Exhibit B
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
EUSA PHARMA, INC.,
EUSA PHARMA (USA), INC.
and
CYTOGEN CORPORATION
Dated as of March 10, 2008
TABLE OF CONTENTS
Page
ME1 7313446v.2
ARTICLE I THE MERGER.....................................................2
1.1 The Merger..........................................................2
1.2 Closing; Effective Time.............................................2
1.3 Effects of the Merger...............................................2
1.4 Further Assurances..................................................3
ARTICLE II EFFECT ON CAPITAL STOCK; SURRENDER OF
CERTIFICATES AND PAYMENT.......................................3
2.1 Total Merger Consideration; Effect on Capital Stock.................3
2.2 Surrender of Stock Certificates and Payment.........................5
2.3 Withholding Rights..................................................6
2.4 Lost, Stolen or Destroyed Certificates..............................7
2.5 Company Derivative Securities; Company Restricted Shares............7
ARTICLE III REPRESENTATIONS AND WARRANTIES
OF THE COMPANY.................................................8
3.1 Organization and Good Standing......................................8
3.2 Capitalization......................................................9
3.3 Subsidiaries of the Company........................................11
3.4 Authority and Enforceability.......................................12
3.5 No Conflict; Authorizations........................................13
3.6 SEC Filings; Financial Statements..................................14
3.7 No Undisclosed Liabilities.........................................15
3.8 Inventory..........................................................16
3.9 Accounts Receivable................................................16
3.10 Taxes..............................................................16
3.11 Compliance with Law................................................19
3.12 Authorizations.....................................................20
3.13 Title to Personal Properties.......................................20
3.14 Condition of Tangible Assets.......................................21
3.15 Leased Real Property...............................................21
3.16 Intellectual Property..............................................23
3.17 Absence of Certain Changes or Events...............................26
3.18 Contracts..........................................................28
3.19 Litigation.........................................................29
3.20 Employee Benefits..................................................30
3.21 Labor and Employment Matters.......................................33
3.22 Environmental......................................................34
3.23 Related Party Transactions.........................................37
3.24 Insurance..........................................................38
3.25 Books and Records..................................................39
3.26 Product Warranty...................................................39
3.27 Brokers or Finders.................................................39
TABLE OF CONTENTS
(continued)
Page
3.28 No Illegal Payments................................................40
3.29 Bank Accounts......................................................40
3.30 Rights Plan; Antitakeover Statutes.................................40
3.31 Opinion of Financial Advisor.......................................40
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT
AND MERGER SUB................................................40
4.1 Organization and Good Standing.....................................41
4.2 Authority and Enforceability.......................................41
4.3 No Conflicts; Authorizations.......................................41
4.4 Availability of Funds..............................................42
4.5 Brokers or Finders.................................................42
4.6 Interim Operations of Sub..........................................42
ARTICLE V COVENANTS OF THE COMPANY......................................42
5.1 Management Consulting Committee....................................42
5.2 Conduct of Business................................................43
5.3 Negative Covenants.................................................44
5.4 Access to Information..............................................46
5.5 Resignations.......................................................46
5.6 Consents...........................................................46
5.7 Notification of Certain Matters....................................47
5.8 Exclusivity........................................................48
5.9 Company Stockholders' Meeting......................................49
5.10 Proxy Statement....................................................50
5.11 Fairness Opinion...................................................51
ARTICLE VI COVENANTS OF PARENT...........................................51
6.1 Benefit Plans......................................................51
6.2 Delisting and Deregistration.......................................52
6.3 Indemnification....................................................52
ARTICLE VII COVENANTS OF THE COMPANY AND PARENT...........................53
7.1 Regulatory Approvals...............................................53
7.2 Public Announcements...............................................53
7.3 Further Assurances.................................................54
7.4 Voting Agreements..................................................54
ARTICLE VIII CONDITIONS TO MERGER..........................................54
8.1 Conditions to Each Party's Obligation to Effect the Merger.........54
8.2 Conditions to Obligations of Parent and Merger Sub to
Effect the Merger..................................................54
8.3 Conditions to Obligation of the Company to Effect the Merger.......56
ii
TABLE OF CONTENTS
(continued)
Page
ARTICLE IX TERMINATION...................................................56
9.1 Termination........................................................56
9.2 Effect of Termination..............................................59
9.3 Remedies...........................................................59
9.4 Termination Fee....................................................59
ARTICLE X MISCELLANEOUS.................................................61
10.1 Notices............................................................61
10.2 Survival...........................................................62
10.3 Amendments and Waivers.............................................62
10.4 Fees and Expenses..................................................63
10.5 Successors and Assigns.............................................63
10.6 Governing Law......................................................63
10.7 Consent to Jurisdiction............................................63
10.8 Counterparts.......................................................64
10.9 Third Party Beneficiaries..........................................64
10.10 Entire Agreement...................................................64
10.11 Captions...........................................................64
10.12 Severability.......................................................64
10.13 Specific Performance...............................................64
ARTICLE XI DEFINITIONS...................................................65
11.1 Definitions........................................................65
11.2 Interpretation.....................................................67
iii
Execution Copy
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated March 10, 2008 (the "Agreement"), by
and among EUSA Pharma Inc., a Delaware corporation ("Parent"), EUSA Pharma
(USA), Inc., a Delaware corporation and a wholly owned subsidiary of Parent
("Merger Sub"), and Cytogen Corporation, a Delaware corporation (the "Company").
Capitalized terms used in this Agreement shall have the meanings assigned to
them in ARTICLE XI, or in the applicable Section of this Agreement to which
reference is made in ARTICLE XI.
WHEREAS, the respective Boards of Directors of Parent, Merger Sub and the
Company deem it advisable and in the best interests of their respective
stockholders to enter into this Agreement providing for, among other things, the
merger (the "Merger") of Merger Sub with and into the Company in accordance with
the provisions of the General Corporation Law of the State of Delaware (the
"DGCL") upon the terms and subject to the conditions set forth herein; and
WHEREAS, in furtherance thereof, the respective Boards of Directors of
Parent, Merger Sub and the Company have approved this Agreement and the Merger
in accordance with the DGCL, upon the terms and subject to the conditions set
forth in this Agreement; and
WHEREAS, the Board of Directors of the Company has determined that the
consideration to be paid for each share of the issued and outstanding common
stock, par value $0.01 per share, of the Company (the "Company Common Stock") in
the Merger is fair to the holders thereof and has resolved to recommend to the
stockholders of the Company the adoption of this Agreement; and
WHEREAS, concurrently with the execution of this Agreement, as a condition
and inducement to Parent's and Merger Sub's willingness to enter into this
Agreement, Parent and the Company are entering into voting agreements, in
substantially the form attached hereto as Exhibit A, with certain officers and
directors of the Company, dated as of the date hereof (the "Voting Agreement")
pursuant to which such officers and directors have agreed, upon the terms and
subject to the conditions set forth in their respective Voting Agreements, among
other things, (i) to vote their respective shares of Company Common Stock in
favor of adoption of this Agreement, and (ii) to require that any transferee of
their beneficial ownership of the Company common stock enter into a Voting
Agreement with Parent and the Company; and
WHEREAS, Parent, as the sole stockholder of Merger Sub, has adopted this
Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and the
respective representations and warranties, covenants and agreements contained
herein, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Subject to the terms and conditions of this Agreement and
the Certificate of Merger in such form as is required by the relevant provisions
of the DGCL, at the Effective Time, Merger Sub shall be merged with and into the
Company and the separate corporate existence of Merger Sub shall thereupon
cease. As a result of the Merger, the outstanding shares of capital stock of the
Company and Merger Sub shall be converted or canceled in the manner provided in
ARTICLE II of this Agreement, the separate corporate existence of Merger Sub
shall cease and the Company shall be the surviving corporation following the
Merger. Merger Sub and the Company are sometimes referred to herein as the
"Constituent Corporations" and the Company as the surviving corporation
following the Merger is sometimes referred to herein as the "Surviving
Corporation."
1.2 Closing; Effective Time. Subject to the terms and conditions contained
in this Agreement, the closing of the Merger (the "Closing") shall take place at
the offices of Xxxxxx, Xxxxx & Xxxxxxx LLP, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx
Xxxxxx 00000, at 10:00 a.m. on a date to be specified by the parties which shall
be no later than two (2) Business Days after satisfaction (or waiver as provided
herein) of the conditions set forth in ARTICLE VIII (other than those conditions
that by their nature will be satisfied at the Closing), unless another time,
date and/or place is agreed to in writing by the parties. The date upon which
the Closing occurs is herein referred to as the "Closing Date." Subject to the
provisions of Section 1.1, as promptly as possible after the satisfaction or, if
permissible, the waiver, of the conditions set forth in ARTICLE VIII of this
Agreement, the Company, as the Surviving Corporation, shall cause the Merger to
be consummated by filing the Certificate of Merger with the Secretary of State
of the State of Delaware in such form as required by and executed in accordance
with the relevant provisions of the DGCL. The Merger shall become effective at
such time as the Certificate of Merger is so filed or at such later time as is
set forth in the Certificate of Merger, if different, which time is hereinafter
referred to as the "Effective Time."
1.3 Effects of the Merger.
(a) At and after the Effective Time, the Merger shall have the
effects specified in the DGCL.
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(b) At the Effective Time, the Certificate of Incorporation of the
Company as the Surviving Corporation shall be amended and restated to read the
same as the Certificate of Incorporation of Merger Sub as in effect immediately
prior to the Effective Time, except that Article I of the Certificate of
Incorporation of the Surviving Corporation shall read as follows: "The name of
this corporation is EUSA Pharma (USA), Inc." As so amended and restated, the
Certificate of Incorporation of the Company shall be the Certificate of
Incorporation of the Surviving Corporation until amended thereafter in
accordance with applicable Law.
(c) At the Effective Time, the Bylaws of Merger Sub shall be the
Bylaws of the Surviving Corporation (except that all references to Merger Sub in
the Bylaws of the Surviving Corporation shall be changed to refer to EUSA Pharma
(USA), Inc.), until amended thereafter in accordance with applicable Law.
(d) At the Effective Time, the directors of Merger Sub immediately
prior to the Effective Time shall be the directors of the Surviving Corporation
and the officers of the Company immediately prior to the Effective Time shall be
the officers of the Surviving Corporation, each to hold office until their
respective death, permanent disability, resignation or removal or until their
respective successors are duly elected and qualified, all in accordance with the
Certificate of Incorporation and Bylaws of the Surviving Corporation and
applicable Law.
1.4 Further Assurances. If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments or assurances or any other acts or things are necessary,
desirable or proper (a) to vest, perfect or confirm, of record or otherwise, in
the Surviving Corporation its right, title and interest in, to or under any of
the rights, privileges, powers, franchises, properties or assets of either of
the Constituent Corporations, or (b) otherwise to carry out the purposes of this
Agreement, the Surviving Corporation and its proper officers and directors or
their designees shall be authorized to execute and deliver, in the name and on
behalf of either Constituent Corporation, all such deeds, bills of sale,
assignments and assurances and to do, in the name and on behalf of either
Constituent Corporation, all such other acts and things as may be necessary,
desirable or proper to vest, perfect or confirm the Surviving Corporation's
right, title and interest in, to and under any of the rights, privileges,
powers, franchises, properties or assets of such Constituent Corporation and
otherwise to carry out the purposes of this Agreement.
ARTICLE II
EFFECT ON CAPITAL STOCK; SURRENDER OF CERTIFICATES AND PAYMENT
2.1 Total Merger Consideration; Effect on Capital Stock. The aggregate
consideration, consisting solely of cash, shall be based upon the formula
contained in Schedule 2.1 of the Company Disclosure Schedules, but shall not
exceed Twenty-Two Million Six Hundred Thousand Dollars ($22,600,000) (the "Total
Merger Consideration"). At the Effective Time, by virtue of the Merger and
without any action on the part of Parent, Merger Sub, the Company or any
stockholder of the Company (each such stockholder, a "Company Stockholder"):
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(a) Each share of Company Common Stock, together with the associated
rights to purchase shares of capital stock of the Company ("Rights") issued
pursuant to that certain Amended and Restated Rights Agreement, dated as of
October 19, 1998, by and between the Company and Xxxxx Xxxxxx Shareholder
Services, L.L.C., as Rights Agent (the "Rights Plan") (each such share of
Company Common Stock, together with the associated Rights, equal to and meaning
a "Share"), issued and outstanding immediately prior to the Effective Time
(other than Excluded Shares (as defined below)) shall be converted into the
right to receive and become exchangeable for an amount of cash equal to the Per
Share Merger Consideration, as provided in Section 2.2 hereof.
(b) Each Share issued and outstanding and owned by Parent, Merger
Sub or any other Subsidiary of Parent and Shares owned by the Company or any
wholly owned subsidiary of the Company, in each case not held on behalf of third
parties (collectively, "Excluded Shares"), immediately prior to the Effective
Time shall be canceled and retired and shall cease to exist, and no cash,
securities or other consideration shall be payable in respect thereof.
(c) Each share of common stock of Merger Sub, par value $0.001 per
share, issued and outstanding immediately prior to the Effective Time shall be
converted into and become one fully paid and nonassessable share of common stock
of the Surviving Corporation.
(d) If between the date of this Agreement and the Effective Time,
the outstanding Shares shall have been changed into a different number of shares
or a different class, by reason of any stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of shares or
any similar event, the Per Share Merger Consideration and any other amounts
payable pursuant to this Agreement shall be correspondingly adjusted to the
extent appropriate to reflect such stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of shares or
similar event.
(e) Shares that are issued and outstanding immediately prior to the
Effective Time and which are held by holders of Shares who have not voted in
favor of or consented to the Merger and who have properly demanded and perfected
their rights to be paid the fair value of such Shares in accordance with Section
262 of the DGCL (the "Appraisal Shares") shall not be converted into the right
to receive the Per Share Merger Consideration and the holders thereof shall be
entitled to only such rights as are granted by Section 262 of the DGCL;
provided, however that if any such stockholder of the Company shall fail to
perfect or shall effectively waive, withdraw or lose such stockholder's rights
under Section 262 of the DGCL, such stockholder's Appraisal Shares in respect of
which the Stockholder would otherwise be entitled to receive fair value under
the Section 262 of the DGCL shall thereupon be deemed to have been converted at
the Effective Time, into the right to receive the Per Share Merger Consideration
without any interest thereon.
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(f) The Company shall give Parent (i) prompt notice of any notice
received by the Company of intent to demand the fair value of any Shares,
withdrawals of such notices and any other instruments served pursuant to Section
262 of the DGCL and received by the Company and (ii) the opportunity to direct
and participate at its expense in all negotiations and proceedings with respect
to the exercise of dissenters' rights under Section 262 of the DGCL. The Company
shall not, except with the prior written consent of Parent, voluntarily make or
agree to make any payment with respect to any such exercise of dissenters'
rights or offer to settle or settle any such rights or approve any withdrawal of
any such demands.
2.2 Surrender of Stock Certificates and Payment.
(a) Promptly following the Effective Time, Parent shall enter into
an agreement with American Stock Transfer and Trust Company, or such other bank
or trust company of recognized standing that may be designated by Parent and is
reasonably satisfactory to the Company (the "Paying Agent"). Following the
Effective Time, Parent shall deposit, or shall cause to be deposited, with the
Paying Agent, for the benefit of the Company Stockholders (other than with
respect to Excluded Shares), the amount of cash payable pursuant to Section 2.1
as of the Effective Time in respect of the Shares (other than Excluded Shares)
(such cash, together with any dividends or distributions with respect thereto,
being hereinafter referred to as the "Payment Fund"). The Paying Agent shall
make the cash payments provided for in the preceding sentence out of the Payment
Fund. The Payment Fund shall not be used for any other purpose.
(b) As promptly as reasonably practicable after the Effective Time,
provided that the Company has cooperated to make the necessary information
available thereto a sufficient time in advance, Parent shall cause the Paying
Agent to mail to each holder of record of Shares a letter of transmittal and
instructions (which shall be in customary form and shall specify that delivery
shall be effected, and risk of loss and title to Shares shall pass, only upon
proper delivery of the certificates representing Shares ("Certificates") or
transfer of uncertificated Shares ("Uncertificated Shares") to the Paying Agent)
for use in exchanging Shares for the Per Share Merger Consideration payable in
respect of such Shares. Upon (x) surrender to the Paying Agent of a Certificate
for cancellation, together with such letter of transmittal, duly executed and
completed in accordance with the instructions thereto, and such other documents
as may be reasonably required pursuant to such instructions, or (y) receipt of
an "agent's message" by the Paying Agent (or any other evidence that the Paying
Agent may reasonably request ) in the case of a book-entry transfer of
Uncertificated Shares, the holder of such Shares shall be entitled to receive in
exchange therefor cash in an amount (subject to any applicable withholding
taxes) equal to the product of the number of Shares represented by a Certificate
or Uncertificated Shares and the Per Share Merger Consideration, and the
Certificate or Uncertificated Shares so surrendered shall forthwith be canceled.
