EXHIBIT 3
AGREEMENT AND PLAN OF MERGER
among
Millennium Pharmaceuticals, Inc.
ANM, Inc.
and
Leukosite, Inc.
October 14, 1999
TABLE OF CONTENTS
Page
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ARTICLE I THE MERGER.........................................................1
Section 1.01 Effective Time of the Merger.............................1
Section 1.02 Closing..................................................2
Section 1.03 Effects of the Merger....................................2
Section 1.04 Directors and Officers...................................2
ARTICLE II CONVERSION OF SECURITIES..........................................2
Section 2.01 Conversion of Capital Stock..............................2
Section 2.02 Exchange of Certificates.................................3
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY....................6
Section 3.01 Organization of the Company..............................6
Section 3.02 The Company Capital Structure............................7
Section 3.03 Authority; No Conflict; Required Filings and Consents....8
Section 3.04 SEC Filings; Financial Statements........................9
Section 3.05 No Undisclosed Liabilities..............................10
Section 3.06 Absence of Certain Changes or Events....................10
Section 3.07 Taxes...................................................11
Section 3.08 Properties..............................................12
Section 3.09 Intellectual Property...................................12
Section 3.10 Preclinical Testing and Clinical Trials.................14
Section 3.11 Agreements, Contracts and Commitments...................14
Section 3.12 Litigation..............................................15
Section 3.13 Environmental Matters...................................15
Section 3.14 Employee Benefit Plans..................................16
Section 3.15 Compliance With Laws....................................17
Section 3.16 Certain Regulatory Matters..............................18
Section 3.17 Tax Matters.............................................18
Section 3.18 Registration Statement; Proxy Statement/Prospectus......18
Section 3.19 Labor Matters...........................................19
Section 3.20 Insurance...............................................19
Section 3.21 No Existing Discussions.................................19
Section 3.22 Opinion of Financial Advisor............................20
Section 3.23 Section 203 of the DGCL Not Applicable..................20
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB.................20
Section 4.01 Organization of Parent and Sub..........................20
Section 4.02 Parent Capital Structure................................20
Section 4.03 Authority; No Conflict; Required Filings and Consents...21
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Section 4.04 SEC Filings; Financial Statements.......................22
Section 4.05 No Undisclosed Liabilities..............................22
Section 4.06 Absence of Certain Changes or Events....................23
Section 4.07 Litigation..............................................23
Section 4.08 Compliance With Laws....................................23
Section 4.09 Tax Matters.............................................23
Section 4.10 Registration Statement; Proxy Statement/Prospectus......23
Section 4.11 Operations of Sub.......................................24
Section 4.12 Opinion of Financial Advisor............................24
ARTICLE V CONDUCT OF BUSINESS...............................................24
Section 5.01 Covenants of the Company................................25
Section 5.02 Cooperation.............................................27
Section 5.03 Confidentiality.........................................27
ARTICLE VI ADDITIONAL AGREEMENTS............................................27
Section 6.01 No Solicitation.........................................27
Section 6.02 Proxy Statement/Prospectus; Registration Statement......29
Section 6.03 Nasdaq Quotation........................................30
Section 6.04 Access to Information...................................30
Section 6.05 Stockholders Meetings...................................30
Section 6.06 Legal Conditions to Merger..............................31
Section 6.07 Public Disclosure.......................................32
Section 6.08 Tax-Free Reorganization.................................32
Section 6.09 Affiliate Agreements....................................32
Section 6.10 Nasdaq Listing..........................................33
Section 6.11 Stock Plans and Warrants................................33
Section 6.12 Brokers or Finders......................................34
Section 6.13 Indemnification.........................................34
Section 6.14 Notification of Certain Matters.........................35
Section 6.15 Comfort Letters from the Company's Accountants..........35
Section 6.16 Stockholder Litigation..................................35
Section 6.17 Relationship with Partners..............................35
Section 6.18 Employee Matters........................................35
Section 6.19 Board Representation....................................37
Section 6.20 401(k) Plan.............................................38
ARTICLE VII CONDITIONS TO MERGER............................................38
Section 7.01 Conditions to Each Party's Obligation To Effect
the Merger..............................................38
Section 7.02 Additional Conditions to Obligations of Parent and Sub..39
Section 7.03 Additional Conditions to Obligations of the Company.....40
ARTICLE VIII TERMINATION AND AMENDMENT......................................40
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Section 8.01 Termination.............................................40
Section 8.02 Effect of Termination...................................42
Section 8.03 Fees and Expenses.......................................42
Section 8.04 Amendment...............................................44
Section 8.05 Extension; Waiver.......................................44
ARTICLE IX MISCELLANEOUS....................................................44
Section 9.01 Nonsurvival of Representations, Warranties
and Agreements..........................................45
Section 9.02 Notices.................................................45
Section 9.03 Interpretation..........................................46
Section 9.04 Counterparts............................................46
Section 9.05 Entire Agreement; No Third Party Beneficiaries..........46
Section 9.06 Governing Law...........................................46
Section 9.07 Other Remedies; Specific Performance....................46
Section 9.08 Assignment..............................................47
Section 9.09 Severability............................................47
Section 9.10 WAIVER OF JURY TRIAL....................................47
Section 9.11 Elimination of Parent Voting Proposal...................47
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TABLES OF DEFINED TERMS
Cross Reference
Terms in Agreement
----- ------------
Acquisition Proposal......................................... Section 6.01(a)
Affiliate.................................................... Section 6.10
Affiliate Agreement.......................................... Section 6.10
Agreement.................................................... Preamble
Agreement of Merger.......................................... Section 1.01
Alternative Transaction...................................... Section 8.03(g)
Antitrust Laws............................................... Section 6.06(b)
Bankruptcy and Equity Exception.............................. Section 3.03(a)
Blue Sky..................................................... Section 7.02(d)
Certificates................................................. Section 2.02(b)
Closing...................................................... Section 1.02
Closing Date................................................. Section 1.02
Code......................................................... Preamble
Company Balance Sheet ....................................... Section 3.04(b)
Company Common Stock ........................................ Section 2.01(b)
Company Disclosure Schedule ................................. Article III
Company Employee Plans ...................................... Section (a)
Company Material Adverse Effect ............................. Section 3.01
Company Material Contract ................................... Section 3.10
Company Meeting ............................................. Section 3.16
Company ..................................................... Section 3.02(b)
Company Rights .............................................. Section 3.02(b)
Company Rights Plan.......................................... Section 3.02(b)
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Company SEC Reports ......................................... Section 3.04(a)
Company Stock Plans ......................................... Section 3.02(a)
Company Voting Agreements.................................... Preamble
Company Voting Proposal ..................................... Section 6.05(a)
Confidentiality Agreement.................................... Section 5.04
Constituent Corporations..................................... Section 1.03
Exchange Ratio............................................... Section 2.01(c)
Effective Time............................................... Section 1.01
Environmental Law............................................ Section 3.12(c)
ERISA........................................................ Section 3.13(a)
ERISA Affiliate.............................................. Section 3.13(a)
Exchange Act................................................. Section 3.03(c)
Exchange Agent............................................... Section 2.02(a)
Exchange Fund................................................ Section 2.02(a)
Governmental Entity.......................................... Section 3.03(c)
Hazardous Substance.......................................... Section 3.12(c)
HSR Act...................................................... Section 3.03(c)
Indemnified Parties.......................................... Section 6.14(a)
IRS.......................................................... Section 3.07(b)
Joint Proxy Statement........................................ Section 3.16
Leases....................................................... Section 3.08
Merger....................................................... Preamble
Order........................................................ Section 6.06(b)
Outside Date................................................. Section 8.01(b)
Parent Balance Sheet......................................... Section 4.04(b)
Parent Common Stock.......................................... Section 2.01(b)
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Parent Disclosure Schedule................................... Article IV
Parent Employee Plans........................................ Section 4.13(a)
Parent Material Adverse Effect............................... Section 4.01
Parent Material Contracts.................................... Section 4.10
Parent Meeting............................................... Section 3.16
Parent SEC Reports........................................... Section 4.04(a)
Parent Stock Plans........................................... Section 4.02(a)
Parent Voting Proposal....................................... Section 6.05(b)
Registration Statement....................................... Section 3.16
Rule 145..................................................... Section 6.10
SEC.......................................................... Section 3.03(c)
Securities Act............................................... Section 3.03(c)
Stockholder Stock Option Agreement........................... Preamble
Subsidiary................................................... Section 3.01
Superior Proposal............................................ Section 6.01(a)
Surviving Corporation........................................ Section 1.03(a)
Tax.......................................................... Section 3.07(a)
Taxes........................................................ Section 3.07(a)
Third Party.................................................. Section 8.03(g)
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of October 14,
1999, by and among Millennium Pharmaceuticals, Inc., a Delaware corporation
("Parent"), ANM, Inc., a Delaware corporation and a direct, wholly-owned
subsidiary of Parent ("Sub"), and Leukosite, Inc., a Delaware corporation (the
"Company").
WHEREAS, the Boards of Directors of Parent and the Company deem it
advisable and in the best interests of each corporation and its respective
stockholders that Parent and the Company combine in order to advance the
long-term business interests of Parent and the Company;
WHEREAS, the combination of Parent and the Company shall be effected by
the terms of this Agreement through a merger of Sub into the Company, as a
result of which the stockholders of the Company will become stockholders of
Parent (the "Merger");
WHEREAS, concurrently with the execution of this Agreement, and as a
condition and inducement of the willingness of Parent to enter into this
Agreement, certain stockholders of the Company have executed Voting Agreements
in favor of Parent in the form attached hereto as Exhibit A (the "Stockholder
Voting Agreement"), pursuant to which such stockholders have agreed to vote and
to give Parent a proxy to vote all of the shares of capital stock of the Company
that such stockholders own; and
WHEREAS, for Federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth below, the
parties agree as follows:
ARTICLE I
THE MERGER
Section 1.01 Effective Time of the Merger. Subject to the provisions of
this Agreement, a certificate of merger in such form as is required by the
relevant provisions of the Delaware General Corporation Law ("DGCL") (the
"Certificate of Merger") shall be duly executed and acknowledged by the
Surviving Corporation (as defined in Section 1.03) and thereafter delivered to
the Secretary of State of the State of Delaware for filing, as soon as
practicable on the Closing Date (as defined in Section 1.02). The Merger shall
become effective upon the filing of the Certificate of Merger with the Secretary
of State of the State of Delaware or at such later time as is established by
Parent and the Company and set forth in the Certificate of Merger (the
"Effective Time").
Section 1.02 Closing. The closing of the Merger (the "Closing") will take
place at 10:00 a.m., Boston time, on a date to be specified by Parent and the
Company (the "Closing Date"), which shall be no later than the fifth business
day after satisfaction or waiver of the conditions set forth in Article VII
(other than delivery of items to be delivered at the Closing), at the offices of
Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, unless another date,
place or time is agreed to in writing by Parent and the Company.
Section 1.03 Effects of the Merger. At the Effective Time (i) the separate
existence of Sub shall cease and Sub shall be merged with and into the Company
(Sub and the Company are sometimes referred to below as the "Constituent
Corporations" and the Company following the Merger is sometimes referred to
below as the "Surviving Corporation"), and (ii) the Bylaws of Sub as in effect
immediately prior to the Effective Time shall be the Bylaws of the Surviving
Corporation. The Merger shall have the effects set forth in Section 259 of the
DGCL.
Section 1.04 Directors and Officers. The directors and officers of Sub
immediately prior to the Effective Time shall be the initial directors and
officers of the Surviving Corporation, each to hold office in accordance with
the Certificate of Incorporation and Bylaws of the Surviving Corporation.
ARTICLE II
CONVERSION OF SECURITIES
Section 2.01 Conversion of Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
shares of capital stock of the Company or capital stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of the capital
stock of Sub shall be converted into and become one fully paid and nonassessable
share of Common Stock of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. All shares of
common stock, $.01 par value per share, of the Company ("Company Common Stock")
that are owned by the Company as treasury stock or by any wholly-owned
Subsidiary (as defined in Section 3.01) of the Company and any shares of Company
Common Stock owned by Parent, Sub or any other wholly-owned Subsidiary of Parent
shall be cancelled and retired and shall cease to exist and no stock of Parent
or other consideration shall be delivered in exchange therefor. Any shares of
Common Stock, $.001 par value per share, of Parent ("Parent Common Stock") owned
by the Company shall be unaffected by the Merger.
(c) Exchange Ratio for Company Common Stock. Subject to Section 2.02, each
issued and outstanding share of Company Common Stock (other than shares to be
cancelled in
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accordance with Section 2.01(b)), shall be converted into the right to receive a
number of shares of Parent Common Stock as is equal to (x) one times (y) the
Exchange Ratio (as defined below). The "Exchange Ratio" shall be .4296. All such
shares of Company Common Stock, when so converted, shall no longer be
outstanding and shall automatically be cancelled and retired and shall cease to
exist, and each holder of a certificate representing any such shares or rights
shall cease to have any rights with respect thereto, except the right to receive
the shares of Parent Common Stock and any cash in lieu of fractional shares of
Parent Common Stock to be issued or paid in consideration therefor upon the
surrender of such certificate in accordance with Section 2.02, without interest.
(d) Adjustments to Exchange Ratio. The Exchange Ratio shall be adjusted to
reflect fully the effect of any stock split, reverse split, stock dividend
(including any dividend or distribution of securities convertible into Parent
Common Stock or Company Common Stock), reorganization, recapitalization or other
like change with respect to Parent Common Stock or Company Common Stock
occurring after the date hereof and prior to the Effective Time.
Section 2.02 Exchange of Certificates. The procedures for exchanging
outstanding shares of Company Common Stock for Parent Common Stock pursuant to
the Merger are as follows:
(a) Exchange Agent. As of the Effective Time, Parent shall deposit with a
bank or trust company designated by Parent (the "Exchange Agent"), for the
benefit of the holders of shares of Company Common Stock, for exchange in
accordance with this Section 2.02, through the Exchange Agent, certificates
representing the shares of Parent Common Stock issuable pursuant to Section 2.01
in exchange for outstanding shares of Company Common Stock and cash in an amount
sufficient to make payments required pursuant to Section 2.02(e) (such shares of
Parent Common Stock and such cash being hereinafter referred to as the "Exchange
Fund").
