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EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
Agreement entered into as of January 20, 1997 by and among
Millennium Pharmaceuticals, Inc., a Delaware corporation (the "Buyer"),
CPI Acquisition Corp., a Delaware corporation and a wholly-owned
subsidiary of the Buyer (the "Transitory Subsidiary"), and ChemGenics
Pharmaceuticals Inc., a Delaware corporation (the "Company"). The
Buyer, the Transitory Subsidiary and the Company are referred to
collectively herein as the "Parties."
This Agreement contemplates a tax-free merger of the Transitory
Subsidiary into the Company. In such merger, the stockholders of the
Company will receive capital stock of the Buyer in exchange for their
capital stock of the Company.
Now, therefore, in consideration of the representations,
warranties and covenants herein contained, the Parties agree as
follows.
ARTICLE I
THE MERGER
1.1 THE MERGER. Upon and subject to the terms and conditions of
this Agreement, the Transitory Subsidiary shall merge with and into the
Company (with such merger referred to herein as the "Merger") at the
Effective Time (as defined below). From and after the Effective Time,
the separate corporate existence of the Transitory Subsidiary shall
cease and the Company shall continue as the surviving corporation in
the Merger (the "Surviving Corporation"). The "Effective Time" shall be
the time at which the Company and the Transitory Subsidiary file the
certificate of merger or other appropriate documents prepared and
executed in accordance with the relevant provisions of the Delaware
General Corporation Law (the "Certificate of Merger") with the
Secretary of State of the State of Delaware. The Merger shall have the
effects set forth in Section 259 of the Delaware General Corporation
Law.
1.2 THE CLOSING. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of Xxxx
and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx XX, commencing at 9:00 a.m. local
time as soon as practicable, and in any event no later than three
business days, after the satisfaction or waiver of all conditions set
forth in Article V hereof to the obligations of the Parties to
consummate the transactions contemplated hereby (the "Closing Date").
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1.3 ACTIONS AT THE CLOSING. At the Closing, (a) the Company shall
deliver to the Buyer and the Transitory Subsidiary the various
certificates, instruments and documents referred to in Section 5.2, (b)
the Buyer and the Transitory Subsidiary shall deliver to the Company
the various certificates, instruments and documents referred to in
Section 5.3, (c) the Company and the Transitory Subsidiary shall file
with the Secretary of State of the State of Delaware the Certificate of
Merger, (d) each Stockholder of record of the Company (the "Company
Stockholders") may deliver to the Buyer for cancellation such Company
Stockholder's certificate or certificates representing Company Shares,
(e) the Buyer shall deliver the appropriate number of Merger Shares (as
defined below) to each Company Stockholder who shall have delivered its
certificate or certificates representing Company Shares pursuant to the
foregoing clause (d), and (f) the Buyer shall deliver a certificate for
the Merger Shares, other than those delivered pursuant to the foregoing
clause (e), to a bank or trust company appointed by the Buyer to act as
the exchange agent (the "Exchange Agent") in accordance with Section
1.7.
1.4 ADDITIONAL ACTION. The Surviving Corporation may, at any time
after the Effective Time, take any action, including executing and
delivering any document, in the name and on behalf of either the
Company or the Transitory Subsidiary, in order to consummate the
transactions contemplated by this Agreement.
1.5 CONVERSION OF SHARES. At the Effective Time, by virtue of the
Merger and without any action on the part of any Party or the holder of
any of the following securities:
(a) Each share of common stock, $.001 par value per share
(the "Company Common Stock"), and of convertible preferred stock, $.01
par value per share (the "Company Convertible Preferred Stock"), of the
Company (collectively, "Company Shares") issued and outstanding
immediately prior to the Effective Time (other than Company Shares
owned beneficially by the Buyer or the Transitory Subsidiary,
Dissenting Shares (as defined below) and Company Shares held in the
Company's treasury) shall be converted into and shall represent the
right to receive such number of shares of common stock, $.001 par value
per share, of the Buyer ("Buyer Common Stock") as is equal to the
Conversion Ratio. The "Conversion Ratio" shall initially be equal to a
fraction expressed as a decimal carried out to four places, the
numerator of which is 4,782,825 and the denominator of which is the
total number of issued and outstanding Company Shares at the Effective
Time. The Conversion Ratio shall be subject to equitable adjustment in
the event of any stock split, stock dividend, reverse stock split or
similar event affecting the Buyer Common Stock between the date of this
Agreement and the Effective Time.
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The shares of Buyer Common Stock issued pursuant to this Section 1.5(a)
are referred to herein as the "Merger Shares."
(b) Each Company Share held in the Company's treasury
immediately prior to the Effective Time and each Company Share owned
beneficially by the Buyer or the Transitory Subsidiary shall be
cancelled and retired without payment of any consideration therefor.
(c) Each share of common stock, $.001 par value per share, of
the Transitory Subsidiary issued and outstanding immediately prior to
the Effective Time shall be converted into and thereafter evidence one
share of common stock, $.001 par value per share, of the Surviving
Corporation.
1.6 Dissenting Shares.
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(a) For purposes of this Agreement, "Dissenting Shares" means
Company Shares held as of the Effective Time by a Company Stockholder
who has not voted such Company Shares in favor of (or consented by
written action to) the adoption of this Agreement and approval of the
Merger and with respect to which appraisal shall have been duly
demanded and perfected in accordance with Section 262 of the Delaware
General Corporation Law and not effectively withdrawn or forfeited.
Dissenting Shares shall not be converted into or represent the right to
receive Merger Shares, unless such Company Stockholder shall have
forfeited his right to appraisal under the Delaware General Corporation
Law or withdrawn, with the consent of the Company, his demand for
appraisal. If such Company Stockholder has so forfeited or withdrawn
his right to appraisal of Dissenting Shares, then as of the occurrence
of such event, such holder's Dissenting Shares shall cease to be
Dissenting Shares and shall be converted into and represent the right
to receive the Merger Shares issuable in respect of such Company Shares
pursuant to Section 1.5(a).
(b) The Company shall give the Buyer (i) prompt notice of any
written demands for appraisal of any Company Shares, withdrawals of
such demands, and any other instruments that relate to such demands
received by the Company and (ii) the opportunity to direct all
negotiations and proceedings with respect to demands for appraisal
under the Delaware General Corporation Law. The Company shall not,
except with the prior written consent of the Buyer, make any payment
with respect to any demands for appraisal of Company Shares or offer to
settle or settle any such demands.
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1.7 Exchange of Shares.
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(a) Prior to the Effective Time, the Buyer shall appoint the
Exchange Agent to effect the exchange for the Merger Shares of
certificates that, immediately prior to the Effective Time, represented
Company Shares converted into Merger Shares pursuant to Section 1.5
(including any Company Shares referred to in the last sentence of
Section 1.6(a)) ("Certificates"). On the Closing Date, or as soon
thereafter as reasonably practicable, the Buyer shall deliver to the
Exchange Agent, in trust for the benefit of holders of Certificates, a
stock certificate (issued in the name of the Exchange Agent or its
nominee) representing the Merger Shares, as described in Section
1.5(a), other than those issued pursuant to Section 1.3(e) hereof. As
soon as practicable after the Effective Time, the Buyer shall cause the
Exchange Agent to send a notice and a transmittal form to each holder
of a Certificate (other than those surrendered and exchanged at the
Closing) advising such holder of the effectiveness of the Merger and
the procedure for surrendering to the Exchange Agent such Certificate
in exchange for the Merger Shares issuable pursuant to Section 1.5(a).
Each holder of a Certificate, upon proper surrender thereof to the
Exchange Agent in accordance with the instructions in such notice (or
surrender at Closing pursuant to Section 1.3(e) hereof), shall be
entitled to receive in exchange therefor (subject to any taxes required
to be withheld) the Merger Shares issuable pursuant to Section 1.5(a).
Until properly surrendered, each such Certificate shall be deemed for
all purposes to evidence only the right to receive the Merger Shares
issuable pursuant to Section 1.5(a). Holders of Certificates shall not
be entitled to receive certificates for the Merger Shares to which they
would otherwise be entitled until such Certificates are properly
surrendered.
(b) If any Merger Shares are to be issued in the name of a
person other than the person in whose name the Certificate surrendered
in exchange therefor is registered, it shall be a condition to the
issuance of such Merger Shares that (i) the Certificate so surrendered
shall be transferable, and shall be properly assigned, endorsed or
accompanied by appropriate stock powers, (ii) such transfer shall
otherwise be proper and (iii) the person requesting such transfer shall
pay to the Exchange Agent any transfer or other taxes payable by reason
of the foregoing or establish to the satisfaction of the Exchange Agent
that such taxes have been paid or are not required to be paid.
Notwithstanding the foregoing, neither the Exchange Agent nor any Party
shall be liable to a holder of Company Shares for any Merger Shares
issuable to such holder pursuant to Section 1.5(a) that are delivered
to a public official pursuant to applicable abandoned property, escheat
or similar laws.
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(c) In the event any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed, the
Buyer shall issue in exchange for such lost, stolen or destroyed
Certificate the Merger Shares issuable in exchange therefor pursuant to
Section 1.5(a). The Board of Directors of the Buyer may, in its
reasonable discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed
Certificate to give the Buyer a bond in such sum as it may direct as
indemnity against any claim that may be made against the Buyer with
respect to the Certificate alleged to have been lost, stolen or
destroyed.
(d) Promptly following the date which is six months after the
Closing Date, the Exchange Agent shall return to the Buyer all Merger
Shares in its possession, and the Exchange Agent's duties shall
terminate. Thereafter, each holder of a Certificate may surrender such
Certificate to the Buyer and, subject to applicable abandoned property,
escheat and similar laws, receive in exchange therefor the Merger
Shares issuable with respect thereto pursuant to Section 1.5(a).
(e) Notwithstanding anything in this Section 1.7 to the
contrary, if the number of Merger Shares to be delivered to the
Exchange Agent as provided in Section 1.3(f) is less than 2,000,000
shares, the Buyer need not appoint an Exchange Agent, but instead may
itself perform all of the duties and obligations of the Exchange Agent
provided for in this Agreement.
1.8 DIVIDENDS. No dividends or other distributions that are
payable to the holders of record of Buyer Common Stock as of a date on
or after the Closing Date shall be paid to former Company Stockholders
entitled by reason of the Merger to receive Merger Shares until such
holders surrender their Certificates in accordance with Section 1.7.
Upon such surrender, the Buyer shall pay or deliver to the persons in
whose name the certificates representing such Merger Shares are issued
any dividends or other distributions that are payable to the holders of
record of Buyer Common Stock as of a date on or after the Closing Date
and which were paid or delivered between the Effective Time and the
time of such surrender; provided that no such person shall be entitled
to receive any interest on such dividends or other distributions.