5
(c) If any portion of the Total Merger Consideration is to be paid
to a Person other than the Person in whose name the surrendered Certificates or
Uncertificated Shares are surrendered, it shall be a condition to such payment
that (i) such Certificate shall be properly endorsed or shall otherwise be in
proper form for transfer or, in the case of an Uncertificated Share, such
Uncertificated Share shall be properly transferred and (ii) the Person
requesting such payment shall pay to the Paying Agent any and all Taxes required
as a result of the payment to a Person other than the registered holder of the
Certificate or Uncertificated Share or establish by evidence satisfactory to the
Paying Agent that any such Taxes have been paid or are not payable. Until
surrendered or transferred as contemplated by this Section 2.2, each Certificate
and Uncertificated Share (other than Certificates or Uncertificated Shares
representing Excluded Shares and Appraisal Shares) shall represent at all times
after the Effective Time solely the right to receive, upon such surrender or
transfer, in accordance with the terms hereof, the Per Share Merger
Consideration in respect of the Company Common Stock represented thereby.
(d) All cash paid upon surrender of Certificates and Uncertificated
Shares in accordance with the terms of this ARTICLE II shall be deemed to have
been paid in full satisfaction of all rights pertaining to the Shares
theretofore represented by such Certificates or Uncertificated Shares. At the
close of business on the day of the Effective Time, the stock transfer books of
the Company shall be closed and there shall be no further registration of
transfers of Shares thereafter on the records of the Company. From and after the
Effective Time, the Company Stockholders shall cease to have any rights with
respect to Shares outstanding immediately prior to the Effective Time, except as
otherwise provided in this Agreement or by Law. On or after the Effective Time,
any Certificates or Uncertificated Shares presented to the Paying Agent or
Parent for any reason shall be canceled and exchanged for the Per Share Merger
Consideration provided for, and in accordance with the procedures set forth in,
this ARTICLE II.
(e) Any portion of the Total Merger Consideration made available to
the Paying Agent to pay for Shares for which appraisal rights have been
perfected shall be returned to Parent upon demand. Any portion of the Payment
Fund that remains undistributed to the Company Stockholders for a period of six
months after the Effective Time shall be redelivered to Parent, and any Company
Stockholders who have not theretofore complied with this ARTICLE II shall
thereafter look only to Parent for the cash to which they are entitled pursuant
to Section 2.1. Any portion of the Payment Fund remaining unclaimed by Company
Stockholders as of a date that is immediately prior to such time as such amounts
would otherwise escheat to or become property of any Governmental Entity shall,
to the extent permitted by applicable Law, become the property of Parent free
and clear of any claims or interest of any Person previously entitled thereto.
To the fullest extent permitted by Law, neither Parent nor the Surviving
Corporation shall be liable to any Company Stockholder or other Person for cash
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar Law.
6
2.3 Withholding Rights. Each of the Surviving Corporation, Parent and the
Paying Agent shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any Company Stockholder such
amounts as it is required to deduct and withhold with respect to the making of
such payment under the Internal Revenue Code of 1986 (the "Code"), or any
provision of state, local or foreign Tax Law. To the extent that amounts are so
withheld by the Surviving Corporation, Parent or the Paying Agent, as the case
may be, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the Shares in respect of which
such deduction and withholding was made by the Surviving Corporation, Parent or
the Paying Agent, as the case may be.
2.4 Lost, Stolen or Destroyed 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 or the Paying Agent, the posting by such
Person of a bond, in such reasonable amount as the Surviving Corporation or
Paying Agent may direct, as indemnity against any claim that may be made against
it with respect to such Certificate and the payment of any fee charged by the
Paying Agent for such service, the Paying Agent will issue in exchange for such
lost, stolen or destroyed Certificate the amount of cash to which the holder
thereof is entitled pursuant to Section 2.1 (subject to any applicable
withholding taxes).
2.5 Company Derivative Securities; Company Restricted Shares.
(a) The Board of Directors of the Company shall take all actions
necessary to cause, at the Effective Time, each outstanding option, stock
equivalent right, warrant or other right to acquire shares of Company Common
Stock (a "Derivative Security" or "Derivative Securities") whether or not then
exercisable or vested, shall, by virtue of the Merger and without any action on
the part of any holder of any Derivative Security, become fully exercisable and
vested. At the Effective Time (A) each Derivative Security which is then
outstanding shall be canceled and (B) in consideration of such cancellation,
each Derivative Security shall be converted into the right to receive, as
promptly as reasonably practicable following the Effective Time, a cash payment
with respect thereto equal to the product of (x) the excess of the Per Share
Merger Consideration over the exercise price thereof of the Derivative Security,
if any, and (y) the number of shares of Common Stock subject thereto (such
payment to be net of taxes required by Law to be withheld with respect thereto).
No payment shall be made with respect to any Derivative Security having a per
share exercise price, as in effect at the Effective Time, equal to or greater
than the Per Share Merger Consideration. In addition, all shares reserved for
issuance under the Option Plans (as herein defined) shall be canceled. The
cancellation of a Derivative Security as provided in this Section 2.5 shall be
deemed a release of any and all rights the holder thereof had or may have in
respect of such Derivative Security. Within five (5) business days after the
Effective Time, Parent shall pay the aggregate amount due to holders of
Derivative Securities pursuant to this Section 2.5 to an account or accounts
designated by the Company by wire transfer of immediately available United
States funds. Notwithstanding anything to the contrary contained herein, prior
to the Effective Time, the Company shall take any and all actions necessary to
effectuate this Section 2.5.
7
(b) At the Effective Time, each share of Company Common Stock that
is subject to vesting and a repurchase option in favor of the Company
immediately prior to the Effective Time (collectively, "Company Restricted
Shares") shall be 100% exercisable, whether or not then exercisable or vested,
and each holder of Company Restricted Shares shall be treated as a holder of
Company Common Stock pursuant to Section 2.1 above and entitled to receive the
Per Share Merger Consideration for each Company Restricted Share.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Merger Sub that
the statements contained in this ARTICLE III are true and correct, except as set
forth in the forms, reports, statements, schedules, registration statements and
other documents filed by the Company with the SEC (other than the exhibits to
such documents) within the last twelve months (collectively, the "Current
Company SEC Reports"), or disclosure schedule dated and delivered as of the date
hereof by the Company to Parent (the "Company Disclosure Schedule"), which is
being concurrently delivered to Parent in connection herewith and is designated
therein as being the Company Disclosure Schedule. The Company Disclosure
Schedule shall be arranged in paragraphs corresponding to each representation
and warranty set forth in this ARTICLE III.
3.1 Organization and Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation, has all requisite power to own, lease and
operate its properties and to carry on its business as now being conducted and
is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which it owns or leases property or conducts
any business so as to require such qualification, except for those jurisdictions
where the failure to be so qualified and in good standing would not reasonably
be expected to be, individually or in the aggregate, material to the Company and
its Subsidiaries taken as a whole. The Company has delivered to Parent prior to
the date of this Agreement true and complete copies of (i) its Charter Documents
and (ii) all minutes of (A) the meetings of its Board of Directors, (B) the
meetings of each committee of its Board of Directors and (C) the meetings of its
stockholders (in each case including any and all written consents in lieu of
such meetings) held between January 1, 2006 and August 14, 2007. Such Charter
Documents are in full force and effect and the Company is not in default of any
provision thereunder. There are no resolutions or other actions of the Board of
Directors, any committee of the Board of Directors or the stockholders other
than as disclosed in the minutes and written consents provided to Parent.
"Charter Documents" means, with respect to any entity, the certificate of
incorporation, the articles of incorporation, by-laws, articles of organization,
limited liability company agreement, partnership agreement, formation agreement,
joint venture agreement or other similar organizational documents of such entity
(in each case, as amended).
8
3.2 Capitalization.
(a) The authorized capital stock of the Company consists of
100,000,000 shares of Company Common Stock, of which 35,570,836 shares of
Company Common Stock are issued and outstanding as of the date hereof, and
5,400,000 shares of preferred stock, par value $.01 per share (the "Company
Preferred Stock"), of which no shares of Company Preferred Stock are issued and
outstanding as of the date hereof. All issued and outstanding shares of Company
Common Stock have been duly authorized and validly issued, are fully paid and
nonassessable, and were issued in compliance with all applicable federal and
state securities Laws. No shares of Company Common Stock are held by any
Subsidiary of the Company. No shares of Company Common Stock or Company
Preferred Stock are held in the Company's treasury. As of the date hereof,
200,000 shares of Company Preferred Stock are designated as Series C Junior
Participating Preferred Stock, of which no shares are issued and outstanding,
but are reserved for issuance upon the exercise of Rights issued pursuant to the
Rights Plan.
(b) The Company has duly reserved 3,305,528 shares of Company Common
Stock for future issuance pursuant to the Company Stock Plans, of which options
to purchase shares of Company Common Stock (the "Company Stock Options") to
purchase 1,970,866 shares of Company Common Stock are outstanding as of the date
hereof. The Company has provided to Parent a report dated as of December 13,
2007 that sets forth with respect to each Company Stock Option that is
outstanding as of such date: (i) the name of the holder of such Company Stock
Option; (ii) the date on which such Company Stock Option was granted; (iii) the
term of such Company Stock Option; (iv) the total number of shares of Company
Common Stock that was originally subject to such Company Stock Option; (v) the
number of shares of Company Common Stock that remain subject to such Company
Stock Option and the number of such shares of Company Common Stock that have
vested; (vi) the vesting schedule for such Company Stock Option; (vii) the
exercise price per share of Company Common Stock purchasable under such Company
Stock Option; and (viii) whether such Company Stock Option has been designated
an "incentive stock option" as defined in section 422 of the Code. The Company
has delivered to Parent accurate and complete copies of the Company Stock Plans
under which there are currently outstanding options. The Company has provided to
Parent a report dated as of the date hereof that sets forth with respect to
Company Restricted Shares that are outstanding as of such date: (i) the name of
each holder of Company Restricted Shares; (ii) the total number of Company
Restricted Shares originally issued to such holder; (iii) the date on which such
Company Restricted Shares were issued; (iv) the number of Company Restricted
Shares which have vested; (v) the vesting schedule for such Company Restricted
Shares; and (vi) the purchase price per share of such Company Restricted Shares.
The Company has delivered to Parent accurate and complete copies of (A) its
standard form of restricted shares agreement and (B) any restricted shares
agreement which deviates in any material respect from the standard form of
restricted shares agreement. The Company has duly reserved 10,535,370 shares of
Company Common Stock for future issuance pursuant to the warrants issued by the
Company (the "Company Warrants") to purchase 10,535,370 shares of Company Common
Stock which are outstanding as of the date hereof.
9
(c) Except for (i) the shares of Company Common Stock outstanding as
of the date hereof, (ii) the Company Stock Options outstanding as of the date
hereof, (iii) the Rights, and (iv) the other options, warrants, purchase rights,
subscription rights, conversion rights, exchange rights and other Contracts
that, directly or indirectly, could require the Company to issue, sell or
otherwise cause to become outstanding shares of Company Common Stock that are
disclosed in Section 3.2(c)(iv) of the Company Disclosure Schedule (the options,
warrants, rights and other Contracts required to be disclosed pursuant to this
Section 3.2(c)(iv), the "Other Purchase Rights"), the Company does not have
outstanding securities of any kind. Except as set forth in the preceding
sentence, the Company is not a party to any Contract obligating the Company,
directly or indirectly, to issue additional securities and, to the Company's
Knowledge, there is no circumstance or condition that may give rise to a claim
by any Person that such Person is entitled to acquire any securities of the
Company. As of the Effective Time, there will be no more than an aggregate of
36,135,929 shares of Company Common Stock that are then outstanding or subject
to (A) 527,040 Company Restricted Shares that are then outstanding; and (B)
38,053 shares of Common Stock issued under the Company's 2005 Employee Stock
Purchase Plan.
(d) All outstanding Company Stock Options and Other Purchase Rights
have been duly authorized and validly issued and were issued in compliance with
all applicable federal and state securities Laws. All shares of Company Common
Stock subject to issuance upon exercise, conversion and/or exchange of Company
Stock Options and Other Purchase Rights, upon issuance in accordance with the
terms and conditions specified in the instruments pursuant to which they are
issuable, will be duly authorized, validly issued, fully paid and nonassessable.
(e) No Company Stock Option, Company Restricted Share or Other
Purchase Right will by its terms require an adjustment in connection with the
Merger, except as contemplated by this Agreement. Neither the consummation of
the transactions contemplated by this Agreement, nor any action taken or to be
taken by the Company in connection with such transactions, will result in the
inability of Parent after the Effective Time to exercise any right or benefit
held by the Company prior to the Effective Time with respect to any Company
Stock Option assumed by Parent or any Company Restricted Share, to the extent
applicable.
(f) None of the shares of Company Common Stock, Company Stock
Options or Other Purchase Rights were issued or have been transferred in
violation of, or are subject to, any preemptive rights, rights of first offer or
subscription agreements. The Company is not a party to any stockholder
agreements, voting agreements, voting trusts or any such other similar
arrangements with respect to the transfer, voting or other rights associated
with its securities other than in accordance with the provisions hereof and, to
the Company's Knowledge, there are no such agreements to which the Company is
not a party.
10
(g) Except for the repurchase at cost of shares of Company Common
Stock from employees of the Company and its Subsidiaries in connection with the
termination of their employment, the Company has not repurchased or otherwise
reacquired any of its securities. The repurchase of any such securities was duly
approved and authorized by the Board of Directors and complied in all respects
with applicable Law, and the Company has no liability, contingent or otherwise,
to make any payments with respect to any such repurchased securities. There are
no obligations, contingent or otherwise, of the Company to repurchase, redeem or
otherwise acquire any of its securities. There are no declared or accrued unpaid
dividends with respect to any of the Company's securities.
(h) The Company does not have outstanding or authorized any stock
appreciation, phantom stock, profit participation, or similar rights.
(i) The Company does not have outstanding any bonds, debentures,
notes or other obligations or debt securities the holders of which have the
right to vote (or convertible into, or exercisable or exchangeable for,
securities having the right to vote) on any matter.
3.3 Subsidiaries of the Company.
(a) The Company Disclosure Schedule contains a true and complete
list of the Subsidiaries of the Company and sets forth with respect to each such
Subsidiary (i) the jurisdiction of formation, (ii) the authorized and
outstanding capital stock of such Subsidiary, (iii) the owner(s) of record of
such outstanding capital stock and (iv) its status as an active or dormant
company. The outstanding shares of capital stock of each Subsidiary of the
Company have been duly authorized and validly issued, are fully paid and
nonassessable and, other than as set forth on the Company Disclosure Schedule,
are owned by the Company or another Subsidiary of the Company free and clear of
all liens, claims, charges, security interests, mortgages, pledges, easements,
conditional sale or other title retention agreements, defects in title,
covenants or other restrictions of any kind, including, any restrictions on the
use, voting, transfer or other attributes of ownership (collectively, "Liens").
(b) Each Subsidiary of the Company is validly existing and in good
standing under the Laws of the jurisdiction of its formation, has all requisite
power to own, lease and operate its properties and to carry on its business as
now being conducted and is duly qualified to do business and is in good standing
in each jurisdiction in which it owns or leases property or conducts any
business so as to require such qualification, except for those jurisdictions
where the failure to be so qualified and in good standing would not reasonably
be expected to be, individually or in the aggregate, material to the Company and
its Subsidiaries taken as a whole. All actions taken by each of the Subsidiaries
has been authorized by all necessary corporate action, except where the failure
to so authorize would not reasonably be expected to be, individually or in the
aggregate, material to the Company.
(c) Other than the shares of capital stock set forth in the Company
Disclosure Schedule, no Subsidiary of the Company has outstanding securities of
any kind. No Subsidiary of the Company is party to any Contract obligating such
Subsidiary, directly or indirectly, to issue any additional securities and there
is no circumstance or condition that may give rise to a claim by any Person that
such Person is entitled to acquire the securities of any such Subsidiary.
11
(d) No Subsidiary of the Company has outstanding any bonds,
debentures, notes or other obligations or debt securities the holders of which
have the right to vote (or convertible into, or exercisable or exchangeable for,
securities having the right to vote) on any matter.
(e) Other than as set forth in the Company Disclosure Schedule,
neither the Company nor any Subsidiary of the Company, directly or indirectly,
owns any securities or other interest in any corporation, partnership, joint
venture or other business association or entity, or to provide funds to or make
any investment.
(f) There are no obligations, contingent or otherwise, of the
Company or any Subsidiary of the Company to provide funds to or make an
investment (in the form of a loan, capital contribution or otherwise) in any
entity.