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, the Exchange Agent shall mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of Company Common Stock (the "Certificates")
whose shares were converted pursuant to Section 2.01 into the right to receive
shares of Parent Common Stock (i) a letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon delivery of the Certificates to the Exchange Agent and
shall be in such form and have such other provisions as Parent may reasonably
specify) and (ii) instructions for effecting the surrender of the Certificates
in exchange for certificates representing shares of Parent Common Stock (plus
cash in lieu of fractional shares, if any, of Parent Common Stock and any
dividends or distributions as provided below). Upon surrender of a Certificate
for cancellation to the Exchange Agent or to such other agent or agents as may
be appointed by Parent, together with such letter of transmittal, duly executed,
and such other documents as may reasonably be required by the Exchange Agent,
the holder of such Certificate shall be entitled to receive in exchange therefor
a certificate representing that number of whole shares of Parent Common
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Stock which such holder has the right to receive pursuant to the provisions of
this Article II plus cash in lieu of fractional shares pursuant to Section
2.02(e) and any dividends or distributions pursuant to Section 2.02(c), and the
Certificate so surrendered shall immediately be cancelled. In the event of a
transfer of ownership of Company Common Stock which is not registered in the
transfer records of the Company, a certificate representing the proper number of
shares of Parent Common Stock plus cash in lieu of fractional shares pursuant to
Section 2.02(e) and any dividends or distributions pursuant to Section 2.02(c)
may be issued or paid to a person other than the person in whose name the
Certificate so surrendered is registered, if the Certificate representing such
Company Common Stock is presented to the Exchange Agent, accompanied by all
documents required to evidence and effect such transfer and by evidence that any
applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 2.02, each Certificate shall be deemed at any time
after the Effective Time to represent only the right to receive upon such
surrender the certificate representing shares of Parent Common Stock plus cash
in lieu of fractional shares pursuant to Section 2.02(e) and any dividends or
distributions pursuant to Section 2.02(c) as contemplated by this Section 2.02.
(c) Distributions with Respect to Unexchanged Shares. No dividends or
other distributions declared or made after the Effective Time with respect to
Parent Common Stock with a record date after the Effective Time shall be paid to
the holder of any unsurrendered Certificate with respect to the shares of Parent
Common Stock represented thereby and no cash payment in lieu of fractional
shares shall be paid to any such holder pursuant to subsection (e) below until
the holder of record of such Certificate shall surrender such Certificate.
Subject to the effect of applicable laws, following surrender of any such
Certificate, there shall be paid to the record holder of the certificates
representing whole shares of Parent Common Stock issued in exchange therefor,
without interest, (i) at the time of such surrender, the amount of any cash
payable in lieu of a fractional share of Parent Common Stock to which such
holder is entitled pursuant to subsection (e) below and the amount of dividends
or other distributions with a record date after the Effective Time with respect
to such whole shares of Parent Common Stock with a payment date on or prior to
such time of surrender, and (ii) at the appropriate payment date, the amount of
dividends or other distributions with a record date after the Effective Time but
prior to surrender and a payment date subsequent to surrender payable with
respect to such whole shares of Parent Common Stock.
(d) No Further Ownership Rights in Company Common Stock. All shares of
Parent Common Stock issued upon the surrender for exchange of Certificates in
accordance with the terms hereof (together with any cash or other distributions
paid pursuant to subsection (e) of this Section 2.02) shall be deemed to have
been issued in full satisfaction of all rights pertaining to such shares of
Company Common Stock, and from and after the Effective Time there shall be no
further registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of Company Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation or the Exchange Agent
for any reason, they shall be cancelled and exchanged as provided in this
Article II.
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(e) No Fractional Shares. No certificate or scrip representing fractional
shares of Parent Common Stock shall be issued upon the surrender for exchange of
Certificates, and such fractional share interests will not entitle the owner
thereof to vote or to any other rights of a stockholder of Parent.
Notwithstanding any other provision of this Agreement, each holder of shares of
Company Common Stock exchanged pursuant to the Merger who would otherwise have
been entitled to receive a fraction of a share of Parent Common Stock (after
taking into account all Certificates delivered by such holder) shall receive, in
lieu thereof, cash (without interest) in an amount equal to such fractional part
of a share of Parent Common Stock multiplied by the average of the last reported
sales prices of Parent Common Stock, as reported on the Nasdaq National Market,
during the ten consecutive trading days ending on the last trading day prior to
the Closing Date.
(f) Termination of Exchange Fund. Any portion of the Exchange Fund which
remains undistributed to the stockholders of the Company for 180 days after the
Effective Time shall be delivered to Parent, upon demand, and any stockholders
of the Company who have not previously complied with this Section 2.02 shall
thereafter look only to Parent for payment of their claim for Parent Common
Stock, any cash in lieu of fractional shares of Parent Common Stock and any
dividends or distributions with respect to Parent Common Stock.
(g) No Liability. To the extent permitted by applicable law, neither
Parent nor the Company shall be liable to any holder of shares of Company Common
Stock or Parent Common Stock, as the case may be, for such shares (or dividends
or distributions with respect thereto) properly delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law. If any
Certificate shall not have been surrendered prior to two years after the
Effective Time (or immediately prior to such earlier date on which any shares of
Parent Common Stock, and any cash payable to the holder of such Certificate
pursuant to this Article II or any dividends or distributions payable to the
holder of such Certificate would otherwise escheat to or become the property of
any governmental body or authority), any such shares of Parent Common Stock or
cash, dividends or distributions in respect of such Certificate shall, to the
extent permitted by applicable law, become the property of the Surviving
Corporation, free and clear of all claims or interest of any person previously
entitled thereto.
(h) Withholding Rights. Each of Parent and the Surviving Corporation shall
be entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of shares of Company Common Stock such
amounts as it is required to deduct and withhold with respect to the making of
such payment under the Code, or any provision of state, local or foreign tax
law. To the extent that amounts are so withheld by the Surviving Corporation or
Parent, as the case may be, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the shares of
Company Common Stock in respect of which such deduction and withholding was made
by the Surviving Corporation or Parent, as the case may be.
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(i) Lost Certificates. If 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 and, if required by the
Surviving Corporation, the posting by such person of a bond in such reasonable
amount as the Surviving Corporation may direct as indemnity against any claim
that may be made against it with respect to such Certificate, the Exchange Agent
will issue in exchange for such lost, stolen or destroyed Certificate the shares
of Parent Common Stock and any cash in lieu of fractional shares, and unpaid
dividends and distributions on shares of Parent Common Stock deliverable in
respect thereof pursuant to this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub that the statements
contained in this Article III are true and correct, except as set forth herein
or in the disclosure schedule delivered by the Company to Parent on or before
the date of this Agreement (the "Company Disclosure Schedule"). The Company
Disclosure Schedule shall be arranged in sections corresponding to the numbered
and lettered sections contained in this Article III and the disclosure in any
section shall qualify other sections in this Article III only to the extent that
it is reasonably apparent from a reading of such disclosure that it also
qualifies or applies to such other sections.
Section 3.01 Organization of the Company. Each of the Company and its
Subsidiaries (as defined below), other than L&I Partners, L.P., a Delaware
limited partnership ("L&I Partners"), is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, has all requisite corporate power to own, lease and operate its
properties and assets and to carry on its business as now being conducted and as
proposed to be conducted, and is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the failure to
be so qualified, individually or in the aggregate, would be reasonably likely to
have a material adverse effect on the business, properties, financial condition,
results of operations or prospects of the Company and its Subsidiaries, taken as
a whole or to have a material adverse effect on the ability of the Company to
consummate the transactions contemplated by this Agreement (a "Company Material
Adverse Effect"); provided, however, that for purposes of this Agreement, any
adverse change in the stock price of the Company in and of itself, as quoted on
the Nasdaq National Market, shall not be taken into account in determining
whether there has been or would be a "Company Material Adverse Effect" on or
with respect to the Company and its Subsidiaries, taken as a whole. L&I Partners
is a limited partnership duly organized, validly existing and in good standing
under the laws of the State of Delaware, has all requisite partnership power to
own, lease and operate its properties and assets and to carry on its business as
now being conducted and as proposed to be conducted, and is duly qualified to do
business and is in good standing as a foreign limited partnership in each
jurisdiction in which the failure to be so qualified, individually or in the
aggregate, would be reasonably likely to have a Company Material Adverse Effect.
Except as set
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forth in the Company SEC Reports (as defined in Section 3.04) filed prior to the
date hereof, neither the Company nor any of its Subsidiaries directly or
indirectly owns any equity or similar interest in, or any interest convertible
into or exchangeable or exercisable for, any corporation, partnership, joint
venture or other business association or entity, excluding securities in any
publicly traded company held for investment by the Company and comprising less
than five percent (5%) of the outstanding stock of such company. As used in this
Agreement, the word "Subsidiary" means, with respect to a party, any corporation
or other organization, whether incorporated or unincorporated, of which (i) such
party or any other Subsidiary of such party is a general partner or a managing
member (excluding partnerships, the general partnership interests of which held
by such party or any Subsidiary of such party do not have a majority of the
voting interest in such partnership) or (ii) at least a majority of the
securities or other interests having by their terms ordinary voting power to
elect a majority of the Board of Directors or others performing similar
functions with respect to such corporation or other organization is directly or
indirectly owned or controlled by such party or by any one or more of its
Subsidiaries, or by such party and one or more of its Subsidiaries. Without
limiting or modifying the foregoing, and notwithstanding the foregoing
definition, L&I Partners shall also be deemed to be a Subsidiary of the Company.
Section 3.02 The Company Capital Structure.
(a) The authorized capital stock of the Company consists of 25,000,000
shares of Company Common Stock and 5,000,000 shares of Preferred Stock ("Company
Preferred Stock"). As of the date of this Agreement, (i) 14,671,189 shares of
Company Common Stock are issued and outstanding, all of which are validly
issued, fully paid and nonassessable, (ii) no shares of Company Common Stock
were held in the treasury of the Company or by Subsidiaries of the Company, and
(iii) no shares of Company Preferred Stock were issued and outstanding. The
Company Disclosure Schedule shows the number of shares of Company Common Stock
reserved for future issuance pursuant to stock options granted and outstanding
as of the date of this Agreement, and the plans under which such options were
granted (collectively, the "Company Stock Plans") and sets forth a complete and
accurate list of all holders of options outstanding as of the date of this
Agreement to purchase shares of Company Common Stock (such outstanding options,
the "Company Stock Options") under the Company Stock Plans, indicating the
number of shares of Company Common Stock subject to each Company Stock Option,
and the exercise price, the date of grant and the expiration date thereof. The
Company Disclosure Schedule shows the number of shares of Company Common Stock
reserved for future issuance pursuant to warrants or other outstanding rights to
purchase shares of Company Common Stock outstanding as of the date of this
Agreement (such outstanding warrants or other rights, the "Company Warrants")
and the agreement or other document under which such Company Warrants were
granted and sets forth a complete and accurate list of all holders of Company
Warrants indicating the number and type of shares of Company Common Stock
subject to each Company Warrant, and the exercise price, the date of grant and
the expiration date thereof. All shares of Company Common Stock are, and all
shares of Company Common Stock subject to issuance as specified above are, duly
authorized and, upon issuance on the terms
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and conditions specified in the instruments pursuant to which they are issuable,
shall be, validly issued, fully paid and nonassessable and not subject to or
issued in violation of any purchase option, call option, right of first refusal,
preemptive right, subscription right or any similar right under any provision of
the DGCL, the Company's Certificate of Incorporation or By-Laws or any agreement
to which the Company is a party or is otherwise bound. There are no obligations,
contingent or otherwise, of the Company or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any shares of Company Common Stock or
any other capital stock of the Company or any Subsidiary or to provide funds to
or make any investment (in the form of a loan, capital contribution or
otherwise) in any such Subsidiary or any other entity. All of the outstanding
shares of capital stock or other equity interests of each of the Company's
Subsidiaries are duly authorized, validly issued, fully paid and nonassessable
and all such shares and other equity interests in any Subsidiary are owned by
the Company or another Subsidiary of the Company free and clear of all security
interests, liens, claims, pledges, agreements, limitations in the Company's
voting rights, charges or other encumbrances of any nature.
(b) Except for the Company Stock Plans, the Company Warrants and shares of
capital stock and other securities of the Company issuable pursuant to the
foregoing, (i) there are no equity securities of any class of the Company or any
of its Subsidiaries, or any security exchangeable into or exercisable for such
equity securities, issued, reserved for issuance or outstanding, and (ii) there
are no options, warrants, equity securities, calls, rights, commitments or
agreements of any character to which the Company or any of its Subsidiaries is a
party or by which it or any of its Subsidiaries is bound obligating the Company
or any of its Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock of or other equity
interests in the Company or any of its Subsidiaries or obligating the Company or
any of its Subsidiaries to grant, extend, accelerate the vesting of, otherwise
modify or amend or enter into any such option, warrant, equity security, call,
right, commitment or agreement. To the best knowledge of the Company, other than
the Stockholder Voting Agreements, there are no voting trusts, proxies or other
voting agreements or understandings with respect to the shares of capital stock
of or other equity interests in the Company or any of its Subsidiaries. Without
limiting the foregoing, all rights, contingent or otherwise, of any person to
purchase the Company's direct and indirect interests in L & I Partners L.P. have
been terminated.
Section 3.03 Authority; No Conflict; Required Filings and Consents.
(a) The Company has all requisite corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement and the consummation of
the transactions contemplated by this Agreement by the Company have been duly
authorized by all necessary corporate action on the part of the Company, subject
only to the approval of the Merger by the Company's stockholders under the DGCL.
This Agreement has been duly executed and delivered by the Company and
constitutes the valid and binding obligations of the Company, enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and
-8-
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles (the "Bankruptcy and Equity Exception").
(b) The execution and delivery of this Agreement by the Company does not,
and the consummation of the transactions contemplated by this Agreement will
not, (i) conflict with, or result in any violation or breach of, any provision
of the Certificate of Incorporation or Bylaws of the Company, or the charter,
by-laws, or other organizational document of any Subsidiary of the Company, (ii)
result in any violation or breach of, or constitute (with or without notice or
lapse of time, or both) a default (or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of any material benefit)
under, or require a consent or waiver under, or constitute a change in control
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, license, contract or other agreement, instrument or obligation
to which the Company or any of its Subsidiaries is a party or by which any of
them or any of their properties or assets may be bound, or (iii) conflict with
or violate any permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to the Company or any of
its Subsidiaries or any of its or their properties or assets, except in the case
of (ii) and (iii) for any such conflicts, violations, defaults, terminations,
cancellations or accelerations which are not, individually or in the aggregate,
reasonably likely to have a Company Material Adverse Effect.
(c) No consent, approval, license, permit, order or authorization of, or
registration, declaration or filing with, any court, administrative agency or
commission or other governmental authority or instrumentality, foreign or
domestic ("Governmental Entity") is required by or with respect to the Company
or any of its Subsidiaries in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby, except
for (i) the filing of a pre-merger notification report under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, ("HSR Act"),
(ii) the filing of the Certificate of Merger with the Delaware Secretary of
State, (iii) the filing of the Joint Proxy Statement (as defined in Section 3.18
below) with the Securities and Exchange Commission (the "SEC") in accordance
with the Securities Exchange Act of 1934, as amended (the "Exchange Act"), (iv)
such consents, approvals, orders, authorizations, registrations, declarations
and filings as may be required under applicable state securities laws and (v)
such other consents, licenses, permits, orders, authorizations, filings,
approvals and registrations which, if not obtained or made, would not be
reasonably likely, individually or in the aggregate, to have a Company Material
Adverse Effect. The Company stockholder vote required for the approval of the
Company Voting Proposal (as defined below) is the affirmative vote of a majority
of the outstanding shares of Company Common Stock on the record date for the
Company Meeting (as defined below).
Section 3.04 SEC Filings; Financial Statements.