1.9 FRACTIONAL SHARES. No certificates or script representing
fractional Merger Shares shall be issued to former Company Stockholders
upon the surrender for exchange of Certificates, and such former
Company Stockholders shall not be entitled to any voting rights, rights
to receive any dividends or distributions or other rights as a
stockholder of the Buyer with respect to any fractional Merger Shares
that would otherwise be
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issued to such former Company Stockholders. In lieu of any fractional
Merger Shares that would otherwise be issued, each former Company
Stockholder that would have been entitled to receive a fractional
Merger Share shall, upon proper surrender of such person's
Certificates, receive such whole number of Merger Shares as is equal to
the precise number of Merger Shares to which such person would be
entitled, rounded up or down to the nearest whole number.
1.10 Options and Warrants.
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(a) As of the Effective Time, all options to purchase Company
Shares issued by the Company pursuant to its 1992 Employee, Director
and Consultant Stock Option Plan ("Options"), whether vested or
unvested, shall be assumed by the Buyer and shall be deemed to be
Options granted pursuant to the Buyer's 1996 Equity Incentive Plan.
Immediately after the Effective Time, each Option outstanding
immediately prior to the Effective Time shall be deemed to constitute
an option to acquire, on the same terms and conditions as were
applicable under such Option at the Effective Time, such number of
shares of Buyer Common Stock as is equal to the number of Company
Shares subject to the unexercised portion of such Option multiplied by
the Conversion Ratio (with any fraction resulting from such
multiplication to be rounded up or down to the nearest whole number or,
in the case of .5, to the nearest odd number). The exercise price per
share of each such assumed Option shall be equal to the exercise price
of such Option immediately prior to the Effective Time, divided by the
Conversion Ratio. The term, exercisability, vesting schedule, status as
an "incentive stock option" under Section 422 of the Internal Revenue
Code of 1986 (as amended, the "Code"), if applicable, and all of the
other terms of the Options shall otherwise remain unchanged. Each
assumed Option shall be covered by an effective Registration Statement
on Form S-8.
(b) As soon as practicable after the Effective Time, the
Buyer or the Surviving Corporation shall deliver to the holders of
Options appropriate notices setting forth such holders' rights pursuant
to such Options, as amended by this Section 1.10, and the agreements
evidencing such Options shall continue in effect on the same terms and
conditions (subject to the amendments provided for in this Section 1.10
and such notice).
(c) The Buyer shall take all corporate action necessary to
reserve for issuance a sufficient number of shares of Buyer Common
Stock for delivery upon exercise of the Options assumed in accordance
with this Section 1.10.
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(d) Subject to, and simultaneously with the occurrence of,
the Closing, each of PerSeptive Biosystems, Inc. ("PBS"), and Comdisco,
Inc. ("Comdisco"), shall surrender to the Company the respective
warrants to purchase shares of capital stock of the Company
("Warrants") held by them in consideration of specified cash payments,
all as provided in the respective letter agreements of even date
herewith by and among the Buyer, the Company and PBS and by and among
the Buyer, the Company and Comdisco.
1.11 CERTIFICATE OF INCORPORATION. The Certificate of Incorporation
of the Surviving Corporation shall be the same as the Certificate of
Incorporation of the Transitory Subsidiary immediately prior to the
Effective Time, except that the name of the corporation set forth
therein shall be changed to the name of the Company.
1.12 BY-LAWS. The By-laws of the Surviving Corporation shall be the
same as the By-laws of the Transitory Subsidiary immediately prior to
the Effective Time, except that the name of the corporation set forth
therein shall be changed to the name of the Company.
1.13 DIRECTORS AND OFFICERS. The directors of the Transitory
Subsidiary shall become the directors of the Surviving Corporation as
of the Effective Time. The officers of the Company shall remain as
officers of the Surviving Corporation after the Effective Time,
retaining their respective positions, except as specified by the Buyer
pursuant to Section 5.2(g).
1.14 NO FURTHER RIGHTS. From and after the Effective Time, no
Company Shares shall be deemed to be outstanding, and holders of
Certificates shall cease to have any rights with respect thereto,
except as provided herein or by law.
1.15 CLOSING OF TRANSFER BOOKS. At the Effective Time, the stock
transfer books of the Company shall be closed and no transfer of
Company Shares shall thereafter be made. If, after the Effective Time,
Certificates are presented to the Surviving Corporation or the Exchange
Agent, they shall be cancelled and exchanged for Merger Shares in
accordance with Section 1.5(a), subject to applicable law in the case
of Dissenting Shares.
1.16 BOARD SEAT. The Company and the Buyer agree that the Company
shall have the right to designate an individual to serve on the Board
of Directors of the Buyer, such individual to be acceptable to the
Buyer. The Buyer agrees to use reasonable efforts to cause such
individual to be elected to the Board of Directors of the Buyer as soon
as reasonably practicable after such individual is agreed upon by the
Buyer and the Company. The
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Buyer shall have no further obligations under this Section 1.16 from
and after December 31, 1997.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Buyer that the
statements contained in this Article II are true and correct, except as
set forth in the disclosure schedule attached hereto (the "Disclosure
Schedule"). The Disclosure Schedule shall be initialed by the Parties
and shall be arranged in paragraphs corresponding to the numbered and
lettered paragraphs contained in this Article II, and the disclosures
in any paragraph of the Disclosure Schedule shall be deemed to qualify
other paragraphs in this Article II if it is reasonably clear from a
reading of the disclosure that such disclosure is applicable to such
other paragraphs.
2.1 ORGANIZATION, QUALIFICATION AND CORPORATE POWER. The Company
is a corporation duly organized, validly existing and in corporate and
tax good standing under the laws of the state of its incorporation. The
Company is duly qualified to conduct business and is in corporate and
tax good standing under the laws of each jurisdiction in which the
nature of its businesses or the ownership or leasing of its properties
requires such qualification, other than any such failures to be so
qualified or in corporate and tax good standing that do not, either
individually or in the aggregate, have a material adverse effect on the
assets, business, financial condition, results of operations or future
prospects (other than prospects relating to the economy in general or
the biotechnology or pharmaceutical industries in general) of the
Company (a "Material Adverse Effect"). The Company has all requisite
corporate power and authority to carry on the businesses in which it is
engaged and to own and use the properties owned and used by it. The
Company has furnished to the Buyer true and complete copies of its
Certificate of Incorporation and By-laws, each as amended and as in
effect on the date hereof. The Company is not in default under or in
violation of any provision of its Certificate of Incorporation or
By-laws.
2.2 CAPITALIZATION. The authorized capital stock of the Company,
as of the date of this Agreement, consists of (i) 13,441,667 shares of
convertible preferred stock, $.01 par value per share, of which
6,400,000 shares are designated Series A Convertible Preferred Stock,
6,150,732 shares of which are issued and outstanding, 1,100,000 shares
are designated Series B Convertible Preferred Stock, 1,063,366 shares
of which are issued and outstanding, 775,000 shares are designated
Series C
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Convertible Preferred Stock, 767,739 shares of which are issued and
outstanding, 3,000,000 shares are designated Series D Convertible
Preferred Stock, all of which are issued and outstanding, and 2,166,667
shares are designated Series E Convertible Preferred Stock, 833,334
shares of which are issued and outstanding, and (ii) 33,866,667 shares
of common stock, $.001 par value per share, 8,335,079 shares of which
are issued and outstanding and no shares of which are held in the
treasury of the Company. Section 2.2 of the Disclosure Schedule sets
forth as of the date of this Agreement, a complete and accurate list of
(i) all stockholders of the Company, indicating (by class and series)
the number of Company Shares held by each stockholder, and (ii) all
holders of Options and Warrants, indicating (by class and series) the
number of Company Shares subject to each Option and Warrant. All of the
issued and outstanding Company Shares are, and all Company Shares that
may be issued upon exercise of Options and Warrants will be, duly
authorized, validly issued, fully paid, nonassessable and free of all
preemptive rights. There are no outstanding or authorized options,
warrants, rights, agreements or commitments to which the Company is a
party or which are binding upon the Company providing for the issuance,
disposition or acquisition of any of its capital stock, other than the
Options and Warrants listed in Section 2.2 of the Disclosure Schedule.
There are no outstanding or authorized stock appreciation, phantom
stock or similar rights with respect to the Company. There are no
agreements, voting trusts, proxies, or understandings with respect to
the voting, or registration under the Securities Act of 1933, as
amended (the "Securities Act"), of any Company Shares. To the knowledge
of the Company, all of the issued and outstanding Company Shares were
issued in compliance with applicable federal and state securities laws.
2.3 AUTHORIZATION OF TRANSACTION. The Company has all requisite
power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution and delivery of this
Agreement and, subject to the adoption of this Agreement and the
approval of the Merger by (i) the holders of 60% of the issued and
outstanding shares of Company Convertible Preferred Stock voting as a
single class and (ii) the holders of a majority of the issued and
outstanding shares of Company Common Stock and Company Convertible
Preferred Stock, voting together as a single class (the "Requisite
Stockholder Approval"), the performance by the Company of this
Agreement and the consummation by the Company of the transactions
contemplated hereby have been duly and validly authorized by all
necessary corporate action on the part of the Company. This Agreement
has been duly and validly executed and delivered by the Company and
constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.
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2.4 NONCONTRAVENTION. Subject to compliance with the applicable
requirements of the Securities Act and any applicable state securities
laws, and the filing of the Certificate of Merger as required by the
Delaware General Corporation Law, neither the execution and delivery of
this Agreement by the Company, nor the consummation by the Company of
the transactions contemplated hereby, will:
(a) conflict with or violate any provision of the charter or
By-laws of the Company;
(b) require on the part of the Company any filing with, or
any permit, authorization, consent or approval of, any court,
arbitrational tribunal, administrative agency or commission or other
governmental or regulatory authority or agency (a "Governmental
Entity"), other than any filing, permit, authorization, consent or
approval which if not obtained or made would not have a Material
Adverse Effect or materially adversely affect the ability of the
Parties to consummate the transactions contemplated by this Agreement;
(c) conflict with, result in a breach of, constitute (with or
without due notice or lapse of time or both) a default under, result in
the acceleration of, create in any party the right to accelerate,
terminate, modify or cancel, or require any notice, consent or waiver
under, any contract, lease, sublease, license, sublicense, franchise,
permit, indenture, agreement or mortgage for borrowed money, instrument
of indebtedness, Security Interest (as defined below) or other
arrangement to which the Company is a party or by which the Company is
bound or to which any of its assets is subject, other than any
conflict, breach, default, acceleration, termination, modification or
cancellation which individually or in the aggregate would not have a
Material Adverse Effect or materially adversely affect the ability of
the Parties to consummate the transactions contemplated by this
Agreement;
(d) result in the imposition of any Security Interest upon
any assets of the Company; or
(e) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to the Company or any of its properties
or assets.