(g) Any Subsidiary of the Company that is not wholly-owned is
dormant and inactive. There are no contracts, assets, liabilities, obligations
or entitlements existing in connection with any such Subsidiary to any
stockholder or third party.
3.4 Authority and Enforceability.
(a) The Company has all necessary corporate power and authority to
enter into this Agreement, and, subject in the case of the consummation of the
Merger to the Company Stockholder Approval, to perform its obligations hereunder
and to consummate the transactions contemplated hereby. The execution and
delivery by the Company of this Agreement and the consummation by the Company of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company, subject in the case of the
consummation of the Merger to the Company Stockholder Approval. The affirmative
vote of the holders of a majority of the outstanding shares of Company Common
Stock at a duly convened meeting of the Company Stockholders to adopt this
Agreement is the only vote of the holders of any class of capital stock or other
security of the Company necessary to approve this Agreement and the Merger (the
"Company Stockholder Approval"). This Agreement has been duly executed and
delivered by the Company and, assuming due authorization, execution and delivery
by Parent and Merger Sub, constitutes the valid and binding obligation of the
Company, enforceable against it in accordance with its terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or other similar Laws affecting or relating to creditors' rights
generally, and (ii) the availability of injunctive relief and other equitable
remedies.
(b) The Board of Directors of the Company has, by the unanimous vote
of all directors then in office, (i) approved this Agreement and the
transactions contemplated hereby, (ii) determined that the Merger is advisable
and in the best interests of the Company Stockholders and (iii) resolved to
recommend that the Company Stockholders adopt this Agreement and directed that
this Agreement be submitted to the Company Stockholders for adoption.
12
3.5 No Conflict; Authorizations.
(a) The execution and delivery of this Agreement by the Company do
not, and the performance by the Company of its obligations hereunder and the
consummation by the Company of the transactions contemplated hereby (in each
case, with or without the giving of notice or lapse of time, or both) will not,
directly or indirectly, (i) violate the provisions of the Company's or any of
its Subsidiaries' Charter Documents, (ii) violate or conflict with, or
constitute a default, an event of default or an event creating rights of
acceleration, termination, cancellation, imposition of additional obligations or
loss of rights, or require a consent to assignment, under any Contract (A) to
which the Company or any of its Subsidiaries is a party, (B) of which the
Company or any of its Subsidiaries is a beneficiary or (C) by which the Company
or any of its Subsidiaries or any of their respective assets is bound, (iii)
assuming compliance by the Company with the matters referred to in Section
3.5(b), violate or conflict with any Law, Authorization or Order applicable to
the Company or any of its Subsidiaries, or give any Governmental Entity or other
Person the right to challenge any of the transactions contemplated hereby or to
exercise any remedy, obtain any relief under or revoke or otherwise modify any
rights held under, any such Law, Authorization or Order, or (iv) result in the
creation of any Liens upon any of the assets owned or used by the Company or any
of its Subsidiaries, except for any such violations, conflicts, defaults and
events referred to in clause (ii) and for any such violations, conflicts,
challenges, remedies, relief, revocations, modifications or Liens referred to in
clauses (iii) and (iv) that would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. Section
3.5(a) of the Company Disclosure Schedule sets forth all consents, waivers,
assignments and other approvals and actions that are required in connection with
the transactions contemplated by this Agreement under any Contract to which the
Company or any of its Subsidiaries is a party (collectively, "Consents") in
order to preserve all rights of, and benefits to, the Surviving Corporation and
its Subsidiaries thereunder.
(b) No Authorization or Order of, registration, declaration or
filing with, or notice to any Governmental Entity or other Person, is required
by or with respect to the Company or any of its Subsidiaries in connection with
the execution and delivery of this Agreement and the consummation of the Merger,
except for (i) any necessary filing or approval of the New Jersey Department of
Environmental Protection pursuant to ISRA (as herein defined), (ii) the filing
of the Certificate of Merger with the Secretary of State of the State of
Delaware, (iii) the filing with the Securities and Exchange Commission (the
"SEC") of the Proxy Statement and such reports under Sections 13, 15(d) and 16
of the Securities Exchange Act of 1934 (the "Exchange Act") as may be required
in connection with this Agreement and the transactions contemplated hereby and
(iv) such filings under the rules of the NASDAQ Global Market ("NASDAQ") as may
be required in connection with this Agreement and the transactions contemplated
hereby.
13
3.6 SEC Filings; Financial Statements.
(a) The Company has filed all forms, reports, statements, schedules,
registration statements and other documents required to be filed by it with the
SEC from January 1, 2002 through and including its Quarterly Report on Form 10-Q
for the quarter ended September 30, 2007, and, when filed with the SEC, the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2007
(collectively, the "Company SEC Reports"). The Company has provided Parent with
draft audited financial statements of the Company for the year ended December
31, 2007. As of the respective dates they were filed, and with respect to the
Form 10-K, as of the date of its filing (and if amended or superseded by a
filing prior to the date of this Agreement then on the date of such filing), (i)
each Company SEC Report complied, and each such Company SEC Report filed
subsequent to the date hereof will comply, in all material respects with the
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
and the Exchange Act, as the case may be, (ii) none of the Company SEC Reports
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading, (iii) each required Company SEC Report containing financial
statements that has been filed with or submitted to the SEC by the Company since
January 1, 2002, was accompanied by the certifications required to be filed or
submitted by the Company's chief executive officer and chief financial officer
pursuant to the Xxxxxxxx-Xxxxx Act of 2002 and, at the time of filing or
submission of each such certificate, such certification was true and accurate
and complied in all material respects with the Xxxxxxxx-Xxxxx Act of 2002. The
Company maintains "disclosure controls and procedures" (as defined in Rule
13a-15(e) of the Exchange Act) required by Rule 13a-15 under the Exchange Act.
Such disclosure controls and procedures are sufficient to ensure that material
information (both financial and non-financial) required to be disclosed by the
Company in the reports that it files or furnishes under the Exchange Act is
recorded and reported on a timely basis to the Company's management to allow the
principal executive officer and the principal financial officer of the Company
or individuals performing similar functions, to make timely decisions regarding
required disclosure. Based on its most recent evaluation of such disclosure
controls and procedures prior to the date hereof, the Company has not disclosed
to its independent auditors and the audit committee of the Board of Directors
(i) any significant deficiencies and material weaknesses in the design or
operation of the Company's internal controls over financial reporting that are
reasonably likely to adversely affect the Company's ability to record, process,
summarize and report financial information and (ii) any fraud, whether or not
material, that involves management or other employees of the Company who have a
significant role in the Company's internal controls over financial reporting.
The Company is in compliance in all material respects with the provisions of the
Xxxxxxxx-Xxxxx Act and the rules and regulations promulgated thereunder
applicable to it. The Company has promptly disclosed, by filing a Current Report
on Form 8-K, any change in or waiver of the Company's code of ethics as required
by the Xxxxxxxx-Xxxxx Act. No Subsidiary of the Company is required to file any
form, report or other document with the SEC or any similar Governmental Entity
or any national securities exchange or quotation service.
14
(b) Each of the consolidated financial statements (including, in
each case, any notes thereto) contained in the Company SEC Reports (the "Company
Financial Statements") was prepared in accordance with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis throughout
the periods indicated (except as may be indicated in the notes thereto or, in
the case of unaudited statements, as permitted by Form 10-Q of the SEC) and each
presents fairly, in all material respects, the consolidated financial position,
results of operations and cash flows of the Company and its consolidated
Subsidiaries as at the respective dates thereof and for the respective periods
indicated therein, except as otherwise noted therein (subject, in the case of
unaudited statements, to normal and recurring year-end adjustments which would
not reasonably be expected to be, individually or in the aggregate, material to
the Company and its Subsidiaries taken as a whole). The most recent unaudited
balance sheet of the Company contained in the Company's Annual Report on Form
10-K for the year ended December 31, 2007 is hereinafter referred to as the
"Company Balance Sheet" and the date thereof is hereinafter referred to as the
"Company Balance Sheet Date." The draft audited financial statements for the
year ended December 31, 2007 (including any notes thereto) provided to the
Parent (the "Draft Financial Statements") were prepared in accordance with
United States generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods indicated (except as may be indicated in
the notes thereto) and presents fairly, in all material respects, the
consolidated financial position, results of operations and cash flows of the
Company and its consolidated Subsidiaries as at the date thereof and for the
period indicated therein, except as otherwise noted therein. When completed, and
signed by the auditors of the Company, there will be no material changes
thereto.
(c) There are no outstanding or unresolved comments in any comment
letters received by the Company from the SEC. As of the date of this Agreement,
to the knowledge of the Company, none of the Company SEC Reports is the subject
of any ongoing review by the SEC. The Company has furnished to Parent a complete
and correct copy of any amendments or modifications, which have not yet been
filed with the SEC but which are required to be filed, to agreements, documents
or other instruments that previously had been filed by the Company with the SEC
pursuant to the Securities Act or the Exchange Act.
3.7 No Undisclosed Liabilities. The Company and its Subsidiaries have no
liabilities, obligations or commitments of any nature whatsoever, asserted or
unasserted, known or unknown, absolute or contingent, accrued or unaccrued,
matured or unmatured or otherwise ("Liabilities"), except (a) those which are
adequately reflected or reserved against in the Company Balance Sheet, and (b)
those which have been incurred in the ordinary course of business and consistent
with past practice since the Company Balance Sheet Date and which are not,
individually or in the aggregate, material in amount. Neither the Company nor
any of its Subsidiaries is a party to, or has any commitment to become a party
to, any joint venture, off-balance sheet partnership or any similar Contract or
arrangement (including any Contract or arrangement relating to any transaction
or relationship between or among the Company and any of its Subsidiaries, on the
one hand, and any unconsolidated Affiliate, including any structured finance,
special purpose or limited purpose entity or Person, on the other hand, or any
"off-balance sheet arrangement" (as defined in Item 303(a)(iv) of Regulation
S-K)).
15
3.8 Inventory. The Company Disclosure Schedule provides a complete list as
of December 31, 2007 of current raw materials, supplies, parts, work-in-process
and finished goods as of the date hereof and provides the shelf life for all
finished goods. All inventory of the Company and its Subsidiaries (including
materials, supplies, parts, work-in-process and finished goods) is of a quality,
quantity and condition useable or saleable in the ordinary course of business.
None of such inventory is obsolete and no write-down of such inventory has been
made or should have been made in the period since the date of the applicable
Company Disclosure Schedule. The quantities of each item of inventory are not
excessive and are reasonable in the present circumstances of the Company and its
Subsidiaries. All work in process and finished goods inventory is free of any
material defect or other deficiency. All of such inventory is located at the
facilities of the Company or a Subsidiary of the Company or third-party contract
providers of the Company, and no inventory is held on a consignment basis.
3.9 Accounts Receivable. The accounts receivable of the Company and its
Subsidiaries as set forth on the Company Balance Sheet or arising since the date
thereof are, to the extent not paid in full by the account debtor prior to the
date hereof, (a) valid and genuine, have arisen solely out of bona fide sales
and deliveries of goods, performance of services and other business transactions
in the ordinary course of business consistent with past practice, (b) not
subject to valid defenses, set-offs or counterclaims, and (c) collectible within
sixty (60) days after due date at the full recorded amount thereof less, in the
case of accounts receivable appearing on the Company Balance Sheet, the recorded
allowance for collection losses on the Company Balance Sheet or, in the case of
Accounts Receivable arising since the Company Balance Sheet Date, the recorded
allowance for collection losses shown on the accounting records of the Company
and its Subsidiaries. The allowance for collection losses on the Company Balance
Sheet and, with respect to Accounts Receivable arising since the Company Balance
Sheet Date, the allowance for collection losses shown on the accounting records
of the Company and its Subsidiaries, have been determined in accordance with
GAAP consistent with past practice. The accounts receivable existing as of the
Closing Date will be collectible within sixty (60) days after due date at the
full recorded amount thereof net of the reserves shown on the accounting records
of the Company and its Subsidiaries as of the Closing Date (which reserve shall
be adequate and shall not represent a greater percentage of the accounts
receivable as of the Closing Date than the reserve reflected in the Company
Balance Sheet represented of the accounts receivable reflected therein).
3.10 Taxes.
(a) As used in this Agreement, the following words and terms have
the following definitions:
16
(i) "Tax" or "Taxes" means any and all federal, state, local,
or foreign net or gross income, gross receipts, net proceeds, sales, use, ad
valorem, value added, franchise, bank shares, withholding, payroll, employment,
excise, property, deed, stamp, alternative or add-on minimum, environmental,
profits, windfall profits, transaction, license, lease, service, service use,
occupation, severance, energy, unemployment, social security, workers'
compensation, capital, premium, and other taxes, assessments, customs, duties,
fees, levies, or other governmental charges of any nature whatever, whether
disputed or not, together with any interest, penalties, additions to tax, or
additional amounts with respect thereto.
(ii) "Tax Returns" means any return, declaration, report,
claim for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any amendment
thereof.
(iii) "Taxing Authority" means any Governmental Entity having
jurisdiction with respect to any Tax.
(b) Each of the Company and its Subsidiaries has duly and timely
filed all Tax Returns required to have been filed by or with respect to the
Company or such Subsidiary and will duly and timely file all Tax Returns due
between the date hereof and the Closing Date. Each such Tax Return correctly and
completely reflects all liability for Taxes and all other information required
to be reported thereon. All Taxes owed by the Company and each Subsidiary of the
Company (whether or not shown on any Tax Return) have been timely paid (or, if
due between the date hereof and the Closing Date, will be duly and timely paid).
Each of the Company and its Subsidiaries has adequately provided for, in its
books of account and related records, all Liability for all unpaid Taxes, being
current Taxes not yet due and payable.
(c) Each of the Company and its Subsidiaries has withheld and timely
paid all Taxes required to have been withheld and paid by it and has complied
with all information reporting and backup withholding requirements, including
maintenance of required records with respect thereto.
(d) The statute of limitations for the assessment of income Taxes
has expired for all periods prior to January 1, 2004. Neither the Company nor
any of its Subsidiaries is the beneficiary of any extension of time within which
to file any Tax Return, nor has the Company or any of its Subsidiaries made (or
had made on its behalf) any requests for such extensions. Neither the Company
nor any of its Subsidiaries has waived (or is subject to a waiver of) any
statute of limitations in respect of Taxes or has agreed to (or is subject to)
any extension of time with respect to a Tax assessment or deficiency. No power
of attorney granted by the Company or any Subsidiary with respect to any Taxes
is currently in force.
(e) The Company Disclosure Schedule indicates those Tax Returns that
have been audited and those Tax Returns that currently are the subject of audit.
Except as set forth in the Company Disclosure Schedule there is no material
Action now pending or threatened against or with respect to the Company or any
of its Subsidiaries in respect of any Tax or any assessment or deficiency nor is
there any basis for same. There are no liens for Taxes (other than for current
Taxes not yet due and payable) upon the assets of the Company. The Company has
delivered to Parent correct and complete copies of all federal and state income
Tax Returns, examination reports, and statements of deficiencies assessed
against or agreed to by the Company or any of its Subsidiaries for the tax
periods ended December 31, 2004, 2005 and 2006.
17
(f) The Company Disclosure Schedule lists, as of the date of this
Agreement, all jurisdictions in which the Company or any of its Subsidiaries
currently files Tax Returns. No claim has been made by an authority in a
jurisdiction where the Company or any of its Subsidiaries does not file Tax
Returns that any of them is or may be subject to taxation by that jurisdiction
or that any of them must file Tax Returns.
(g) Neither the Company nor any of its Subsidiaries has filed a
consent pursuant to the collapsible corporation provisions of Section 341(f) of
the Code (or any corresponding provisions of state, local or foreign income Tax
Law). None of the assets or properties of the Company or any of its Subsidiaries
constitutes tax-exempt bond financed property or tax-exempt use property within
the meaning of Section 168 of the Code. Neither the Company nor any of its
Subsidiaries is a party to any "safe harbor lease" within the meaning of Section
168(f)(8) of the Code, as in effect prior to amendment by the Tax Equity and
Fiscal Responsibility Act of 1982, or to any "long-term contract" within the
meaning of Section 460 of the Code. Neither the Company nor any of its
Subsidiaries has ever been a United States real property holding corporation
within the meaning of Section 897(c)(2) of the Code. The Company is not a
"foreign person" within the meaning of Section 1445 of the Code. 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 under certain circumstances
could obligate it to make payments that would not be deductible under Sections
280G, 409A, 404 or 162 of the Code or an excise tax to the recipient of such
payments pursuant to Section 4999 of the Code.