(a) The Company has filed and made available to Parent all forms, reports
and documents required to be filed by the Company with the SEC since June 27,
1997 (collectively, the "Company SEC Reports"). The Company SEC Reports (i) at
the time filed, complied in all
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material respects with the applicable requirements of the Securities Act of
1933, as amended (the "Securities Act"), and the Exchange Act, as the case may
be, and (ii) did not at the time they were filed contain any untrue statement of
a material fact or omit to state a material fact required to be stated in such
Company SEC Reports or necessary in order to make the statements in such Company
SEC Reports, in the light of the circumstances under which they were made, not
misleading. None of the Company's Subsidiaries is required to file any forms,
reports or other documents with the SEC. Each of the Company SEC Reports was
filed on a timely basis.
(b) Each of the consolidated financial statements (including, in each
case, any related notes and schedules) contained or to be contained in the
Company SEC Reports (i) complied or will comply as to form in all material
respects with the applicable published rules and regulations of the SEC with
respect thereto, (ii) were or will be prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes to such financial
statements or, in the case of unaudited statements, as permitted by Form 10-Q of
the SEC) and (iii) fairly presented or will fairly present the consolidated
financial position of the Company and its Subsidiaries as of the dates and the
consolidated results of its operations and cash flows for the periods indicated,
consistent with the books and records of the Company and its Subsidiaries,
except that the unaudited interim financial statements were or are subject to
normal and recurring year-end adjustments which were not or are not expected to
be material in amount. The unaudited balance sheet of the Company as of June 30,
1999 is referred to herein as the "Company Balance Sheet."
Section 3.05 No Undisclosed Liabilities. Except as disclosed in the
Company SEC Reports filed prior to the date hereof, and except for normal or
recurring liabilities incurred since the date of the Company Balance Sheet in
the ordinary course of business and consistent with past practices, the Company
and its Subsidiaries do not have any liabilities, either accrued, contingent or
otherwise (whether or not required to be reflected in financial statements in
accordance with generally accepted accounting principles), and whether due or to
become due, which individually or in the aggregate are reasonably likely to have
a Company Material Adverse Effect.
Section 3.06 Absence of Certain Changes or Events. Except as disclosed in
the Company SEC Reports filed prior to the date hereof, since the date of the
Company Balance Sheet, the Company and its Subsidiaries have conducted their
businesses only in the ordinary course and in a manner consistent with past
practice and, since such date, there has not been (i) any event, change or
development in the financial condition, results of operations, business,
properties or prospects of the Company and its Subsidiaries, taken as a whole
that individually or in the aggregate has had, or is reasonably likely to have,
a Company Material Adverse Effect; (ii) any damage, destruction or loss (whether
or not covered by insurance) with respect to the Company or any of its
Subsidiaries having a Company Material Adverse Effect; (iii) any material change
by the Company in its accounting methods not required pursuant to generally
accepted accounting principles, principles or practices to which Parent has not
previously consented in writing; (iv) any revaluation by the Company of any of
its assets having a Company Material
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Adverse Effect; or (v) any other action or event that would have required the
consent of Parent pursuant to Section 5.01 of this Agreement had such action or
event occurred after the date of this Agreement.
Section 3.07 Taxes.
(a) For the purposes of this Agreement, a "Tax" or, collectively, "Taxes,"
means any and all material federal, state, local and foreign taxes, assessments
and other governmental charges, duties, impositions and liabilities, including
taxes based upon or measured by gross receipts, income, profits, sales, use and
occupation, and value added, ad valorem, transfer, gains, franchise,
withholding, payroll, recapture, employment, excise, unemployment insurance,
social security, business license, occupation, business organization, stamp,
environmental and property taxes, together with all interest, penalties and
additions imposed with respect to such amounts and any obligations under any
agreements or arrangements with any other person with respect to such amounts
and including any liability for taxes of a predecessor entity.
(b) The Company and each of its Subsidiaries have (i) filed all federal,
state, local and foreign tax returns and reports required to be filed by them
prior to the date of this Agreement (taking into account extensions) and all
such returns were complete and accurate in all respects, (ii) paid or accrued
all Taxes due and payable, whether or not so reflected on such returns or
reports, and (iii) paid or accrued all Taxes for which a notice of assessment or
collection has been received (other than amounts being contested in good faith
by appropriate proceedings), except in the case of clause (i), (ii) or (iii) for
any such filings, inaccuracies, payments or accruals which are not reasonably
likely, individually or in the aggregate, to have a Company Material Adverse
Effect. Unpaid Taxes for periods prior to the date hereof do not materially
exceed accruals and reserves for Taxes (exclusive of any accruals and reserves
for Taxes established to reflect timing differences between book and Tax income)
as set forth on the Company Balance Sheet. Neither the Internal Revenue Service
(the "IRS") nor any other taxing authority has asserted any claim for Taxes, or
to the actual knowledge of the chief executive officer or the chief financial
officer of the Company, is threatening to assert any claims for Taxes, which
claims, individually or in the aggregate, are reasonably likely to have a
Company Material Adverse Effect. The Company and each of its Subsidiaries have
withheld or collected and paid over to the appropriate governmental authorities
(or are properly holding for such payment) all Taxes required by law to be
withheld or collected, except for amounts which are not reasonably likely,
individually or in the aggregate, to have a Company Material Adverse Effect.
There are no liens for Taxes upon the assets of the Company or any of its
Subsidiaries (other than liens for Taxes that are not yet due or that are being
contested in good faith by appropriate proceedings), except for liens which are
not reasonably likely, individually or in the aggregate, to have a Company
Material Adverse Effect.
(c) Neither the Company nor any Subsidiary has any actual or potential
liability for any Taxes of any person (other than the Company and its
Subsidiaries) under Treasury
-11-
Regulation Section 1.1502-6 (or any similar provision of federal, state, local
or foreign law, or as a transferee or successor, by contract, or otherwise.
(d) Neither the Company nor any of its Subsidiaries is a "consenting
corporation" within the meaning of Section 341(f) of the Code, and none of the
assets of the Company or the Subsidiaries are subject to an election under
Section 341(f) of the Code.
(e) Neither the Company nor any of its Subsidiaries has been a United
States real property holding corporation within the meaning of Section 897(c)(2)
of the Code during the applicable period specified in Section 897(c)(1)(A)(ii)
of the Code.
(f) Neither the Company nor any of its Subsidiaries has made any payments,
is obligated to make any payments, or is a party to any agreement that could
obligate it to make any payments that will be an "excess parachute payment"
under Section 280G of the Code.
Section 3.08 Properties. The Company Disclosure Schedule sets forth a true
and complete list of all real property leased by the Company or its Subsidiaries
(collectively "Lease(s)") and the location of the premises. The Company is not
in default under any of such leases, except where the existence of such
defaults, individually or in the aggregate, is not reasonably likely to have a
Company Material Adverse Effect. The Company does not own and has never owned
any real property.
Section 3.09 Intellectual Property.
(a) The Company Disclosure Schedule sets forth a true and complete list of
each of the following items: (1) all patents and applications therefor,
including any patent term extensions or supplementary protection certificates,
registrations of trademarks (including service marks) and applications therefor,
domain names and registrations of copyrights and applications therefor that are
owned by the Company or any of its Subsidiaries or that are licensed or
sublicensed to the Company or any of its Subsidiaries, (2) all licenses,
agreements and contracts relating to Intellectual Property Rights (as defined
below) pursuant to which the Company or any of its Subsidiaries are entitled to
use any Intellectual Property Rights owned by any third party (the "Third Party
Licenses"), other than commercially available, mass marketed shrink-wrap
software, and (3) all agreements under which the Company or any of its
Subsidiaries has granted any third party the right to use any Intellectual
Property Rights.
(b) The Company and its Subsidiaries exclusively own, or are licensed,
sublicensed or otherwise possess legally enforceable rights to use, pursuant to
the licenses, agreements and contracts listed in Section 3.09(a)(2) of the
Company Disclosure Schedule, all Intellectual Property Rights that are used or
necessary to conduct the business of the Company and its Subsidiaries as
currently conducted, or would be used or necessary as such business is planned
to be conducted, and material, individually or in the aggregate, to the Company
and its Subsidiaries, taken as a whole, including without limitation all
Intellectual Property Rights used or necessary
-12-
to conduct the clinical programs for Xxxxxxx, XXX00, XXX00, XXX000, LDP341 and
LDP519 (each of which (the "Ongoing Clinical Programs") is deemed to be material
to the Company and its Subsidiaries taken as a whole) and all Intellectual
Property Rights that are now used or planned to be used or are necessary to
make, use or sell Xxxxxxx, XXX00, XXX00, XXX000, LDP341 and LDP519 after those
products are approved for marketing and sale by the appropriate health
regulatory authorities (the "Company Intellectual Property Rights"). For
purposes hereof, "Intellectual Property Rights" means all patents, including
patent term extensions and supplementary protection certificates, trademarks,
trade names, domain names, service marks and copyrights, any applications for
and registrations of such patents, trademarks, trade names, domain names,
service marks and copyrights, and all processes, formulae, methods, schematics,
technology, know-how, computer software programs or applications and tangible or
intangible proprietary information or material.
(c) The execution and delivery of this Agreement and consummation of the
Merger will not result in the breach of, or create on behalf of any third party
the right to terminate or modify, any license, sublicense or other agreement
relating to the Company Intellectual Property Rights, including any Third Party
License.
(d) All patents, including all patent term extensions and supplementary
protection certificates, registered trademarks, service marks and copyrights
under which the Company or any of its Subsidiaries holds any rights and which
are material to the business of the Company and its Subsidiaries, taken as a
whole, are valid and subsisting, and all applications for such patents,
trademarks, service marks and copyrights are subsisting and were filed in good
faith. The Company and its Subsidiaries have taken reasonable measures to
protect the proprietary nature of the Company Intellectual Property Rights that
are material to the business of the Company and its Subsidiaries, taken as a
whole, and to maintain in confidence all trade secrets and confidential
information owned or used by the Company or any of its Subsidiaries and that are
material to the business of the Company and its Subsidiaries, taken as a whole.
To the knowledge of the Company, no other person or entity is infringing,
violating or misappropriating any of the Company Intellectual Property Rights.
(e) None of the activities or business previously or currently conducted
by the Company or any of the Subsidiaries or planned to be conducted by the
Company or any of the Subsidiaries (including the manufacture, use and sale of
the future products which are the subject of Ongoing Clinical Programs for any
clinical indications) infringes, violates or constitutes a misappropriation of,
any Intellectual Property Rights of any other person or entity. Neither the
Company nor any of its Subsidiaries have received any complaint, claim or notice
alleging any such infringement, violation or misappropriation, present or
future.
(f) Neither the Company nor any of its Subsidiaries is a party to any
agreement under which, following the Closing, a third party would be entitled to
receive a license or any other right in or to Intellectual Property Rights of
Parent or any of Parent's Affiliates (other than the Company and its
Subsidiaries) or which, following the Closing, would restrict or limit the
-13-
business or operations of Parent or any of its Affiliates (other than the
Company and its Subsidiaries).
Section 3.10 Preclinical Testing and Clinical Trials. The human clinical
trials, animal studies and other preclinical tests conducted by the Company or
any of its Subsidiaries or in which the Company or any of its Subsidiaries has
participated, and such studies and tests conducted on behalf of the Company or
any of its Subsidiaries, were and, if still pending, are being conducted in all
material respects in accordance with experimental protocols, informed consents,
procedures and controls generally used by qualified experts in the preclinical
or clinical study of products comparable to those being developed by the Company
or any of its Subsidiaries. None of the Company, its Subsidiaries or any agent
or representative of the Company or any of its Subsidiaries has received any
notices or correspondence from the FDA or any other governmental agency
requiring the termination, suspension or modification (other than such
modifications as are normal in the regulatory process) of any animal studies,
preclinical tests or clinical trials conducted by or on behalf of the Company or
any of its Subsidiaries or in which the Company or any of its Subsidiaries has
participated. To the Company's knowledge, no clinical investigator acting for
the Company has been or is now, or is threatened to become, the subject of any
disbarment or disqualification proceedings by any regulatory agency.
Section 3.11 Agreements, Contracts and Commitments.
(a) There are no contracts or agreements that are material contracts (as
defined in Item 601(b)(10) of Regulation S-K) with respect to the Company and
its Subsidiaries ("Company Material Contracts") other than those Company
Material Contracts identified on the exhibit index of the Company's 10-K for the
year ended December 31, 1998 or the exhibit index of Forms 10-Q or 8-K filed by
the Company subsequent to April 5, 1999 and prior to October 12, 1999. No
Company Material Contract has expired by its terms and each Company Material
Contract is in full force and effect. Neither the Company nor any of its
Subsidiaries is in violation of or in default under (nor does there exist any
condition which, upon the passage of time or the giving of notice or both, would
cause such a violation of or default under) any lease, permit, concession,
franchise, license or other contract or agreement to which it is a party or by
which it or any of its properties or assets is bound, except for violations or
defaults that, individually or in the aggregate, have not resulted in and are
not reasonably likely to result in a Company Material Adverse Effect.
(b) The Company Disclosure Schedule sets forth a complete list of each
contract or agreement to which the Company or any Subsidiary is a party or bound
(i) with any Affiliate of the Company (other than any Subsidiary which is a
direct or indirect wholly owned subsidiary of the Company), other than any
agreements (A) which are or have been fully performed and under which neither
the Company nor any Subsidiary has any continuing right, liability or
obligation, (B) that are otherwise disclosed on the Company Disclosure Schedule
and marked with a footnote indicating that it is a contract or agreement with an
Affiliate of the Company or (C) Stockholder Voting Agreements, or (ii) that
includes any non-competition or similar provision imposing any restrictions or
undertakings on the Company or any Subsidiary of the Company.
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To the Company's knowledge, none of the contracts or agreements referred to in
the foregoing clause (ii) would preclude Parent or any of its Affiliates from
engaging in any current activities of Parent or such Affiliates or any planned
activities of Parent or such Affiliates that Parent has disclosed to the
Company. Copies of all the agreements, contract and arrangements set forth in
the Company Disclosure Schedule (which shall include all contracts with
PaineWebber Incorporated and its affiliates) have heretofore been made available
to Parent and such copies are accurate and complete.
(c) The Company has not borrowed any funds pursuant to its Loan Agreement
with Genentech, Inc., dated December 18, 1997. The Limited Partners of L&I
Partners have each contributed the same amount to the capital thereof and have
not agreed to make contributions to the capital thereof in excess of $10,000,000
in the aggregate.
Section 3.12 Litigation. Except as described in the Company SEC Reports
filed prior to the date hereof, there is no action, suit or proceeding, claim,
arbitration or investigation against the Company or any of its Subsidiaries
pending or as to which the Company or any of its Subsidiaries has received any
written notice of assertion, which, individually or in the aggregate, is
reasonably likely to have a Company Material Adverse Effect.
Section 3.13 Environmental Matters.