For purposes of this Agreement, "Security Interest" means any mortgage,
pledge, security interest, encumbrance, charge, or other lien (whether
arising by contract or by operation of law), other than (i) mechanic's,
materialmen's, and similar liens, (ii) liens arising under worker's
compensation, unemployment insurance, social security, retirement, and
similar legislation, and
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(iii) liens on goods in transit incurred pursuant to documentary
letters of credit, in each case arising in the ordinary course of
business consistent with past custom and practice ("Ordinary Course of
Business") of the Company and not material to the Company.
2.5 SUBSIDIARIES. The Company does not, directly or indirectly,
have the power to vote or direct the voting of sufficient securities to
elect a majority of the directors of any corporation and does not have
a similar or analogous power with respect to any other type of business
entity, including without limitation a trust, partnership or limited
liability company.
2.6 REGISTRATION STATEMENT AND FINANCIAL STATEMENTS. The Company
has previously furnished to the Buyer complete and accurate copies, as
amended or supplemented (including without limitation Amendment No. 1
dated January 14, 1997), of its Registration Statement on Form S-1 (as
initially filed with the Securities and Exchange Commission (the "SEC")
on December 18, 1996) (the "Company Registration Statement"). As of
January 14, 1997, the Company Registration Statement did not contain
any 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 financial statements of the Company included in the
Company Registration Statement (the "Financial Statements") (i) comply
as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto, (ii) have been prepared in accordance with United
States generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods covered thereby (except as may
be indicated therein or in the notes thereto), (iii) fairly present the
financial condition, results of operations and cash flows of the
Company as of the respective dates thereof and for the periods referred
to therein, and (iv) are consistent with the books and records of the
Company.
2.7 ABSENCE OF CERTAIN CHANGES. Since December 31, 1996, (a) there
has not been any material adverse change in the assets, business,
financial condition, results of operations or future prospects (other
than (i) prospects relating to the economy in general or the
biotechnology or pharmaceutical industries in general or (ii) any
circumstances or events arising out of or resulting from the execution
or performance of this Agreement, including without limitation any
action by Pfizer, Inc. or Wyeth-Ayerst or any departure of any key
employees) of the Company, and (b) the Company has not taken (except
with the prior written consent of the Buyer) any of the actions set
forth in paragraphs (a) through (n) of Section 4.4, except that the
Company
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has incurred costs, expenses and obligations in connection with the
Company Registration Statement.
2.8 UNDISCLOSED LIABILITIES. The Company does not have any
material liability (whether known or unknown, whether absolute or
contingent, whether liquidated or unliquidated and whether due or to
become due), except for (a) liabilities shown on its balance sheet
dated December 31, 1996 included in the Company Registration Statement
(the "Most Recent Balance Sheet"), (b) liabilities which have arisen
since December 31, 1996 in the Ordinary Course of Business or in
connection with the public offering contemplated by the Company
Registration Statement and (c) liabilities incurred in the Ordinary
Course of Business which are not required by GAAP to be reflected on a
balance sheet or in the notes thereto.
2.9 TAX MATTERS. The Company has filed all tax returns that it was
required to file and, to the knowledge of the Company, all such tax
returns were correct and complete in all material respects. The Company
is not a party to any tax allocation or sharing agreement. The Company
is not and has not ever been a member of an "affiliated group" of
corporations (within the meaning of Section 1504 of the Code).
2.10 Intellectual Property.
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(a) To the knowledge of the Company, the Company owns, or is
licensed or otherwise possesses legally enforceable rights to use, all
patents, trademarks, trade names, service marks, copyrights (and any
applications for such patents, trademarks, trade names, service marks
and copyrights), schematics, technology, know-how, computer software
programs or applications and tangible or intangible proprietary
information or material (collectively, "Intellectual Property") that
are material to the conduct of its business as currently conducted or
planned to be conducted (as described in the Company Registration
Statement). Section 2.10 of the Disclosure Schedule lists (i) all
material written licenses, sublicenses and other agreements to which
the Company is a party and pursuant to which any third party is
authorized to use any Intellectual Property rights of the Company or
pursuant to which the Company assigns Intellectual Property rights to
any third party, and (ii) all material written licenses, sublicenses
and other agreements to which the Company is a party and pursuant to
which the Company is authorized to use any third party patents,
trademarks, copyrights (including software) or other Intellectual
Property.
(b) The Company has not been named in any suit, action or
proceeding which involves a claim of infringement by the Company of any
Intellectual Property right of any third party, which, if determined
adversely to the Company, would reasonably
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foreseeably have a material adverse effect on the assets, business,
financial condition, results of operations or future prospects of the
Company, and the Company has not received any written threat as to the
institution by a third party of any such suit, action or proceeding.
The Company is a party to agreements that provide that the Company will
own all Intellectual Property rights in any developments made by any of
its employees or contractors. To the knowledge of the Company, the
conduct of its business as currently conducted and planned to be
conducted (as described in the Company Registration Statement) does not
infringe any Intellectual Property rights of a third party, other than
infringements that do not and will not, individually or in the
aggregate, have a Material Adverse Effect. To the knowledge of the
Company, the Intellectual Property rights of the Company are not being
infringed by activities, products or services of any third party in a
manner that has a Material Adverse Effect.
2.11 MATERIAL CONTRACTS. Item 16 of the Company Registration
Statement lists each contract to which the Company is a party which is
material to the Company (a "Material Contract"). The Company has
delivered to the Buyer a correct and complete copy of each Material
Contract. As to each Material Contact, neither the Company nor, to the
knowledge of the Company, the other party thereto is in breach or
default thereunder, other than breaches or defaults which do not,
either individually or in the aggregate, have a Material Adverse
Effect.
2.12 LITIGATION. Section 2.12 of the Disclosure Schedule
identifies, and contains a brief description of, (a) any unsatisfied
judgement, order, decree, stipulation or injunction and (b) any claim,
complaint, action, suit, proceeding, hearing or investigation of or
before any Governmental Entity or before any arbitrator to which the
Company is a party or, to the knowledge of the Company, is threatened
to be made a party that reasonably could be expected to have a Material
Adverse Effect.
2.13 EMPLOYEES. To the knowledge of the Company, as of the date of
this Agreement, no key employee of the Company or group of employees of
the Company has any plans to terminate employment with the Company,
which terminations, either individually or in the aggregate, have a
Material Adverse Effect. The Company is not a party to or bound by any
collective bargaining agreement.
2.14 Employee Benefits and Contracts.
-------------------------------
(a) The Disclosure Schedule lists all employee benefit plans
(as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")) maintained by the Company. Each of
such employee benefit plans complies in all material respects with
applicable requirements of ERISA or the
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Code, and no "reportable event" or "prohibited transaction" (as such
terms are defined in ERISA) has occurred with respect to any such plan,
and no termination, if it has occurred or were to occur before the
Effective Date, would present a risk of liability to any Governmental
Entity or other persons that would have a Material Adverse Effect.
(b) The Company has never maintained an employee benefit plan
subject to Section 412 of the Code or Title IV of ERISA. Each employee
benefit plan of the Company intended to be qualified under Section
401(a) of the Code has received a favorable determination letter from
the Internal Revenue Service confirming such qualification. The Company
has never had an obligation to contribute to a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA. There are no unfunded
obligations under any employee benefit plan of the Company providing
benefits after termination of employment to any employee or former
employee, including but not limited to retiree health coverage and
deferred compensation, but excluding continuation of health coverage
required to be continued under Section 4980(B) of the Code. Each
employee benefit plan of the Company may be amended or terminated by
the Company without the consent or approval of any other person. Except
for Section 1.10(a) of this Agreement, there is no employee benefit
plan, stock option plan, stock appreciation right plan, restricted
stock plan, stock purchase plan, or severance benefit plan of the
Company, any of the benefits of which will be increased or the vesting
of the benefits under which will be accelerated by the occurrence of
any of the transactions contemplated by this Agreement or the benefits
under which will be calculated on the basis of the transactions
contemplated by this Agreement.
(c) The Company is not obligated to make any parachute
payment, as defined in Section 280G(b)(2) of the Code, nor will any
parachute payment be deemed to have occurred as a result of or arising
out of any of the transactions contemplated by this Agreement. The
Company has no contract, agreement, obligation or arrangement with any
employee or other person, any of the benefits of which will be
increased or the vesting of the benefits under which will be
accelerated by any change of control of the Company or the occurrence
of any of the transactions contemplated by this Agreement or the
benefits under which will be calculated on the basis of the
transactions contemplated by this Agreement (other than those
transactions contemplated by Section 1.10(a) hereof).
2.15 Environmental Matters.
---------------------
(a) The Company has complied with all applicable
Environmental Laws (as defined below), except for violations of
Environmental Laws that do not and will not, individually or in
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the aggregate, have a Material Adverse Effect. There is no pending or,
to the knowledge of the Company, threatened civil or criminal
litigation, written notice of violation, formal administrative
proceeding, or investigation, inquiry or information request by any
Governmental Entity, relating to any Environmental Law involving the
Company, except for litigation, notices of violations, formal
administrative proceedings or investigations, inquiries or information
requests that will not, individually or in the aggregate, have a
Material Adverse Effect. For purposes of this Agreement, "Environmental
Law" means any federal, state or local law, statute, rule or regulation
or the common law relating to the environment or occupational health
and safety.
(b) To the knowledge of the Company, there have been no
releases of any Materials of Environmental Concern (as defined below)
into the environment at any parcel of real property or any facility
formerly or currently owned, operated or controlled by the Company,
other than releases that do not and will not, individually or in the
aggregate, have a Material Adverse Effect. For purposes of this
Agreement, "Materials of Environmental Concern" means any chemicals,
pollutants or contaminants, hazardous substances (as such term is
defined under CERCLA), solid wastes and hazardous wastes (as such terms
are defined under the federal Resources Conservation and Recovery Act),
toxic materials, oil or petroleum and petroleum products, or any other
material subject to regulation under any Environmental Law.
(c) Set forth in Section 2.15(c) of the Disclosure Schedule
is a list of all of the solid and hazardous waste transporters and
treatment, storage and disposal facilities that have been utilized by
the Company. The Company is not aware of any material environmental
liability of any such transporter or facility.