(h) Neither the Company nor any of its Subsidiaries has been the
"distributing corporation" (within the meaning of Section 355(c)(2) of the Code)
with respect to a transaction described in Section 355 of the Code within the
5-year period ending as of the date of this Agreement. Neither the Company nor
any of its Subsidiaries has received (or is subject to) any ruling from any
Taxing Authority or has entered into (or is subject to) any agreement with a
Taxing Authority. Each of the Company and its Subsidiaries have disclosed on its
federal income Tax Returns all positions taken therein that could give rise to a
substantial understatement of federal income Tax within the meaning of Section
6662 of the Code.
(i) Neither the Company nor any of its Subsidiaries (i) has ever
been a party to any Tax allocation or sharing agreement or Tax indemnification
agreement, (ii) has ever been a member of an affiliated, consolidated, condensed
or unitary group or (iii) has any liability for or obligation to pay Taxes of
any other Person under Treas. Reg. 1.1502-6 (or any similar provision of Tax
Law), or as transferee or successor, by contract or otherwise. Neither the
Company nor any of its Subsidiaries is a party to any joint venture,
partnership, or other arrangement that is treated as a partnership for federal
income tax purposes.
18
(j) The Company has not entered into any transaction that
constitutes a "reportable transaction" within the meaning of Treasury Regulation
Section 1.6011-4(b).
(k) The unpaid Taxes of the Company and any of its Subsidiaries (A)
did not, as of the Company Balance Sheet Date, exceed the reserve for Tax
liability (rather than any reserve for deferred Taxes established to reflect
timing differences between book and Tax income) set forth on the face (rather
than in any notes thereto) of the Company Balance Sheet and (B) do not exceed
that reserve as adjusted for the operations and transactions through the Closing
Date in accordance with the past custom and practice of the Company in filing
its Tax Returns.
(l) Neither the Company nor any of its Subsidiaries will be required
to include any item of income in, or exclude any item of deduction from, taxable
income for any Taxable period (or portion thereof) ending after the Closing Date
as a result of any (A) change in method of accounting for a Taxable period
ending on or prior to the Closing Date; (B) "closing agreement" as described in
Code ss.7121 (or any corresponding or similar provision of state, local or
foreign income tax law) executed on or prior to the Closing Date; (C)
intercompany transactions or any excess loss account described in Treasury
Regulations under Code ss.1502 (or any corresponding or similar provision of
state, local or foreign income tax law); (D) installment sale or open
transaction disposition made on or prior to the Closing Date; or (E) prepaid
amount received on or prior to the Closing Date.
(m) Neither the Company nor any of its Subsidiaries has (i) sold any
property or undertaken any transaction pursuant to which cash or other property
was received prior to the Closing and income or gain will be recognized on or
after the Closing, (ii) owned, directly or indirectly, stock in a "passive
foreign investment company", a "controlled foreign corporation", a "foreign
personal holding company", or a "foreign investment company", within the meaning
of Code Sections 1297(a), 957(a), 552(a) and 1246(b), respectively, (iii)
undertaken any action which would result in an "overall foreign loss" within the
meaning of the Code Section 904(f)(2), (iv) been subject to the "dual
consolidated loss" provisions of Code Section 1503(d), or (v) taken the position
that any income constitutes "blocked income" on account of foreign or domestic
legal restrictions and is therefore not currently taxable.
(n) The Company's tax basis in its assets for purposes of
determining its future amortization, depreciation and other federal income tax
deductions is accurately reflected on the Company's tax books and records.
3.11 Compliance with Law.
(a) Each of the Company and its Subsidiaries has complied in all
material respects with each, and is not in violation in any material respect of,
any applicable Law to which the Company or any of its Subsidiaries or its
business, operations, assets or properties are or have been subject.
19
(b) No event has occurred and no circumstances exist that (with or
without the passage of time or the giving of notice) may result in a violation
of, conflict with or failure on the part of the Company or any of its
Subsidiaries to comply with, any Law, except for any such violations, conflicts
or failures to comply that would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. Neither the
Company nor any of its Subsidiaries has received notice regarding any such
violation of, conflict with, or failure to comply with, any Law.
3.12 Authorizations.
(a) Each of the Company and its Subsidiaries owns, holds or lawfully
uses in the operation of its business all Authorizations which are necessary for
it to conduct its business as currently conducted or for the ownership and use
of the assets owned or used by the Company or such Subsidiary in the conduct of
its business free and clear of all Liens, except where the failure to own, hold,
possess or lawfully use any such Authorizations would not reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse Effect.
Such Authorizations are valid and in full force and effect and none of such
Authorizations will be terminated or impaired or become terminable as a result
of the transactions contemplated by this Agreement. All material Authorizations
are listed in the Company Disclosure Schedule.
(b) No event has occurred and no circumstances exist that (with or
without the passage of time or the giving of notice) may result in a violation
of, conflict with, failure on the part of the Company or any of its Subsidiaries
to comply with the terms of, or the revocation, withdrawal, termination,
cancellation, suspension or modification of any material Authorization. Neither
the Company nor any of its Subsidiaries has received notice regarding any
violation of, conflict with, failure to comply with the terms of, or any
revocation, withdrawal, termination, cancellation, suspension or modification
of, any material Authorization. Neither the Company nor any of its Subsidiaries
is in default, nor has the Company or any of its Subsidiaries received notice of
any claim of default, with respect to any material Authorization.
3.13 Title to Personal Properties.
(a) The Company Disclosure Schedule sets forth a complete and
accurate list of all the personal properties and assets owned, leased or used by
the Company or any of its Subsidiaries or otherwise used in the businesses of
the Company and its Subsidiaries as of the date of this Agreement, with a
current fair market value in excess of $250,000, specifying whether and by whom
each such asset is owned or leased and, in the case of leased assets, indicating
the parties to, execution dates of and annual payments under, the lease.
(b) With respect to personal properties and assets that they purport
to own, including all properties and assets reflected as owned on the Company
Balance Sheet (other than inventory sold in the ordinary course of business
since the date thereof), the Company or one of its Subsidiaries has good and
valid title to all of such properties and assets, free and clear of all Liens
other than Permitted Liens. "Permitted Liens" means (i) liens for current
20
personal property taxes not yet due and payable and with respect to which the
Company maintains adequate reserves, (ii) workers', carriers' and mechanics' or
other like liens incurred in the ordinary course of business with respect to
which payment is not due and that do not impair the conduct of the Company's or
any of its Subsidiaries' business in any material respect or the present use of
the affected property and (iii) liens that are immaterial in character, amount,
and extent and which do not detract from the value or interfere with the present
use of the properties they affect and which secure indebtedness in amounts not
exceeding $200,000 in the aggregate.
(c) With respect to personal properties and assets that are leased,
the Company or one of its Subsidiaries has a valid leasehold interest in such
properties and assets and all such leases are in full force and effect and
constitute valid and binding obligations of the other party(ies) thereto.
Neither the Company nor any of its Subsidiaries nor any other party thereto is
in violation of any of the terms of any such lease, except where any such
violation would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.
3.14 Condition of Tangible Assets. All buildings, plants, leasehold
improvements, structures, facilities, equipment and other items of tangible
property and assets which are owned, leased or used by the Company or any of its
Subsidiaries are structurally sound, are in good operating condition and repair
(subject to normal wear and tear given the use and age of such assets), are
usable in the regular and ordinary course of business and conform in all
material respects to all Laws and Authorizations relating to their construction,
use and operation.
3.15 Leased Real Property.
(a) The Company Disclosure Schedule contains a list of all real
property and interests in real property leased by the Company or any of its
Subsidiaries (the "Leased Real Property"). The Company does not own any real
property. The Leased Real Property listed on the Company Disclosure Schedule
includes all interests in real property used in or necessary for the conduct of
the businesses and operations of the Company and its Subsidiaries as currently
conducted.
(b) The Company has delivered to Parent a true and complete copy of
every lease and sublease pursuant to which the Company or any Subsidiary of the
Company is a party or by which any of them is bound (each, a "Lease"). The
Company or one of its Subsidiaries has peaceful, undisturbed and exclusive
possession of the Leased Real Property. Each lease or sublease for Leased Real
Property is in full force and effect and there exists no default by the Company
or any of its Subsidiaries under any Lease and no circumstance exists which,
with or without the giving of notice, the passage of time or both, would
constitute or result in such a default.
(c) The uses for which the buildings, facilities and other
improvements located on the Leased Real Property are zoned do not materially
restrict, or materially impair, the use of the Leased Real Property for purposes
of the business. Neither the Company nor any of its Subsidiaries has received
any notice from any Governmental Entity or other Person that the Leased Real
Property does not comply with all applicable material building and zoning codes,
deed restrictions, ordinances and rules.
21
(d) No Governmental Entity having the power of eminent domain over
the Leased Real Property has commenced or, to the Company's Knowledge, intends
to exercise the power of eminent domain or a similar power with respect to all
or any part of the Leased Real Property. There are no pending or, to the
Company's Knowledge, threatened condemnation, fire, health, safety, building,
zoning or other land use regulatory proceedings, lawsuits or administrative
actions relating to any portion of the Leased Real Property or any other matters
which do or may adversely effect the current use, occupancy or value thereof.
Neither the Company nor any of its Subsidiaries has received notice of any
pending or threatened special assessment proceedings affecting any portion of
the Leased Real Property.
(e) The Leased Real Property and all present uses and operations of
the Leased Real Property comply in all material respects with all Laws,
Authorizations, covenants, conditions, restrictions, easements, disposition
agreements and similar matters affecting the Leased Real Property. The continued
use, occupancy and operation of the Leased Real Property as currently used,
occupied and operated do not constitute a nonconforming use and are not the
subject of a special use permit under any Law.
(f) The Leased Real Property is in suitable condition for the
businesses of the Company and its Subsidiaries as currently conducted. Each of
the Company and its Subsidiaries has good and valid rights of ingress and egress
to and from all Leased Real Property from and to the public street systems for
all usual street, road and utility purposes.
(g) No Person other than the Company or a Subsidiary of the Company
is in possession of any of the Leased Real Property or any portion thereof, and
there are no leases, subleases, licenses, concessions or other agreements,
written or oral, granting to any Person other than the Company or a Subsidiary
of the Company the right of use or occupancy of the Leased Real Property or any
portion thereof. No easement, utility transmission line or water main located on
the Leased Real Property adversely affects the use of the Leased Real Property
or any improvement on the Leased Real Property in any material respect.
(h) All water, sewer, gas, electric, telephone and drainage
facilities, and all other utilities required by any Law or necessary for the
current use and operation of the Leased Real Property are installed to the
property lines of the Leased Real Property, are connected pursuant to valid
permits to municipal or public utility services or proper drainage facilities,
are fully operable and are adequate to service the Leased Real Property in the
operation of the business as currently conducted and to permit compliance with
the requirements of all Laws in the operation thereof. No fact or condition
exists which could result in the termination or reduction of the current access
from the Leased Real Property to existing roads or to sewer or other utility
services presently serving the Leased Real Property.
22
3.16 Intellectual Property.
(a) As used in this Agreement, "Intellectual Property" means: (i)
inventions (whether or not patentable), trade secrets, technical data,
databases, customer lists, designs, tools, methods, processes, technology,
ideas, know-how, source code, product road maps and other proprietary
information and materials ("Proprietary Information"); (ii) trademarks and
service marks (whether or not registered), trade names, logos, trade dress and
other proprietary indicia and all goodwill associated therewith; (iii)
documentation, advertising copy, marketing materials, web-sites, specifications,
mask works, drawings, graphics, databases, recordings and other works of
authorship, whether or not protected by Copyright; (iv) computer programs,
including any and all software implementations of algorithms, models and
methodologies, whether in source code or object code, design documents,
flow-charts, user manuals and training materials relating thereto and any
translations thereof (collectively, "Software"); and (v) all forms of legal
rights and protections that may be obtained for, or may pertain to, the
Intellectual Property set forth in clauses (i) through (iv) in any country of
the world ("Intellectual Property Rights"), including all issued or granted
patent, patent applications (including provisional U.S. applications), design
patents, PCT patent applications, invention disclosures and other rights to
inventions or designs ("Patents"), all registered and unregistered copyrights in
both published and unpublished works ("Copyrights"), all trademarks, service
marks and other proprietary indicia (whether or not registered) ("Marks"), trade
secret rights, mask works, moral rights or other literary property or authors
rights, and all applications, registrations, issuances, divisions,
continuations, renewals, reissuances and extensions of the foregoing.
(b) The Company Disclosure Schedule lists (by name, owner and, where
applicable, registration number and jurisdiction of registration, application,
certification or filing) all Intellectual Property that is owned by the Company
and/or one or more of its Subsidiaries (whether exclusively, jointly with
another Person or otherwise) ("Company Owned Intellectual Property"). Except as
described in the Company Disclosure Schedule, the Company or one of its
Subsidiaries owns the entire right, title and interest to all Company Owned
Intellectual Property free and clear of all Liens.
(c) The Company Disclosure Schedule lists all licenses, sublicenses
and other Contracts ("In-Bound Licenses") pursuant to which a third party
authorizes the Company or any of its Subsidiaries to use, practice any rights
under, or grant sublicenses with respect to, any Intellectual Property owned by
such third party, including the incorporation of any such Intellectual Property
into the Company's or any of its Subsidiaries' products and, with respect to
each In-Bound License, whether the In-Bound License is exclusive or
non-exclusive; provided, however, that the Company Disclosure Schedule is not
required to list In-Bound Licenses that consist solely of "shrink-wrap" end-user
licenses.
23
(d) The Company Disclosure Schedule lists all licenses, sublicenses
and other Contracts ("Out-Bound Licenses") pursuant to which the Company or any
of its Subsidiaries authorizes a third party to use, practice any rights under,
or grant sublicenses with respect to, any Company Owned Intellectual Property or
pursuant to which the Company or any of its Subsidiaries grants rights to use or
practice any rights under any Intellectual Property owned by a third party and,
with respect to each Out-Bound License, whether the Out-Bound License is
exclusive or non-exclusive.
(e) The Company and/or one or more of its Subsidiaries (i)
exclusively own the entire right, interest and title to all Intellectual
Property that is used in or necessary for the businesses of the Company and its
Subsidiaries as they are currently conducted or proposed to be conducted free
and clear of Liens (including the design, manufacture, license and sale of all
products currently under development or in production), or (ii) otherwise
rightfully use or otherwise enjoy such Intellectual Property pursuant to the
terms of a valid and enforceable In-Bound License that is listed in the Company
Disclosure Schedule or that is a "shrink-wrap" or similar commercially available
end-user license. The Company Owned Intellectual Property, together with the
Company's and its Subsidiaries' rights under the In-Bound Licenses listed in the
Company Disclosure Schedule or that are "shrink-wrap" and similar commercially
available end-user licenses (collectively, the "Company Intellectual Property"),
constitutes all the Intellectual Property used in or necessary for the operation
of the Company's and its Subsidiaries' businesses as they are currently
conducted and as proposed to be conducted.
(f) All registration, maintenance, annuity and renewal fees, and any
other governmental fees related to Patents, Marks, Copyrights and any other
certifications, filings or registrations that are owned by the Company or any of
its Subsidiaries ("Company Registered Items") that are currently due have been
paid and all documents and certificates related to such Company Registered Items
have been filed with the relevant Governmental Entity or other authorities in
the United States or foreign jurisdictions, as the case may be, for the purposes
of maintaining such Company Registered Items. All Company Registered Items are
in good standing, held in compliance with all applicable legal requirements and
enforceable by the Company and/or one or more of its Subsidiaries. All Company
Intellectual Property that are owned or licensed by the Company or any of its
Subsidiaries are valid.
(g) The Company is not aware of any challenges (or any basis
therefor) with respect to the validity or enforceability of any Company
Intellectual Property. The Company Disclosure Schedule lists the status of any
Actions before any court of competent jurisdiction, the United States Patent and
Trademark Office or any other Governmental Entity anywhere in the world related
to any of the Company Intellectual Property, including the due date for any
outstanding response by the Company or any of its Subsidiaries in such Actions.
Neither the Company nor any of its Subsidiaries has taken any action or failed
to take any action that could reasonably be expected to result in the
abandonment, cancellation, forfeiture, relinquishment, invalidation, waiver or
unenforceability of any Company Intellectual Property. The Company Disclosure
Schedule lists all previously held Company Registered Items and all Company
owned Intellectual Property that the Company or any of its Subsidiaries has
abandoned, cancelled, forfeited or relinquished during the 12 months prior to
the date of this Agreement.