(a) Except as disclosed in the Company SEC Reports filed prior to the date
hereof and except for such matters that, individually or in the aggregate, are
not reasonably likely to have a Company Material Adverse Effect: (i) the Company
and its Subsidiaries have complied with all applicable Environmental Laws (as
defined in Section 3.13(b)); (ii) the properties currently owned or operated by
the Company and its Subsidiaries (including soils, groundwater, surface water,
buildings or other structures) are not contaminated with any Hazardous
Substances (as defined in Section 3.13(c)); (iii) the properties formerly owned
or operated by the Company or any of its Subsidiaries were not contaminated with
Hazardous Substances during the period of ownership or operation by the Company
or any of its Subsidiaries; (iv) neither the Company nor its Subsidiaries are
subject to liability for any Hazardous Substance disposal or contamination on
the property of any third party; (v) neither the Company nor any of its
Subsidiaries have released any Hazardous Substance; (vi) neither the Company nor
any of its Subsidiaries has received any notice, demand, letter, claim or
request for information alleging that the Company or any of its Subsidiaries may
be in violation of, liable under or have obligations under any Environmental
Law; (vii) neither the Company nor any of its Subsidiaries is subject to any
orders, decrees, injunctions or other arrangements with any Governmental Entity
or is subject to any indemnity or other agreement with any third party relating
to liability under any Environmental Law or relating to Hazardous Substances;
and (viii) there are no circumstances or conditions involving the Company or any
of its Subsidiaries that could reasonably be expected to result in any claims,
liability, obligations, investigations, costs or restrictions on the ownership,
use or transfer of any property of the Company or any of its Subsidiaries
pursuant to any Environmental Law.
-15-
(b) As used herein, the term "Environmental Law" means any federal, state,
local or foreign law, regulation, order, decree, permit, authorization, opinion,
common law or agency requirement relating to: (A) the protection, investigation
or restoration of the environment, health and safety, or natural resources, (B)
the handling, use, presence, disposal, release or threatened release of any
Hazardous Substance or (C) noise, odor, wetlands, pollution, contamination or
any injury or threat of injury to persons or property.
(c) As used herein, the term "Hazardous Substance" means any substance
that is: (A) listed, classified, regulated or which falls within the definition
of a "hazardous substance" or "hazardous material" pursuant to any Environmental
Law; (B) any petroleum product or by-product, asbestos-containing material,
lead- containing paint or plumbing, polychlorinated biphenyls, radioactive
materials or radon; or (C) any other substance which is the subject of
regulatory action by any Governmental Entity pursuant to any Environmental Law.
Section 3.14 Employee Benefit Plans.
(a) The Company has listed in Section 3.14 of the Company Disclosure
Schedule all employee benefit plans (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) and all bonus,
stock option, stock purchase, incentive, deferred compensation, supplemental
retirement, severance and other similar employee benefit plans, and all
unexpired severance agreements, written or otherwise, for the benefit of, or
relating to, any current or former employee of the Company or any of its
Subsidiaries or any trade or business (whether or not incorporated) which is or
was ever a member of a controlled group of corporations or which is or was ever
under common control with the Company (an "ERISA Affiliate") within the meaning
of Section 414 of the Code, or any Subsidiary of the Company (together, the
"Company Employee Plans").
(b) With respect to each Company Employee Plan, the Company has furnished
or made available to Parent, a true and correct copy of (i) the most recent
annual report (Form 5500) filed with the IRS, (ii) such Company Employee Plan,
(iii) each trust agreement and group annuity contract, if any, relating to such
Company Employee Plan and (iv) all reports regarding the satisfaction of the
nondiscrimination requirements of Sections 410(b), 401(k) and 401(m) of the
Code.
(c) With respect to the Company Employee Plans, no event has occurred, and
to the knowledge of the Company, there exists no condition or set of
circumstances in connection with which the Company, or any of its Subsidiaries
or any ERISA Affiliate, could be subject to any liability that is reasonably
likely, individually or in the aggregate to have a Company Material Adverse
Effect under ERISA, the Code or any other applicable law.
(d) With respect to the Company Employee Plans, there are no funded
benefit obligations for which contributions have not been made or properly
accrued and there are no unfunded benefit obligations which have not been
accounted for by reserves, or otherwise properly footnoted in accordance with
generally accepted accounting principles, on the financial
-16-
statements of the Company, which obligations are reasonably likely, individually
or in the aggregate, to have a Company Material Adverse Effect.
(e) Neither the Company, any Subsidiary of the Company nor any ERISA
Affiliate has (i) ever maintained a Company Employee Benefit Plan which was ever
subject to Title IV of ERISA or Section 412 of the Code or (ii) ever been
obligated to contribute to a multiemployer plan (as defined in Section
4001(a)(3) of ERISA).
(f) Except as disclosed in Company SEC Reports filed prior to the date of
this Agreement, and except as provided for in this Agreement, neither the
Company nor any of its Subsidiaries is a party to any oral or written (i)
agreement with any officer or other key employee of the Company or any of its
Subsidiaries, the benefits of which are contingent, or the terms of which are
materially altered, upon the occurrence of a transaction involving the Company
of the nature contemplated by this Agreement, (ii) agreement with any employee
of the Company or any of its Subsidiaries providing any term of employment or
compensation guarantee extending for a period longer than one year from the date
hereof and for the payment of compensation in excess of $100,000 per annum, or
(iii) agreement or plan, including any stock option plan, stock appreciation
right plan, restricted stock plan or stock purchase plan, any of the benefits of
which will be increased, or the vesting of the benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by this Agreement.
(g) Each Company Employee Plan intended to be qualified under Section
401(a) of the Code has either obtained from the IRS a favorable determination
letter as to its qualified status under the Code, including all amendments to
the Code effected by the Tax Reform Act of 1986 and subsequent legislation, or
has applied (or has time remaining in which to apply) to the IRS for such a
determination letter prior to the expiration of the requisite period under
applicable Treasury Regulations or IRS pronouncements in which to apply for such
determination letter and to make any amendments necessary to obtain a favorable
determination or has been established under a standardized prototype plan for
which an IRS opinion letter has been obtained by the plan sponsor and is valid
as to the adopting employer. The Company has furnished to Parent a copy of the
most recent IRS determination or opinion with respect to each such Company
Employee Plan and nothing has occurred since the inception of each such Company
Employee Plan which could reasonably be expected to cause the loss of the
tax-qualified status of any Company Employee Plan subject to Section 401(a) of
the Code.
(h) None of the Company Employee Plans promises or provides retiree
medical or other retiree welfare benefits to any person, except as required by
applicable law.
Section 3.15 Compliance With Laws. The Company and each of its
Subsidiaries has complied with, is not in violation of, and has not received any
notice alleging any violation with respect to, any foreign, federal, state or
local statute, law or regulation with respect to the conduct of its business, or
the ownership or operation of its properties or assets, except for failures to
-17-
comply or violations which, individually or in the aggregate, have not had and
are not reasonably likely to have a Company Material Adverse Effect.
Section 3.16 Certain Regulatory Matters.
(a) Section 3.16 of the Company Disclosure Schedule sets forth a complete
and accurate list of any written communications between the Company or any of
its Subsidiaries, on the one hand, and the FDA or any other governmental entity
on the other hand that describe matters that could have a material adverse
effect on the Company's currently projected sales or revenues attributable to
any contemplated compound, product or product line of the Company or its
Subsidiaries. The Company has made available to Parent copies of all such
documents, as well as copies of all complaints and other information required to
be maintained by the Company pursuant to the United States Federal Food, Drug
and Cosmetic Act and Comprehensive Drug Abuse Prevention and Control Act of 1970
and the corresponding laws of jurisdictions other than the United States.
(b) The Company and its Subsidiaries have filed with the FDA and all
applicable state and local regulatory bodies for and received approval of all
registrations, applications, licenses, requests for exemptions, permits and
other regulatory authorizations necessary to conduct the business of the Company
and its Subsidiaries as currently conducted, the absence of which would,
individually or in the aggregate, be reasonably likely to have a Company
Material Adverse Effect. The Company and its Subsidiaries and, to the Company's
knowledge any third party which is a manufacturer for the Company or its
Subsidiaries, are in compliance in all material respects with all such
registrations, applications, licenses, requests for exemptions, permits and
other regulatory authorizations. The Company is in compliance in all material
respect with all material FDA, state and local rules, regulations, guidelines
and policies, including, but not limited to, material FDA, state and local
rules, regulations and policies relating to good manufacturing practice ("GMP")
and good laboratory practice ("GLP"); and the Company has no reason to believe
that any party granting any such registration, application, license, request for
exemption, permit or other authorization is considering limiting, suspending or
revoking the same and knows of no basis for any such limitation, suspension or
revocation.
Section 3.17 Tax Matters. To its knowledge, after consulting with its
independent auditors, neither the Company nor any of its Affiliates (as defined
in Section 6.10) has taken or agreed to take any action which would prevent the
Merger from constituting a transaction qualifying as a reorganization under
368(a) of the Code.
Section 3.18 Registration Statement; Proxy Statement/Prospectus. The
information to be supplied by the Company for inclusion in the registration
statement on Form S-4 pursuant to which shares of Parent Common Stock issued in
the Merger will be registered under the Securities Act (the "Registration
Statement"), shall not at the time the Registration Statement is declared
effective by the SEC contain any untrue statement of a material fact or omit to
state any material fact required to be stated in the Registration Statement or
necessary in order to make the statements in the Registration Statement not
misleading. The information to be supplied by the
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Company for inclusion in the joint proxy statement/prospectus to be sent to the
stockholders of Parent and the Company in connection with the meeting of the
Company's stockholders to consider this Agreement and the Merger (the "Company
Meeting") and in connection with the meeting of Parent's stockholders (the
"Parent Meeting") to consider the issuance of shares of Parent Common Stock
pursuant to the Merger (the "Joint Proxy Statement") shall not, on the date the
Joint Proxy Statement is first mailed to stockholders of the Company or Parent,
at the time of the Company Stockholders' Meeting and the Parent Stockholders'
Meeting and at the Effective Time, contain any statement which, at such time and
in light of the circumstances under which it shall be made, is false or
misleading with respect to any material fact, or omit to state any material fact
necessary in order to make the statements made in the Joint Proxy Statement not
false or misleading; or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of
proxies for the Company Meeting or the Parent Meeting which has become false or
misleading. If at any time prior to the Effective Time any event relating to the
Company or any of its Affiliates, officers or directors should be discovered by
the Company which should be set forth in an amendment to the Registration
Statement or a supplement to the Joint Proxy Statement, the Company shall
promptly inform Parent.
Section 3.19 Labor Matters. Neither the Company nor any of its
Subsidiaries is a party to or otherwise bound by any collective bargaining
agreement, contract or other agreement or understanding with a labor union or
labor organization. Neither the Company nor any of its Subsidiaries is the
subject of any proceeding asserting that the Company or any of its Subsidiaries
has committed an unfair labor practice or is seeking to compel it to bargain
with any labor union or labor organization or that, individually or in the
aggregate, is reasonably likely to have a Company Material Adverse Effect, nor
is there pending or, to the knowledge of the Company, threatened, any labor
strike, dispute, walkout, work stoppage, slow-down or lockout involving the
Company or any of its Subsidiaries that, individually or in the aggregate, is
reasonably likely to have a Company Material Adverse Effect.
Section 3.20 Insurance. All fire and casualty, general liability, business
interruption, product liability, clinical trial and sprinkler and water damage
insurance policies maintained by the Company or any of its Subsidiaries are with
reputable insurance carriers, provide full and adequate coverage for all normal
risks incident to the business of the Company and its Subsidiaries and their
respective properties and assets, and are in character and amount at least
equivalent to that carried by persons engaged in similar businesses and subject
to the same or similar perils or hazards, except for any such failures to
maintain insurance policies that, individually or in the aggregate, are not
reasonably likely to have a Company Material Adverse Effect. The Company
Disclosure Schedule sets forth the insurance coverages maintained by the Company
and a history of any claims paid.
Section 3.21 No Existing Discussions. As of the date hereof, neither the
Company nor any of its Subsidiaries is engaged, directly or indirectly, in any
discussions or negotiations with any other party with respect to an Acquisition
Proposal (as defined in Section 6.01).
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Section 3.22 Opinion of Financial Advisor. The financial advisor of the
Company, PaineWebber Incorporated, has delivered to the Company an opinion dated
on or about the date of this Agreement to the effect, as of such date, that the
Exchange Ratio is fair to the holders of Company Common Stock from a financial
point of view.
Section 3.23 Section 203 of the DGCL Not Applicable. The Board of
Directors of the Company has taken all actions so that the restrictions
contained in Section 203 of the DGCL applicable to a "business combination" (as
defined in Section 203) will not apply to the execution, delivery or performance
of this Agreement or the Stockholder Voting Agreements or the consummation of
the Merger or the other transactions contemplated by this Agreement or the
Stockholder Voting Agreements.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub represent and warrant to the Company that the statements
contained in this Article IV are true and correct, except as set forth herein or
in the disclosure schedule delivered by Parent to the Company on or before the
date of this Agreement (the "Parent Disclosure Schedule"). The Parent Disclosure
Schedule shall be arranged in paragraphs corresponding to the numbered and
lettered paragraphs contained in this Article IV and the disclosure in any
paragraph shall qualify other paragraphs in this Article IV only to the extent
that it is reasonably apparent from a reading of such document that it also
qualifies or applies to such other paragraphs.
Section 4.01 Organization of Parent and Sub. Each of Parent and Sub is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, has all requisite corporate power to
own, lease and operate its properties and assets and to carry on its business as
now being conducted and as proposed to be conducted, and is duly qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
in which the failure to be so qualified, individually or in the aggregate, would
be reasonably likely to have a material adverse effect on the business,
properties, financial condition, results of operations or prospects of Parent
and its Subsidiaries, taken as a whole or to have a material adverse effect on
the ability of Parent to consummate the transactions contemplated by this
Agreement (a "Parent Material Adverse Effect"); provided, however, that for
purposes of this Agreement, any adverse change in the stock price of Parent in
and of itself, as quoted on the Nasdaq National Market, shall not be taken into
account in determining whether there has been or would be a "Parent Material
Adverse Effect" on or with respect to Parent and its Subsidiaries, taken as a
whole.
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Section 4.02 Parent Capital Structure. As of the date of this Agreement,
the authorized capital stock of Parent consists of (i) 100,000,000 shares of
Common Stock, $.001 par value ("Parent Common Stock"), and (ii) 5,000,000 shares
of Preferred Stock, $.001 par value. As of October 13, 1999, there were issued
and outstanding 36,689,903 shares of Parent Common Stock, all of which are
validly issued, fully paid and nonassessable, and no shares of Preferred Stock.
The Parent Disclosure Schedule shows the number of shares of Parent Common Stock
reserved for future issuance pursuant to stock options granted and outstanding
as of the date of this Agreement, and the plans under which such options were
granted (collectively, the "Parent Stock Plans"). All shares of Parent Common
Stock subject to issuance as specified above are duly authorized and, upon
issuance on the terms and conditions specified in the instruments pursuant to
which they are issuable, shall be validly issued, fully paid and nonassessable.
Section 4.03 Authority; No Conflict; Required Filings and Consents.
(a) Each of Parent and Sub has all requisite corporate power and authority
to enter into this Agreement and to consummate the transactions contemplated by
this Agreement. The execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate action on the part of each of Parent and
Sub, subject only to the approval of the Parent Voting Proposal (as defined in
Section 6.05) by Parent's stockholders. This Agreement has been duly executed
and delivered by each of Parent and Sub and constitutes the valid and binding
obligation of each of Parent and Sub, enforceable in accordance with its terms,
subject to the Bankruptcy and Equity Exception.
