convenient to
effect the transaction described herein.
(b) Subject to the terms and conditions hereof, the parties hereto shall
use commercially reasonable efforts to cause the Effective Time to occur as soon
as practicable after the stockholder votes with respect to the Merger. In case
at any time after the Effective Time any further action is necessary to carry
out this Agreement, the proper officers and directors of each party shall take
all such necessary action.
(c) The parties hereto agree that they will consult with each other with
respect to the obtaining of all permits, consents, approvals and authorizations
required or advisable for the Merger to be consummated and each party will keep
the other apprised of the status of matters relating to completion of the
transactions contemplated hereby.
(d) Subject to applicable laws governing the exchange of information, each
of the parties will furnish the other with all information concerning itself,
its directors, officers and stockholders an such other matters as may be
reasonably necessary or advisable in connection with any filing, notice or
application made by or on behalf of such other party to any third party,
including any regulatory agency having jurisdiction over such party.
9.11 ANNOUNCEMENTS. The parties will consult and cooperate with each other
as to the timing and content of any public announcements regarding this
Agreement. Notwithstanding the foregoing, either party hereto may issue any
press release or make any public announcement that may be required by law or the
rules or requirements of any regulatory agency having jurisdiction over the
parties hereto if it has used commercially reasonable efforts to consult with
the other party but has been unable to do so in a timely manner.
9.12 EXPENSES. Except as contemplated herein, each party shall bear its own
costs associated with this Agreement, the closing of this Agreement, and all
ancillary or related measures, including without limitation, costs of attorney
fees, accountancy fees, filing fees, travel, or other costs or expenses, without
right or recourse from the other.
9.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties, covenants and agreements of the parties set forth in this Agreement
or in any instrument, certificate, opinion or other writing provided for herein
shall not survive the Closing.
9.14 EXHIBITS. As of the execution hereof, the parties have provided each
other with the exhibits and other documentation described herein and no change
therein shall be made in any such exhibit or other documentation unless
immediately disclosed to the other party, and where required, such other party's
consent has been obtained.
9.15 NO JOINT VENTURE. Nothing contained in this Agreement will be deemed
or construed as creating a joint venture or partnership between any of the
parties hereto. No party is by virtue of this Agreement authorized as an agent,
employee or legal representative of any other party. No party will have the
power to control the activities and operations of any other and their status is,
and at all times, will continue to be, that of independent contractors with
respect to each other. No party will have any power or authority to bind or
commit any other. No party will hold itself out as having any authority or
relationship in contravention of this Section.
9.16 NO SOLICITATION.
(a) Neither party hereto (whether directly or indirectly through advisors,
agents of other intermediaries) shall encourage, solicit, participate in or
engage in discussions or negotiations with, or provide any information or offer
access to its properties, books or records to any third party concerning a
Competing Transaction (as defined herein). Each party shall use its commercially
reasonable efforts to cause its officers, directors, employees, affiliates,
agents and representatives not to encourage, solicit, participate in or engage
in discussions or negotiations with, or provide any information or offer access
to its properties, books or records to any third party concerning a Competing
Transaction. Notwithstanding the foregoing, either party (the "Receiving Party")
may furnish information and access, in each case only in response to an
unsolicited written proposal that, in the opinion of such party's board of
directors in consultation with its advisors, is likely to lead to a Superior
Proposal, provided that the Receiving Party shall first have entered into a
confidentiality agreement with such third party no less favorable than that
between the parties hereto, and may thereafter participate in discussions and
negotiate with the party making such unsolicited proposal. The Receiving Party
shall provide a copy of such unsolicited proposal (which shall identify the
party making such proposal) and any amendments thereto to the other party hereto
within one (1) business day of the Receiving Party's receipt thereof, and shall
keep the other party hereto promptly advised of material developments with
respect thereto. Nothing contained in this Section 9.16 shall prevent the
Receiving Party from taking and disclosing to its stockholders any information
or position with respect to a Competing Transaction if, in the good faith
judgment of the Receiving Party's board of directors, after receiving advice
from outside legal counsel, failure to disclose would be reasonably likely to
constitute a breach of such board of directors' fiduciary duty to the Receiving
Party's stockholders under applicable law (including a duty of candor) or
otherwise be a violation of any applicable law.
