MUTUAL TERMINATION AND RELEASE AGREEMENT
This MUTUAL TERMINATION AND RELEASE AGREEMENT (this "Agreement") is made
and entered into as of June 4, 2003 (the "Effective Date"), by and among NPS
Pharmaceuticals, Inc., a Delaware corporation ("NPS"), Enzon Pharmaceuticals,
Inc., a Delaware corporation ("Enzon"), Momentum Merger Corporation, a Delaware
corporation ("Momentum"), Xxxxxx Acquisition Corporation a Delaware corporation
("Xxxxxx"), and Einstein Acquisition Corporation, a Delaware corporation
("Einstein"). NPS, Enzon, Momentum, Xxxxxx, and Xxxxxxxx are collectively
referred to herein as the "Parties" and each individually as a "Party." Unless
otherwise defined herein, capitalized terms used herein shall have the meaning
given them in the Merger Agreement (as defined below).
RECITALS
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A. NPS, Enzon, Momentum, Xxxxxx and Einstein are Parties to that certain
Agreement and Plan of Reorganization dated as of February 19, 2003, as amended
(the "Merger Agreement").
B. Contemporaneously with the execution of the Merger Agreement, NPS,
Enzon, Momentum, certain officers and directors of NPS and Enzon entered into
(i) those certain NPS Voting Agreements, (ii) those certain Enzon Voting
Agreements, (iii) those certain NPS Affiliate Agreements, and (iv) those certain
Enzon Affiliate Agreements (collectively, the "Ancillary Agreements").
C. Pursuant to the Merger Agreement, Enzon entered into that certain
Amended and Restated Employment Agreement with Xxxxxx X. Xxxxxxx, as amended
(the "Xxxxxxx Employment Agreement").
D. NPS and Enzon in connection with the execution of this Agreement shall
enter into that certain Restricted Stock Purchase Agreement of even date
herewith and attached hereto as Exhibit A (the "Stock Purchase Agreement") and
the Registration Rights Agreement as described in the Stock Purchase Agreement
(the "Registration Rights Agreement").
E. The Board of Directors of each of NPS, Enzon, Momentum, Xxxxxx and
Xxxxxxxx has determined to terminate the Merger Agreement and each of the
Ancillary Agreements and to effect certain other matters as provided herein.
AGREEMENT
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NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties, intending
to be legally bound, agree as follows:
1. Termination of Merger Agreement. The Parties agree that, effective at
5:30 p.m., Eastern Standard Time, on the Effective Date, and subject to the
terms and conditions of this Agreement, the Stock Purchase Agreement and the
Registration Rights Agreement, (i) the Merger Agreement is hereby terminated and
of no further force or effect pursuant to Section 7.1(a) therein, and (ii) each
of the Ancillary Agreements is each hereby terminated and of no further force or
effect. For the avoidance of doubt, it is the intention of the Parties that no
provision of the Merger Agreement, including without limitation Section 7.2
(Notice of Termination; Effect of Termination) and 7.3 thereof (Fees and
Expenses), shall survive the termination of the Merger Agreement pursuant to the
terms of this Agreement.
2. Issuance of NPS Shares. Subject to the terms and conditions of this
Agreement, the Stock Purchase Agreement and the Registration Rights Agreement,
NPS agrees to issue to Enzon, and Enzon agrees to purchase from NPS, One Million
Five Hundred Thousand (1,500,000) shares of NPS common stock, $0.001 par value
per share (the "Shares").