(b) The execution and delivery of this Agreement by each of Parent and Sub
does not, and the consummation of the transactions contemplated by this
Agreement will not, (i) conflict with, or result in any violation or breach of,
any provision of the Certificate of Incorporation or Bylaws of Parent or Sub,
(ii) result in any violation or breach of, or constitute (with or without notice
or lapse of time, or both) a default (or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of any material benefit)
under, or require a consent or waiver under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, license, contract or
other agreement, instrument or obligation to which Parent or any of its
Subsidiaries is a party or by which any of them or any of their properties or
assets may be bound, or (iii) conflict with or violate any permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Parent or any of its Subsidiaries or any of its or
their properties or assets, except in the case of (ii) and (iii) for any such
conflicts, violations, defaults, terminations, cancellations or accelerations
which are not, individually or in the aggregate, reasonably likely to have a
Parent Material Adverse Effect.
(c) No consent, approval, license, permit, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is required by
or with respect to Parent or any of its Subsidiaries in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for (i) the filing of the pre-merger
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notification report under the HSR Act, (ii) the filing of the Registration
Statement with the SEC in accordance with the Securities Act, (iii) the filing
of the Certificate of Merger with the Delaware Secretary of State, (iv) the
filing of the Joint Proxy Statement with the SEC in accordance with the Exchange
Act, (v) such consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable state securities
laws, (vi) the approval by the Nasdaq National Market of the listing of the
shares of Parent Common Stock to be issued in the transactions contemplated by
this Agreement, and (vii) such other consents, licenses, permits, orders,
authorizations, filings, approvals and registrations which, if not obtained or
made, would not be reasonably likely, individually or in the aggregate, to have
a Parent Material Adverse Effect. The Parent stockholder vote required for the
approval of the Parent Voting Proposal (as defined below) is the affirmative
vote of the holders of a majority of the shares of Parent Common Stock voted at
the Parent Meeting (as defined below) at which a quorum of the holders of the
outstanding shares of Parent Common Stock on the record date for the Parent
Meeting is present.
Section 4.04 SEC Filings; Financial Statements.
(a) Parent has filed all forms, reports and documents required to be filed
by Parent with the SEC since January 1, 1998 (collectively, the "Parent SEC
Reports"). The Parent SEC Reports (i) at the time filed, complied in all
material respects with the applicable requirements of the Securities Act and the
Exchange Act, as the case may be, and (ii) did not at the time they were filed
contain any untrue statement of a material fact or omit to state a material fact
required to be stated in such Parent SEC Reports or necessary in order to make
the statements in such Parent SEC Reports, in the light of the circumstances
under which they were made, not misleading. None of Parent's Subsidiaries is
required to file any forms, reports or other documents with the SEC. Each of
Parent's SEC Reports was filed on a timely basis.
(b) Each of the consolidated financial statements (including, in each
case, any related notes and schedules) contained or to be contained in the
Parent SEC Reports (i) complied or will comply as to form in all material
respects with the applicable published rules and regulations of the SEC with
respect thereto, (ii) were or will be prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes to such financial
statements or, in the case of unaudited statements, as permitted by Form 10-Q of
the SEC) and (iii) fairly presented or will fairly present the consolidated
financial position of Parent and its Subsidiaries as of the dates and the
consolidated results of its operations and cash flows for the periods indicated,
consistent with the books and records of Parent and its Subsidiaries, except
that the unaudited interim financial statements were or are subject to normal
and recurring year-end adjustments which were not or are not expected to be
material in amount. The unaudited balance sheet of Parent as of June 30, 1999 is
referred to as the "Parent Balance Sheet".
Section 4.05 No Undisclosed Liabilities. Except as disclosed in the Parent
SEC Reports filed prior to the date hereof, and except for normal or recurring
liabilities incurred since the date
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of the Parent Balance Sheet in the ordinary course of business consistent with
past practices, Parent and its Subsidiaries do not have any liabilities, either
accrued, contingent or otherwise (whether or not required to be reflected in
financial statements in accordance with generally accepted accounting
principles), and whether due or to become due, which individually or in the
aggregate, are reasonably likely to have a Parent Material Adverse Effect.
Section 4.06 Absence of Certain Changes or Events. Except as disclosed in
the Parent SEC Reports filed prior to the date hereof, since the date of the
Parent Balance Sheet, Parent and its Subsidiaries have conducted their
businesses only in the ordinary course and in a manner consistent with past
practice and, since such date, there has not been (i) any event, change or
development in the financial condition, results of operations, business,
properties or prospects of Parent and its Subsidiaries, taken as a whole, that,
individually or in the aggregate, has had, or is reasonably likely to have, a
Parent Material Adverse Effect; (ii) any damage, destruction or loss (whether or
not covered by insurance) with respect to Parent or any of its Subsidiaries
having a Parent Material Adverse Effect; (iii) any material change by Parent in
its accounting methods not required pursuant to generally accepted accounting
principles, principles or practices to which the Company has not previously
consented in writing; or (iv) any revaluation by Parent of any of its assets
having a Parent Material Adverse Effect.
Section 4.07 Litigation. Except as described in the Parent SEC Reports
filed prior to the date hereof, there is no action, suit or proceeding, claim,
arbitration or investigation against Parent pending or as to which Parent has
received any written notice of assertion, which, individually or in the
aggregate, is reasonably likely to have a Parent Material Adverse Effect or a
material adverse effect on the ability of Parent to consummate the transactions
contemplated by this Agreement.
Section 4.08 Compliance With Laws. Parent and each of its Subsidiaries has
complied with, is not in violation of, and has not received any notices of
violation with respect to, any foreign, federal, state or local statute, law or
regulation with respect to the conduct of its business, or the ownership or
operation of its properties or assets, except for failures to comply or
violations which, individually or in the aggregate, have not had and are not
reasonably likely to have a Parent Material Adverse Effect.
Section 4.09 Tax Matters. To its knowledge, after consulting with its
independent auditors, neither Parent nor any of its Affiliates has taken or
agreed to take any action which would prevent the Merger from constituting a
transaction qualifying as a reorganization under Section 368(a) of the Code.
Section 4.10 Registration Statement; Proxy Statement/Prospectus. The
information in the Registration Statement (except for information supplied by
the Company for inclusion in the Registration Statement, as to which Parent
makes no representation and which shall not constitute part of a Parent SEC
Report for purposes of this Agreement) shall not at the time the Registration
Statement is declared effective by the SEC contain any untrue statement of a
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material fact or omit to state any material fact required to be stated in the
Registration Statement or necessary in order to make the statements in the
Registration Statement not misleading. The information (except for information
to be supplied by the Company for inclusion in the Joint Proxy Statement, as to
which Parent makes no representation) in the Joint Proxy Statement shall not, on
the date the Joint Proxy Statement is first mailed to stockholders of Parent or
the Company, at the time of the Parent Meeting and the Company Meeting and at
the Effective Time, contain any statement which, at such time and in light of
the circumstances under which it shall be made, is false or misleading with
respect to any material fact, or omit to state any material fact necessary in
order to make the statements made in the Joint Proxy Statement not false or
misleading; or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of
proxies for the Parent Meeting or the Company Meeting which has become false or
misleading. If at any time prior to the Effective Time any event relating to
Parent or any of its Affiliates, officers or directors should be discovered by
Parent which should be set forth in an amendment to the Registration Statement
or a supplement to the Joint Proxy Statement, Parent shall promptly inform the
Company.
Section 4.11 Operations of Sub. Sub was formed solely for the purpose of
engaging in the transactions contemplated by this Agreement, has engaged in no
other business activities and has conducted its operations only as contemplated
by this Agreement.
Section 4.12 Opinion of Financial Advisor. The financial advisor of
Parent, BancBoston Xxxxxxxxx Xxxxxxxx Inc., has delivered to Parent an opinion
dated the date of this Agreement, to the effect that, as of such date, the
Exchange Ratio was fair to Parent from a financial point of view.
ARTICLE V
CONDUCT OF BUSINESS
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Section 5.01 Covenants of the Company. During the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement or the Effective Time, the Company agrees as to itself and its
Subsidiaries (except to the extent that Parent shall otherwise consent in
writing), to carry on its business in the usual, regular and ordinary course in
substantially the same manner as previously conducted, to pay its debts and
Taxes and perform other obligations when due subject to good faith disputes over
such debts, Taxes or obligations, and, to the extent consistent with such
business, use commercially reasonable efforts consistent with past practices and
policies to preserve intact its present business organization, keep available
the services of its present officers and key employees and preserve its
relationships with customers, suppliers, distributors, and others having
business dealings with it; provided, however, that the Company shall not be
obligated to increase the compensation of or otherwise make additional payments
to such persons. Except as expressly contemplated by this Agreement or set forth
in the Company Disclosure Schedule, the Company shall not (and shall not permit
any of its Subsidiaries to), without the written consent of Parent:
(a) Accelerate, amend or change the period of exercisability of any
Company Warrant or any outstanding option or restricted stock granted under any
Company Stock Plan or authorize cash payments in exchange for any Company
Warrant or any option granted under any of such plans, except as required by the
terms of such plans or any related agreements in effect as of the date of this
Agreement;
(b) Declare or pay any dividends on or make any other distributions
(whether in cash, stock or property) in respect of any of its capital stock, or
split, combine or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock, or purchase or otherwise acquire, directly or
indirectly, any shares of its capital stock;
(c) Issue, deliver or sell, or authorize or propose the issuance, delivery
or sale of, any shares of its capital stock or securities convertible into
shares of its capital stock, or subscriptions, rights, warrants or options to
acquire, or other agreements or commitments of any character obligating it to
issue any such shares or other convertible securities, other than the issuance
of shares of Company Common Stock pursuant to the exercise of the Company
Warrants or options outstanding on the date of this Agreement under the Company
Stock Plans;
(d) Acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial equity interest in or substantial portion of the assets
of, or by any other manner, any business or any corporation, partnership or
other business organization or division, or otherwise acquire or agree to
acquire any assets (other than inventory and other items in the ordinary course
of business and consistent with past practice);
(e) Sell, lease, license or otherwise dispose of any of its properties or
assets;
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(f) (i) Increase or agree to increase the compensation payable or to
become payable to its officers or employees, (ii) grant any severance or
termination pay to, or enter into any employment or severance agreements with,
any employees or officers, (iii) enter into any collective bargaining agreement,
(iv) establish, adopt, enter into or amend any bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination or severance or other plan, trust, fund,
policy or arrangement for the benefit of any directors, officers or employees or
(v) forgive any indebtedness of any employee to the Company or any of its
Subsidiaries;
(g) Amend or propose to amend its charter or bylaws, except as
contemplated by this Agreement;
(h) Incur any indebtedness for borrowed money, make any loans to any
person or entity or guarantee any debt securities of others;
(i) Initiate, compromise, or settle any material litigation or arbitration
proceeding;
(j) Modify, amend or terminate any contract that is material to the
Company and its Subsidiaries taken as a whole, or waive, release or assign any
material rights or claims;
(k) Make or rescind any Tax election, settle or compromise any Tax
liability or amend any Tax return;
(l) Change its methods of accounting as in effect at June 30, 1999 except
as required by generally accepted accounting principles;
(m) Make or commit to make any capital expenditures that exceed the
capital budget furnished by the Company to Parent;
(n) License any intellectual property rights to or from any third party;
(o) Close any facility or office;
(p) Invest funds in debt securities or other instruments maturing more
than 90 days after the date of investment;
(q) Initiate any new clinical trials or any new phase of any ongoing
clinical trials;
(r) Adopt or implement any stockholder rights plan that could have the
effect of impeding or restricting the consummation of the transactions
contemplated hereby; or
(s) Take, or agree in writing or otherwise to take, any of the actions
described in paragraphs (a) through (r) above.
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Section 5.02 Cooperation. Subject to compliance with applicable law, from
the date hereof until the Effective Time, the Company and each of its
Subsidiaries shall make its officers available to confer on a regular and
frequent basis with one or more representatives of Parent to report on the
general status of ongoing operations and shall promptly provide Parent or its
counsel with copies of all filings made by such party with any Governmental
Entity in connection with this Agreement, the Merger and the transactions
contemplated hereby and thereby.
Section 5.03 Confidentiality. The parties acknowledge that Parent and the
Company have previously executed a Confidential Disclosure Agreement dated as of
October 4, 1999 (the "Confidentiality Agreement"), which Confidentiality
Agreement will continue in full force and effect in accordance with its terms,
except as expressly modified herein.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.01 No Solicitation.
(a) From and after the date of this Agreement until the earlier of the
Effective Time or termination of this Agreement pursuant to its terms, the
Company and its Subsidiaries shall not, directly or indirectly, through any
officer, director, employee, financial advisor, representative or agent of such
party (i) solicit, initiate, or encourage any inquiries or proposals that
constitute, or could reasonably be expected to lead to, a proposal or offer for
a merger, consolidation, business combination, sale of substantial assets,
tender offer, sale of shares of capital stock (excluding sales pursuant to
existing employee and director stock plans) or similar transaction involving the
Company or any of its Subsidiaries, other than the transactions contemplated by
this Agreement (any of the foregoing inquiries or proposals being referred to in
this Agreement as an "Acquisition Proposal"), (ii) engage in negotiations or
discussions concerning, or provide any non-public information to any person or
entity relating to, any Acquisition Proposal, or (iii) agree to or recommend any
Acquisition Proposal; provided, however, that so long as the Company and its
Subsidiaries have not breached this Section 6.01, nothing contained in this
Agreement shall prevent the Company or its Board of Directors, from:
(A) furnishing non-public information to, or entering into discussions or
negotiations with, any person or entity in connection with an unsolicited bona
fide written Acquisition Proposal that would result in the acquisition of more
than 50% of the combined voting power of the shares of the Company then
outstanding or all or substantially all of the consolidated assets of the
Company and its Subsidiaries by such person or entity or recommending such an
unsolicited bona fide written Acquisition Proposal to the stockholders of the
Company, if and only to the extent that
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(1) the Board of Directors of the Company believes in good faith
(after consultation with its financial advisor) that such Acquisition Proposal
is reasonably capable of being completed on the terms proposed and would, if
consummated, result in a transaction more favorable than the transaction
contemplated by this Agreement (any such more favorable Acquisition Proposal
being referred to in this Agreement as a "Superior Proposal") and the Company's
Board of Directors determines in good faith after consultation with outside
legal counsel that such action is necessary for such Board of Directors to
comply with its fiduciary duties to stockholders under applicable law;
(2) prior to furnishing such non-public information to, or entering
into discussions or negotiations with, such person or entity, such Board of
Directors receives from such person or entity an executed confidentiality
agreement with terms no less favorable to such party than those contained in the
Confidentiality Agreement; and
(3) prior to recommending a Superior Proposal, the Company provides
Parent with at least five business days' prior notice of its proposal to do so,
during which time Parent may make, and in such event the Company shall consider,
a counterproposal to such Superior Proposal, and the Company shall itself and
shall cause its financial and legal advisors to negotiate on its behalf in good
faith with Parent with respect to the terms and conditions of such
counterproposal; or
(B) complying with Rule 14d-9 and 14e-2 promulgated under the
Exchange Act with regard to an Acquisition Proposal.