(b) Except as set forth in this Section 9.16(b), neither party's board of
directors nor any committee thereof shall (i) withdraw or modify their
recommendation that their respective stockholders approve this Agreement or (ii)
approve or recommend, or authorize or cause such party to enter into any
agreement or letter of intent with respect to any Competing Transaction (other
than a confidentiality agreement on the terms described in Section 9.16(a) of
this Agreement). Notwithstanding the foregoing, prior to their respective
stockholder meetings either of the parties' board of directors may withdraw or
modify its recommendation that the stockholders of such party approve this
Agreement in connection with such party's receipt of a Superior Proposal, and
may authorize and cause such party to enter into an agreement with respect to,
or approve or recommend, a Superior Proposal; provided, however, that the party
receiving such Superior Proposal shall, prior to or concurrently with the
execution of such agreement, terminate this Agreement in accordance with the
provisions of Section 8.1(g).
(c) For purposes of this Agreement:
(i) "Competing Transaction" shall mean with respect to either party
hereto, any tender offer or exchange offer for, or any other proposal for
the acquisition of a substantial equity interest in, or of a substantial
portion of the assets of, or any merger, consolidation or other business
combination or similar transaction by or with a third party.
(ii) "Superior Proposal" shall mean any bona fide proposal relating to
a Competing Transaction which is on terms and conditions which the
Receiving Party's board of directors determines, in its good faith
judgment, after consulting with its advisors, and taking into account,
among other things, all legal, financial, regulatory and other aspects of
the proposal and the party making the proposal, (A) to be more favorable to
the stockholders of the Receiving Party than the Merger and (B) is
reasonably capable of being consummated.
9.17 PATENT LICENSE REVERSION. If at any time after the Effective Time the
Surviving Corporation elects to terminate any of the patent license agreements
of Pathogenics that pre-existed the Closing, it shall provide the officers and
directors of Pathogenics that pre-existed the Closing with written notice
sufficient to avoid any loss or forfeiture, and a corporation owned by the
stockholders of Pathogenics that pre-existed the Closing shall have the right,
but not the obligation, at their sole expense, to be assigned the patent license
agreements without any additional payment to the Surviving Corporation in order
to maintain the patent license agreements at their sole expense.
9.18 INDEMNIFICATION.
(a) From and after the Effective Time, the Surviving Corporation shall
indemnify, defend and hold harmless the officers, directors and employees of
Egenix and Pathogenics ( the "Indemnified Parties") against all losses,
expenses, claims, damages or liabilities (i) arising out of the transactions
contemplated by this Agreement or arising as a result thereof or (ii) otherwise
arising prior to the Effective Time, in each case to the fullest extent
permitted or required under (A) applicable law, (B) any indemnification
agreements between the parties hereto and any Indemnified Party and (C) the
parties respective certificates of incorporation and by-laws as in effect as of
the date hereof.
(b) If the Surviving Corporation or any of its successors or assigns (i)
consolidates with or merges into any third party and shall not be the continuing
or surviving corporation or entity of such consolidation or merger or (ii)
transfers all or substantially all of its assets and properties to any third
party, then, and in each such case the successors and assigns of such entity
shall assume the obligations set forth in this Section 9.18, which obligations
are expressly intended to be for the benefit of, and shall be enforceable by,
each Indemnified Party.
9.19 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one
and the same agreement.
AGREED AND ACCEPTED as of the date first above written.
PATHOGENICS, INC.
By:
--------------------
Name:
Title:
EGENIX, INC.
By:
--------------------
Name:
Title:
EXHIBIT 1.1(c)
CERTIFICATE OF MERGER
BETWEEN
EGENIX, INC. AND PATHOGENICS, INC.
1. The names of the constituent corporations are Egenix, Inc., a Delaware
corporation, and Pathogenics, Inc., a Delaware corporation.
2. An Agreement and Plan of Merger dated __________, 2006 ( the "Merger
Agreement") has been approved, adopted, certified, executed and acknowledged be
each of the constituent corporations in accordance with Section 251 of the
Delaware General Corporation Law ("DGCL").
3. The name of the surviving corporation is Pathogenics, Inc. (the "Surviving
Corporation").