24
(h) None of the Company's Intellectual Property Rights or any of the
Company's products or services currently or formerly developed manufactured,
sold, offered for sale, distributed, provided, shipped, imported, exported or
licensed, by the Company or any of its Subsidiaries, or which are currently
under development, has infringed or infringes upon, or otherwise unlawfully used
or uses, the Intellectual Property Rights of any third party. Neither the
Company nor any of its Subsidiaries, by conducting its business as currently
conducted or as conducted in the past has infringed or infringes upon, or
otherwise unlawfully used or uses, any Intellectual Property Rights of a third
party. Neither the Company nor any of its Subsidiaries has received any
communication alleging that the Company or any of its Subsidiaries or any of
their respective products, services, activities or operations infringe upon or
otherwise unlawfully use any Intellectual Property Rights of a third party nor,
to the Company's Knowledge, is there any basis therefor. No Action has been
instituted, or, to the Company's Knowledge, threatened, relating to any
Intellectual Property formerly or currently used by the Company or any of its
Subsidiaries and none of the Company Intellectual Property is subject to any
outstanding Order. To the Company's Knowledge, no Person has infringed or is
infringing any Intellectual Property Rights of the Company or any of its
Subsidiaries or has otherwise misappropriated or is otherwise misappropriating
any Company Intellectual Property.
(i) With respect to the Company's or any of its Subsidiaries'
Proprietary Information, the documentation relating thereto is current, accurate
and sufficient in detail and content to identify and explain it and to allow its
full and proper use without reliance on the special knowledge or memory of
others. The Company and its Subsidiaries have taken reasonable best steps to
protect and preserve the confidentiality of all Proprietary Information owned by
the Company or any of its Subsidiaries. Without limiting the generality of the
foregoing, the Proprietary Information of the Company and its Subsidiaries
(other than Proprietary Information that became public after the filing of a
patent application completely inclusive of such Proprietary Information that
eventually published or issued as a Patent) is not part of the public knowledge
and has not been used or divulged for the benefit of any Person other than the
Company and its Subsidiaries. Any receipt or use by, or disclosure to or from, a
third party of Proprietary Information owned by the Company or any of its
Subsidiaries or such third party has been pursuant to the terms of binding
written confidentiality agreement between the Company or such Subsidiary and
such third party ("Nondisclosure Agreements"). The Company and its Subsidiaries
are, and to the Company's Knowledge, all other parties thereto are, in
compliance with the provisions of the Nondisclosure Agreements. The Company and
its Subsidiaries are in compliance with the terms of all Contracts pursuant to
which a third party has disclosed to, or authorized the Company or any of its
Subsidiaries to use, Proprietary Information owned by such third party.
(j) All current and former employees, consultants and contractors of
the Company and its Subsidiaries have executed and delivered, and are in
compliance with, enforceable agreements regarding the protection of Proprietary
Information and providing valid written assignments of all Intellectual Property
conceived or developed by such employees, consultants or contractors in
connection with their services for, or contractual obligations to, the Company
and its Subsidiaries ("Work Product Agreements"). No current or former employee,
consultant or contractor or any other Person has any right, claim or interest to
any of the Company Intellectual Property.
25
(k) No employee, consultant or contractor of the Company or any of
its Subsidiaries has been, is or will be, by performing services for the Company
or such Subsidiary, in violation of any term of any employment, invention
disclosure or assignment, confidentiality, noncompetition agreement or other
restrictive covenant or any Order as a result of such employee's, consultant's
or independent contractor's employment by the Company or any Subsidiary or any
services rendered by such employee, consultant or independent contractor.
(l) All Intellectual Property that has been distributed, sold or
licensed to a third party by the Company or any of its Subsidiaries that is
covered by a warranty conformed to or conforms to, and performed or performs in
accordance with, the representations and warranties provided with respect to
such Intellectual Property by or on behalf of the Company or such Subsidiary for
the time period during which such representations and warranties apply. True and
complete copies have been provided to Parent of all Contracts pursuant to which
the Company or any of its Subsidiaries has agreed to indemnify a third party in
connection with any Intellectual Property that has been distributed, sold or
licensed by the Company or any of its Subsidiaries.
(m) The execution and delivery of this Agreement by the Company does
not, and the consummation of the Merger (in each case, with or without the
giving of notice or lapse of time, or both) will not, directly or indirectly,
result in the loss or impairment of, or give rise to any right of any third
party to terminate or reprice or otherwise renegotiate any of the Company's or
any of its Subsidiaries' rights to own or control any of its Intellectual
Property or their respective rights under any Out-Bound License or In-Bound
License, nor require the consent of any Governmental Entity or other third party
in respect of any such Intellectual Property.
3.17 Absence of Certain Changes or Events. Except as set forth in the
Company Disclosure Schedules, since September 30, 2007 (unless otherwise
qualified below) to the date of this Agreement (with respect to the
representation and warranty made as of the date of this Agreement) and to the
Closing Date (with respect to the representation and warranty made as of the
Closing Date):
(a) there has not been a Company Material Adverse Effect since
December 31, 2007;
(b) neither the Company nor any of its Subsidiaries has amended or
otherwise modified its Charter Documents;
(c) neither the Company nor any of its Subsidiaries has declared,
set aside or paid any dividend or other distribution (whether in cash, stock or
property) with respect to any of its securities;
26
(d) neither the Company nor any of its Subsidiaries has split,
combined or reclassified any of its securities, or issued, or authorized for
issuance, any securities except for the grant of Company Stock Options and the
issuance of shares of Company Common Stock upon exercise of Company Stock
Options, in each case, in the ordinary course of business consistent with past
practice;
(e) neither the Company nor any of its Subsidiaries has altered any
term of any outstanding securities;
(f) neither the Company nor any of its Subsidiaries has (i)
materially increased or modified the compensation or benefits payable or to
become payable to any of their respective current or former directors,
employees, contractors or consultants, (ii) materially increased or modified any
bonus, severance, termination, pension, insurance or other employee benefit
plan, payment or arrangement made to, for or with any of its current or former
directors, employees, contractors or consultants or (iii) entered into any
employment, severance or termination agreement, outside the normal course of
business;
(g) neither the Company nor any of its Subsidiaries has sold,
leased, transferred or assigned any property or assets of the Company or any of
its Subsidiaries except for the sale of inventory and the grant of Out-Bound
Licenses on a non-exclusive basis, in each case in the ordinary course of
business consistent with past practice;
(h) neither the Company nor any of its Subsidiaries has incurred,
assumed or guaranteed any Indebtedness, or modified the terms of any
Indebtedness outstanding as of the Balance Sheet Date;
(i) neither the Company nor any of its Subsidiaries has incurred any
material Liability or created or assumed any Lien on any asset, except for
Permitted Liens, Liens arising under lease financing arrangements existing as of
the Company Balance Sheet Date and Liens for taxes not yet due and payable with
respect to which the Company maintains adequate reserves since December 31,
2007;
(j) neither the Company nor any of its Subsidiaries has made any
loan, advance or capital contribution to, or investment in, any Person except
for travel loans or advances in the ordinary course of business consistent with
past practice;
(k) neither the Company nor any of its Subsidiaries has entered into
any Material Contract;
(l) (i) no Material Contract as herein defined has been modified,
(ii) no rights under any Material Contract have been waived or accelerated and
(iii) no Contract that would be required to be listed as a Material Contract
pursuant to Section 3.18 hereof if such Contract were in effect on the date
hereof has been terminated or cancelled;
(m) neither the Company nor any of its Subsidiaries has sold,
transferred, pledged or assigned, and there has been no material reduction in
the value of, any Company Intellectual Property;
27
(n) there has not been any labor dispute, except for individual
grievances, or any activity or proceeding by a labor union or representative
thereof to organize any employees of the Company or any of its Subsidiaries;
(o) there has not been any violation of or conflict with any Law to
which the business, operations, assets or properties of the Company or any of
its Subsidiaries are subject, except for any such violations and conflicts that
would not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect;
(p) neither the Company nor any of its Subsidiaries has agreed or
entered into any arrangement to take any action which, if taken prior to the
date hereof, would have made any representation or warranty set forth in this
ARTICLE III untrue or incorrect as of the date when made;
(q) there has not been any material damage, destruction or loss with
respect to the property and assets of the Company or any of its Subsidiaries,
whether or not covered by insurance;
(r) there has not been any revaluation of the Company's or any of
its Subsidiaries' assets, including writing down the value of inventory or
writing off notes or accounts receivable or impairing product license fees held
in the balance sheet, other than in the ordinary course of business consistent
with past practice and the Company has engaged in an evaluation of the value of
its assets in accordance with GAAP at least as recently as December 31, 2007;
(s) neither the Company nor any of its Subsidiaries has made any
change in accounting practices or procedures and in particular in respect of
sales and inventory since December 31, 2007;
(t) neither the Company nor any of its Subsidiaries has made any Tax
election, changed its method of Tax accounting or settled any claim for Taxes
since December 31, 2007; or
(u) neither the Company nor any of its Subsidiaries has agreed,
whether in writing or otherwise, to do any of the foregoing.
3.18 Contracts.
(a) Except for this Agreement and except for Contracts filed as
exhibits to the Company's SEC Reports, as of the date of this Agreement, none of
the Company or its Subsidiaries is a party to or bound by any Contract: (i) that
would be required to be filed by the Company as a "material contract" pursuant
to Item 601(b)(10) of Regulation S-K under the Securities Act; (ii) containing
covenants binding upon the Company or its Subsidiaries that restrict the ability
of the Company or any of its Subsidiaries (or which, following the consummation
of the Merger, would materially restrict the ability of the Surviving
Corporation or its Affiliates) to compete in any business or geographic area;
(iii) involving the payment or receipt of royalties or other amounts of more
28
than $100,000 annually, calculated based upon the revenues or income of the
Company or its Subsidiaries or income or revenues related to any product of the
Company or its Subsidiaries; (iv) with any Affiliate; (v) that would prevent,
materially delay or materially impede the Company's ability to consummate the
transactions contemplated by this Agreement; or (vi) that were not negotiated
and entered into an arm's length basis. Each such Contract described in clauses
(i) through (v) and each Contract filed as an exhibit to the Company's SEC
Reports is referred to herein as a "Material Contract."
(b) Each Material Contract is valid and binding upon the Company or
a Subsidiary of the Company that is party thereto subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar Laws relating to or affecting creditors' rights generally and
general equitable principles. Neither the Company nor any of its Subsidiaries
is, and to the Company's Knowledge, no other party thereto is, in default in the
performance, observance or fulfillment in any material respect of any
obligation, covenant, condition or other term contained in any Material
Contract, and neither the Company nor any of its Subsidiaries has given or
received notice to or from any Person relating to any such alleged or potential
default that has not been cured. No event has occurred which with or without the
giving of notice or lapse of time, or both, may conflict in any material respect
with or result in a violation or breach in any material respect of, or give any
Person the right to exercise any remedy under or accelerate the maturity or
performance of, or cancel, terminate or modify, any Material Contract.
(c) The Company has provided copies of each Material Contract to
Parent.
(d) All Contracts other than Material Contracts to which the Company
or any of its Subsidiaries is a party or is subject, or by which any of their
respective assets are bound (collectively, the "Minor Contracts"), are in all
material respects valid and enforceable in accordance with their terms. Neither
the Company nor any of its Subsidiaries is in default in the performance,
observance or fulfillment of any obligation, covenant or condition contained
therein, and no event has occurred which with or without the giving of notice or
lapse of time, or both, would constitute a default thereunder by the Company or
any of its Subsidiaries, except in either case where such default would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
3.19 Litigation.
(a) Except as otherwise disclosed in the Company Disclosure
Schedule, there is no action, suit or proceeding, claim, arbitration, litigation
or investigation (each, an "Action") pending or, to the Company's Knowledge,
threatened (i) against or affecting the Company or any of its Subsidiaries or,
to the knowledge of the Company, pending or threatened against any present or
former officer, director or employee of the Company or any of its Subsidiaries
or other Person in connection with which the Company or any of its Subsidiaries
has an indemnification obligation or (ii) that challenges or seeks to prevent,
29
enjoin or otherwise delay the Merger. No event has occurred or circumstances
exist that may give rise or serve as a basis for any such Action. There is no
Action against any current or, to the Company's Knowledge, former director or
employee of the Company or any of its Subsidiaries with respect to which the
Company or any of its Subsidiaries has or is reasonably likely to have an
indemnification obligation.
(b) There is no unsatisfied judgment, penalty or award against or
affecting the Company or any of its Subsidiaries or any of their respective
properties or assets. There is no Order to which the Company or any of its
Subsidiaries or any of their respective properties or assets are subject.
(c) All Actions which have been settled by the Company have been
fully and finally settled pursuant to the terms of all applicable settlement
agreements and the Company has no outstanding obligations or liabilities to the
parties to such Actions and, to the extent applicable, such Actions have been
dismissed with prejudice.
3.20 Employee Benefits.
(a) The Company Disclosure Schedule sets forth a complete and
accurate list of all Company Benefit Plans. A current, accurate and complete
copy of each Company Benefit Plan has been provided to Parent. Neither the
Company nor any of its Subsidiaries has any intent or commitment to create any
additional Company Benefit Plan or amend any Company Benefit Plan. "Company
Benefit Plan" means any "employee benefit plan" as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974 ("ERISA"), including any (a)
nonqualified deferred compensation or retirement plan or arrangement which is an
Employee Pension Benefit Plan (as defined in ERISA Section 3(2)), (b) qualified
defined contribution retirement plan or arrangement which is an Employee Pension
Benefit Plan, (c) qualified defined benefit retirement plan or arrangement which
is an Employee Pension Benefit Plan (including any Multiemployer Plan (as
defined in ERISA Section 3(37)), (d) Employee Welfare Benefit Plan (as defined
in ERISA Section 3(1)) or material fringe benefit plan or program, or (e) stock
purchase, stock option, severance pay, employment, change-in-control, vacation
pay, company awards, salary continuation, sick leave, excess benefit, bonus or
other incentive compensation, life insurance, or other employee benefit plan,
contract, program, policy or other arrangement, whether or not subject to ERISA,
in each case which is sponsored, maintained or contributed to by the Company,
any of its Subsidiaries or any ERISA Affiliate, or with respect to which the
Company, any of its Subsidiaries or any ERISA Affiliate otherwise has any
present or future Liability. "ERISA Affiliate" means any entity which is a
member of a "controlled group of corporations" with, under "common control" with
or a member of an "affiliated services group" with, the Company or any of its
Subsidiaries, as defined in Section 414(b), (c), (m) or (o) of the Code.
(b) The Company has provided or made available to Parent a complete
and correct copy of each Company Benefit Plan and all trust agreements,
insurance contract or other funding arrangements, all summary plan descriptions,
and all material amendments and modifications to any such Company Benefit Plan.
Each Company Benefit Plan has been and is currently administered in compliance
30
in all material respects with its constituent documents and with all reporting,
disclosure and other requirements of ERISA and the Code applicable to such
Company Benefit Plan. Each Company Benefit Plan that is an Employee Pension
Benefit Plan (as defined in Section 3(2) of ERISA) and which is intended to be
qualified under Section 401(a) of the Code (a "Pension Plan"), has been
determined by the Internal Revenue Service to be so qualified and no condition
exists that would adversely affect any such determination. No Company Benefit
Plan is a "defined benefit plan" as defined in Section 3(35) of ERISA.
(c) None of the Company, any Subsidiary of the Company, any ERISA
Affiliate or any trustee or agent of any Company Benefit Plan has been or is
currently engaged in any prohibited transactions as defined by Section 406 of
ERISA or Section 4975 of the Code for which an exemption is not applicable which
could subject Company, any Subsidiary of the Company, any ERISA Affiliate or any
trustee or agent of any Company Benefit Plan to the tax or penalty imposed by
Section 4975 of the Code or Section 502 of ERISA.
(d) There is no event or condition existing which could be deemed a
"reportable event" (within the meaning of Section 4043 of ERISA) with respect to
which the 30-day notice requirement has not been waived. To the Company's
Knowledge, no condition exists which could subject the Company or any of its
Subsidiaries to a penalty under Section 4071 of ERISA.
(e) None of the Company, any Subsidiary of the Company or any ERISA
Affiliate is, or has been, party to any "multi-employer plan," as that term is
defined in Section 3(37) of ERISA.
(f) True and correct copies of the two most recent annual reports on
Form 5500 and any attached schedules for each Company Benefit Plan (if any such
report was required by applicable Law).
(g) With respect to each Company Benefit Plan, there are no actions,
suits or claims (other than routine claims for benefits in the ordinary course)
pending or, to the Company's Knowledge, threatened against any Company Benefit
Plan, the Company, any Subsidiary of the Company, any ERISA Affiliate or any
trustee or agent of any Company Benefit Plan.
(h) With respect to each Company Benefit Plan to which the Company,
any Subsidiary of the Company or any ERISA Affiliate is a party which
constitutes a group health plan subject to Section 4980B of the Code, each such
Company Benefit Plan complies, and in each case has complied, in all material
respects with all applicable requirements of Section 4980B of the Code.