(b) The Company will, and will cause its representatives and agents to,
immediately cease any and all existing activities, discussions or negotiations
with any parties conducted heretofore of the nature described in Section 6.01(a)
and will use reasonable efforts to obtain the return of any confidential
information furnished to any such parties.
(c) The Company shall notify Parent immediately after receipt by the
Company (or its advisors) of any Acquisition Proposal or any request for
nonpublic information in connection with an Acquisition Proposal or for access
to the properties, books or records of the Company by any person or entity that
informs the Company that it is considering making, or has made, an Acquisition
Proposal. Such notice shall be made orally and in writing and shall indicate in
reasonable detail the identity of the offeror and the terms and conditions of
such proposal, inquiry or contact. The Company shall continue to keep Parent
informed, on a current basis, of the status of any such discussions or
negotiations and the terms being discussed or negotiated.
(d) Nothing in this Section 6.01 shall (i) permit the Company to terminate
this Agreement (except as specifically provided in Section 8.01 hereof), (ii)
permit the Company to enter into any agreement with respect to an Acquisition
Proposal during the term of this Agreement (it being agreed that during the term
of this Agreement, the Company shall not enter
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into any agreement with any person that provides for, or in any way facilitates,
an Acquisition Proposal (other than a confidentiality agreement of the type
referred to in Section 6.01(a) above)) or (iii) affect any other obligation of
the Company under this Agreement.
(e) Without limiting the foregoing, it is agreed that any violation of the
restrictions set forth in this Section 6.01 by any representative or affiliates
of the Company, whether or not such person is purporting to act on behalf of the
Company or otherwise, shall be deemed to be a breach of this Section 6.01 by the
Company.
Section 6.02 Proxy Statement/Prospectus; Registration Statement.
(a) As promptly as practical after the execution of this Agreement, Parent
and the Company shall prepare and file with the SEC the Joint Proxy Statement,
and Parent shall prepare and file with the SEC the Registration Statement, in
which the Joint Proxy Statement will be included as a prospectus, provided that
Parent may delay the filing of the Registration Statement until approval of the
Joint Proxy Statement by the SEC. Parent and the Company shall use all
reasonable efforts to cause the Registration Statement to become effective as
soon after such filing as practicable. Each of Parent and the Company will
respond to any comments of the SEC and will use its respective commercially
reasonable efforts to have the Joint Proxy Statement cleared by the SEC and the
Registration Statement declared effective under the Securities Act as promptly
as practicable after such filings and will cause the Joint Proxy Statement and
the prospectus contained within the Registration Statement to be mailed to its
stockholders at the earliest practicable time after both the Proxy Statement is
cleared by the SEC and the Registration Statement is declared effective under
the Securities Act. Each of Parent and the Company will notify the other
promptly upon the receipt of any comments from the SEC or its staff or any other
government officials and of any request by the SEC or its staff or any other
government officials for amendments or supplements to the Registration
Statement, the Joint Proxy Statement or any filing pursuant to Section 6.02(b)
or for additional information and will supply the other with copies of all
correspondence between such party or any of its representatives, on the one
hand, and the SEC, or its staff or any other government officials, on the other
hand, with respect to the Registration Statement, the Joint Proxy Statement, the
Merger or any filing pursuant to Section 6.02(b). Each of Parent and the Company
will cause all documents that it is responsible for filing with the SEC or other
regulatory authorities under this Section 6.02 to comply in all material
respects with all applicable requirements of law and the rules and regulations
promulgated thereunder. Whenever any event occurs which is required to be set
forth in an amendment or supplement to the Joint Proxy Statement, the
Registration Statement or any filing pursuant to Section 6.02(b), Parent or the
Company, as the case may be, will promptly inform the other of such occurrence
and cooperate in filing with the SEC or its staff or any other government
officials, and/or mailing to stockholders of Parent and/or the Company, such
amendment or supplement.
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(b) Parent and the Company shall make all necessary filings with respect
to the Merger under the Securities Act, the Exchange Act, applicable state blue
sky laws and the rules and regulations thereunder.
Section 6.03 Nasdaq Quotation. The Company agrees to use commercially
reasonable efforts to continue the quotation of Company Common Stock on the
Nasdaq National Market during the term of this Agreement.
Section 6.04 Access to Information. Upon reasonable notice, the Company
shall (and shall cause each of its Subsidiaries to) afford to Parent's officers,
employees, accountants, counsel and other representatives, reasonable access,
during normal business hours during the period prior to the Effective Time, to
all its properties, books, contracts, commitments and records and, during such
period, the Company shall (and shall cause each of its Subsidiaries to) furnish
promptly to Parent (a) a copy of each report, schedule, registration statement
and other document filed or received by it during such period pursuant to the
requirements of federal securities laws and (b) all other information concerning
its business, properties and personnel as Parent may reasonably request. Unless
otherwise required by law, Parent will hold any such information which is
nonpublic in confidence in accordance with the Confidentiality Agreement. No
information or knowledge obtained in any investigation pursuant to this Section
6.04 or otherwise shall affect or be deemed to modify any representation or
warranty contained in this Agreement or the conditions to the obligations of the
parties to consummate the Merger.
Section 6.05 Stockholders Meetings.
(a) The Company, acting through its Board of Directors, shall, subject to
and in accordance with applicable law and its Certificate of Incorporation and
Bylaws, promptly and duly call, give notice of, convene and hold as soon as
practicable following the date on which the Registration Statement becomes
effective the Company Meeting for the purpose of voting to approve and adopt
this Agreement and the Merger (the "Company Voting Proposal"). The Board of
Directors of the Company shall (i) recommend approval and adoption of the
Company Voting Proposal by the stockholders of the Company and include in the
Joint Proxy Statement such recommendation and (ii) take all reasonable and
lawful action to solicit and obtain such approval; provided, however, that in
the context of an Acquisition Proposal the Board of Directors of the Company may
withdraw such recommendation if (but only if) (i) the Board of Directors of the
Company has received a Superior Proposal, (ii) such Board of Directors upon
advice of its outside legal counsel determines that it is required, in order to
comply with its fiduciary duties under applicable law, to recommend such
Superior Proposal to the stockholders of the Company, and (iii) the Company has
complied with the provisions of Section 6.01.
(b) Parent, acting through its Board of Directors, shall, subject to and
in accordance with applicable law and its Certificate of Incorporation and
Bylaws, promptly and duly call, give notice of, convene and hold as soon as
practicable following the date on which the Registration Statement becomes
effective, the Parent Meeting for the purpose of voting to approve the
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issuance of the shares of Parent Common Stock to be issued in the Merger (the
"Parent Voting Proposal"). The Board of Directors of Parent shall (i) recommend
approval of the Parent Voting Proposal and include in the Joint Proxy Statement
such recommendation and (ii) take all reasonable and lawful action to solicit
and obtain such approval; provided that Parent may withdraw such recommendation
if the Board of Directors upon advice of its outside legal counsel determines
that it is required to do so to comply with its fiduciary duties.
(c) The persons listed on Schedule 6.05(c) have each executed and
delivered a Stockholder Voting Agreement to Parent and Sub concurrently with the
signing of this Agreement.
Section 6.06 Legal Conditions to Merger.
(a) Subject to the terms hereof, the Company and Parent shall use their
respective commercially reasonable efforts to (i) take, or cause to be taken,
all appropriate action, and do, or cause to be done, all things necessary and
proper under applicable law to consummate and make effective the transactions
contemplated hereby as promptly as practicable, (ii) obtain from any
Governmental Entity or any other third party any consents, licenses, permits,
waivers, approvals, authorizations, or orders required to be obtained or made by
the Company or Parent or any of their Subsidiaries in connection with the
authorization, execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby including, without limitation, the Merger,
(iii) as promptly as practicable, make all necessary filings, and thereafter
make any other required submissions, with respect to this Agreement and the
Merger required under (A) the Securities Act and the Exchange Act, and any other
applicable federal or state securities laws, (B) the HSR Act and any related
governmental request thereunder, and (C) any other applicable law and (iv)
execute or deliver any additional instruments necessary to consummate the
transactions contemplated by, and to fully carry out the purposes of, this
Agreement. The Company and Parent shall cooperate with each other in connection
with the making of all such filings, including providing copies of all such
documents to the non-filing party and its advisors prior to filing and, if
requested, to accept all reasonable additions, deletions or changes suggested in
connection therewith. The Company and Parent shall use their respective
commercially reasonable efforts to furnish to each other all information
required for any application or other filing to be made pursuant to the rules
and regulations of any applicable law (including all information required to be
included in the Joint Proxy Statement and the Registration Statement) in
connection with the transactions contemplated by this Agreement.
(b) Subject to the terms hereof, Parent and the Company agree, and shall
cause each of their respective Subsidiaries, to cooperate and to use their
respective commercially reasonable efforts to obtain any government clearances
or approvals required for Closing under the HSR Act, the Xxxxxxx Act, as
amended, the Xxxxxxx Act, as amended, the Federal Trade Commission Act, as
amended, and any other federal, state or foreign law or, regulation or decree
designed to prohibit, restrict or regulate actions for the purpose or effect of
monopolization or restraint of trade (collectively "Antitrust Laws"), to respond
to any government requests for information
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under any Antitrust Law, and to contest and resist any action, including any
legislative, administrative or judicial action, and to have vacated, lifted,
reversed or overturned any decree, judgment, injunction or other order (whether
temporary, preliminary or permanent) (an "Order") that restricts, prevents or
prohibits the consummation of the Merger or any other transactions contemplated
by this Agreement under any Antitrust Law. The parties hereto will consult and
cooperate with one another, and consider in good faith the views of one another,
in connection with any analyses, appearances, presentations, memoranda, briefs,
arguments, opinions and proposals made or submitted by or on behalf of any party
hereto in connection with proceedings under or relating to any Antitrust Law.
Parent shall be entitled to direct any proceedings or negotiations with any
Governmental Entity relating to any of the foregoing, provided that it shall
afford the Company a reasonable opportunity to participate therein.
Notwithstanding anything to the contrary in this Section 6.06, neither Parent
nor any of its Subsidiaries shall be required to (i) divest any of their
respective businesses, product lines or assets, or to take or agree to take any
other action or agree to any limitation, that could reasonably be expected to
have a material adverse effect on Parent or on Parent combined with the Company
after the Effective Time, or (ii) take any action under this Section 6.06 if the
United States Department of Justice or the United States Federal Trade
Commission authorizes its staff to seek a preliminary injunction or restraining
order to enjoin consummation of the Merger.
(c) Each of the Company and Parent shall give (or shall cause their
respective Subsidiaries to give) any notices to third parties, and use, and
cause their respective Subsidiaries to use, their commercially reasonable
efforts to obtain any third party consents related to or required in connection
with the Merger that are (A) necessary to consummate the transactions
contemplated hereby, (B) disclosed or required to be disclosed in the Company
Disclosure Schedule or the Parent Disclosure Schedule, as the case may be, or
(C) required to prevent a Company Material Adverse Effect or a Parent Material
Adverse Effect from occurring prior to or after the Effective Time.
Section 6.07 Public Disclosure. Parent and the Company shall consult with
each other before issuing any press release or otherwise making any public
statement with respect to the Merger or this Agreement and shall not issue any
such press release or make any such public statement, except as may be required
by law.
Section 6.08 Tax-Free Reorganization. Parent and the Company shall each
use its best efforts to cause the Merger to be treated as a reorganization
within the meaning of Section 368(a) of the Code. The parties hereto hereby
adopt this Agreement as a plan of reorganization.
Section 6.09 Affiliate Agreements. Upon the execution of this Agreement,
the Company will provide Parent with a list of those persons who are, in the
Company's respective reasonable judgment, "affiliates" of the Company, within
the meaning of Rule 145 (each such person who is an "affiliate" of the Company
within the meaning of Rule 145 is referred to as an "Affiliate") promulgated
under the Securities Act ("Rule 145"). The Company shall provide Parent such
information and documents as Parent shall reasonably request for purposes of
reviewing such list
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and shall notify Parent in writing regarding any change in the identity of its
Affiliates prior to the Closing Date. The Company shall deliver or cause to be
delivered to Parent by October 31, 1999 (and in any case prior to the mailing of
the Joint Proxy Statement) from each of its Affiliates, an executed Affiliate
Agreement, in substantially the form appended hereto as Exhibit C (collectively,
the "Affiliate Agreements"). Parent shall be entitled to place appropriate
legends on the certificates evidencing any Parent Common Stock to be received by
such Affiliates of the Company pursuant to the terms of this Agreement, and to
issue appropriate stop transfer instructions to the transfer agent for the
Parent Common Stock, consistent with the terms of the Affiliate Agreements
(provided that such legends or stop transfer instructions shall be removed, two
years after the Effective Date, upon the request of any stockholder that is not
then an Affiliate of Parent).
Section 6.10 Nasdaq Listing. Parent shall use commercially reasonable
efforts to cause the shares of Parent Common Stock to be issued in the Merger to
be listed on the Nasdaq National Market, subject to official notice of issuance,
on or prior to the Closing Date.
Section 6.11 Stock Plans and Warrants.
(a) At the Effective Time, by virtue of the Merger, the Company Stock
Plans shall be assumed by Parent. At the Effective Time, each outstanding option
to purchase shares of the Company Common Stock ( "Company Stock Option") under
the Company Stock Plans, whether vested or unvested, and each Company Warrant,
shall be deemed to constitute an option or warrant to acquire, on the same terms
and conditions as were applicable under such Company Stock Option or Company
Warrant, the same number of shares of Parent Common Stock as the holder of such
Company Stock Option or Company Warrant would have been entitled to receive
pursuant to the Merger had such holder exercised such option or Company Warrant
in full immediately prior to the Effective Time (rounded downward to the nearest
whole number), at a price per share (rounded upward to the nearest whole cent)
equal to (y) the aggregate exercise price for the shares of Company Common Stock
purchasable pursuant to such Company Stock Option or Company Warrant immediately
prior to the Effective Time divided by (z) the number of full shares of Parent
Common Stock deemed purchasable pursuant to such Company Stock Option or Company
Warrant in accordance with the foregoing.
(b) As soon as practicable after the Effective Time, Parent shall deliver
to the participants in Company Stock Plans and holders of Company Warrants
appropriate notice setting forth such participants' rights pursuant thereto and
the grants pursuant to Company Stock Plans shall continue in effect on the same
terms and conditions (subject to the adjustments required by this Section 6.11
after giving effect to the Merger).
(c) Parent shall reserve for issuance a sufficient number of shares of
Parent Common Stock for delivery under Company Stock Plans assumed in accordance
with this Section 6.11. As soon as practicable after the Effective Time, Parent
shall file a registration statement on Form S-8 (or any successor or other
appropriate forms), or another appropriate form with respect to the shares of
Parent Common Stock subject to such options and shall use its best efforts to
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maintain the effectiveness of such registration statement or registration
statements (and maintain the current status of the prospectus or prospectuses
contained therein) for so long as such options remain outstanding.
(d) The Company shall terminate its Employee Stock Purchase Plan in
accordance with its terms as of or prior to the Effective Time. The Company
shall not commence a new offering under its Employee Stock Purchase Plan after
the date of this Agreement.