2.16 LEGAL COMPLIANCE. The Company and the conduct and operations
of its business, are in compliance with each law (including rules and
regulations thereunder) of any federal, state, local or foreign
government, or any Governmental Entity, which (a) affects or relates to
this Agreement or the transactions contemplated hereby or (b) is
applicable to the Company or its business, except for any violations of
or defaults under a law referred to in clause (b) above which do not
and will not, individually or in the aggregate, have a Material Adverse
Effect.
2.17 PERMITS. The Company holds all permits, licenses,
registrations, certificates, orders or approvals from any Governmental
Entity (including without limitation those issued or required under
Environmental Laws and those relating to the occupancy or use of owned
or leased real property) ("Permits")
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material to the conduct of its business. Each such Permit is in full
force and effect and, to the knowledge of the Company, will continue in
full force and effect following the Closing.
2.18 BROKERS' FEES. The Company does not have any liability or
obligation to pay any fees or commissions to any broker, finder or
agent with respect to the transactions contemplated by this Agreement.
2.19 COMPANY ACTION. The Board of Directors of the Company, at a
meeting duly called and held, has by the unanimous vote of all
directors present (i) determined that the Merger is fair and in the
best interests of the Company and its stockholders, (ii) adopted this
Agreement in accordance with the provisions of the Delaware General
Corporation Law, and (iii) directed that this Agreement and the Merger
be submitted to the Company Stockholders for their adoption and
approval and resolved to recommend that Company Stockholders vote in
favor of the adoption of this Agreement and the approval of the Merger.
2.20 COMPANY STOCKHOLDERS. As of the date of this Agreement, the
Company has 52 stockholders of record. Based solely upon
representations made to the Company by such stockholders, 24 of such
stockholders are "accredited investors" (as defined in Regulation D
promulgated under the Securities Act ("Regulation D")), and 28 of such
stockholders are not "accredited investors" under Regulation D.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BUYER
AND THE TRANSITORY SUBSIDIARY
Each of the Buyer and the Transitory Subsidiary represents and
warrants to the Company as follows:
3.1 ORGANIZATION. Each of the Buyer and the Transitory Subsidiary
is a corporation duly organized, validly existing and in good standing
under the laws of the state of its incorporation. The Buyer has all
requisite corporate power and authority to carry on the businesses in
which it is engaged and to own and use the properties owned and used by
it. The Buyer is not in default under or in violation of any provision
of its Certificate of Incorporation, as amended, or By-laws.
3.2 CAPITALIZATION. The authorized capital stock of the Buyer, as
of January 14, 1997, consists of (i) 100,000,000 shares of Buyer Common
Stock, of which 23,924,063 shares were issued and outstanding and none
were held in the treasury of the Buyer and
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(ii) 5,000,000 of authorized blank check preferred stock, $.01 par
value per share, none of which have been designated. All of the issued
and outstanding shares of Buyer Common Stock are duly authorized,
validly issued, fully paid, nonassessable and free of all preemptive
rights. All of the Merger Shares will be, when issued in accordance
with this Agreement, duly authorized, validly issued, fully paid,
nonassessable and free of all preemptive rights.
3.3 AUTHORIZATION OF TRANSACTION. Each of the Buyer and the
Transitory Subsidiary has all requisite power and authority to execute
and deliver this Agreement and to perform its obligations hereunder.
The execution and delivery of this Agreement by the Buyer and the
Transitory Subsidiary and the performance by the Buyer and the
Transitory Subsidiary of this Agreement and the consummation of the
transactions contemplated hereby and thereby by the Buyer and the
Transitory Subsidiary have been duly and validly authorized by all
necessary corporate action on the part of the Buyer and Transitory
Subsidiary. This Agreement has been duly and validly executed and
delivered by the Buyer and the Transitory Subsidiary and constitutes a
valid and binding obligation of the Buyer and the Transitory
Subsidiary, enforceable against them in accordance with its terms. No
vote of the holders of any class or series of Buyer capital stock is
necessary to approve this Agreement or the Merger, and no such vote
will be sought by Buyer.
3.4 NONCONTRAVENTION. Subject to compliance with the applicable
requirements of the Securities Act and any applicable state securities
laws, the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and the filing of the Certificate of Merger as required by the
Delaware General Corporation Law, neither the execution and delivery of
this Agreement by the Buyer or the Transitory Subsidiary, nor the
consummation by the Buyer or the Transitory Subsidiary of the
transactions contemplated hereby, will (a) conflict or violate any
provision of the charter or By-laws of the Buyer or the Transitory
Subsidiary, (b) require on the part of the Buyer or the Transitory
Subsidiary any filing with, or permit, authorization, consent or
approval of, any Governmental Entity, other than any filing, permit,
authorization, consent or approval which if not obtained or made would
not have a material adverse effect on the assets, business, financial
condition, results of operations or future prospects (other than
prospects relating to the economy in general or the biotechnology or
pharmaceutical industries in general) of the Buyer (a "Buyer Material
Adverse Effect") or on the ability of the Parties to consummate the
transactions contemplated by this Agreement, (c) conflict with, result
in breach of, constitute (with or without due notice or lapse of time
or both) a default under, result in the acceleration of, create in any
party any right to
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accelerate, terminate, modify or cancel, or require any notice, consent
or waiver under, any contract, lease, sublease, license, sublicense,
franchise, permit, indenture, agreement or mortgage for borrowed money,
instrument of indebtedness, Security Interest or other arrangement to
which the Buyer or Transitory Subsidiary is a party or by which either
is bound or to which any of their assets are subject, other than any
conflict, breach, default, acceleration, termination, modification or
cancellation which individually or in the aggregate would not have a
Buyer Material Adverse Effect or have a material adverse effect on the
ability of the Parties to consummate the transactions contemplated by
this Agreement, or (d) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to the Buyer or the Transitory
Subsidiary or any of their properties or assets.
3.5 Reports and Financial Statements.
--------------------------------
(a) The Buyer has previously furnished to the Company
complete and accurate copies, as amended or supplemented, of its (a)
Prospectus dated May 6, 1996, as filed with the SEC (the "Buyer
Prospectus"), and (b) all reports filed by the Buyer under Section 13
of the Exchange Act with the SEC since May 6, 1996 (such reports are
collectively referred to herein as the "Buyer Reports"). As of their
respective dates, the Buyer Reports did not contain any 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 audited financial statements and unaudited interim financial
statements of the Buyer included in the Buyer Reports (i) comply as to
form in all material respects with applicable accounting requirements
and the published rules and regulations of the SEC with respect
thereto, (ii) have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby (except as may
be indicated therein or in the notes thereto, and in the case of
quarterly financial statements, as permitted by Form 10-Q under the
Exchange Act), (iii) fairly present the consolidated financial
condition, results of operations and cash flows of the Buyer as of the
respective dates thereof and for the periods referred to therein, and
(iv) are consistent with the books and records of the Buyer.
(b) As to each contract that is material to the Buyer's
business and which has been filed by the Buyer as an exhibit to any of
the Buyer Reports, neither the Buyer nor, to the knowledge of the
Buyer, the other party thereto is in breach or default thereunder,
other than breaches or defaults which do not, either individually or in
the aggregate, have a Buyer Material Adverse Effect.
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(c) The Buyer has filed in a timely manner all documents that
the Buyer was required to file under the Exchange Act.
3.6 ABSENCE OF MATERIAL ADVERSE CHANGES. Since September 30, 1996,
there has not been any material adverse change in the assets, business,
financial condition, results of operations or future prospects (other
than (i) prospects relating to the economy in general or the
biotechnology or pharmaceutical industries in general or (ii) any
circumstances or events arising out of or resulting from the execution
or performance of this Agreement) of the Buyer.
3.7 BROKERS' FEES. Except as to Xxxxxxxxx, Xxxxxxxx & Co. LLP,
neither the Buyer nor the Transitory Subsidiary has any liability or
obligation to pay any fees or commissions to any broker, finder or
agent with respect to the transactions contemplated by this Agreement.
3.8 BUYER COMMON STOCK. At the Effective Time, the Merger Shares
and shares of Buyer Common Stock issuable upon exercise of the Options
will not be subject to preemptive rights and will not be subject to any
restriction on transfer imposed by the Buyer, except (i) restrictions
on resale of the Merger Shares under the Securities Act and applicable
state securities laws (because the Merger Shares will not have been
registered thereunder); (ii) as provided in agreements of certain of
the Company Stockholders referred to in Section 4.8 of this Agreement
not to sell, transfer or convey such shares for a specified period of
time after the Closing Date; and (iii) with respect to the Merger
Shares issued to PerSeptive BioSystems, Inc. ("PBIO"), the repurchase
option described in Section 5 of the Consulting and Services Agreement
dated June 28, 1996 by and between the Company and PBIO, as amended
from time to time.
3.9 LITIGATION. The Buyer is not a party to or threatened to be
made a party to (a) any unsatisfied judgment, order, decree,
stipulation or injunction or (b) any claim, complaint, action, suit,
proceeding, hearing or investigation of or before any Governmental
Entity or before any arbitrator to which the Buyer is a party or, to
the knowledge of the Buyer, is threatened to be made a party that
reasonably could be expected to have a Buyer Material Adverse Effect.
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ARTICLE IV
COVENANTS
4.1 BEST EFFORTS. Each of the Parties shall use its best efforts,
to the extent commercially reasonable, to take all actions and to do
all things necessary, proper or advisable to consummate the
transactions contemplated by this Agreement (including without
limitation making the representations referenced in Section 5.2(h) and
Section 5.3(f)); provided, however, that notwithstanding anything in
this Agreement to the contrary, the Buyer shall not be required to sell
or dispose of or hold separately (through a trust or otherwise) any of
its assets or businesses.
4.2 NOTICES AND CONSENTS. The Company shall use its best efforts
to obtain, at its expense, all such waivers, permits, consents,
approvals or other authorizations from third parties and Governmental
Entities, and to effect all such registrations, filings and notices
with or to third parties and Governmental Entities, as may be required
by or with respect to the Company in connection with the transactions
contemplated by this Agreement (including without limitation those
listed in Section 2.4 of the Disclosure Schedule).
4.3 Confidential Offering Memorandum and Information Statement.
----------------------------------------------------------
(a) As promptly as reasonably practicable following the
execution of this Agreement, the Buyer and the Company shall jointly
prepare appropriate materials for the purpose of making disclosure of
the Merger to and soliciting the written consents of Company
Stockholders in favor of the adoption of this Agreement and approval of
the Merger. Such materials shall be in the form of a joint confidential
offering memorandum and information statement (the "Offering
Memorandum/Information Statement") which shall contain the information
concerning the Buyer, the Transitory Subsidiary and the Company
required under Regulation D (including without limitation, Rule
502(b)(2) thereof) and a form of written consent soliciting written
consents from Company Stockholders in favor of the approval of the
Merger and adoption of this Agreement.