(i) Full payment has been made of all amounts which the Company, any
Subsidiary of the Company or any ERISA Affiliate was required to have paid as a
contribution to any Company Benefit Plan as of the last day of the most recent
fiscal year of each of the Benefit Plans ended prior to the date of this
Agreement, and none of the Company Benefit Plans has incurred any "accumulated
funding deficiency" (as defined in Section 302 of ERISA and Section 412 of the
Code), whether or not waived, as of the last day of the most recent fiscal year
of each such Company Benefit Plan ended prior to the date of this Agreement.
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(j) Each Company Benefit Plan is, and its administration is and has
been during the 6-year period preceding the date of this Agreement, in all
material respects in compliance with, and none of Company, any Subsidiary of the
Company or any ERISA Affiliate has received any claim or notice that any such
Company Benefit Plan is not in material compliance with, all applicable Laws and
Orders and prohibited transaction exemptions, including to the extent
applicable, the requirements of ERISA.
(k) None of the Company, any Subsidiary of the Company and any ERISA
Affiliate is in default in any material respect in performing any of its
contractual obligations under any of the Company Benefit Plans or any related
trust agreement or insurance contract.
(l) There are no material outstanding Liabilities of any Company
Benefit Plan other than Liabilities for benefits to be paid to participants in
any Company Benefit Plan and their beneficiaries in accordance with the terms of
such Company Benefit Plan.
(m) Subject to ERISA and the Code, each Company Benefit Plan may be
amended, modified, terminated or otherwise discontinued by the Company, a
Subsidiary of the Company or an ERISA Affiliate at any time without liability.
(n) No Company Benefit Plan other than a Pension Plan, retiree
medical plan or severance plan provides benefits to any individual after
termination of employment.
(o) Except as otherwise provided in the Disclosure Schedules, the
consummation of the Merger will not (either alone or in conjunction with any
other event) (i) entitle any current or former director, employee, contractor or
consultant of the Company or any of its Subsidiaries to severance pay,
unemployment compensation or any other payment, (ii) accelerate the time of
payment or vesting, or increase the amount of compensation due to any such
director, employee, contractor or consultant, or result in the payment of any
other benefits to any Person or the forgiveness of any Indebtedness of any
Person, (iii) result in any prohibited transaction described in Section 406 of
ERISA or Section 4975 of the Code for which an exemption is not available, or
(iv) result in the payment or series of payments by any Company or any of its
Affiliates to any person of an "excess parachute payment" within the meaning of
Section 280G of the Code.
(p) With respect to each Company Benefit Plan that is funded wholly
or partially through an insurance policy, all premiums required to have been
paid to date under the insurance policy have been paid, all premiums required to
be paid under the insurance policy through the Closing will have been paid on or
before the Closing and, as of the Closing, there will be no liability of the
Company, any Subsidiary of the Company or any ERISA Affiliate under any
insurance policy or ancillary agreement with respect to such insurance policy in
the nature of a retroactive rate adjustment, loss sharing arrangement or other
actual or contingent liability arising wholly or partially out of events
occurring prior to the Closing.
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(q) Each Company Benefit Plan that constitutes a "welfare benefit
plan," within the meaning of Section 3(1) of ERISA, and for which contributions
are claimed by the Company, any Subsidiary of the Company or any ERISA Affiliate
as deductions under any provision of the Code, is in compliance in all material
respects with all applicable requirements pertaining to such deduction. With
respect to any welfare benefit fund (within the meaning of Section 419 of the
Code) related to a welfare benefit plan, there is no disqualified benefit
(within the meaning of Section 4976(b) of the Code) that would result in the
imposition of a tax under Section 4976(a) of the Code. All welfare benefit funds
intended to be exempt from tax under Section 501(a) of the Code have been
determined by the Internal Revenue Service to be so exempt and no event or
condition exists which would adversely affect any such determination.
(r) Each Company Benefit Plan and any other arrangement that is a
"nonqualified deferred compensation plan" within the meaning of Section 409A(d)
of the Code complies in form and operation, and has substantially complied at
all applicable times, with the requirements of Section 409A.
3.21 Labor and Employment Matters.
(a) The Company Disclosure Schedule sets forth (i) (A) a list of all
employees, contractors and consultants of the Company and its Subsidiaries
(including title and position) as of the date hereof, and (B) the base
compensation and benefits of each such employee, consultant and consultant whose
base compensation and target bonus exceeds $10,000 in the year ending December
31, 2007. All directors, employees, contractors and consultants of the Company
and its Subsidiaries may be terminated by the Company or the relevant Subsidiary
at any time with or without cause and without any severance or other Liability
to the Company or such Subsidiary.
(b) Neither the Company nor any of its Subsidiaries is a party or
subject to any labor union or collective bargaining Contract and, to the
knowledge of the Company, as of the date of this Agreement, there are no labor
unions or other organizations representing, purporting to represent or
attempting to represent any employees of the Company or any of its Subsidiaries.
There are no pending or threatened labor disputes, work stoppages, requests for
representation, pickets, work slow-downs due to labor disagreements or any
actions or arbitrations which involve the labor or employment relations of the
Company or any of its Subsidiaries. There is no unfair labor practice, charge or
complaint pending, unresolved or, to the Company's Knowledge, threatened before
the National Labor Relations Board. No event has occurred or circumstance exist
that may provide the basis of any work stoppage or other labor dispute.
33
(c) Each of the Company and its Subsidiaries has complied in all
material respects with each, and is not in violation in any material respect of
any, Law relating to anti-discrimination and equal employment opportunities and
there are, and have been, no material violations of any other Law respecting the
hiring, hours, wages, occupational safety and health, employment, promotion,
termination or benefits of any employee or other Person. Each of the Company and
its Subsidiaries has filed all reports, information and notices required under
any Law respecting the hiring, hours, wages, occupational safety and health,
employment, promotion, termination or benefits of any employee or other Person,
and will timely file prior to Closing all such reports, information and notices
required by any Law to be given prior to Closing.
(d) Each of the Company and its Subsidiaries has paid or properly
accrued in the ordinary course of business all wages and compensation due to
employees, including all vacations or vacation pay, holidays or holiday pay,
sick days or sick pay, and bonuses.
(e) Neither the Company nor any of its Subsidiaries is a party to
any Contract which restricts the Company or any of its Subsidiaries from
relocating, closing or terminating any of its operations or facilities or any
portion thereof. Neither the Company nor any of its Subsidiaries have since
January 1, 2004 effectuated a "plant closing" (as defined in the Worker
Adjustment and Retraining Notification Act of 1988 (the "WARN Act")) or (ii) a
"mass lay-off" (as defined in the WARN Act), in either case affecting any site
of employment or facility of the Company or any of its Subsidiaries, except in
accordance with the WARN Act. The consummation of the Merger will not create
liability for any act by the Company or any of its Subsidiaries on or prior to
the Closing Date under the WARN Act or any other Law respecting reductions in
force or the impact on employees on plant closings or sales of businesses.
(f) Each of the Company and its Subsidiaries has complied and is in
compliance in all material respects with the requirements of the Immigration
Reform and Control Act of 1986. The Company Disclosure Schedule sets forth a
true and complete list of all employees working in the United States who are not
U.S. citizens and a description of the legal status under which each such
employee is permitted to work in the United States. All employees of the Company
and its Subsidiaries who are performing services for the Company or any of its
Subsidiaries in the United States are legally able to work in the United States
and will be able to continue to work in the United States following the Merger.
The Company's and its Subsidiaries' relationship with its employees is good, and
there are no pending or threatened claims by any employees.
3.22 Environmental.
(a) As used in this Agreement, the following words and terms have
the following definitions:
34
(i) "Environment" means all air, surface water, groundwater,
sediment, soil and land, including land surface or subsurface, including all
fish, wildlife, biota and all other natural resources present therein or
thereon.
(ii) "Environmental Action" means any request or demand for
information, directive, order, notice, notice of violation, demand, claim,
proceeding or other Action brought or threatened under any Environmental Law or
Environmental Permit or otherwise asserting that the Company or any of its
Subsidiaries has actual or potential any Environmental Liability.
(iii) "Environmental Clean-up Site" means any location which
is listed or included or proposed for listing or inclusion on the National
Priorities List, the Comprehensive Environmental Response, Compensation and
Liability Information System, or on any similar state or foreign list of sites
requiring investigation or cleanup, or which is the subject of any pending or
threatened Action, including any Environmental Action, related to or arising
from any alleged violation of any Environmental Law or Environmental Permit or
at which there has been a threatened or actual Release of a Hazardous Substance.
(iv) "Environmental Laws" means any and all applicable Laws
and Authorizations issued, promulgated or entered into by any Governmental
Entity relating to the Environment, worker health and safety, preservation or
reclamation of natural resources, or to the management, handling, use,
generation, treatment, storage, transportation, disposal, manufacture,
distribution, formulation, packaging, labeling, Release or threatened Release of
or exposure to Hazardous Substances, whether now existing or subsequently
amended or enacted, including but not limited to: the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601
et seq. ("CERCLA"); the Federal Water Pollution Control Act, 33 U.S.C. Section
1251 et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Occupational Safety
and Health Act, 29 U.S.C. Section 651 et seq.; the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Safe
Drinking Water Act, 42 U.S.C. Section 300(f) et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801 et seq.; the Federal Insecticide,
Fungicide and Rodenticide Act 7 U.S.C. Section 136 et seq.; the Resource
Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. Section 6901 et seq.;
the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Oil
Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.; and any similar or
implementing state or local Law, and any non-U.S. Laws and regulations of
similar import, and all amendments or regulations promulgated thereunder; and
any common law doctrine, including but not limited to, negligence, nuisance,
trespass, personal injury, or property damage related to or arising out of the
presence, Release, or exposure to Hazardous Substances.
(v) "Environmental Liabilities" means Liabilities based upon
or arising out of (A) the ownership or operation of the business of the Company
or any of its Subsidiaries or (B) the operation or condition of the Leased Real
Property or any other real property currently or formerly owned, operated or
leased by the Company or any of its Subsidiaries, in each case to the extent
35
based upon or arising out of (i) Environmental Law, (ii) a failure to obtain,
maintain or comply with any Environmental Permit, (iii) a Release of any
Hazardous Substance or (iv) the use, generation, storage, transportation,
treatment, sale or other off-site disposal of Hazardous Substances.
(vi) "Environmental Permit" means any Authorization required
under or issued pursuant to Environmental Law, any and all Orders issued or
required by, or entered into or with a Governmental Entity under Environmental
Law.
(vii) "Hazardous Substances" means all explosive or regulated
radioactive materials or substances, hazardous or toxic materials, wastes or
chemicals, petroleum and petroleum products (including crude oil or any fraction
thereof), asbestos or asbestos containing materials, and all other materials,
chemicals or substances which are regulated by, form the basis of liability or
are defined as hazardous, extremely hazardous, toxic or words of similar import,
under any Environmental Law, including materials listed in 49 C.F.R. Section
172.101 and materials defined as hazardous pursuant to Section 101(14) of
CERCLA.
(viii) "ISRA" means the Industrial Site Recovery Act, N.J.S.A.
13:1K-6 et seq. and the regulations promulgated thereunder.
(ix) "Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping, or
disposing of Hazardous Substances into the Environment.
(b) Each of the Company and its Subsidiaries has secured, and is in
compliance with, all Environmental Permits required in connection with its
business, operations and the Leased Real Property. Each Environmental Permit,
together with the name of the Governmental Entity issuing such Environmental
Permit, is set forth in the Company Disclosure Schedule. All such Environmental
Permits are valid and in full force and effect and none of such Environmental
Permits will be terminated or impaired or become terminable as a result of the
Merger. Each of the Company and its Subsidiaries have been, and are currently,
in compliance with the requirements of all Environmental Laws applicable to its
business and operations and to the Leased Real Property. Neither the Company nor
any of its Subsidiaries has received any notice, or is subject to any
Environmental Action, alleging that the Company or any of its Subsidiaries is
not in such compliance with Environmental Laws.
(c) There are no past, pending or, to the Company's Knowledge,
threatened Environmental Actions against or affecting the Company or any of its
Subsidiaries, or arising out of any business or operations of the company or any
of its Subsidiaries, or with respect to any of the Leased Real Property, and the
Company is not aware of any facts or circumstances which could be expected to
form the basis for any Environmental Action or Environmental Liability against
the Company or any of its Subsidiaries.
36
(d) Neither the Company nor any of its Subsidiaries has entered into
or agreed to any Order, and neither the Company nor any of its Subsidiaries is
subject to any Order, arising out of or issued pursuant to any Environmental
Law, including without limitation, any Order relating to compliance with any
Environmental Law or any Environmental Permit or requiring the investigation or
cleanup of a Hazardous Substance under any Environmental Law.
(e) No Lien has been attached to, or asserted against, or otherwise
obtained with respect to, any assets, property or rights of the Company or any
of its Subsidiaries, including without limitation any of the Leased Real
Property, pursuant to any Environmental Law, and, to the Company's Knowledge, no
such Lien has been threatened. To the Company's Knowledge, there are no facts,
circumstances or other conditions, including, without limitation, any Releases
for which the Company or any of its Subsidiaries is legally responsible, that
could be expected to give rise to, result in the assertion or creation of, any
Liens on or affecting any Leased Real Property.
(f) Neither the Company nor any of its Subsidiaries has received any
notice or request, including, without limitation, any CERCLA 104(e) information
request nor has the Company or any of its Subsidiaries been named a potentially
responsible party with respect to any Environmental Clean-up Site under any
Environmental Law, including, without limitation, CERCLA or any analogous state
Law. To the Company's Knowledge, there are no circumstances or conditions that
could be expected to result in the issuance of any such notice or request to the
Company or any of its Subsidiaries. Neither the Company nor any of its
Subsidiaries has received an analogous notice or request from any non-U.S.
Governmental Entity.
(g) The Company has provided to Parent true and complete copies of,
or access to, all written environmental assessment materials and reports that
have been prepared by or on behalf of, or are otherwise in the possession,
custody or control of, the Company or any of its Subsidiaries.
(h) None of the Leased Real Property located in New Jersey is an
"industrial establishment" as such term is defined under ISRA.
(i) Neither the Company nor any of its Subsidiaries has transported
for storage, treatment or disposal, by contract, agreement or otherwise, or
arranged for the transportation, storage, treatment or disposal, of any
Hazardous Substances at or to any location, including, without limitation, any
location used for the treatment, storage or disposal of Hazardous Substances.
3.23 Related Party Transactions. Except as otherwise disclosed in the
Company's SEC Reports and Disclosure Schedules, there are no Contracts of any
kind entered into by the Company or any of its Subsidiaries with, or for the
benefit of, any officer, director or stockholder of the Company or, to the
Knowledge of the Company, any Affiliate of any of them, except in each case, for
(a) employment agreements, fringe benefits and other compensation paid to
directors, officers and employees consistent with previously established
policies (including normal merit increases in such compensation in the ordinary
37
course of business) and copies of which have been provided to Parent and are
listed on the Company Disclosure Schedule, (b) reimbursements of ordinary and
necessary expenses incurred in connection with their employment or service, and
(c) amounts paid pursuant to Company Benefit Plans of which copies have been
provided to Parent. To the Knowledge of the Company, none of such Persons has
any material direct or indirect ownership interest in any firm or corporation
with which the Company or any of its Subsidiaries has a business relationship,
or with any firm or corporation that competes with the Company or any of its
Subsidiaries (other than ownership of securities in a publicly traded company
representing less than one percent (1%) of the outstanding stock of such
company). No officer or director of the Company or any of its Subsidiaries or
member of his or her immediate family or greater than five percent (5%)
stockholder of the Company or, to the Knowledge of the Company, any Affiliate of
any of them or any employee of the Company or any of its Subsidiaries is
directly or indirectly interested in any Material Contract.
3.24 Insurance.
(a) The Company Disclosure Schedule sets forth (i) an accurate and
complete list of each insurance policy, binder of insurance and fidelity bond
which covers the Company or any of its Subsidiaries or their respective
businesses, properties, assets, directors or employees (the "Policies") and (ii)
a list of all pending claims and the claims history for the Company and each
Subsidiary during the current year and the preceding three (3) years (including
with respect to insurance obtained but not currently maintained). There are no
pending claims under any of such Policies as to which coverage has been
questioned, denied or disputed by the insurer or in respect of which the insurer
has reserved its rights.
(b) All Policies are issued by an insurer that is financially sound
and reputable with a rating of A or better, are in full force and effect and are
enforceable in accordance with their terms and will continue in full force and
effect with respect to the Company and its Subsidiaries following the Merger.
Such Policies provide adequate insurance coverage for the Company and its
Subsidiaries and their respective businesses, properties, assets and employees,
and are sufficient in all material respects for compliance with all Laws and
Contracts to which the Company or any of its Subsidiaries is a party or by which
it is bound.