(e) The Company shall, prior to December 31, 1999, accelerate unvested
non-statutory options held by Xxxxxxxxxxx X. Xxxxxxxxx and Xxxxxxxxx Xxxxxx as
and to the extent requested by Parent and consented to by the Company, such
consent not to be unreasonably withheld.
Section 6.12 Brokers or Finders. Each of Parent and the Company
represents, as to itself, its Subsidiaries and its Affiliates, that no agent,
broker, investment banker, financial advisor or other firm or person is or will
be entitled to any broker's or finder's fee or any other commission or similar
fee in connection with any of the transactions contemplated by this Agreement
except as set forth on the Company's Disclosure Schedule (in the case of the
Company) or in Schedule 6.12 (in the case of Parent).
Section 6.13 Indemnification.
(a) From and after the Effective Time, Parent shall, to the fullest extent
permitted by law, cause the Surviving Corporation, for a period of six years
from the Effective Time, to honor all of the Company's obligations to indemnify
and hold harmless each present and former director and officer of the Company
(the "Indemnified Parties"), against any costs or expenses (including attorneys'
fees), judgments, fines, losses, claims, damages, liabilities or amounts paid in
settlement incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative, arising
out of or pertaining to matters existing or occurring at or prior to the
Effective Time, whether asserted or claimed prior to, at or after the Effective
Time, to the extent that such obligations to indemnify and hold harmless exist
on the date of this Agreement.
(b) For a period of three years after the Effective Time, Parent shall
cause the Surviving Corporation to maintain (to the extent available in the
market) in effect a directors' and officers' liability insurance policy covering
those persons who are currently covered by the Company's directors' and
officers' liability insurance policy (a copy of which has been heretofore
delivered to Parent) with coverage in amount and scope at least as favorable to
such persons as the Company's existing coverage; provided, that in no event
shall Parent or the Surviving Corporation be required to expend in excess of
150% the annual premium currently paid by the Company for such coverage.
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Section 6.14 Notification of Certain Matters. The Parent will give prompt
notice to the Company, and the Company will give prompt notice to Parent, of the
occurrence, or failure to occur, of any event, which occurrence or failure to
occur would be reasonably likely to cause (a) any representation or warranty of
such party contained in this Agreement to be untrue or inaccurate in any
material respect at any time from the date of this Agreement to the Effective
Time, or (b) any material failure of Parent and Sub or the Company, as the case
may be, or of any officer, director, employee or agent thereof, to comply with
or satisfy any covenant, condition or agreement to be complied with or satisfied
by it under this Agreement. Notwithstanding the above, the delivery of any
notice pursuant to this Section will not limit or otherwise affect the remedies
available hereunder to the party receiving such notice or the conditions to such
party's obligation to consummate the Merger.
Section 6.15 Comfort Letters from the Company's Accountants. The Company
shall use reasonable efforts to cause to be delivered to Parent and the Company
a letter of Xxxxxx Xxxxxxxx LLP, the Company's independent auditors, dated a
date within two business days before the date on which the Registration
Statement shall become effective and addressed to Parent, in form reasonably
satisfactory to Parent and customary in scope and substance for letters
delivered by independent public accountants in connection with registration
statements similar to the Registration Statement.
Section 6.16 Stockholder Litigation. Until the earlier of the termination
of this Agreement in accordance with its terms or the Effective Time, the
Company shall give Parent the opportunity to participate in the defense or
settlement of any stockholder litigation against the Company or its Board of
Directors relating to this Agreement or any of the transactions contemplated by
this Agreement, and shall not settle any such litigation without Parent's prior
written consent, which will not be unreasonably withheld or delayed.
Section 6.17 Relationship with Partners. The Company shall use
commercially reasonable efforts to preserve the goodwill of its license and
collaboration partners through the Closing Date.
Section 6.18 Employee Matters.
(a) Applicability. The provisions of this Section 6.18 shall apply to each
employee of the Company as of the Effective Time (each a "Company Employee" and,
collectively, the "Company Employees"), except Xxxxxxxxxxx X. Xxxxxxxxx and
Xxxxxxxxx Xxxxxx whose employment with the Parent shall in all respects be
governed by the employment agreements referred to in Section 7.02(f). Nothing in
this Section 6.18 shall be construed to limit the right of Parent to (i)
terminate, for any reason or no reason, with or without cause, at any time after
the Effective Time, the employment of any Company Employee who remains an
employee of the Surviving Corporation or becomes an employee of Parent or (ii)
change the terms or conditions of employment of any Company Employee who remains
an employee of the Surviving Corporation or becomes an employee of Parent.
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(b) Employee Benefit Plans. Parent shall enroll the Company Employees in
Parent's employee benefit plans, effective as of the Effective Time (or as soon
as practicable thereafter), including, as applicable, its medical plan, dental
plan, life insurance plan and disability plan, under the same coverage
applicable to similarly situated employees of Parent, giving such Company
Employees service credit for their employment with the Company for eligibility
and vesting purposes for all of Parent's employee benefit plans (including
without limitation health coverage and vacation plans), as if such service had
been performed with Parent and waiving any preexisting condition exclusion with
respect to Parent's medical plan, to the extent that such preexisting condition
would have been covered under the Company's plan. Parent shall use commercially
reasonable efforts to credit each Company Employee with deductible payments and
co-payments paid by such Company Employee under the Company's healthcare plans
in 2000 prior to the Effective Time for purposes of determining the extent to
which any such Company Employee has satisfied his or her deductible and whether
he or she has reached the out-of-pocket maximum under Parent's medical plan for
such plan year. Parent shall give credit to each Company Employee that becomes
an employee of Parent for earned but unused vacation and accrued vacation.
(c) Severance. In the event that, at any time on or after the Effective
Date and prior to the first anniversary of the date on which the Effective Time
occurs, Parent or the Surviving Corporation shall terminate without Cause (as
defined in Section 6.18(d) below) the employment of any Company Employee or any
Company Employee terminates his or her employment with Parent or the Surviving
Corporation for Good Reason (as defined in Section 6.18(d)), then Parent shall
provide to any such Company Employee during his or her Applicable Severance
Period (as defined in Section 6.18(d)) the following severance benefits:
(1) Parent shall continue to pay to any such Company Employee his or
her salary at the level in effect on the effective date of
termination; and
(2) To the extent permissible under law and the terms of the
applicable plan, Parent shall continue to provide to any such
Company Employee all employee benefits to which such Company
Employee was entitled or in which such Company Employee was
participating on the effective date of termination;
provided, however, that Parent and the Surviving Corporation shall not be
obligated to provide the foregoing severance benefits to any Company Employee
unless such Company Employee executes and delivers to Parent an agreement
containing non-solicitation provisions in the form attached to the Parent
Disclosure Schedule as Section 6.18 thereof and appropriate releases of claims
by the Company Employee.
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(d) Definitions. For purposes of this Agreement, the following terms shall
have the meaning provided therefor below:
"Applicable Severance Period" shall mean (1) in the case of any Company
Employee that is listed on Schedule 6.18 as a Senior Vice President of the
Company on the date hereof, a period of 12 months after the effective date of
termination of his or her employment, (2) in the case of any Company Employee
that is listed on Schedule 6.18 as a Vice President of the Company on the date
hereof, a period of nine months after the effective date of termination of his
or her employment, (3) in the case of any Company Employee that is listed on
Schedule 6.18 as a Director of the Company on the date hereof, a period of six
months after the effective date of termination of his or her employment, and (4)
in the case of any other Company Employee, a period of three months after the
effective date of termination of his or her employment.
"Cause" shall mean that any one or more of the following has occurred:
(i) the Employee shall have committed an act of theft, dishonesty, gross
dereliction of duty, fraud, embezzlement, misappropriation or breach of
fiduciary duty against Parent or the Surviving Corporation, or has
disclosed trade secrets or proprietary information of or committed any
other act of material misconduct against Parent or the Surviving
Corporation; or
(ii) the Employee shall have been convicted by a court of competent
jurisdiction of, or pleaded guilty or nolo contendere to, any felony or
any crime involving dishonesty; or
(iii) the Employee shall have failed to carry out his or her reasonably
assigned duties after written notice of such failure and a reasonable
opportunity (which shall not exceed 10 days) to cure such failure.
"Good Reason" shall mean (i) any reduction in the Employee's salary as in
effect immediately prior to such reduction or (ii) the relocation of the
Employee, without the Employee's consent, outside the vicinity of the greater
Boston area in Massachusetts.
(e) Third Party Beneficiaries. Each Company Employee is an intended third
party beneficiary of the provisions of Section 6.18(c) and shall be entitled to
enforce the provisions of Section 6.18(c) to the same extent as if such Company
Employee were a party to this Agreement.
Section 6.19 Board Representation. At the effective Time, Parent shall
expand the Board of Directors by one director and Xxxxxxxxxxx X. Xxxxxxxxx shall
be elected by the Board of Directors of Parent as a Class I director to fill the
vacancy created thereby. In addition, subject to its fiduciary duties under the
DGCL, the Board of Directors of the Company shall nominate Xx. Xxxxxxxxx for
reelection as a Class I director at the Company's annual meeting of stockholders
in 2000. If Xx. Xxxxxxxxx shall for any reason cease to be a director of the
Company prior to the Company's annual meeting of stockholders in 2003, the Board
of Directors of Parent shall in
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good faith consider replacing Xx. Xxxxxxxxx with another person who is serving
as a director of the Company on the date of this Agreement.
Section 6.20 401(k) Plan. Prior to the Effective Time, the Company shall
take all action required to amend its 401(k) Plan such that such 401(k) Plan
does not cover any of the employees of Parent or its ERISA Affiliates other than
the Company or any of the Company's Subsidiaries.
ARTICLE VII
CONDITIONS TO MERGER
Section 7.01 Conditions to Each Party's Obligation To Effect the Merger.
The respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction prior to the Closing Date of the following
conditions:
(a) Stockholder Approvals. The Company Voting Proposal shall have been
approved and adopted by the affirmative vote of the holders of a majority of the
shares of Company Common Stock outstanding on the record date for the Company
Meeting and the Parent Voting Proposal shall have been approved by the
affirmative vote of the holders of a majority of the shares of Parent Common
Stock voted at the Parent Meeting at which a quorum is present.
(b) HSR Act. The waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated.
(c) Governmental Approvals. Other than the filing provided for by Section
1.02, all authorizations, consents, orders or approvals of, or declarations or
filings with, or expirations of waiting periods imposed by, any Governmental
Entity, the failure of which to file, obtain or occur is reasonably likely to
have a Parent Material Adverse Effect or a Company Material Adverse Effect,
shall have been filed, been obtained or occurred.
(d) Registration Statement. The Registration Statement shall have become
effective under the Securities Act and shall not be the subject of any stop
order or proceedings seeking a stop order.
(e) No Injunctions. No Governmental Entity of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any order, executive
order, stay, decree, judgment or injunction (each an "Order") or statute, rule
or regulation which is in effect and which has the effect of making the Merger
illegal or otherwise prohibiting consummation of the Merger.
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(f) Nasdaq. The shares of Parent Common Stock to be issued in the Merger
shall have been approved for listing on the Nasdaq National Market, subject only
to official notice of issuance.
Section 7.02 Additional Conditions to Obligations of Parent and Sub. The
obligations of Parent and Sub to effect the Merger are subject to the
satisfaction of each of the following conditions, any of which may be waived in
writing exclusively by Parent and Sub:
(a) Representations and Warranties. The representations and warranties of
the Company set forth in this Agreement shall be true and correct as of the date
of this Agreement and (except to the extent such representations and warranties
speak as of an earlier date) as of the Closing Date as though made on and as of
the Closing Date, except (other than with respect to Section 3.02) for (i)
changes contemplated by this Agreement and (ii) where the failures to be true
and correct, individually or in the aggregate and without regard to any
qualifications as to materiality or Company Material Adverse Effect contained in
such representations and warranties, have not had and are not reasonably likely
to have a Company Material Adverse Effect; and Parent shall have received a
certificate signed on behalf of the Company by the chief executive officer and
the chief financial officer of the Company to such effect.
(b) Performance of Obligations of the Company. The Company shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date; and Parent shall have
received a certificate signed on behalf of the Company by the chief executive
officer and the chief financial officer of the Company to such effect.
(c) Tax Opinion. Parent shall have received a written opinion from Xxxx
and Xxxx LLP, counsel to Parent, to the effect that the Merger will be treated
for federal income tax purposes as a tax-free reorganization within the meaning
of Section 368(a) of the Code; provided that if Xxxx and Xxxx LLP does not
render such opinion, this condition shall nonetheless be deemed satisfied if
Xxxxxxx Xxxx LLP renders such opinion to Parent (it being agreed that Parent and
the Company shall each provide reasonable cooperation, including making
reasonable representations, to Xxxxxxx Xxxx LLP or Xxxx and Xxxx LLP, as the
case may be, to enable them to render such opinion).
(d) Third Party Consents. The Company shall have obtained (i) all consents
and approvals of third parties referred to in Section 3.03(c) and 3.09(c) of the
Company Disclosure Schedule and (ii) any other consent or approval of any third
party (other than a Governmental Entity) the failure of which to obtain,
individually or in the aggregate, is reasonably likely to have a Company
Material Adverse Effect.
(e) Resignations. Parent shall have received copies of the resignations,
effective as of the Effective Time, of each director of the Company and its
Subsidiaries.
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(f) Employment Agreements. The Employment Agreements between Parent and
each of Messrs. Xxxxxxxxx and Xxxxxx, dated as of the date hereof, shall be in
full force and effect.
Section 7.03 Additional Conditions to Obligations of the Company. The
obligation of the Company to effect the Merger is subject to the satisfaction of
each of the following conditions, any of which may be waived, in writing,
exclusively by the Company:
(a) Representations and Warranties. The representations and warranties of
Parent and Sub set forth in this Agreement shall be true and correct as of the
date of this Agreement and (except to the extent such representations speak as
of an earlier date) as of the Closing Date as though made on and as of the
Closing Date, except for, (i) changes contemplated by this Agreement and (ii)
where the failures to be true and correct, individually or in the aggregate and
without regard to any qualifications as to materiality or Parent Material
Adverse Effect contained in such representations and warranties, have not had
and are not reasonably likely to have a Parent Material Adverse Effect; and the
Company shall have received a certificate signed on behalf of Parent by the
chief executive officer or the chief financial officer of Parent to such effect.
(b) Performance of Obligations of Parent and Sub. Parent and Sub shall
have performed in all material respects all obligations required to be performed
by them under this Agreement at or prior to the Closing Date, and the Company
shall have received a certificate signed on behalf of Parent by the chief
executive officer or the chief financial officer of Parent to such effect.
(c) Tax Opinion. The Company shall have received the opinion of Xxxxxxx
Xxxx LLP, counsel to the Company, to the effect that the Merger will be treated
for Federal income tax purposes as a tax-free reorganization within the meaning
of Section 368(a) of the Code; provided that if Xxxxxxx Xxxx, LLP does not
render such opinion, this condition shall nonetheless be deemed satisfied if
Xxxx and Xxxx LLP renders such opinion to the Company (it being agreed that
Parent and the Company shall each provide reasonable cooperation, including
making reasonable representations, to Xxxxxxx Xxxx LLP or Xxxx and Xxxx LLP, as
the case may be, to enable them to render such opinion).