3. Releases.
(a) Each of the Parties on its behalf and on behalf of its parents,
affiliates, subsidiaries, segments or divisions, successors and assigns, present
and former stockholders, officers, directors, employees, insurers,
administrators, agents, representatives, attorneys and any persons acting by,
through, under or in concert with each of them or any of them, hereby completely
releases and forever discharges the other Parties, their parents, affiliates,
subsidiaries, segments or divisions, successors and assigns, present and former
stockholders, officers, directors, employees, insurers, administrators, agents,
representatives and attorneys (collectively, the "Releasees") from any and all
claims, rights, demands, actions, obligations, liabilities and causes of action
of any and every kind, nature and character whatsoever, known or unknown, which
such Party may now have, could have had or may in the future have against the
other Parties and the other Parties' Releasees for or on account of any acts,
omissions, events or matters relating to or arising out of the Merger Agreement,
the Ancillary Agreements, the Xxxxxxx Employment Agreement and the transactions
contemplated by any of such agreements, including without limitation, claims of
fraud, claims of willful or intentional breach, or otherwise based on the
termination thereof, and whether based on tort, contract (express or implied),
or any federal, state or local law, statute or regulation (hereinafter, the
"Released Matters"); provided, however, that notwithstanding the foregoing, no
Party releases any other Party from any obligations, liabilities or claims
arising under or in connection with the performance of this Agreement, the Stock
Purchase Agreement, the Registration Rights Agreement or, after the date of this
Agreement, the Confidentiality Agreement. Each of the Parties shall refrain from
asserting any matter released or purported to be released hereby against the
other Parties and the other Parties' Releasees in any manner, including without
limitation by way of counterclaim, offset or defense.
(b) It is understood and agreed that the preceding paragraph is a full
and final release covering all known as well as unknown or unanticipated debts,
claims or damages of the Parties relating to or arising out of the Merger
Agreement, the Ancillary Agreements, the Xxxxxxx
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Employment Agreement and the transactions contemplated by any of such
agreements. Therefore, each of the Parties expressly waives any rights it may
have under statute or common law principle under which a general release does
not extend to claims which such Party does not know or suspect to exist in its
favor at the time of executing the release, which if known by such Party must
have affected such Party's settlement with the other. In connection with such
waiver and relinquishment, the Parties acknowledge that they or their attorneys
or agents may hereafter discover claims or facts in addition to or different
from those which they now know or believe to exist with respect to the Released
Matters, but that it is their intention hereby fully, finally and forever to
settle and release all of the Released Matters. In furtherance of this
intention, the releases herein given shall be and remain in effect as full and
complete mutual releases with regard to the Released Matters notwithstanding the
discovery or existence of any such additional or different claim or fact.
4. Fees and Expenses. As was provided in Section 7.3(a) of the Merger
Agreement, NPS and Enzon shall share equally (i) all fees and expenses,
excluding attorneys' fees and expenses, which shall be paid for by the Party
incurring such expense but including accountants' fees and expenses, incurred in
relation to the printing and filing (with the SEC) of the Joint Proxy
Statement/Prospectus (including any preliminary materials related thereto) and
the Registration Statement (including financial statements and exhibits) and any
amendments or supplements thereto, (ii) the filing fee for the Notification and
Report Forms filed with the FTC and DOJ under the HSR Act, and pre-merger
notification and reports forms under similar applicable laws of other
jurisdictions, and (iii) reasonable attorneys' fees and expenses incurred in
connection with any foreign pre-merger filings. The Parties further acknowledge
that NPS and Enzon have each incurred additional expenses, including without
limitation attorneys' and accountants' fees and expenses, and fees and expenses
payable to their respective investment banks, which shall be paid for by the
Party incurring such expenses, in connection with the consummation of the
transactions contemplated by the Merger Agreement. In furtherance of the
foregoing with respect to fees and expenses that NPS and Enzon have agreed to
share, each of NPS and Enzon agree that (i) they shall accurately and completely
account to the other for all expenses that each of them has incurred for which
responsibility is to be shared pursuant to this Section 4 (a "Shared Expense"),
(ii) if either has paid or at any time pays more than fifty percent (50%) of any
Shared Expense, then such Party shall notify the other Party of such payment and
(iii) such other Party shall, within fifteen (15) days of its receipt of such
notice, reimburse to the notifying Party the appropriate amount so that both
Parties will have paid their share of each Shared Expense.