(b) Promptly following preparation of the Offering
Memorandum/Information Statement, the Company will circulate to each
Company Stockholder the Offering Memorandum/Information Statement
(which may include by reference, Buyer's Reports and other materials
filed by the Buyer under the Exchange Act previously sent to Company
Stockholders) and, pursuant thereto and in accordance with the Delaware
General Corporation Law, shall
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solicit written consents from Company Stockholders in favor of the
adoption of this Agreement and the approval of the Merger along with
such other instruments and documents (including, without limitation,
investor questionnaires and investment representations) as shall be
required for the offering and sale of Merger Shares to be exempt from
the registration requirements of the Securities Act pursuant to Rule
506 of Regulation D.
(c) The Company shall comply with all applicable provisions
of and rules under the Securities Act and the Delaware General
Corporation Law in the preparation and distribution of the Offering
Memorandum/Information Statement and the solicitation of written
consents thereunder. Without limiting the foregoing, the Company shall
ensure that the information in the Offering Memorandum/Information
Statement relating to the Company or furnished by the Company in
writing for inclusion therein does not, as of the date on which it is
distributed to Company Stockholders, and as of the date of taking of
action by written consent, contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements made, in light of the circumstances under which they were
made, not misleading (provided that the Company shall not be
responsible for the accuracy or completeness of any information
relating to the Buyer or any other information furnished by the Buyer
in writing for inclusion therein).
(d) The Buyer shall comply with all applicable provisions of
and rules under the Securities Act in the preparation and distribution
of the Offering Memorandum/ Information Statement and the offering and
issuance of the Merger Shares. Without limiting the foregoing, the
Buyer shall ensure that the Offering Memorandum/Information Statement
does not, as of the date on which it is distributed to Company
Stockholders, and as of the date of the taking of action by written
consent, contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not
misleading (provided that the Buyer shall not be responsible for the
accuracy or completeness of any information relating to the Company or
any other information furnished by the Company in writing for inclusion
therein).
(e) The Company, acting through its Board of Directors, shall
include in the Offering Memorandum/Information Statement the
recommendation of its Board of Directors that the Company Stockholders
consent to the adoption of this Agreement and the approval of the
Merger, and shall otherwise use its best efforts to obtain the
Requisite Stockholder Approval. Notwithstanding the foregoing, the
obligations set forth in this paragraph (e) shall not apply (and the
Board of Directors shall be permitted to modify
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or withdraw any such recommendation previously made) if (i) the Company
receives a bona fide written offer, subject only to customary
conditions (excluding any financing condition), for an acquisition of
all or substantially all of the Company on terms more favorable in the
aggregate, from a financial point of view, to Company Stockholders than
the terms of the Merger (a "Higher Offer") and (ii) the Board of
Directors of the Company is advised in a written opinion from outside
legal counsel (a copy of which is furnished to the Buyer) that the
fiduciary duties of the Board of Directors under applicable law
prohibit it from fulfilling the foregoing obligations.
4.4 OPERATION OF BUSINESS. Except as contemplated by this
Agreement, during the period from the date of this Agreement to the
Effective Time, the Company shall conduct its operations in the
Ordinary Course of Business and in compliance in all material respects
with applicable laws and regulations and, to the extent consistent
therewith, use reasonable efforts to preserve intact its current
business organization, keep its physical assets in good working
condition, keep available the services of its current officers and
employees and preserve its relationships with customers, suppliers and
others having business dealings with it to the end that its goodwill
and ongoing business shall not be impaired in any material respect.
Without limiting the generality of the foregoing, prior to the
Effective Time, the Company shall not, without the written consent of
the Buyer:
(a) issue, sell, deliver or agree or commit to issue, sell or
deliver (whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase or otherwise) or
authorize the issuance, sale or delivery of, except as set forth in
Section 1.10(d) hereto, or redeem or repurchase, any stock of any class
or any other securities or any rights, warrants or options to acquire
any such stock or other securities (except pursuant to the conversion
or exercise of convertible securities or Options outstanding on the
date hereof), except as set forth in Section 1.10(d) hereto, or amend
any of the terms of any convertible securities, Options or Warrants;
(b) split, combine or reclassify any shares of its capital
stock; declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in
respect of its capital stock;
(c) create, incur or assume any debt not currently
outstanding (including obligations in respect of capital leases);
assume, guarantee, endorse or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the obligations of
any other person or entity; or make any loans,
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advances or capital contributions to, or investments in, any other
person or entity;
(d) except for the executive bonuses, not to exceed in the
aggregate $300,000, enter into, adopt or amend any employee benefit
plan or any employment or severance agreement or arrangement of the
type described in Section 2.14 or (except for normal increases in the
Ordinary Course of Business) increase in any manner the compensation or
fringe benefits of, or materially modify the employment terms of, its
directors, officers or employees, generally or individually, or pay any
benefit not required by the terms in effect on the date hereof of any
existing employee benefit plan;
(e) acquire, sell, lease, encumber or dispose of any assets
or property, other than purchases and sale of assets in the Ordinary
Course of Business;
(f) amend its charter or By-laws;
(g) change in any material respect its accounting methods,
principles or practices, except insofar as may be required by a
generally applicable change in GAAP;
(h) discharge or satisfy any Security Interest or pay any
obligation or liability (including without limitation any payment,
other than accounting expenses, printing expenses and legal fees,
relating to the offering that is the subject of the Company
Registration Statement) other than in the Ordinary Course of Business;
(i) mortgage or pledge any of its property or assets or
subject any such assets to any Security Interest;
(j) sell, assign, transfer or license any Intellectual
Property;
(k) enter into, amend (in a manner that is adverse to the
Company or the Buyer), terminate, take or omit to take any action that
would constitute a material violation of or material default under, or
waive any rights under, any Material Contract;
(l) make or commit to make any capital expenditure in excess
of $50,000 per item;
(m) take any action or fail to take any action permitted by
this Agreement with the knowledge that such action or failure to take
action would result in (i) any of the representations and warranties of
the Company set forth in this
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Agreement becoming untrue or (ii) any of the conditions to the Merger
set forth in Article V not being satisfied; or
(n) except as set forth in Section 1.10(d) hereto, agree in
writing or otherwise to take any of the foregoing actions.
4.5 FULL ACCESS; INTERIM FINANCIAL STATEMENTS. The Company shall
permit representatives of the Buyer to have full access (at all
reasonable times, and in a manner so as not to interfere with the
normal business operations of the Company) to all premises, properties,
financial and accounting records, contracts, other records and
documents, and personnel, of or pertaining to the Company. Promptly
following the end of each month between the date of this Agreement and
the Closing Date, the Company shall prepare and furnish to the Buyer
financial statements of the Company as of and for the month and year to
date period ending on the last day of such month, all in a manner
consistent with the Company's past practice.
4.6 NOTICE OF BREACHES. The Company shall promptly deliver to the
Buyer written notice of any event or development that would (a) render
any statement, representation or warranty of the Company in this
Agreement (including the Disclosure Schedule) inaccurate or incomplete
in any material respect, or (b) constitute or result in a breach by the
Company of, or a failure by the Company to comply with, any agreement
or covenant in this Agreement applicable to such party. The Buyer or
the Transitory Subsidiary shall promptly deliver to the Company written
notice of any event or development that would (i) render any statement,
representation or warranty of the Buyer or the Transitory Subsidiary in
this Agreement inaccurate or incomplete in any material respect, or
(ii) constitute or result in a breach by the Buyer or the Transitory
Subsidiary of, or a failure by the Buyer or the Transitory Subsidiary
to comply with, any agreement or covenant in this Agreement applicable
to such party. No such disclosure shall be deemed to avoid or cure any
such misrepresentation or breach.
4.7 EXCLUSIVITY. The Company shall not, and the Company shall use
its best efforts to cause its Affiliates and each of its officers,
directors, employees, representatives and agents not to, directly or
indirectly, (a) encourage, solicit, initiate, engage or participate in
discussions or negotiations with any person or entity (other than the
Buyer) concerning any merger, consolidation, sale of material assets,
tender offer, recapitalization, accumulation of Company Shares, proxy
solicitation or other business combination involving the Company, any
subsidiary or any division of the Company or any subsidiary (an
"Acquisition Transaction") or (b) provide any non-public
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information concerning the business, properties or assets of the
Company or any subsidiary to any person or entity (other than the
Buyer). Notwithstanding the foregoing, the Company may furnish or cause
to be furnished non-public information concerning the business,
properties or assets of the Company to any other person or entity, and
may engage in discussions or negotiations with another person or
entity, if in either case (i) such person or entity has submitted a
Higher Offer to the Company prior to the receipt of Requisite
Stockholder Approval and (ii) the Board of Directors of the Company is
advised in a written opinion from outside legal counsel (a copy of
which is furnished to the Buyer) that the fiduciary duties of the Board
of Directors under applicable law so require. The Company shall
immediately notify the Buyer of, and shall disclose to the Buyer all
details of, any inquiries, discussions or negotiations of the nature
described in the first sentence of this Section 4.7.
4.8 AGREEMENTS FROM CERTAIN COMPANY STOCKHOLDERS. In order to
induce the Buyer and the Transitory Subsidiary to enter into this
Agreement, the Company Stockholders listed on Schedule 4.8 hereto have
each entered into a Stockholder Agreement by and among such
Stockholder, the Company and the Buyer in the form of Exhibit A. The
Company agrees to use its best efforts to assure that all such
Stockholder Agreements remain in full force and effect through and
including the Effective Time.
4.9 LISTING OF MERGER SHARES. The Buyer shall use its best efforts
to list the Merger Shares on the Nasdaq National Market at the time
that the Registration Statement (as defined in Section 4.1(b)) is
declared effective by the SEC.
4.10 INDEMNIFICATION. The Buyer shall not, for a period of six
years after the Effective Time, take any action to alter to impair any
exculpatory or indemnification provisions now existing in the Amended
and Restated Certificate of Incorporation or By-Laws of the Company for
the benefit of any individual who served as a director or officer of
the Company at any time prior to the Effective Time, except for any
changes which may be required to conform with changes in applicable law
and any changes which do not affect the application of such provisions
to acts or omissions of such individuals prior to the Effective Time.