4. The certificate of incorporation of Pathogenics, Inc. will be the certificate
of incorporation of the Surviving Corporation; provided, however, that the
certificate of incorporation of the Surviving Corporation shall be amended and
restated in its entirety as follows:
ARTICLE I
The name of this corporation is Egenix, Inc. (referred to herein as the
"Corporation").
ARTICLE II
The address of the Corporation's registered office in the State of Delaware is
000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxx, Xxxxxxxx 00000. The name of the
Corporation's registered agent at such address is National Registered Agents,
Inc.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or activity for
which corporations may be organized under the DGCL.
ARTICLE IV
CAPITAL STOCK
The total number of shares of stock which the Corporation shall have authority
to issue is Sixty Five Million (65,000,000). Fifty Million (50,000,000) shares
shall be common stock, par value $0.001 per share (the "Common Stock") and
Fifteen Million (15,000,000) shares shall be preferred stock, par value $0.001
per share (the "Preferred Stock"), of which One Million (1,000,000) shares shall
be designated as Series A Preferred Stock, par value $0.001 per share (the
"Series A Preferred Stock").
Authority is hereby expressly granted to the Board of Directors from time to
time to issue the Preferred Stock as Preferred Stock of any series and, in
connection with the creation of each series, to fix by the resolutions or
resolutions providing for the issue of shares thereof, the number of shares of
such series and the designations, powers, preferences, rights, qualifications,
limitations and restrictions of such series, to the full extent now or hereafter
permitted by the laws of the State of Delaware.
PREFERRED STOCK
The relative powers, preferences and rights of, and the qualifications,
limitations and restrictions granted to and imposed upon, certain of the
Preferred Stock are as follows: SERIES A PREFERRED STOCK
1. DESIGNATION. The designation of such series shall be "Series A Preferred
Stock" (hereinafter referred to as the "Series A Preferred Stock") and the
number of shares constituting such series is One Million (1,000,000). The number
of authorized shares of Series A Preferred Stock may be increased or reduced by
further resolutions of the Board of Directors of the Corporation or any duly
authorized committee thereof and by the filing of a certificate pursuant to the
provisions of the DGCL stating that such increase or reduction has been so
authorized, but the number of shares of Series A Preferred Stock shall not be
reduced below 200,000 unless there shall be less than 200,000 shares of Series A
Preferred Stock outstanding, in which case the number of shares of Series A
Preferred Stock may be reduced to a number of shares equal to the number of such
shares outstanding from time to time. Shares of Series A Preferred Stock may
either be evidenced by certificates or may be uncertificated in the discretion
of the Corporation's Board of Directors; provided, however, that if any such
shares are not evidenced by certificates, the Board of Directors of the
Corporation shall cause to be made in the corporation's stockholder ledger an
entry listing the name and address of each holder of such shares, the date of
issuance of such shares to each such holder and the number of such shares so
issued.
2. DIVIDENDS. The Series A Preferred Stock shall not be entitled to any
dividend.
3. REDEMPTION. There shall be no mandatory redemption of the outstanding shares
of Series A Preferred Stock. Nothing herein, however, shall prevent the
Corporation from repurchasing or redeeming any or all of its outstanding shares
of Series A Preferred Stock in accordance with applicable law. All shares of
Series A Preferred Stock redeemed or purchased by the Corporation shall be
retired and canceled and shall be restored to the status of authorized but
unissued shares of Preferred Stock, without designation as to series, and may
thereafter be issued as Preferred Stock, but not as shares of Series A Preferred
Stock.
4. CONVERSION OR EXCHANGE.
CONVERSION RIGHT. The holders of Series A Preferred Stock shall have the
right at any time to convert all or any portion of such shares of Series A
Preferred stock into shares of the Corporation's Common Stock, or such other
securities into which such Common Stock shall have been converted or by which
such Common Stock shall have been replaced, at the rate of two (2) shares of
Common Stock for each one (1) share of Series A Preferred Stock. A holder of
shares of Series A Preferred Stock may elect to convert such shares into Common
Stock in a single transaction or series of transactions; provided, that in any
election involving conversion of less than all of such holders shares of Series
A Preferred Stock such holder shall elect to convert not less than twenty
percent (20%) of the original amount of such holder's shares of Series A
Preferred Stock.