(c) All premiums due under the Policies have been paid in full or,
with respect to premiums not yet due, accrued. Neither the Company nor any of
its Subsidiaries has received a notice of cancellation of any Policy or of any
material changes that are required in the conduct of the business of the Company
or any of its Subsidiaries as a condition to the continuation of coverage under,
or renewal of, any such Policy. There is no existing default or event which,
with the giving of notice or lapse of time or both, would constitute a default
under any Policy or entitle any insurer to terminate or cancel any Policy. The
Company has no Knowledge of any threatened termination of, or material premium
increase with respect to, any Policy and none of such Policies provides for
retroactive premium adjustments.
38
3.25 Books and Records. The books, records and accounts of the Company and
its Subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions and the assets and Liabilities of the Company and its Subsidiaries.
Neither the Company nor any of its Subsidiaries has engaged in any transaction,
maintained any bank account or used any of the funds of the Company or any of
its Subsidiaries other than transactions, bank accounts and funds which have
been and are reflected in the normally maintained books and records of the
business. The minute books (containing the records of the meetings, or written
consents in lieu of such meetings, of the stockholders, the Board of Directors
and any committees of the Board of Directors), the stock certificate books, and
the stock record books of the Company and its Subsidiaries are correct and
complete in all material respects, and have been maintained in accordance with
sound business practices. At the Closing, all of those books and records will be
in the possession of the Company. At the Closing, the Company will deliver, or
cause to be delivered, to Parent or its designee all of the minute books of the
Company and its Subsidiaries.
3.26 Product Warranty.
(a) There are no warranties (express or implied) outstanding with
respect to any products currently or formerly manufactured, sold, distributed,
provided, shipped or licensed ("Products"), or any services rendered, by the
Company or any of its Subsidiaries, beyond that set forth in the standard
conditions of sale or service, copies of which are included in the Company
Disclosure Schedule.
(b) Each Product manufactured, sold, distributed, provided, shipped
or licensed, or service rendered, by the Company or any of its Subsidiaries has
been in conformity with all applicable contractual commitments and warranties.
There are no material design, manufacturing or other defects, latent or
otherwise, with respect to any Products and such Products are not toxic when
used in accordance with their intended use. Each Product that has been
manufactured, sold, distributed, provided, shipped or licensed prior to Closing
contains all warnings required by applicable Law and such warnings are in
accordance with reasonable industry practice.
(c) The Company Balance Sheet reflects adequate reserves (in
accordance with GAAP) for product design and warranty claims and other damages
in connection with any Product manufactured, sold, distributed, shipped or
licensed, or service rendered, by the Company and its Subsidiaries on or prior
to the Company Balance Sheet Date. The accounting records of the Business will
reflect adequate reserves (in accordance with GAAP) for all such claims in
connection with Products manufactured, sold, distributed, shipped or licensed,
or services rendered by, the Company or any of its Subsidiaries on or prior to
the Closing Date.
3.27 Brokers or Finders. There is no investment banker, broker, finder,
financial advisor or other intermediary which has been retained by or is
authorized to act on behalf of the Company or the Company Stockholders who is
entitled to any fee or commission in connection with the transactions
contemplated by this Agreement, other than ThinkEquity Partners, LLC in an
amount of $730,000 and Xxxxxx Xxxxxxxxxx Xxxxx LLC in an amount of $275,000.
39
3.28 No Illegal Payments. None of the Company, any of its Subsidiaries or,
to the Knowledge of the Company, any Affiliate, officer, agent or employee
thereof, directly or indirectly, has, since inception, on behalf of or with
respect to the Company or any of its Subsidiaries, (a) made any unlawful
domestic or foreign political contributions, (b) made any payment or provided
services which were not legal to make or provide or which the Company, any of
its Subsidiaries or any Affiliate thereof or any such officer, employee or other
Person should reasonably have known were not legal for the payee or the
recipient of such services to receive, (c) received any payment or any services
which were not legal for the payer or the provider of such services to make or
provide, (d) had any material transactions or payments which are not recorded in
its accounting books and records or (e) had any off-book bank or cash accounts
or "slush funds."
3.29 Bank Accounts. The Company Disclosure Schedule sets forth the name of
each bank, safe deposit company or other financial institution in which the
Company or any of its Subsidiaries has an account, lock box or safe deposit box
and the names of all persons authorized to draw thereon or have access thereto.
3.30 Rights Plan; Antitakeover Statutes. The Rights Plan is not required
to be amended such that entering into this Agreement and the transactions
contemplated hereby and thereby, do not and will not on the date hereof or as a
result of the passage of time (i) result in any person being deemed to have
become an Acquiring Person (as defined in the Rights Plan), (ii) result in the
ability of any person to exercise any Rights (as defined in the Rights Plan)
under the Rights Plan, (iii) enable or require the Rights to separate from the
Shares to which they are attached or to be triggered or become exercisable or
(iv) enable the Company to exchange any Rights for shares of the Company's
capital stock, pursuant to the Rights Plan. No Distribution Date, Stock
Acquisition Date, Triggering Event (as such terms are defined in the Rights
Plan) or similar event has occurred or will occur by reason of (A) the adoption,
approval, execution or delivery of this Agreement, (B) the public announcement
of such adoption, approval, execution or delivery or (C) the consummation of the
transactions contemplated hereby and thereby.
3.31 Opinion of Financial Advisor. The Board of Directors of the Company
and a special committee of the Board of Directors have received an opinion from
the Company's financial advisor dated as of the date hereof and addressed to the
special committee and the Board of Directors of the Company to the effect that,
as of the date hereof and based upon and subject to the limitations,
qualifications and assumptions set forth therein, the Total Merger Consideration
to be paid to the holders of shares of the Company Common Stock is fair, from a
financial point of view, to the holders.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub represent and warrant to the Company that the
statements contained in this ARTICLE IV are true and correct.
40
4.1 Organization and Good Standing. Each of Parent and Merger Sub is a
corporation duly organized, validly existing and in good standing under the Laws
of the jurisdiction of its incorporation, has all requisite power to own, lease
and operate its properties and to carry on its business as now being conducted,
and is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which it owns or leases property or conducts
any business so as to require such qualification, except for those jurisdictions
where the failure to be so qualified and in good standing would not reasonably
be expected to be, individually or in the aggregate, material to Parent and its
Subsidiaries taken as a whole.
4.2 Authority and Enforceability. Each of Parent and Merger Sub has the
requisite power and authority to enter into this Agreement and to consummate the
Merger. The execution and delivery of this Agreement by Parent and Merger Sub
and the consummation by Parent and Merger Sub of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of Parent and Merger Sub. This Agreement has been duly executed and delivered by
Parent and Merger Sub and, assuming due authorization, execution and delivery by
the Company, constitutes the valid and binding obligation of Parent and Merger
Sub, enforceable against each of them in accordance with its terms, except as
such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or other similar Laws affecting or relating to
creditors' rights generally, and (b) the availability of injunctive relief and
other equitable remedies.
4.3 No Conflicts; Authorizations.
(a) The execution and delivery of this Agreement by Parent and
Merger Sub do not, and the performance by Parent and Merger Sub of their
obligations hereunder and the consummation by Parent and Merger Sub of the
transactions contemplated hereby will not, (i) violate the provisions of any of
the Charter Documents of Parent or Merger Sub, (ii) violate any Contract to
which Parent or Merger Sub is a party, (iii) assuming compliance by Parent with
the matters referred to Section 4.3(b), violate any Law applicable to Parent or
Merger Sub on the date hereof, or (iv) result in the creation of any Liens upon
any of the assets owned or used by Parent or Merger Sub, other than such
violations referred to in clauses (i), (ii) and (iii) and such Liens referred to
in clause (iv) which would not reasonably be expected to have, individually or
in the aggregate, a Parent Material Adverse Effect.
(b) No Authorization or Order of, registration, declaration or
filing with, or notice to any Governmental Entity is required by or with respect
to Parent in connection with the execution and delivery of this Agreement and
the consummation of the Merger, except for (i) the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware and (ii) such
Authorizations, Orders, registrations, declarations, filings and notices the
failure to obtain or make which would not reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect.
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4.4 Availability of Funds. Parent has cash available or has equity
investment commitments or existing borrowing facilities which together are
sufficient to enable it to satisfy its obligations under this Agreement.
4.5 Brokers or Finders. There is no investment banker, broker, finder,
financial advisor or other intermediary which has been retained by or is
authorized to act on behalf of Parent who is entitled to any fee or commission
in connection with the transactions contemplated by this Agreement other than
Ferghana Partners Inc. and its subsidiary, Ferghana Securities Inc.
4.6 Interim Operations of Sub. Merger 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.
ARTICLE V
COVENANTS OF THE COMPANY
5.1 Management Consulting Committee.
(a) Promptly following execution of this Agreement, the parties
shall establish a management consulting committee (the "MCC"), which shall
consist of a minimum of six (6) persons (the "MCC Member" or "MCC Members") with
the Company and Parent each entitled to appoint three (3) MCC Members and shall
have a term beginning on the date hereof and terminating on the earlier of (i)
termination of this Agreement; and (ii) the Effective Time. The Company shall
appoint a chairperson to the MCC (the "MCC Chairperson") Either the Company or
Parent may replace any or all of its representatives on the MCC at any time upon
written notice to the other party; provided, however, that each party shall use
reasonable efforts to keep an appropriate level of continuity in representation.
(b) Subject to the terms of this Agreement, the MCC shall be a forum
for information sharing with respect to the operations and working capital of
the Company between the date of this Agreement and the earlier of the (i)
termination of this Agreement; and (ii) the Effective Time. In furtherance of
the MCC's objectives, the Company shall furnish to the MCC, promptly following
execution of this Agreement, its forecasted working capital plan, dated as of
March 7, 2008 (the "Plan"), which was previously furnished to the Parent, and
shall update the Plan no less than every two (2) weeks thereafter and, shall
provide to the MCC complete and accurate information regarding the Company, its
operations, financial condition, results of operations, and such other
information as from time to time may be reasonably requested by the MCC Members.
In addition, the Company will provide the MCC with advance notice of the
expenditure of any amounts in excess of $100,000 to the extent not reflected on
the forecasted working capital plan.
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(c) The MCC shall meet at least twice during every calendar month
during the period beginning on the date this Agreement and terminating on the
earlier of (i) termination of this Agreement; and (ii) the Effective Date; and
more or less frequently as the Company and Parent mutually deem appropriate or
as reasonably requested by either such party, on such dates, and at such places
and times, as such parties shall agree; provided that the parties shall endeavor
to have the first meeting of the MCC within ten (10) days after the
establishment of the MCC. The venue for meetings shall be offices of the
Company, or such other place as the parties may agree, if not held by
teleconference or videoconference. The MCC Members of the MCC also may convene
or be polled or consulted from time to time by means of telecommunications,
video conferences, electronic mail or correspondence, as deemed necessary or
appropriate by the MCC Chairperson.
(d) The MCC shall have no decision making authority with respect to
the parties, but shall have the right to consultation with respect to the
operations and working capital of the Company during the period beginning on the
date hereof and terminating on the earlier of (i) termination of this Agreement;
and (ii) the Effective Time. At the request of the Parent, the scope of the
matters to be discussed may be expanded to include planning beyond the Effective
Time. The discussions of the MCC and any information presented to the MCC by the
Company shall be subject to the terms of the Confidentiality Agreement.
5.2 Conduct of Business. 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 shall, and it shall cause each of its Subsidiaries
to:
(a) maintain its corporate existence and carry on its business in
the usual, regular and ordinary course in a manner consistent with past practice
and in accordance with the provisions of this Agreement and in compliance with
all Laws, Authorizations and Contracts including, without limitation, meeting
all of its contractual obligations and preserving the Company Intellectual
Property, with consultation with the MCC with respect to the operations and
working capital of the Company;
(b) except as otherwise set forth in the Plan, use its best efforts
consistent with past practices and policies to preserve intact its present
business organization, keep available the services of its present employees and
preserve its relationships with customers, suppliers, distributors, licensors,
licensees and others having business dealings with it; provided that the Company
is not authorized to, and shall not, make any commitments to any of the
foregoing Persons on behalf of Parent;
(c) maintain its books and records in accordance with past practice,
and to use its reasonable best efforts to maintain in full force and effect all
Authorizations and Policies;
(d) promptly notify Parent of any event or occurrence not in the
ordinary course of business;
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(e) provide Parent with a list of actions that must be taken by the
Company or any of its Subsidiaries within sixty (60) days immediately following
the Closing Date for the purposes of obtaining, maintaining, perfecting,
preserving or renewing any Company Registered Items; and
(f) use its best efforts to conduct its business in such a manner
that on the Closing Date the representations and warranties of the Company
contained in this Agreement shall be true and correct, as though such
representations and warranties were made on and as of such date, and the Company
shall use its best efforts to cause all of the conditions to the obligations of
Parent and Merger Sub under this Agreement to be satisfied as soon as
practicable following the date hereof.
5.3 Negative Covenants. Except as expressly provided in this Agreement,
the Company shall not, and it shall not permit any of its Subsidiaries to,
without the prior written consent of Parent:
(a) adopt or propose any amendment to the Charter Documents of the
Company or any of its Subsidiaries;
(b) declare, set aside or pay any dividend or other distribution
(whether in cash, stock or other property) with respect to any securities;
(c) (i) issue or authorize for issuance any securities, except the
grant of Company Stock Options to newly hired non-officer employees in the
ordinary course of business consistent with past practice or the issuance of
shares of Company Common Stock upon the exercise of Company Stock Options, or
(ii) make any change in any issued and outstanding securities, or redeem,
purchase or otherwise acquire any securities other than the repurchase at cost
from employees of shares of Company Common Stock in connection with the
termination of their employment pursuant to the Company's standard form of
option/restricted shares agreement;
(d) (i) outside of ordinary course of business and other than
pursuant to a written agreement or Company Benefit Plan disclosed in the Company
Disclosure Schedule in the amount required thereunder, (A) modify the
compensation or benefits payable or to become payable by the Company or any of
its Subsidiaries to any of its current or former directors, employees,
contractors or consultants, or (B) modify any bonus, severance, termination,
pension, insurance or other employee benefit plan, payment or arrangement made
to, for or with any current or former directors, employees, contractors or
consultants of the Company or any of its Subsidiaries or (ii) enter into any
employment (other than offer letters and letter agreements entered into in the
ordinary course of business consistent with past practice with employees who are
terminable "at-will"), severance or termination agreement, outside of ordinary
course of business;
(e) establish, adopt, enter into, amend or terminate any Company
Benefit Plan or any collective bargaining, thrift, compensation or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any current or
former directors, employees, contractors or consultants of the Company or any of
its Subsidiaries;
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(f) other than (A) sales of inventory, (B) the grant of Out-Bound
Licenses on a non-exclusive basis and (C) other dispositions of property and
assets that are not material, individually or in the aggregate, to the Company
and its Subsidiaries, taken as a whole, in each case in the ordinary course of
business consistent with past practice, sell, lease, transfer or assign any
property or assets of the Company or any of its Subsidiaries (including, but not
limited to, granting any sublicense or making any assignment of the License
Agreement between the Company and Inpharma AS);
(g) (i) assume, incur or guarantee any Indebtedness, other than
endorsements for collection in the ordinary course of business, (ii) modify the
terms of any existing Indebtedness or (iii) repay any existing Indebtedness in
advance of its maturity date;
(h) mortgage, pledge or permit to become subject to Liens (other
than Permitted Liens) any properties or assets of the Company or any of its
Subsidiaries;
(i) other than travel loans or advances in the ordinary course of
business consistent with past practice, make any loans, advances or capital
contributions to, or investments in, any other Person;
(j) not cancel any debts or waive any claims or rights of
substantial value;
(k) other than in the ordinary course of business consistent with
past practice, (i) amend, modify or terminate, or waive, release or assign any
rights under, any Material Contract, (ii) enter into any Contract which, if
entered into prior to the date hereof, would have been required to be set forth
in Section 3.18 of the Company Disclosure Schedule;
(l) (i) make any capital expenditure, or commit to make any capital
expenditure, which in any one case exceeds $50,000 or capital expenditures which
in the aggregate exceed $200,000 or (ii) except as permitted by clause (i),
acquire any assets, properties or rights other than Inventory in the ordinary
course of business consistent with past practice;
(m) not settle or compromise any litigation other than settlements
or compromises of litigation where the settlement is limited solely to the
release of claims and the monetary payment by the Company or any of its
Subsidiaries does not exceed $100,000 in the aggregate or $25,000 in any
individual case;
(n) amend any Company Stock Option, Company Restricted Share or
Other Purchase Right or authorize cash payments in exchange for any of the
foregoing;
(o) make any filings or registrations, with any Governmental Entity,
except routine filings and registrations made in the ordinary course of
business;
(p) be party to (i) any merger, acquisition, consolidation,
recapitalization, liquidation, dissolution or similar transaction involving the
Company or any of its Subsidiaries or (ii) any purchase of all or any
substantial portion of the assets or securities of the Company or any of its
Subsidiaries;
45
(q) take any actions outside the ordinary course of business;
(r) other than as required by GAAP (as advised by its regular
independent accounts), make any changes in its accounting methods, principles or
practices;
(s) make any Tax election, change its method of Tax accounting or
settle any claim relating to Taxes;
(t) take any action or omit to do any act within its reasonable
control which action or omission which is reasonably likely to result in any of
the conditions to the Merger not being satisfied, except as may be required by
applicable Law; or
(u) agree, whether in writing or otherwise, to do any of the
foregoing.