4.11 Registration of Buyer Common Stock Comprising the Merger
-------------------------------------------------------
Shares.
------
(a) For purposes of this Agreement, "Registrable Shares"
shall mean the shares of Buyer Common Stock issued in the Merger (and
any shares received in respect of such shares because of a stock split,
stock dividend, recapitalization, classification or other live event),
but excluding shares of Buyer Common Stock
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issued in the Merger that have been sold or otherwise transferred by
the Company Stockholders who initially received such shares in the
Merger (collectively, the "Holders"); provided however, that a
distribution of shares of Buyer Common Stock issued in the Merger
without additional consideration, to underlying beneficial owners (such
as the general and limited partners, shareholders or trust
beneficiaries of a Holder) shall not be deemed such a sale or transfer
for purposes of this Section 4.11 and such underlying beneficial owners
shall be entitled to the same rights under this Section 4.11 as the
initial Holder from which the Registrable Shares were received and
shall be deemed a Holder for the purposes of this Section 4.11.
(b) On or before June 2, 1997, the Buyer shall file, and
shall use its best efforts to have declared effective as promptly as
practicable thereafter, a "shelf" registration statement (the
"Registration Statement") on Form S-3 (or such successor or other
appropriate form) pursuant to Rule 415 (or similar rule that may be
adopted by the SEC under the Securities Act) for the resale of the
Registrable Shares; provided, that in the event that the Buyer is not
eligible to utilize a Form S-3 registration statement, Buyer's
obligations under this sentence shall instead require the filing of a
Registration Statement on Form S-1 or Form S-2, it being understood by
the parties that at such time as the Buyer becomes eligible to use Form
S-3 it shall be entitled to convert any registration statement on Form
S-1 or S-2 to a registration statement on Form S-3. Except as set forth
below, the Buyer agrees to use its best efforts to keep the
Registration Statement effective for a period of three years (or such
shorter period of time to which the three-year period specified in Rule
144(k) may be shortened at any time after the date of this Agreement)
after the Effective Time or, if shorter, when (i) all the Registrable
Shares have been sold pursuant to the Registration Statement or (ii)
the first date on which each Holder may sell all of the Registrable
Shares held by such Holder without registration pursuant to Rule 144 of
the SEC within a three-month period.
(c) The Buyer shall use its best efforts to qualify all
Registrable Shares under any applicable state securities laws;
PROVIDED, HOWEVER, that Buyer shall not be required to qualify as a
foreign corporation or execute a general consent to service of process
in any jurisdiction.
(d) From time to time, the Buyer will amend or supplement the
Registration Statement and any prospectus contained therein to the
extent necessary to comply with the Securities Act and any applicable
state securities statute or regulations. The Buyer will also promptly
provide the Holders with as many copies
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of the prospectus contained in the Registration Statement as Holders
may reasonably request.
(e) The Buyer shall be entitled to (i) postpone the filing or
effectiveness of the Registration Statement or (ii) if effective, elect
that the Registration Statement not be usable and require each Holder
seeking to sell Registrable Shares pursuant to the Registration
Statement to suspend sales or purchases pursuant to any prospectus
contained therein, for a reasonable period of time, but not in excess
of 60 days (a "Blackout Period"), if the Buyer determines in good faith
that the registration and distribution of Registrable Shares (or the
use of the Registration Statement or any related prospectus) would
interfere with any pending material acquisition, material corporate
reorganization or any other material corporate development involving
the Buyer or any of its subsidiaries or would require premature
disclosure thereof. If circumstances beyond the control of the Buyer
require a Black-Out Period, the Buyer agrees to use its best efforts to
(i) cause such filings to be made or the registration statement to be
declared effective and/or to (ii) lift such suspension as soon as
possible after the commencement of a Black-Out Period. The Buyer shall
promptly give each Holder seeking to sell or purchase Registrable
Shares pursuant to the Registration Statement written notice of such
determination and an approximation of the anticipated delay; PROVIDED,
HOWEVER, that the aggregate number of days included in all Blackout
Periods during any consecutive 12 months shall not exceed 120 days.
(f) Each Holder seeking to sell Registrable Shares pursuant
to the Registration Statement shall provide in writing all information
reasonably requested by the Buyer for inclusion in or in connection
with the Registration Statement and any such information shall not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
(g) The Buyer will indemnify and hold harmless each holder of
Registrable Shares (including any broker or dealer through whom such
shares may be sold) and each person, if any, who controls such holder
or any such broker or dealer within the meaning of Section 15 of the
Securities Act from and against any and all losses, claims, damages,
expenses or liabilities, joint or several, to which they or any of them
become subject under the Securities Act, applicable state securities
laws or under any other statute or at common law or otherwise, as
incurred, and, except as hereinafter provided, will reimburse each such
holder and each such controlling person, if any, for any legal or other
expenses reasonably incurred by them or any of them in connection
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with investigating or defending any actions whether or not resulting in
any liability insofar as such losses, claims, damages, expenses,
liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement, in any preliminary or amended preliminary
prospectus or in the final prospectus (or the Registration Statement or
any such prospectus as from time to time amended or supplemented by the
Buyer), or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of
the circumstances in which they were made, not misleading, or any
violation by the Buyer of any rule or regulations promulgated under the
Securities Act or any state securities laws applicable to the Buyer and
relating to action or inaction required of the Buyer in connection with
such registration. Notwithstanding the foregoing, the Buyer shall have
no obligation to indemnify any such holder or controlling person if:
(i) such untrue statement or omission was made in such Registration
Statement, preliminary or amended preliminary prospectus or final
prospectus in reliance upon and in conformity with information
furnished in writing to the Buyer in connection therewith by such
holder of Registrable Shares (in the case of indemnification of such
holder) or such controlling person (in the case of indemnification of
such controlling person) expressly for use therein, or (ii) such untrue
statement or alleged untrue statement or omission or alleged omission
was contained in a preliminary prospectus and corrected in a final or
amended prospectus copies of which were delivered to such holder of
Registrable Shares on a timely basis, and such holder of Registrable
Shares failed to deliver a copy of the final or amended prospectus at
or prior to the confirmation of the sale of the Registrable Shares to
the person asserting any such loss, claim, damage or liability in any
case where such delivery is required by the Securities Act.
(h) Each holder of the Registrable Shares so registered will
indemnify and hold harmless the Buyer, each of its directors, each of
its officers who have signed or otherwise participated in the
preparation of the Registration Statement and each person, if any, who
controls the Buyer within the meaning of Section 15 of the Securities
Act from and against any and all losses, claims, damages, expenses or
liabilities, joint or several, to which they or any of them may become
subject under the Securities Act, applicable state securities law or
under any other statute or at common law or otherwise, and, except as
hereinafter provided, will reimburse the Buyer and each such director,
officer, or controlling person for any legal or other expenses
reasonably incurred by them or any of them in connection with
investigating or defending any actions whether or not resulting in any
liability, insofar as such losses, claims, damages, expenses,
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liabilities or actions arise out of or are based upon any untrue
statement of a material fact contained in the Registration Statement,
in any preliminary or amended preliminary prospectus or in the final
prospectus (or in the Registration Statement or any such prospectus as
from time to time amended or supplemented) or arise out of or are based
upon the omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, but only to the extent that such statement or omission was
made in reliance upon and in conformity with information furnished in
writing to the Buyer in connection therewith by such holder of
Registrable Shares expressly for use therein. Each Holder's obligations
hereunder shall be limited to an amount equal to the proceeds received
by such Holder sold in any such registration.
(i) Each person entitled to indemnification under this
Section 4.11 (an "Indemnitee") shall give notice to the party required
to provide indemnification (the "Indemnitor") promptly after such
Indemnitee has actual knowledge of any claim as to which indemnity may
be sought, and the Indemnitor shall assume the defense of any such
claim and any litigation resulting therefrom, including the employment
of counsel selected by the Indemnitor (and reasonably acceptable to the
Indemnitee) and shall assume the payment of all expenses. The
Indemnitee shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnitee,
except that the Indemnitor shall pay the fees and expenses of such
counsel if dual representation would be inadvisable due to actual or
potential differing interests between the parties. The failure of any
Indemnitee to give notice as provided herein shall not relieve the
Indemnitor of its obligations under this Section 4.11 except to the
extent the Indemnitor is materially prejudiced thereby. The Indemnitor
shall not be liable for any settlement of any such action or
proceedings effected without its written consent, but if settled with
its written consent, or if there be a final judgment for the plaintiff
in any such action or proceeding, the Indemnitor shall indemnify and
hold harmless such Indemnitee from and against any loss or liability
(to the extent stated above) by reason of such settlement or judgment.
Each Indemnitee shall furnish such information regarding itself or the
claim in question as an Indemnitor may reasonably request in writing
and as shall be reasonably required in connection with the defense of
such claim and litigation resulting therefrom.
(j) In order to provide for just and equitable contribution
to joint liability under the Securities Act in any case in which the
Buyer or any Holder makes a claim for indemnification pursuant to this
Section 4.11 but it is judicially determined (by the entry of a final
judgment or decree by a court
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of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not
be enforced in such case notwithstanding that this Section 4.11
provides for indemnification, in such case, then the Buyer and such
Holder will contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after contribution from
others) in such proportion as is appropriate to reflect the relative
fault of the Buyer on the one hand and of the Holder on the other in
connection with the statements or omission which resulted in such
losses, claims, damages or liabilities, as well as any other relevant
equitable considerations or, if the allocation provided herein is not
permitted by applicable law, in such proportion as shall be appropriate
to reflect the relative benefits received by the Buyer and any Holder
from the offering of the securities covered by such Registration
Statement. The relative fault of the Buyer on the one hand and of the
Holder on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates
to information supplied by the Buyer on the one hand or by the Holder
on the other, and each party's relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission; PROVIDED, HOWEVER, that, in any such case (i) no Holder will
be required to contribute any amount in excess of the proceeds received
by such Holder from the sale of Registrable Shares offered by it
pursuant to the Registration Statement; and (ii) no person or entity
guilty of fraudulent misrepresentation within the meaning of Section
11(f) of the Securities Act will be entitled to contribution from any
person or entity who was not guilty of such fraudulent
misrepresentation.
(k) The Buyer shall bear all costs and expenses of the
registration provided for in this Section 4.11, including, but not
limited to, printing, legal and accounting expenses, SEC and NASD
filing fees and all related "Blue Sky" fees and expenses, and the
reasonable fees and expenses of one counsel for all Holders PROVIDED,
HOWEVER, that the Buyer shall have no obligation to pay or otherwise
bear any portion of the underwriters' or other commissions or discounts
or brokerage fees or commissions, attributable to the Registrable
Shares being offered and sold by the Holders.