Any holder of outstanding shares of Series A Preferred Stock may elect to
convert such shares of Series A Preferred Stock into shares of Common Stock by
serving written notice on the Corporation setting forth: (1) the number of
shares of such holder's Series A Preferred Stock to be converted; (2) the date
by which such conversion must occur, such date being at least thirty (30) and
not more than sixty (60) days after the date of such notice; (3) whether such
shares of Common Stock are to be evidenced by a single certificate or multiple
certificates (in which latter case the denominations of such certificates shall
also be set forth); and (4) if such certificates are to be issued in the name or
names of a person or persons other than that of the holder of the Series A
Preferred Stock so converting, the name(s) and address(es) of such other
person(s).
ISSUANCE OF CERTIFICATES FOR COMMON STOCK. Promptly following the effective
date of any conversion in accordance with the written notice from a holder of
Series A Preferred Stock, the Corporation shall issue a certificate or
certificates evidencing shares of Common Stock into which such shares of Series
A Preferred Stock have been converted in accordance with the instructions set
forth in such converting holder's notice to the Corporation.
5. CERTAIN ADJUSTMENTS.
STOCK DIVIDENDS, SPLITS AND COMBINATIONS. If at any time or from time to
time, the holders of Common Stock become entitled to receive additional shares
or less shares because of a stock dividend, stock split or combination of
shares, the number of shares of Common Stock into which outstanding shares of
Series A Preferred Stock may be converted shall be proportionately and
correspondingly adjusted.
RECLASSIFICATIONS. If at any time or from time to time, the holders of
Common Stock become entitled to receive a different class of stock (the
"Entitlement Event"), any holder of outstanding shares of Series A Preferred
Stock shall be entitled to receive upon such holder's conversion of shares of
Series A Preferred Stock after the Entitlement Event for each share of Common
Stock into which shares of Series A Preferred Stock have been converted the same
number and kind of shares of stock as a holder of shares of the Common Stock
immediately prior to the Entitlement Event was eligible to receive with respect
to such Common Stock pursuant to the Entitlement Event. This provision shall
include any reclassification in connection with a merger of another corporation
into the Corporation.
CERTAIN DISTRIBUTIONS. If at any time or from time to time, the holders of
Common Stock become entitled to receive an extraordinary distribution consisting
of cash, debt securities or property including stock of a subsidiary as a
spin-off or split-off, the Corporation shall send written notice at least thirty
(30) days but no more than sixty (60) days prior to the record date of
shareholders eligible to receive such distribution to the holders of shares of
Series A Preferred Stock describing the amount and nature of the distribution,
the time fixed for its payment and any conditions thereupon, and if such holder
does not elect to convert such holder's shares of Series A Preferred Stock on or
before such record date, the holder of such shares of Series A Preferred Stock
shall not be eligible to participate in such extraordinary distribution per
share of the Common Stock. An extraordinary distribution shall mean any
distribution other than periodic payments of cash dividends from profits
intended to be regular and recurring. The value of any extraordinary
distribution shall be conclusively determined in good faith by an affirmative
vote of the Board of Directors of the Corporation.
MERGER INTO OR SALE OF ASSETS TO ANOTHER CORPORATION. If at any time or
from time to time, the holders of the Common Stock become entitled to receive
stock, securities, property or cash (or any combination of them) by reason of a
capital reorganization or dissolution, liquidation or winding-up of the
Corporation, a merger with, a consolidation of the Corporation into, a sale of
all or substantially all of the assets of the corporation to, another
corporation (the "Reorganization Event"), each holder of shares of Series A
Preferred Stock shall be entitled to receive upon conversion of such shares of
Series A Preferred Stock after the Reorganization Event the same stock,
securities, property or cash (or combination of them) as a holder of the same
number of shares of the Common Stock into which such shares of Series A
Preferred Stock was convertible immediately prior to the Reorganization Event
was eligible to receive with respect to such Common Stock pursuant to the
Reorganization Event.