5. Confidentiality. The Parties acknowledge that Enzon and NPS have
previously executed a letter agreement effective December 18, 2002 (the
"Confidentiality Agreement"), which Confidentiality Agreement, including the
"Standstill" provisions in paragraph 7 therein (the "Standstill Provision"),
will continue in full force and effect in accordance with its terms and each of
NPS and Enzon will hold, and will cause its respective directors, officers,
Employees, agents and advisors (including attorneys, accountants, consultants,
bankers and financial advisors) to hold, any Evaluation Material (as defined in
the Confidentiality Agreement) confidential in accordance with the terms of the
Confidentiality Agreement. Notwithstanding the Standstill Provision, Enzon and
NPS acknowledge and agree that the negotiation and execution of this Agreement,
the Stock
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Purchase Agreement and the Registration Rights Agreement and NPS' issuance of
the Shares to Enzon pursuant to the Stock Purchase Agreement and the completion
of any other transactions contemplated by the Stock Purchase Agreement and the
Registration Rights Agreement and any transactions in which Enzon may engage to
hedge its position in the Shares it receives pursuant to the Stock Purchase
Agreement do not and will not cause a breach or violation of the Standstill
Provision by Enzon. In addition, as soon as practicable, but in no event later
than thirty (30) days from the date hereof, each of NPS and Enzon shall (i)
return to the other Party all copies of all Evaluation Material received from
such other Party and (ii) destroy all analyses, compilations, summaries, studies
and other materials prepared by it based in whole or in part on, or otherwise
containing or reflecting any of, the Evaluation Material received from such
other Party.
6. Publicity. NPS and Enzon will issue a joint press release in the form
attached hereto as Exhibit B (the "Initial Release") upon the signing of this
Agreement with respect to this Agreement and the termination of the Merger
Agreement and the Ancillary Agreements. Except as required by law or applicable
listing agreement, no Party shall issue any other press release or make any
public announcement or statement relating to the termination of the Merger
Agreement or execution of this Agreement prior to the issuance of the Initial
Release or at any time thereafter that is inconsistent with the Initial Release.
7. Further Assurances. Each Party agrees to cooperate fully with the other
Parties and to execute such further instruments, documents and agreements and to
give such further written assurances as may be reasonably requested by any other
Party to evidence and reflect the transactions described in this Agreement and
to carry into effect the intents and purposes of this Agreement. Without
limiting the foregoing, the Parties shall (a) cooperate with each other and
promptly prepare and file all necessary documentation to withdraw all
applications, including without limitation Momentum's listing application with
The NASDAQ National Market, notices, petitions and filings made with, and shall
use their reasonable efforts to terminate any proceedings before, any
Governmental Authority, including without limitation the SEC, in connection with
the Merger Agreement and (b) cooperate with each other to promptly wind up the
affairs of, and to dissolve under the laws of the State of Delaware, Momentum,
Einstein and Xxxxxx.
8. Representations and Warranties. Each of the Parties represents and
warrants to the other Parties that (a) such Party has all requisite legal and
corporate power and authority to execute, deliver and perform its obligations
under this Agreement; (b) all corporate action on the part of such Party, its
directors, officers and stockholders necessary for the authorization, execution,
delivery and performance of this Agreement by such Party has been taken; and (c)
this Agreement constitutes a valid and binding obligation of such Party,
enforceable against such Party in accordance with its terms, subject to laws of
general application relating to bankruptcy, insolvency and the relief of debtors
and rules of law governing specific performance, injunctive relief or other
equitable remedies.
9. Miscellaneous.
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(a) No Assignment; Binding Effect. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned by any Party hereto
without the prior written consent of the other Parties hereto and any attempt to
do so shall be void, except for assignments and transfers by operation of law.
Subject to the preceding sentence, this Agreement is binding upon, inures to the
benefit of and is enforceable by and upon the Parties and their respective
successors and assigns.
(b) Amendment. This Agreement may be amended, supplemented or modified
by a written instrument duly executed by NPS and Enzon. Any such amendment,
supplement, or modification shall be binding upon all of the Parties.