(l) So long as the Registration Statement is effective
covering the resale of the Registrable Shares, the Buyer shall file in
a timely manner all documents that the Buyer is required to file under
the Exchange Act and shall furnish to each Holder upon request:
(i) any such documents filed by the Buyer with the SEC;
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(ii) upon the reasonable request of the Holder, any
other information concerning the Buyer that is
generally available to the public; and
(iii) an adequate number of copies of the prospectuses
relating to the resale of the Registrable Shares to
supply to any party requiring such prospectuses.
ARTICLE V
CONDITIONS TO CONSUMMATION OF MERGER
5.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS. The respective
obligations of each Party to consummate the Merger are subject to the
satisfaction of the following conditions:
(a) this Agreement and the Merger shall have received the
Requisite Stockholder Approval;
(b) no action, suit or proceeding shall be pending or
threatened by or before any Governmental Entity wherein an unfavorable
judgment, order, decree, stipulation or injunction would (i) prevent
consummation of any of the transactions contemplated by this Agreement,
(ii) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation or (iii) affect adversely the right of
the Buyer to own, operate or control any of the assets and operations
of the Surviving Corporation following the Merger, and no such
judgment, order, decree, stipulation or injunction shall be in effect;
and
(c) The Buyer shall have received an opinion from Xxxx and
Xxxx LLP to the effect that the offering and sale of the Merger Shares
is exempt from the registration requirements of the Securities Act.
5.2 CONDITIONS TO OBLIGATIONS OF THE BUYER AND THE TRANSITORY
SUBSIDIARY. The obligation of each of the Buyer and the Transitory
Subsidiary to consummate the Merger is subject to the satisfaction of
the following additional conditions:
(a) the holders of at least 95% of the total number of
outstanding Company Shares as of the Effective Time shall have
consented in writing to the adoption of this Agreement and the approval
of the Merger;
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(b) the Company shall have obtained all of the waivers,
permits, consents, approvals or other authorizations, and effected all
of the registrations, filings and notices, referred to in Section 4.2,
except for any which if not obtained or effected would not have a
material adverse effect on the assets, business, financial condition,
results of operations or future prospects of the Company or on the
ability of the Parties to consummate the transactions contemplated by
this Agreement;
(c) the representations and warranties of the Company set
forth in Article II shall have been true and correct when made on the
date hereof and shall be true and correct in all material respects
(other than those representations and warranties which are qualified as
to materiality, which shall be true and correct in accordance with
their terms) as of the Effective Time as if made as of the Effective
Time, except for representations and warranties made as of a specific
date, which shall be true and correct as of such date;
(d) the Company shall have performed or complied with in all
material respects its agreements and covenants required to be performed
or complied with under this Agreement as of or prior to the Effective
Time (other than those agreements and covenants which are qualified as
to materiality, which shall have been performed or complied with in
accordance with their terms);
(e) the Company shall have delivered to the Buyer and the
Transitory Subsidiary a certificate (without qualification as to
knowledge or materiality or otherwise) to the effect that each of the
conditions specified in clauses (a) and (b) of Section 5.1 and clauses
(a) through (d) of this Section 5.2 is satisfied in all respects;
(f) the Buyer and the Transitory Subsidiary shall have
received from counsel to the Company an opinion with respect to the
matters set forth in EXHIBIT B attached hereto, addressed to the Buyer
and the Transitory Subsidiary and dated as of the Closing Date;
(g) the Buyer and the Transitory Subsidiary shall have
received the resignations, effective as of the Effective Time, of each
director and officer of the Company specified by the Buyer in writing
at least one business day prior to the Closing;
(h) the Buyer shall have received an opinion from Xxxx and
Xxxx LLP, in a form reasonably satisfactory to the Buyer, dated the
Closing Date, based upon certain factual representations of the Company
and the Buyer reasonably requested by such counsel,
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to the effect that the Merger will constitute a reorganization for
federal income tax purposes within the meaning of Section 368(a) of the
Code and no gain or loss will be recognized by the Company, the Buyer
or the Transitory Subsidiary as a result of the Merger;
(i) the following agreements shall have been executed and
delivered and shall remain in full force and effect as of the Effective
Time: (i) the Letter Agreement dated January 18, 1997 by and between
Comdisco Inc. and the Company; (ii) the Letter Agreement dated January
18, 1997 by and among Comdisco, Inc., the Company and the Buyer; (iii)
the Amendment, Consent and Waiver Agreement dated January 18, 1997 by
and among Wyeth-Ayerst, the Company and the Buyer; (iv) the Letter
Agreement dated January 18, 1997 by and between Pfizer, Inc. and the
Company; (v) the Letter Agreement dated January 18, 1997 by and between
PBIO, the Company and the Buyer; and (vi) the Stockholder Agreements
with the holders of Company Shares set forth on Schedule 4.8;
(j) all actions to be taken by the Company in connection with
the consummation of the transactions contemplated hereby and all
certificates, opinions, instruments and other documents required to
effect the transactions contemplated hereby shall be reasonably
satisfactory in form and substance to the Buyer and the Transitory
Subsidiary; and
(k) the holders of (i) Options covering at least 90% of the
Company Shares subject to outstanding Options, and (ii) at least 90% of
the total number of outstanding Company Shares as of the Effective Time
held by employees, former employees and consultants of the Company,
shall have signed a Lock-up Agreement by the Closing Date which shall
have substantially identical terms to the lock-up provisions set forth
in the Stockholders Agreement attached hereto as EXHIBIT A.
5.3 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligation of
the Company to consummate the Merger is subject to the satisfaction of
the following additional conditions:
(a) the representations and warranties of the Buyer and the
Transitory Subsidiary set forth in Article III shall have been true and
correct when made on the date hereof and shall be true and correct in
all material respects (other than those representations and warranties
which are qualified as to materiality, which shall be true and correct
in accordance with their terms) as of the Effective Time as if made as
of the Effective Time, except for representations and warranties made
as of a specific date, which shall be true and correct as of such date;
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(b) each of the Buyer and the Transitory Subsidiary shall
have performed or complied with in all material respects its agreements
and covenants required to be performed or complied with under this
Agreement as of or prior to the Effective Time (other than those
agreements and covenants which are qualified as to materiality, which
shall have been performed or complied with in accordance with their
terms);
(c) each of the Buyer and the Transitory Subsidiary shall
have delivered to the Company a certificate (without qualification as
to knowledge or materiality or otherwise) to the effect that each of
the conditions specified in clauses (b) and (c) of Section 5.1 and
clauses (a) and (b) of this Section 5.3 is satisfied in all respects;
(d) the Company shall have obtained all of the waivers,
permits, consents, approvals or other authorizations referred to in
Section 4.2, except for any waivers, permits, consents, approvals or
authorizations in whose absence the Merger could be consummated without
materially adversely affecting the Company or the Company Stockholders;
(e) the Company shall have received from counsel to the Buyer
and the Transitory Subsidiary an opinion with respect to the matters
set forth in EXHIBIT C attached hereto, addressed to the Company and
dated as of the Closing Date;
(f) the Company shall have received an opinion from Mintz,
Levin, Cohen, Ferris, Glovsky and Popeo, P.C., addressed to the Company
Stockholders in a form reasonably satisfactory to the Company, dated
the Closing Date, based upon certain factual representations of the
Company and the Buyer reasonably requested by such counsel, to the
effect that the Merger will constitute a reorganization for federal
income tax purposes within the meaning of Section 368(a) of the Code
and no Company Stockholder who received Merger Shares in exchange for
Company Shares in the Merger shall recognize taxable gain or loss upon
such exchange; and
(g) all actions to be taken by the Buyer and the Transitory
Subsidiary in connection with the consummation of the transactions
contemplated hereby and all certificates, opinions, instruments and
other documents required to effect the transactions contemplated hereby
shall be reasonably satisfactory in form and substance to the Company.
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ARTICLE VI
TERMINATION
6.1 TERMINATION OF AGREEMENT. The Parties may terminate this
Agreement prior to the Effective Time (whether before or after
Requisite Stockholder Approval) as provided below:
(a) the Parties may terminate this Agreement by mutual
written consent;
(b) the Buyer may terminate this Agreement by giving written
notice to the Company in the event the Company is in breach, and the
Company may terminate this Agreement by giving written notice to the
Buyer and the Transitory Subsidiary in the event the Buyer or the
Transitory Subsidiary is in breach, of any material representation,
warranty or covenant contained in this Agreement, and such breach is
not remedied within 10 days of delivery of written notice thereof;
(c) any Party may terminate this Agreement by giving written
notice to the other Parties at any time after 45 days after the mailing
of the Offering Memorandum/Information Statement to Company
Stockholders pursuant to Section 4.3 hereof if prior to such date the
Company does not have the consents providing for the Requisite
Stockholder Approval;
(d) the Buyer may terminate this Agreement by giving written
notice to the Company if the Closing shall not have occurred on or
before the 180th day following the date of this Agreement by reason of
the failure of any condition precedent under Section 5.1 or 5.2 hereof
(unless the failure results primarily from a breach by the Buyer or the
Transitory Subsidiary of any representation, warranty or covenant
contained in this Agreement);
(e) the Company may terminate this Agreement by giving
written notice to the Buyer and the Transitory Subsidiary if the
Closing shall not have occurred on or before the 180th day following
the date of this Agreement by reason of the failure of any condition
precedent under Section 5.1 or 5.3 hereof (unless the failure results
primarily from a breach by the Company of any representation, warranty
or covenant contained in this Agreement); or
(f) the Buyer may terminate this Agreement if (i) the Board
of Directors of the Company withdraws its recommendation of the Merger
or modifies such recommendation in a manner adverse to the Buyer, fails
to reconfirm such recommendation within five business days after a
request from the Buyer that the Board of
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Directors do so or fails to reject any proposal relating to an
Acquisition Transaction made by a party other than the Buyer within
five business days following the date that such proposal is made.
6.2 EFFECT OF TERMINATION. Except as set forth in Section 6.3, if
any Party terminates this Agreement pursuant to Section 6.1, all
obligations of the Parties hereunder shall terminate without any
liability of any Party to any other Party, except for any liability of
any Party for breaches of this Agreement occurring prior to such
termination.
6.3 TERMINATION FEE. Notwithstanding Section 6.2, in the event of
the termination of this Agreement by the Buyer pursuant to (x) Section
6.1(b) as a result of a breach by the Company of Section 4.3(b) or
Section 4.7 or (y) Section 6.1(f), the Company shall, immediately upon
such termination, pay to the Buyer in cash a termination fee in the
amount of $3,000,000, plus an amount equal to all of the Buyer's
out-of-pocket expenses incurred in connection with the transactions
contemplated by this Agreement (including without limitation fees and
expenses of legal counsel, investment bankers and accountants), whether
incurred before or after the date of this Agreement ("Buyer Expenses").