ARTICLE VIII
TERMINATION AND AMENDMENT
Section 8.01 Termination. This Agreement may be terminated at any time
prior to the Effective Time (with respect to Sections 8.01(b) through 8.01(g),
by written notice by the terminating party to the other party), whether before
or after approval of the matters presented in connection with the Merger by the
stockholders of the Company or Parent:
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(a) by mutual written consent of Parent and the Company; or
(b) by either Parent or the Company if the Merger shall not have been
consummated on or before April 30, 2000 (the "Outside Date") (provided that the
right to terminate this Agreement under this Section 8.01(b) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of or resulted in the failure of the Merger to
occur on or before such date); or
(c) by either Parent or the Company if a Governmental Entity of competent
jurisdiction shall have issued a nonappealable final order, decree or ruling or
taken any other nonappealable final action, in each case having the effect of
permanently restraining, enjoining or otherwise prohibiting the Merger; or
(d) by Parent or the Company if (x) at the Company Meeting (including any
adjournment or postponement), the requisite vote of the stockholders of the
Company in favor of the Company Voting Proposal shall not have been obtained; or
if (y) at the Parent Meeting (including any adjournment or postponement), the
requisite vote of the stockholders of Parent in favor of the Parent Voting
Proposal shall not have been obtained (provided that the right to terminate this
Agreement under this Section 8.01(d) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the cause of or
resulted in the failure to obtain the approval of the Company Voting Proposal or
Parent Voting Proposal, as applicable); or
(e) by Parent, if (i) the Board of Directors of the Company shall have
failed to recommend approval of the Company Voting Proposal in the Joint Proxy
Statement or shall have withdrawn or modified its recommendation of the Company
Voting Proposal; (ii) Parent requests in writing that the Board of Directors of
the Company reconfirm its recommendation of this Agreement or the Merger and the
Board of Directors of the Company fails to do so within five business days after
its receipt of Parent's request; (iii) the Board of Directors of the Company
shall have approved or recommended to the stockholders of the Company an
Acquisition Proposal; (iv) a tender offer or exchange offer for outstanding
shares of Company Common Stock is commenced (other than by Parent or an
Affiliate of Parent) and the Board of Directors of the Company recommends that
the stockholders of the Company tender their shares in such tender or exchange
offer or, within 10 days after such tender or exchange offer, fails to recommend
against acceptance of such offer or takes no position with respect to the
acceptance thereof; (v) the Company shall have breached (or be deemed to have
breached) the provisions of Section 6.01; or (vi) for any reason the Company
fails to call and hold the Company Meeting as required by Section 6.05(a); or
(f) by the Company, if (i) the Board of Directors of Parent shall have
failed to recommend approval of the Parent Voting Proposal in the Joint Proxy
Statement or shall have withdrawn or modified its recommendation of the Parent
Voting Proposal; (ii) the Company requests in writing that the Board of
Directors of Parent reconfirm its recommendation of the
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Parent Voting Proposal and the Board of Directors of Parent fails to do so
within five business days after its receipt of the Company's request; or (iii)
for any reason Parent fails to call and hold the Parent Meeting as required by
Section 6.05(b); or
(g) by Parent or the Company, if there has been a breach of any
representation, warranty, covenant or agreement on the part of the other party
set forth in this Agreement, which breach (i) causes the conditions set forth in
Section 7.02(a) or (b) (in the case of termination by Parent) or 7.03(a) or (b)
(in the case of termination by the Company) not to be satisfied, and (ii) shall
not have been, or is not capable of being, cured within 15 days following
receipt by the breaching party of written notice of such breach from the other
party.
Section 8.02 Effect of Termination. In the event of termination of this
Agreement as provided in Section 8.01, this Agreement shall immediately become
void and there shall be no liability or obligation on the part of Parent, the
Company, Sub or their respective officers, directors, stockholders or
Affiliates, except as set forth in Sections 5.03, 6.12, 8.03 and Article IX;
provided that any such termination shall not limit liability for any willful
breach of this Agreement (which includes without limitation the making of any
representation or warranty by a party in this Agreement that the party knew was
not true and accurate when made) and the provisions of Sections 5.03, 6.12, 8.03
and Article IX of this Agreement and the Confidentiality Agreement shall remain
in full force and effect and survive any termination of this Agreement.
Section 8.03 Fees and Expenses.
(a) Except as set forth in this Section 8.03, all fees and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses, whether or not the
Merger is consummated; provided however, that the Company and Parent shall share
equally all fees and expenses, other than attorneys' fees, incurred with respect
to the printing and filing of the Joint Proxy Statement (including any related
preliminary materials) and the Registration Statement (including financial
statements and exhibits) and any amendments or supplements thereto.
(b) The Company shall pay Parent up to $1,500,000 as reimbursement for
expenses of Parent actually incurred relating to the transactions contemplated
by this Agreement prior to termination (including, but not limited to, fees and
expenses of Parent's counsel, accountants and financial advisors, but excluding
any discretionary fees paid to such financial advisors), upon the termination of
this Agreement (i) by Parent or the Company pursuant to Section 8.01(d)(x), (ii)
by Parent pursuant to Section 8.01(e), (iii) by Parent or the Company pursuant
to Section 8.01(b) if the failure to satisfy the condition set forth in Section
7.02(a) by the Outside Date shall have resulted in the Closing not occurring, or
(iv) by Parent pursuant to Section 8.01(g).
(c) The Company shall pay Parent a termination fee of $25,600,000 upon
(except as otherwise provided in the proviso to clause (iii) below) the earliest
to occur of the following events:
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(i) the termination of this Agreement by Parent pursuant to Section
8.01(e); or
(ii) the termination of this Agreement by Parent pursuant to Section
8.01(g) after a breach by the Company of this Agreement; or
(iii) the termination of the Agreement by Parent or the Company
pursuant to Section 8.01(d)(x) as a result of the failure to receive the
requisite vote for approval of the Company Voting Proposal by the stockholders
of the Company at the Company Meeting if, at the time of such failure, there
shall have been announced an Alternative Transaction relating to the Company
which shall not have been absolutely and unconditionally withdrawn and
abandoned; provided, however, that if (A) the Alternative Transaction is a
tender offer or exchange offer, (B) neither the Company nor any of its
Affiliates enters into any contract or agreement with the bidder or any
Affiliate of the bidder relating to such tender offer or exchange offer and (C)
the Board of Directors of the Company recommends against acceptance of such
tender offer or exchange offer, then the termination fee specified in this
Section 8.03(c) shall only be payable by the Company if, within one year of the
date of termination pursuant to this Section 8.03(c)(iii), (x) an Alternative
Transaction is closed or (y) the Company enters into a binding agreement
relating to an Alternative Transaction, in which event the termination fee shall
be payable by the Company on the first to occur of (x) or (y).
(d) Parent shall pay the Company up to $1,500,000 as reimbursement for
expenses of the Company actually incurred relating to the transactions
contemplated by this Agreement prior to termination (including, but not limited
to, but excluding any discretionary fees paid to such financial advisors), upon
the termination of this Agreement (i) by the Company or Parent pursuant to
Section 8.01(d)(y), (ii) by the Company pursuant to Section 8.01(f), (iii) by
Parent or the Company pursuant to Section 8.01(b) if the failure to satisfy the
condition set forth in Section 7.03(a) by the Outside Date shall have resulted
in the Closing not occurring, or (iv) by the Company pursuant to Section
8.01(g).
(e) Parent shall pay the Company a termination fee of $25,600,000 upon the
termination of this Agreement by the Company pursuant to Section 8.01(f) or
pursuant to Section 8.01(g) after a breach by Parent of this Agreement.
(f) The expenses and fees, if applicable, payable pursuant to Section
8.03(b), 8.03(c), 8.03(d) and 8.03(e) shall be paid within one business day
after demand therefor following the first to occur of the events giving rise to
the payment obligation described in Section 8.03(b), 8.03(c)(i), (ii) or (iii),
8.03(d) or 8.03(e). If one party fails to promptly pay to the other any expense
reimbursement or fee due hereunder, the defaulting party shall pay the costs and
expenses (including legal fees and expenses) in connection with any action,
including the filing of any lawsuit or other legal action, taken to collect
payment, together with interest on the amount of any unpaid fee at the publicly
announced prime rate of Fleet Bank, N.A. plus five percent per annum, compounded
quarterly, from the date such expense reimbursement or fee was required to be
paid.
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(g) As used in this Agreement, "Alternative Transaction" means (i) a
transaction pursuant to which any person (or group of persons) other than Parent
or its affiliates (a "Third Party"), acquires more than 10% of the outstanding
shares of Company Common Stock pursuant to a tender offer or exchange offer or
otherwise, (ii) a merger or other business combination involving the Company
pursuant to which any Third Party acquires more than 10% of the outstanding
shares of Company Common Stock or of the entity surviving such merger or
business combination, (iii) any other transaction pursuant to which any Third
Party acquires control of assets (including for this purpose the outstanding
equity securities of Subsidiaries of the Company and the entity surviving any
merger or business combination including any of them) of the Company having a
fair market value equal to more than 10% of the fair market value of all the
assets of the Company immediately prior to such transaction, or (iv) any public
announcement by a Third Party of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing.
Section 8.04 Amendment. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors,
at any time before or after approval of the matters presented in connection with
the Merger by the stockholders of the Company or of Parent, but, after any such
approval, no amendment shall be made which by law requires further approval by
such stockholders without such further approval. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
Section 8.05 Extension; Waiver. At any time prior to the Effective Time,
the parties hereto, by action taken or authorized by their respective Boards of
Directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (iii) waive compliance
with any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Nonsurvival of Representations, Warranties and Agreements.
None of the representations, warranties and agreements in this Agreement or in
any instrument delivered pursuant to this Agreement shall survive the Effective
Time, except for the agreements contained in Articles I and II, Sections 6.11,
6.12, 6.13, 6.18(c), 6.18(e), 6.20 and Article IX, and the agreements of the
Affiliates delivered pursuant to Section 6.09. The Confidentiality Agreement
shall survive the execution and delivery of this Agreement.
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Section 9.02 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 for next business day delivery, in each case to the
intended recipient as set forth below:
(a) if to Parent or Sub, to
Millennium Pharmaceuticals, Inc.
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx, Esq.
with a copy to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
Telecopy: (000) 000-0000
(b) if to the Company, to
Leukosite, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxxxxxx X. Xxxxxxxxx
with a copy to:
Xxxxxxx Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attn: Xxxxx X. Xxxx, Esq.
Telecopy: (000) 000-0000
Any party may give any notice, request, demand, claim or other communication
hereunder using any other means (including personal delivery, expedited courier,
messenger service, telecopy, telex, ordinary mail or electronic mail), 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,
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requests, demands, claims and other communications hereunder are to be delivered
by giving the other parties notice in the manner herein set forth.
Section 9.03 Interpretation. When a reference is made in this Agreement to
Articles or Sections, such reference shall be to an Article or a Section of this
Agreement unless otherwise indicated. The table of contents, table of defined
terms and headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.
The phrases "the date of this Agreement", "the date hereof," and terms of
similar import, unless the context otherwise requires, shall be deemed to refer
to October 14, 1999. The words "include," "includes" and "including" when used
herein shall be deemed in each case to be followed by the words "without
limitation."
Section 9.04 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two 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.
Section 9.05 Entire Agreement; No Third Party Beneficiaries. This
Agreement (including the documents and the instruments referred to herein) (a)
constitute the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, and (b) except as expressly provided in Sections 6.11,
6.13, 6.18(c), 6.18(e) and 6.20 are not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder; provided that the
Confidentiality Agreement shall remain in full force and effect until the
Effective Time. Each party hereto agrees that, except for the representations
and warranties contained in this Agreement, neither the Company nor Parent makes
any other representations or warranties, and each hereby disclaims any other
representations and warranties made by itself or any of its officers, directors,
employees, agents, financial and legal advisors or other representatives, with
respect to the execution and delivery of this Agreement or the transactions
contemplated hereby, notwithstanding the delivery or disclosure to the other or
the other's representatives of any documentation or other information with
respect to any one or more of the foregoing.
Section 9.06 Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Delaware without regard to any
applicable conflicts of law.
Section 9.07 Other Remedies; Specific Performance. Except as otherwise
provided herein, any and all remedies herein expressly conferred upon a party
will be deemed cumulative with and not exclusive of any other remedy conferred
hereby, or by law or equity upon such party, and the exercise by a party of any
one remedy will not preclude the exercise of any other remedy. The parties
hereto agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an
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injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any state having jurisdiction, this being in addition to any other remedy to
which they are entitled at law or in equity.
Section 9.08 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and assigns.
Section 9.09 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 hereto. The parties further agree
to replace such void or unenforceable provision of this Agreement with a valid
and enforceable provision that will achieve, to the extent possible, the
economic, business and other purposes of such void or unenforceable provision.
Section 9.10 WAIVER OF JURY TRIAL. EACH OF PARENT, THE COMPANY AND SUB
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 PARENT, THE COMPANY OR SUB IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
Section 9.11 Elimination of Parent Voting Proposal. Notwithstanding
anything in this Agreement to the contrary, in the event that no vote of
Parent's stockholders is required for the issuance of Parent Common Stock
pursuant to Section 2.01 above, then, at the election of the Parent in its sole
discretion: (i) the provisions of this Agreement which require Parent to call,
give notice of, convene and hold a stockholders meeting, and Section 7.01(a), to
the extent relating to the approval of the Parent Voting Proposal, shall be
deemed satisfied, and all references in this Agreement to a Joint Proxy
Statement shall be deemed to refer only to the Proxy Statement to be sent to
Company stockholders; (ii) for all purposes of this Agreement, Parent shall be
treated as having recommended approval of the Parent Voting Proposal at all
times and the stockholders of Parent will be deemed to have approved the Parent
Voting Proposal; and (iii) no representation or warranty of Parent stating that
the Parent Voting Proposal is required will be treated as untrue.
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IN WITNESS WHEREOF, Parent, Sub and the Company have caused this Agreement
to be signed by their respective officers thereunto duly authorized as of the
date first written above.
Millennium Pharmaceuticals, Inc.
By: /s/ Xxxx Xxxxx
---------------------------
Name: Xxxx Xxxxx
Title: Chief Executive Officer
--------------------------
ANM, Inc.
By: /s/ Xxxx Xxxxxxxxxx
---------------------------
Name: Xxxx Xxxxxxxxxx
Title: President
-------------------------
Leukosite, Inc.
By: /s/ Xxxxxxxxxxx X. Xxxxxxxxx
----------------------------
Name: Xxxxxxxxxxx X. Xxxxxxxxx
Title: Chief Executive Officer
--------------------------
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The undersigned, being the duly elected Secretary or Assistant Secretary
of Sub, hereby certifies that this Agreement has been adopted by a majority of
the votes represented by the outstanding shares of capital stock of Sub entitled
to vote on this Agreement.
/s/ Xxxx Xxxxxxx
--------------------------
Name: Xxxx Xxxxxxx
Title 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 shares of capital stock of
the Company entitled to vote on this Agreement.
---------------------------
Name:
Title:
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