NOTICE OF ADJUSTMENTS. Upon any adjustment as herein described, then, and
in each such case, the Corporation, within 10 days thereafter, shall give notice
thereof to each record holder of shares of Series A Preferred Stock stating the
adjustment in the number of shares of Common Stock into which such holder's
shares of Series A Preferred Stock may be converted and setting forth in
reasonable detail the method of calculating and the facts (including a statement
of the consideration received or deemed to have been received by the Corporation
for any shares of Common Stock) upon which such calculation is based.
6. GENERAL. The Corporation will not, by amendment of its certificate of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid, or seek to avoid the observance or performance of any of the terms of
this Section 6, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holders of Series A Preferred
Stock. The Corporation will take all such action as may be necessary or
appropriate in order that the Corporation may validly and legally issue fully
paid and nonassessable shares of Common Stock or other securities into which
outstanding shares of Series A Preferred Stock may be converted upon the
exercise of any conversion granted herein. The Corporation will not: (1) issue
any capital stock of any class which is preferred as to dividends or as to the
distribution of assets upon voluntary or involuntary dissolution, liquidation or
winding up, unless the rights of the holders thereof shall be limited to a fixed
sum or percentage of par value in respect of participation in dividends and in
any such distribution of assets; and (2) (i) transfer all or substantially all
of its properties and assets to any other entity or (ii) consolidate with or
merge into any other entity where the Corporation is not the continuing or
surviving entity, or (iii) permit any other entity to consolidate with or merge
into the Corporation where the Corporation is continuing or surviving entity
unless, in connection with such consolidation or merger, unless the conversion
rights granted hereby shall survive and apply to the Common Stock, or other
securities of the Corporation into which such shares of Series A Preferred Stock
can be converted, then issuable as a result of such transaction.
7. VOTING RIGHTS. The holders of shares of Series A Preferred Stock originally
issued by the Corporation (the "Initial Holders") shall be entitled, at all
meetings of the stockholders of the Corporation and on all occasions where
stockholders are entitled to vote or give their consent, to thirty (30) votes
for each share of Series A Preferred Stock owned by them; provided, however,
that upon sale, gift or transfer of such shares by an Initial Holder, whether
voluntarily, involuntarily, by operation of law including, without limitation,
bankruptcy, appointment of a guardian, committee of an incompetent, conservator
or custodian or otherwise (but not including by devise, bequest, the laws of
inheritance or descent in which case the persons taking such shares of Series A
Preferred Stock under such circumstances shares shall be entitled to such thirty
(30) votes per share), such shares of Series A Preferred Stock shall be entitled
to, at all meetings of the stockholders of the Corporation and on all occasions
where stockholders are entitled to vote or give their consent, to one vote for
each share of Series A Preferred Stock. The holders of shares of Series A
Preferred Stock shall vote with the holders of shares of Common Stock as a
single class, except to the extent that holders of Common Stock or holders of
Series A Preferred Stock shall be entitled to vote as a separate class pursuant
to the DGCL.
8. RESTRICTIONS ON CREATION OF ADDITIONAL CLASSES OR SERIES OF PREFERRED STOCK.
Notwithstanding any other provision of the Certificate of Incorporation, without
the vote or consent of the holders of a least a majority of the then outstanding
shares of Series A Preferred Stock, the Corporation shall not (i) create or
issue or increase the authorized number of shares of any class or classes or
series of stock ranking prior to or in parity with the Series A Preferred Stock
upon liquidation, (ii) amend or alter or repeal any of the provisions of the
Certificate of Incorporation so as to affect adversely the preferences or rights
of the Series A Preferred Stock or (iii) authorize any reclassification of the
Series A Preferred Stock.
9. LIQUIDATION PREFERENCE. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the holders of the
Series A Preferred Stock shall be entitled to receive out of the assets of the
Corporation available for distribution to stockholders, before any distribution
of assets shall be made to the holders of Common Stock or of any other shares of
stock of the Corporation ranking as to such distribution junior to the Series A
Preferred Stock, an amount equal to Ten Dollars ($10.00) per share. If upon any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the amounts payable with respect to the Series A Preferred Stock
and any other shares of stock of the Corporation ranking as to any such
distribution on a parity with the Series A Preferred Stock are not paid in full,
the holders of the Series A Preferred Stock and of such other shares shall share
ratable in any such distribution of assets of the Corporation in proportion to
the full respective preferential amounts to which they are entitled. After
payment to the holders of the Series A Preferred Stock of the full preferential
amounts provided for in this Section 9, the holders of the Series A Preferred
Stock shall be entitled to no further participation in any distribution of
assets by the Corporation. The consolidation or merger of the Corporation with
or into any other corporation, or the sale of substantially all of the assets of
the corporation in consideration for the issuance of equity securities of
another corporation, shall not be regarded as a liquidation, dissolution or
winding up of the Corporation within the meaning of this Section 9, but only if
such consolidation, merger or sale of assets shall not in any way impair the
voting power, preferences or special rights of the Series A Preferred Stock.