(c) Notices. All notices and other communications required or
permitted hereunder shall between Enzon and NPS be in writing and shall be
mailed by registered or certified mail, postage prepaid by hand, by messenger or
by overnight courier, addressed:
(i) if to Enzon, to:
Enzon Pharmaceuticals, Inc.
000 Xxxxx 000/000
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Chief Executive Officer
Or at such other address as Enzon shall have furnished to NPS,
with a copy to:
Xxxxxx & Whitney LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx
(ii) if to NPS, to:
NPS Pharmaceuticals, Inc.
000 Xxxxxxx Xxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: General Counsel
Or as such address as NPS shall have furnished to Enzon, with a
copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation
0000 Xxxx Xxxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Xxxxxx X. X'Xxxxxx, Esq.
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(iii) Each such notice or other communication shall for all
purposes of this Agreement be treated as effective or having been given when
actually delivered as provided above, if delivered personally or by messenger,
or, on the day shown on the return receipt, if sent by mail or other delivery
service. (d) Entire Agreement. This Agreement supercedes all prior discussions,
representations, warranties and agreements, both written and oral, among the
Parties with respect to the subject matter hereof, and contains the sole and
entire agreement among the Parties with respect to the subject matter hereof,
other than the Confidentiality Agreement. (e) Governing Law. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Delaware, regardless of the laws that might otherwise govern under applicable
principles of conflicts of law thereof.
(e) Remedies. In the event of any breach or default of this Agreement,
the non-breaching Party shall have all rights and remedies provided by law and
equity to enforce this Agreement, including, without limitation, an action for
damages and to obtain specific performance of the terms of this Agreement.
(f) Submission to Jurisdiction. Each of the Parties irrevocably agrees
that any legal action or proceeding with respect to this Agreement or for
recognition and enforcement of any judgment in respect hereof brought by an
other Party hereto or its successors or assigns may be brought and determined in
the Chancery or other Courts of the State of Delaware, and each of the Parties
hereby irrevocably submits with regard to any such action or proceeding for
itself and in respect to it property, generally and unconditionally, to the
nonexclusive jurisdiction of the aforesaid courts.
(g) Severability. In the event that any provision of this Agreement or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the Parties. The Parties further agree to replace such
void and unenforceable provision of this Agreement with a valid and enforceable
provision that will achieve, to the greatest extent possible, the economic,
business and other purposes of such void or unenforceable provision.
(h) Rules of Construction. The Parties agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any Legal Requirement or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the Party drafting such agreement or document.
(i) Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED
ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE ACTIONS OF MOMENTUM, NPS, ENZON,
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XXXXXX, OR XXXXXXXX IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND
ENFORCEMENT HEREOF.
(j) Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the Parties and delivered to the other Parties, it being understood that all
Parties need not sign the same counterpart.
(k) Third Party Beneficiaries. There are no third Party beneficiaries
to this Agreement except for the Parties' Releasees and the Parties to the
Ancillary Agreements that are not Parties to this Agreement
[Signature page follows.]
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IN WITNESS WHEREOF, NPS, Enzon, Momentum, Xxxxxx and Einstein have caused
this Agreement to be duly executed as of the date first above written by their
respective officers duly authorized.
NPS PHARMACEUTICALS, INC.
By: /s/
---------------------------------
Name:
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Its:
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ENZON PHARMACEUTICALS, INC.
By: /s/
---------------------------------
Name:
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Its:
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MOMENTUM MERGER CORPORATION
By: /s/
---------------------------------
Name:
-------------------------------
Its:
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[Signature Page to Mutual Termination and Release Agreement]
XXXXXX ACQUISITION CORPORATION
By: /s/
---------------------------------
Name:
-------------------------------
Its:
--------------------------------
EINSTEIN ACQUISITION CORPORATION
By: /s/
---------------------------------
Name:
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Its:
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[Signature Page to Mutual Termination and Release Agreement]
EXHIBIT A
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Restricted Stock Purchase Agreement
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[OMITTED]
EXHIBIT B
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Joint Press Release
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[OMITTED]