Notwithstanding Section 6.2, in the event of the termination of this
Agreement by the Buyer pursuant to (i) Section 6.1(b) (other than as a
result of a breach by the Company of Section 4.3(b) or 4.7) or (ii)
6.1(d) or by any Party pursuant to Section 6.1(c), the Company shall
pay to the Buyer in cash, upon demand, a sum equal to the Buyer
Expenses.
ARTICLE VII
DEFINITIONS
For purposes of this Agreement, each of the following defined
terms is defined in the Section of this Agreement indicated below.
Defined Term Section
------------ -------
Acquisition Transaction 4.7
Affiliate Agreement 4.8
Blackout Period 4.11(e)
Buyer Introduction
Buyer Common Stock 1.5(a)
Buyer Expenses 6.3
Buyer Material Adverse Effect 3.4
Buyer Prospectus 3.5(a)
Buyer Reports 3.5(a)
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Certificate of Merger 1.1
Certificates 1.7(a)
Closing 1.2
Closing Date 1.2
Code 1.10(a)
Comdisco 1.10(d)
Company Introduction
Company Common Stock 1.5(a)
Company Registration Statement 2.6
Company Shares 1.5(a)
Company Stockholders 1.3
Company Convertible Preferred Shares 1.5(a)
Conversion Ratio 1.5(a)
Disclosure Schedule Article II
Dissenting Shares 1.6(a)
Effective Time 1.1
Environmental Law 2.15(a)
ERISA 2.14(a)
Exchange Act 3.4
Exchange Agent 1.3
Financial Statements 2.6
GAAP 2.6
Governmental Entity 2.4(b)
Higher Offer 4.3(e)
Holders 4.11(a)
Indemnitee 4.11(i)
Indemnitor 4.11(i)
Intellectual Property 2.10(a)
Material Adverse Effect 2.1
Material Contract 2.11
Materials of Environmental Concern 2.15(b)
Merger 1.1
Merger Shares 1.5(a)
Most Recent Balance Sheet 2.8
Offering Memorandum/Information
Statement 4.3(a)
Options 1.10(a)
Ordinary Course of Business 2.4
PBS 1.10(d)
Parties Introduction
Permits 2.17
Registrable Shares 4.11(a)
Registration Statement 4.11(b)
Regulation D 2.20
Requisite Stockholder Approval 2.3
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SEC 2.6
Security Interest 2.4
Securities Act 2.2
Special Meeting 4.3(a)
Surviving Corporation 1.1
Transitory Subsidiary Introduction
Warrants 1.10(d)
ARTICLE VIII
MISCELLANEOUS
8.1 PRESS RELEASES AND ANNOUNCEMENTS. No Party shall issue any
press release or public disclosure relating to the subject matter of
this Agreement without the prior written approval of the other Parties;
PROVIDED, HOWEVER, that any Party may make any public disclosure it
believes in good faith is required by law or regulation (in which case
the disclosing Party shall advise the other Parties and provide them
with a copy of the proposed disclosure and a reasonable opportunity to
comment thereon prior to making the disclosure).
8.2 NO THIRD PARTY BENEFICIARIES. This Agreement shall not confer
any rights or remedies upon any person other than the Parties and their
respective successors and permitted assigns; PROVIDED, HOWEVER, that
the provisions in Article I concerning issuance of the Merger Shares,
in Section 4.11 concerning registration rights and in Section 5.3(f)
concerning the tax opinion are intended for the benefit of the Company
Stockholders, the provisions of Section 1.10 are intended for the
benefit of the holders of Options and the provisions of Section 4.10
are intended for the benefit of the officers and directors of the
Company specified therein.
8.3 ENTIRE AGREEMENT. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the Parties
and supersedes any prior understandings, agreements, or representations
by or among the Parties, written or oral, with respect to the subject
matter hereof.
8.4 SUCCESSION AND ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their
respective successors and permitted assigns. No Party may assign either
this Agreement or any of its rights, interests, or obligations
hereunder without the prior written approval of the other Parties;
provided that the Transitory Subsidiary may assign its rights,
interests and obligations hereunder to an Affiliate of the Buyer.
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8.5 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The respective
representations and warranties of the Company, the Buyer and the
Transitory Subsidiary contained in this Agreement shall expire with,
and be terminated and extinguished upon, the occurrence of the
Effective Time.
8.6 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
8.7 HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
8.8 NOTICES. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request,
demand, claim, or other communication hereunder shall be deemed duly
delivered three business days after it is sent by registered or
certified mail, return receipt requested, postage prepaid, or one
business day after it is sent via a reputable nationwide overnight
courier service, in each case to the intended recipient as set forth
below:
If to the Company: Copy to:
------------------ --------
ChemGenics Pharmaceuticals Xxxxxxx Xxxxxx, Esq.
Inc. Xxxxx, Levin, Cohen,
One Xxxxxxx Square Xxxxxx, Glovsky
Building 300 and Popeo, P.C.
Xxxxxxxxx, XX 00000 One Financial Center
Attention: President Xxxxxx, XX 00000
If to the Buyer: Copy to:
---------------- --------
Millennium Pharmaceuticals, Xxxxxx X. Xxxxxx,
Inc. Esq.
000 Xxxxxxxx Xxxxx Xxxx xxx Xxxx XXX
Xxxxxxxxx, XX 00000 00 Xxxxx Xxxxxx
Xxxxxxxxx: President Xxxxxx, XX 00000
If to the Transitory Subsidiary: Copy to:
-------------------------------- --------
CPI Acquisition Corp.
c/o Millennium Pharmaceuticals, Xxxxxx X. Xxxxxx,
Inc. Esq.
000 Xxxxxxxx Xxxxx Xxxx xxx Xxxx XXX
Xxxxxxxxx, XX 00000 00 Xxxxx Xxxxxx
Xxxxxxxxx: Xxxxxxxxx Xxxxxx, XX 00000
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Any Party may give any notice, request, demand, claim, or other
communication hereunder using any other means (including personal
delivery and telecopy), but no such notice, request, demand, claim, or
other communication shall be deemed to have been duly given unless and
until it actually is received by the party for whom it is intended. Any
Party may change the address to which notices, requests, demands,
claims, and other communications hereunder are to be delivered by
giving the other Parties notice in the manner herein set forth.
8.9 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws (and not the law of
conflicts) of the State of Delaware.
8.10 AMENDMENTS AND WAIVERS. The Parties may mutually amend any
provision of this Agreement at any time prior to the Effective Time;
PROVIDED, HOWEVER, that any amendment effected subsequent to the
Requisite Stockholder Approval shall be subject to the restrictions
contained in the Delaware General Corporation Law. No amendment of any
provision of this Agreement shall be valid unless the same shall be in
writing and signed by all of the Parties. No waiver by any Party of any
default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any
prior or subsequent default, misrepresentation, or breach of warranty
or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.
8.11 SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the offending
term or provision in any other situation or in any other jurisdiction.
If the final judgment of a court of competent jurisdiction declares
that any term or provision hereof is invalid or unenforceable, the
Parties agree that the court making the determination of invalidity or
unenforceability shall have the power to reduce the scope, duration, or
area of the term or provision, to delete specific words or phrases, or
to replace any invalid or unenforceable term or provision with a term
or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified after
the expiration of the time within which the judgment may be appealed.
8.12 EXPENSES. Except as provided in Sections 6.2 and 6.3 hereof,
each of the Parties shall bear its own costs and expenses (including
legal fees and expenses) incurred in connection with this Agreement and
the transactions contemplated hereby.
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8.13 SPECIFIC PERFORMANCE. Each of the Parties acknowledges and
agrees that one or more of the other Parties would be damaged
irreparably in the event any of the provisions of this Agreement are
not performed in accordance with their specific terms or otherwise are
breached. Accordingly, each of the Parties agrees that the other
Parties shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in any
action instituted in any court of the United States or any state
thereof having jurisdiction over the Parties and the matter (subject to
the provisions of Section 8.14), in addition to any other remedy to
which it may be entitled, at law or in equity.
8.14 SUBMISSION TO JURISDICTION. Each of the Parties (a) submits to
the jurisdiction of any state or federal court sitting in the
Commonwealth of Massachusetts in any action or proceeding arising out
of or relating to this Agreement, (b) agrees that all claims in respect
of the action or proceeding may be heard and determined in any such
court, and (c) agrees not to bring any action or proceeding arising out
of or relating to this Agreement in any other court. Each of the
Parties waives any defense of inconvenient forum to the maintenance of
any action or proceeding so brought and waives any bond, surety or
other security that might be required of any other Party with respect
thereto. Any Party may make service on another Party by sending or
delivering a copy of the process to the Party to be served at the
address and in the manner provided for the giving of notices in Section
8.8. Nothing in this Section 8.14, however, shall affect the right of
any Party to serve legal process in any other manner permitted by law.
8.15 CONSTRUCTION. The language used in this Agreement shall be
deemed to be the language chosen by the Parties hereto to express their
mutual intent, and no rule of strict construction shall be applied
against any Party. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires
otherwise.
8.16 INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and
Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
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IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement as of the date first above written.
MILLENNIUM PHARMACEUTICALS, INC.
By: /s/ Xxxx X. Xxxxx
--------------------------------
Title: Chief Executive Officer
-----------------------------
CPI ACQUISITION CORP.
By: /s/ Xxxx X. Xxxxx
--------------------------------
Title: President
-----------------------------
CHEMGENICS PHARMACEUTICALS INC.
By: /s/ Xxxxx X. Xxxxxxxxx, Ph.D.
--------------------------------
Title: Chief Executive Officer
-----------------------------
The undersigned, being the duly elected Secretary or Assistant
Secretary of the Transitory Subsidiary, hereby certifies that this
Agreement has been adopted by a majority of the votes represented by
the outstanding shares of capital stock of the Transitory Subsidiary
entitled to vote on this Agreement.
/s/ Xxxxxx X. Xxxxxx
-----------------------------------
Secretary or Assistant Secretary
The undersigned, being the duly elected Secretary or Assistant
Secretary of the Company, hereby certifies that this Agreement has been
adopted by a majority of the votes represented by the outstanding
Company Shares entitled to vote on this Agreement.
/s/ Xxxxx X. Xxxxxxxxx, Ph.D.
-----------------------------------
Secretary or Assistant Secretary
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