10. LIMITATIONS ON DIVIDENDS ON JUNIOR RANKING STOCK. So long as any Series A
Preferred Stock shall be outstanding, the corporation shall not declare any
dividends on other class or series of Preferred Stock of the Corporation ranking
as to dividends or distributions of assets junior to the Series A Preferred
Stock (any such junior ranking stock being herein referred to as "Junior
Stock"), or make any payment on account of, or set apart money for, a sinking or
other analogous fund for the purchase, redemption or other retirement of any
shares of Junior Stock, or make any distribution in respect thereof, whether in
cash or property or in obligations or stock of the Corporation, other than
Junior Stock (such dividends, payments, setting apart and distributions being
herein called "Junior Stock Payments"), unless all of the conditions set forth
in the following subsections (a) and (b) shall exist at the date of such
declaration in the case of any such dividend, or the date of such setting apart
in the case of any such fund, or the date of such payment or distribution in the
case of any other Junior Stock Payment: Full cumulative dividends shall have
been paid or declared and set apart for payment upon all outstanding shares of
Preferred Stock other than Junior Stock; and The Corporation shall not be in
default or in arrears with respect to any sinking or other analogous fund or any
call for tenders obligation or other agreement for the purchase, redemption or
other retirement of any shares of Preferred Stock other than Junior Stock.
11. RESTRICTIONS ON TRANSFER.
RESTRICTIONS ON TRANSFER. Neither the Series A Preferred Stock, nor any
interest therein, shall be transferable except upon the conditions specified in
this Section 11, which conditions are intended to ensure compliance with the
Securities Act of 1933, as amended (the "Securities Act") and all applicable
state securities laws in respect of the transfer of any such securities or any
interest therein.
RESTRICTIVE LEGEND. Each certificate, if shares of Series A Preferred Stock
shall be issued in certificated form, shall (unless otherwise permitted by the
provisions of this Section 11) include a legend in a form similar to the
following:
NEITHER THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO
WHICH THEY ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT Of
1933, AS AMENDED, AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE
SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT, APPLICABLE STATE
SECURITIES LAWS AND THE RULES AND REGULATIONS THEREUNDER. BY ACCEPTANCE OF THIS
CERTIFICATE, THE HOLDER HEREOF REPRESENTS THAT IT IS ACQUIRING THESE SECURITIES
FOR INVESTMENT AND AGREES TO COMPLY IN ALL RESPECTS WITH SECTION 11 OF THE
COMPANY'S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION COVERING RIGHTS,
PREFERENCES AND PRIVILEGES OF THE SERIES A PREFERRED STOCK, A COPY OF WHICH MAY
BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OR THIS
CERTIFICATE TO THE SECRETARY OF THE CORPORATION AT ITS PRINCIPAL EXECUTIVE
OFFICE.
STOP TRANSFER LEGEND. If shares of Series A Preferred Stock shall issued in
uncertificated form (unless otherwise permitted by the provisions of this
Section 11), the Corporation shall cause its agent for transfer of its
securities to place a "stop transfer" legend on the Corporation's stock transfer
ledger or other similar records prohibiting the transfer of the shares of Series
A Preferred Stock or securities into which such shares have been converted
unless the holder thereof shall have complied with the provisions of this
Section 11.
NOTICE OF PROPOSED TRANSFER. Each holder of shares of Series A Preferred
Stock, by his acceptance of such shares, agrees to comply in all respects with
the provisions of this Section 11. Prior to any proposed transfer of any shares
of Series A Preferred Stock or Common Stock underlying the Series A Preferred
Stock, except in the case of registration thereof pursuant to the Securities Act
of 1933, as amended, the holder thereof shall give written notice to the
Corporation of such holder's intention of effect such transfer. Each such notice
shall describe the manner and circumstances of such transfer in reasonable
detail, and shall be accompanied by (i) a written opinion of counsel reasonably
satisfactory to the Corporation, addressed to the corporation, to the effect
that the proposed transfer may be effected without registration of the Series A
Preferred Stock or the Common Stock underlying the Series A Preferred Stock, or
(ii) written assurance from the Securities Exchange commission ("SEC") that the
SEC will not recommend any action be taken by it in the event such transfer is
effected without registration under such Act. Such proposed transfer may be
effected only if the Corporation shall have received such notice and such
opinion of counsel or written assurance, whereupon the holder of such shares of
Series A Preferred Stock or Common Stock underlying such shares of Series A
Preferred Stock shall be entitled to transfer such shares of Series A Preferred
Stock or Common Stock underlying such shares of series A Preferred Stock in
accordance with the terms of such notice. Each certificate evidencing shares of
Series A Preferred Stock or shares of Common Stock underlying shares of series A
Preferred Stock so transferred shall bear the legend set forth in this Section
11, and each uncertificated share of Series A Preferred Stock so transferred
shall have entered against it in the Corporation's stock transfer ledger or
other similar records a "stop transfer" legend, except that either such legend
may be removed if the opinion of counsel or written assurance is to the further
effect that no such legend nor the restrictions on transfer in this Section 11
are required in order to ensure compliance with such Act.
12. PREEMPTIVE RIGHTS. The holders of shares of Series A Preferred Stock shall
not be entitled to any preemptive or preferential rights for the subscription to
any shares of any capital stock of the Corporation.
ARTICLE V
The Corporation is to have perpetual existence.
ARTCILE VI
The number of directors of the Corporation shall be determined by resolution of
Directors. Elections of directors need not be by written ballot unless the
by-laws of the Corporation shall so provide.
ARTICLE VII
To the fullest extent permitted by applicable law, the Corporation is authorized
to provide indemnification of (and advancement of expenses to) directors,
officers and agents (and any other person that Delaware law permits this
Corporation to provide indemnification) through by-law provisions, agreements
with such agents or other persons, vote of stockholders or disinterested
directors or otherwise, subject only to limits created by applicable Delaware
law (statutory or non-statutory), with respect to action for breach of duty to
the Corporation, its stockholders, and others.
The indemnification and other rights set forth in this Article VII shall not be
exclusive of any provisions with respect thereto in the by-laws or say other
contract or agreement between the Corporation and any officer, director,
employee or agent of the Corporation. Each person who was or is made a party or
is threatened to be made a party to or is in any way involved in any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a "proceeding"), including any
appeal therefrom, by reason of the fact that he or she, or a person of whom he
or she is the legal representative, is or was a director or officer of the
Corporation or a direct or indirect subsidiary of the Corporation, or is or was
serving at the request of the Corporation as a director or officer of another
entity or enterprise, or was a director or officer of a foreign or domestic
corporation which was a predecessor corporation of the Corporation or of another
entity or enterprise at the request of such predecessor corporation, shall be
indemnified and held harmless by the Corporation, and the Corporation shall
advance all expenses actually or reasonably incurred by any such person in
defense of any such proceeding prior to its final determination, to the fullest
extent authorized by the DGCL. In any proceeding against the Corporation to
enforce these rights, such person shall be presumed to be entitled to
indemnification and the Corporation shall have the burden of proving that such
person has not met the standards of conduct for permissible indemnification set
forth in the DGCL; provided that if the DGCL requires the payment of such
expenses in advance of the final disposition of a proceeding, payment shall be
made only if such person undertakes to repay the Corporation if it is ultimately
determined that he or she was not entitled to indemnification.
The rights to indemnification and advancement of expenses conferred by this
Article VII shall be presumed to have been relied upon by the directors and
officers of the Corporation in serving or continuing to serve the Corporation
and shall be enforceable as contract rights and any rights to indemnification of
such directors or officers shall only apply to any loss, liability or expenses
incurred by such director or officer in connection with proceedings brought
against such persons in the capacities in which they serve the Corporation. Said
rights shall not be exclusive of any other rights to which those seeking
indemnification may otherwise be entitled. The Corporation may, upon written
demand presented by a director or officer of the Corporation or of a direct or
indirect subsidiary of the Corporation, or by a person serving at the request of
the Corporation as a director or officer of another entity or enterprise, enter
into contracts to provide such persons with specified rights to indemnification,
which contracts may confer rights and protections to the maximum extent
permitted by the DGCL, as amended and in effect from time to time.
If a claim under this Article VII is not paid in full by the Corporation within
sixty (60) days after a written claim has been received by the Corporation, the
claimant may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of claim and, if successful in whole or in part, the
claimant shall be entitled to be paid also the expenses of prosecuting such
claim. It shall be a defense to any such action (other than an action brought to
enforce the right to be advanced expenses incurred in defending any proceeding
prior to its final disposition where the required undertaking, if any, has been
tendered to the Corporation) that the claimant has not met the standards of
conduct which make it permissible under the DGCL for the Corporation to
indemnify the claimant for the amount claimed, but the claimant shall be
presumed to be entitled to indemnification and the corporation shall have the
burden of proving that the claimant has not met the standards of conduct for
permissible indemnification set forth in the DGCL.
If the DGCL is hereafter amended to permit the Corporation to provided broader
indemnification rights than said law permitted the Corporation to provide prior
to such amendment, the indemnification rights conferred by this Article VII
shall be broadened to the fullest extend permitted by the DGCL, as so amended.
No amendment to or repeal of this Article VII shall affect or diminish in any
way the rights of any indemnitee to indemnification under the provisions hereof
with respect to any action, suit, proceeding or investigation arising out of or
relating to any actions, transactions or facts occurring prior to the final
adoption of any such amendment or repeal.
Neither the amendment nor repeal of this Article VII nor the adoption of any
provision of this Amended and Restated Certificate of Incorporation inconsistent
with Article VII shall eliminate or reduce the effect of this Article VII in
respect of any matter occurring before such amendment, repeal or adoption of an
inconsistent provision or in respect of any cause of action, suit or claim
relating to any such matter which would have given rise to a right of
indemnification or right to receive expenses pursuant to this Article VII if
such provision had not been so amended or repealed or if a provision
inconsistent therewith had not been so adopted.
The Corporation shall be entitled to purchase and maintain indemnity insurance,
if it so chooses, to guard against future expenses.
No director shall be personally liable to the Corporation or any stockholder for
monetary damages for breach of fiduciary duty as a director, except for any
matter in respect of which such director (a) shall be liable under Section 174
of the DGCL or any amendment thereto or successor provision thereto, or (b)
shall be liable by reason that, in addition to any and all other requirements
for liability, such director (1) shall have breached his duty of loyalty to the
Corporation or its stockholders; (2) shall not have acted in good faith or, in
failing to act, shall not have acted in good faith; (3) shall have acted in a
manner involving intentional misconduct or a knowing violation of law or, in
failing to act, shall have acted in a manner involving intentional misconduct or
a knowing violation of law; or (4) shall have derived an improper personal
benefit. If the DGCL is hereafter amended to authorize the further elimination
or limitation of the liability of a director, the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the DGCL, as so amended.
ARTICLE VIII
The Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereinafter prescribed by statute and all rights conferred upon stockholders
herein are granted subject to this provision.
ARTICLE IX
In furtherance and not in limitation of the power conferred by the DGCL, the
Board of Directors is expressly authorized to make, alter, or repeal the by-laws
of the Corporation.
5. An executed copy of the Merger Agreement and Plan of merger is on file
at the principal office of the Surviving Corporation, located at 00 Xxxxx Xxxxx
Xxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000.
6. A copy of the Merger Agreement will be furnished by the Surviving
Corporation, on request and without cost, to any stockholder of any constituent
corporation.
IN WITNESS WHEREOF, the undersigned, being the Chairman of the Board and Chief
Executive Officer of the Surviving Corporation, hereby certifies, under
penalties of perjury, that this Certificate of Merger is the act and deed of
Surviving Corporation, and that the facts stated herein are true.
PATHOGENICS, INC.
By:
----------------------------------------
Xxxxxx X. Xxxxxx, Chairman of the Board
Of Directors and Chief Executive Officer