Notwithstanding the foregoing Section 5.3, the Company may negotiate and amend
that certain Amended and Restated PSMA/PSMP License Agreement by and among the
Company, Progenics Pharmaceuticals, Inc. and PSMA Development Company LLC, dated
April 20, 2006; provided, that, the Company shall consult with Parent prior to
executing any such amendment.
5.4 Access to Information. Subject to the terms of the Confidentiality
Agreement by and between Parent and the Company dated November 6, 2007 (the
"Confidentiality Agreement"), the Company shall, and shall cause its
Subsidiaries to, afford to Parent's officers, directors, employees, accountants,
counsel, consultants, advisors and agents ("Representatives") free and full
access to and the right to inspect, during normal business hours, and upon prior
notice, all of the Leased Real Property, properties, assets, records, Contracts
and other documents related to the Company and its Subsidiaries, and shall
permit them to consult with the officers, employees, accountants, counsel and
agents of the Company and its Subsidiaries for the purpose of making such
investigation of the Company and its Subsidiaries as Parent shall desire to
make. The Company shall furnish to Parent all such documents and copies of
documents and records and information with respect to the Company and its
Subsidiaries and copies of any working papers relating thereto as Parent may
reasonably request. Without limiting the foregoing, the Company shall permit,
and will cause its Subsidiaries to permit, Parent and Parent's Representatives
to conduct such investigations as Parent may reasonably request to assess the
environmental condition of the Leased Real Property.
5.5 Resignations. On the Closing Date, the Company shall cause to be
delivered to Parent duly signed resignations, effective at the Effective Time,
of all members of the Boards of Directors of the Company and its Subsidiaries of
their positions as directors.
5.6 Consents. The Company shall, and shall cause each of its Subsidiaries
to, obtain all Consents; provided that no Indebtedness shall be repaid, except
as otherwise required pursuant to the terms of any applicable loan Contract, and
no Contract shall be amended nor any right thereunder be waived, and no money or
other consideration shall be expended, to obtain any such Consent.
46
5.7 Notification of Certain Matters. The Company shall give prompt notice
to Parent of any fact, event or circumstance known to it that (a) individually
or taken together with all other facts, events and circumstances known to it,
has had or would reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, (b) would cause or constitute a
material breach of any of its representations, warranties, covenants or
agreements contained herein, (c) the failure of any condition precedent to
Parent's obligations, (d) any notice or other communication from any third party
alleging that the consent of such third party is or may be required in
connection with the Merger, (e) any notice or other communication from any
Governmental Entity in connection with the Merger, or (f) any Actions commenced
relating to the Company or any of its Subsidiaries that, if pending on the date
of this Agreement, would have been required to have been disclosed pursuant to
Section 3.19.
5.8 Exclusivity.
(a) Subject to Section 5.8(b), except with respect to this Agreement
and the transactions contemplated hereby, the Company agrees that it will not,
and it will cause each of its Subsidiaries and its and their respective
directors, officers, employees, Affiliates and other agents and representatives
(including any investment banking, legal or accounting firm retained by it or
any of them and any individual member or employee of the foregoing) (each, an
"Agent"), not to: (i) initiate, solicit, or knowingly encourage or seek,
directly or indirectly, any inquiries relating to or the making or
implementation of any Third Party Proposal; (ii) engage in any negotiations
concerning, or provide any information or data to, or have any substantive
discussions with, any Person relating to a Third Party Proposal; (iii) otherwise
cooperate in or facilitate any effort or attempt to make, implement or accept a
Third Party Proposal; (iv) enter into Contract with any Person relating to a
Third Party Proposal or (v) release any third party from, or waive any provision
of, any confidentiality or standstill agreement to which it is a party. The
Company will immediately cease, and will cause its Subsidiaries and Agents
immediately to cease, any and all existing activities, discussions or
negotiations with any third parties conducted heretofore with respect to (or
reasonably likely to lead to) any Third Party Proposal. "Third Party Proposal"
means any Contract, proposal or offer (including any proposal or offer to the
stockholders of the Company) with respect to a proposed or potential Acquisition
Transaction. "Acquisition Transaction" means: (A) any sale, lease or other
disposition, direct or indirect (and however structured), of any business or
assets of the Company and/or any of its Subsidiaries, (B) any tender offer
(including a self-tender offer) or exchange offer, (C) a merger, consolidation,
share exchange, business combination, reorganization, joint venture,
recapitalization, liquidation, dissolution or other similar transaction
involving the Company, (D) the issuance, sale or other disposition, direct or
indirect (and however structured, and including in connection with any
financing), of securities (or securities or other rights convertible into, or
exercisable or exchangeable for, such securities) or (E) any combination of the
foregoing (other than the Merger).
47
(b) Notwithstanding anything to the contrary in Section 5.8(a), the
Board of Directors of the Company may furnish information to, and enter into
discussions or negotiations with, a Person who has made an unsolicited bona fide
Third Party Proposal if, and only if, the Board of Directors of the Company has
(i) reasonably concluded after receiving advice from the Company's independent
financial advisors that such Third Party Proposal constitutes or is reasonably
likely to lead to a Superior Proposal, (ii) concluded, after receiving advice
from its outside legal counsel, that, in light of such Superior Proposal, the
furnishing of such information or entering into discussions in a manner
consistent with its fiduciary obligations to the Company and the Company
Stockholders under applicable Law, (iii) provided written notice to Parent of
its intent to furnish information or enter into discussions or negotiations with
such Person at least three (3) Business Days prior to taking any such action and
(iv) obtained from such Person an executed confidentiality agreement on terms no
less favorable to the Company than those contained in the Confidentiality
Agreement. The Board of Directors of the Company shall furnish to Parent all
information provided to the Person who has made the Superior Proposal to the
extent that such information has not been previously provided to Parent and
shall keep Parent promptly and reasonably informed as to the status of any
discussions regarding such Superior Proposal. Notwithstanding the foregoing, no
information may be furnished and no discussions may be entered into in the event
that the Company has taken any actions inconsistent with this Section 5.8.
"Superior Proposal" means an unsolicited bona fide Third Party Proposal pursuant
to which a Person (or its stockholders) would own, if consummated, all or
substantially all of the outstanding capital stock of the Company (or of the
surviving entity in a merger or the direct or indirect parent of the surviving
entity in a merger) or all or substantially all the assets of the Company and
its Subsidiaries taken as a whole on terms that the Board of Directors of the
Company determines, in its good faith judgment (based on the advice of a
financial advisor), to be more favorable to the Company Stockholders from a
financial point of view than the terms of the Merger and with any financing
required to consummate the transaction contemplated by such Third Party Proposal
committed or likely, in the good faith judgment of the Board of Directors of the
Company (based on the advice of a financial advisor), to be obtained by such
third party on a timely basis. In addition to the obligations of the Company set
forth in this Section 5.8(b), the Company shall promptly, but in no event later
than 24 hours after the receipt thereof, advise Parent in writing of any request
for information that the Company reasonably believes could lead to a Third Party
Proposal, the terms and conditions of such request, Third Party Proposal or
inquiry (including any subsequent material amendment or modification to such
terms and conditions) and the identity of the Person making the request. The
Company shall keep Parent informed in all material respects on a timely basis of
any change in the status of, or any modification or amendment to, any Third
Party Proposal.
(c) Nothing in this Agreement shall prevent the Board of Directors
of the Company from withholding, withdrawing, amending, modifying or changing
its recommendation in favor of the Company Stockholder Approval and, in the case
of a tender or exchange offer made directly to the Company Stockholders,
recommending that the Company Stockholders accept the tender or exchange offer
(each, a "Change of Recommendation"), if all of the following conditions are
satisfied:
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(i) a Superior Proposal is made to the Company and is not
withdrawn;
(ii) the Company Stockholders' Meeting has not occurred;
(iii) the Company shall have provided at least three (3)
Business Days' prior written notice (the "Notice Period") to Parent stating (A)
that it has received a Superior Proposal, (B) the terms and conditions of such
Superior Proposal and the identity the Person making such Superior Proposal and
(C) that it intends to effect a Change of Recommendation and the manner in which
it intends to so;
(iv) Parent shall not have, within the Notice Period, made an
offer that the Board of Directors of the Company by a majority vote determines
in its good faith judgment (based on the written advice of its financial
advisor) to be at least as favorable to the Company and the Company Stockholders
as such Superior Proposal (it being agreed that the Board of Directors of the
Company shall convene a meeting to consider any such offer by Parent promptly
following the receipt thereof);
(v) the Board of Directors of the Company concludes in good
faith, after receiving the advice of its outside legal counsel, that, in light
of such Superior Proposal, the failure of the Board of Directors to effect a
Change of Recommendation is reasonably likely to result in a breach of its
fiduciary obligations to the Company Stockholders under applicable Law;
(vi) the Company shall not have breached any of the provisions
set forth in this Section 5.8.
(d) Nothing contained in this Agreement shall prohibit the Company
or its Board of Directors from taking and disclosing to the Company Stockholders
a position contemplated by Rules 14d-9 and 14e-2(a) promulgated under the
Exchange Act; provided that the Company shall not take a position that effects,
or otherwise make any public statement that constitutes, a Change of
Recommendation unless specifically permitted pursuant to the terms of Section
5.8(c).
5.9 Company Stockholders' Meeting.
(a) As promptly as practicable after the date hereof, the Company
shall take all action necessary under the DGCL and its Charter Documents (i) to
call, convene and hold a meeting of the Company Stockholders to vote upon the
adoption of this Agreement (the "Company Stockholders' Meeting") and the
transactions contemplated hereby and (ii) to solicit the Company Stockholder
Approval. The Board of Directors of the Company will recommend, by unanimous
vote of all directors then in office, that the Company Stockholder Approval be
given and will use its reasonable best efforts to solicit from the Company
Stockholders the Company Stockholder Approval, except to the extent that the
Board of Directors of the Company effects a Change of Recommendation as provided
in Section 5.85.8(c).
49
(b) Nothing in this Agreement shall limit the Company's obligation
to convene the Company Stockholders' Meeting (regardless of whether the Board of
Directors of the Company effects a Change of Recommendation).
5.10 Proxy Statement.
(a) Immediately following the execution of this Agreement, the
Company shall prepare and file with the SEC, no later than March 17, 2008, a
proxy statement (together with any amendments thereof or supplements thereto,
the "Proxy Statement") relating to the Company Stockholders' Meeting. The
Company shall use reasonable best efforts to have cleared by the SEC and
thereafter mail to the Company Stockholders as promptly as practicable the Proxy
Statement and all other proxy materials for the Company Stockholders' Meeting.
(b) Except to the extent expressly permitted by Section 5.85.8(c),
(i) the Board of Directors of the Company shall recommend that the Company
Stockholders vote in favor of the Company Stockholder Approval, (ii) the Proxy
Statement shall include a statement that the Board of Directors of the Company
has recommended that the Company Stockholders vote in favor of the Company
Stockholder Approval and (iii) neither the Board of Directors of the Company nor
any committee thereof shall effect any Change of Recommendation; provided,
however, that the foregoing shall not prohibit the Board of Directors of the
Company from fulfilling its duty of candor or disclosure to its stockholders
under applicable Law. For purposes of this Agreement, such recommendation of the
Board of Directors shall be deemed to have been modified in a manner adverse to
Parent if such recommendation shall no longer be unanimous.
(c) The Proxy Statement and any amendments or supplements to the
Proxy Statement will, when filed, comply as to form in all material respects
with the applicable requirements of the Exchange Act. At the time the Proxy
Statement or any amendment or supplement to the Proxy Statement is first mailed
to the Company Stockholders, at the time the Company Stockholders vote on the
adoption of this Agreement and at the Effective Time, the Proxy Statement, as
supplemented or amended, if applicable, will not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading. If, at any time prior to the Effective Time, any
event or circumstance relating to the Company that should be set forth in an
amendment or a supplement to the Proxy Statement should be discovered by the
Company, the Company shall promptly inform Parent. The covenant contained in
this Section 5.10(c) will not apply to statements or omissions included in the
Proxy Statement based upon information furnished to the Company in writing by
Parent specifically for use therein.
(d) The Company shall give Parent and its counsel a reasonable
opportunity to review and comment on the Proxy Statement, each time before that
document (or any amendment or supplement thereto) is filed with the SEC, and
reasonable and good faith consideration shall be given to any comments made by
Parent and its counsel. The Company shall (i) promptly provide Parent and its
50
counsel with any comments or other communications, whether written or oral, that
the Company or its counsel may receive from time to time from the SEC or its
staff with respect to the Proxy Statement promptly after receipt of those
comments or other communications and (ii) provide Parent with a reasonable
opportunity to participate in the response to those comments and to provide
comments on that response (to which reasonable and good faith consideration
shall be given), including by participating in any discussions or meetings with
the SEC.
5.11 Fairness Opinion. The Company shall deliver to Parent an executed
copy of the opinion from the Company's financial advisor dated as of the date
hereof and addressed to the special committee and the Board of Directors of the
Company to the effect that, as of the date hereof and based upon and subject to
the limitations, qualifications and assumptions set forth therein, the Total
Merger Consideration to be paid to the holders of shares of the Company Common
Stock is fair, from a financial point of view, to the holders.
ARTICLE VI
COVENANTS OF PARENT
6.1 Benefit Plans. Parent and the Surviving Corporation shall take all
reasonable actions necessary to allow eligible employees of the Company and any
of its Subsidiaries who will be employees of the Surviving Corporation and any
of its Subsidiaries ("Transitioned Employees"), to participate on substantially
similar terms in benefit programs which are substantially comparable to those
maintained by the Company immediately prior to the Effective Time for the
benefit of, or offered to, Transitioned Employees to the extent permitted by the
terms of such Parent or Surviving Corporation benefit plan or any insurance
contract or agreement applicable thereto; provided, however, that there shall be
no obligation to offer any stock option, stock purchase, restricted stock, stock
appreciation right, phantom stock or similar plan that provides for the issuance
of shares of Parent or Surviving Corporation stock or interests in such stock,
to any person. Parent and the Surviving Corporation will recognize employment
services of each Transitioned Employee with the Company and any of its
Subsidiaries for purposes of eligibility (but not benefit accrual) under any
benefit plan of Parent and the Surviving Corporation to the extent applicable.
Each Transitioned Employee's years of service with the Company and any of its
Subsidiaries shall be otherwise recognized for all general employment purposes,
including seniority, vacation, personal time and similar general employment
purposes; provided that any vacation time offered by Parent or the Surviving
Corporation in the calendar year of the Effective Time to any Transitioned
Employee shall be offset by any vacation time used by or paid to a Transitioned
Employee by the Company or any of its Subsidiaries in the calendar year of the
Effective Time. In addition, Parent and the Surviving Corporation will (a) waive
all limitations as to preexisting conditions, exclusions, waiting periods and
service requirements with respect to participation and coverage requirements
applicable to Transitioned Employees under any group health plan sponsored by
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Parent, except to the extent such preexisting conditions, exclusion, waiting
period or service requirement had not been satisfied by any such Transitioned
Employee as of the Effective Time under a group health plan sponsored by the
Company or any of its Subsidiaries; and (b) provide each Transitioned Employee
with credit for any deductible, copayment and out-of-pocket limits applicable to
such employees under any such group medical plan sponsored by the Company or any
of its Subsidiaries and paid by the Transitioned Employee prior to the Effective
Time during the calendar year of the Effective Time.
6.2 Delisting and Deregistration. Parent shall use its reasonable best
efforts to cause the Company Common Stock to be no longer quoted on the NASDAQ
and to be deregistered under the Exchange Act as soon as practicable following
the Effective Time.
6.3 Indemnification.
(a) From and after the Effective Time, the Surviving Corporation
shall, to the fullest extent permitted by applicable Law, indemnify, defend and
hold harmless, and provide advancement of expenses to, each Person who is now,
or has been at any time prior to the date hereof or who becomes prior to the
Effective Time, an officer, director or employee of the Company or any of its
Subsidiaries (the "Indemnified Parties") against all losses, claims, damages,
costs, expenses, liabilities or judgments or amounts that are paid in settlement
of or in connection with any claim or Action that is based in whole or in part
on, or arises in whole or in part out of, the fact that such Person is or was a
director, officer or employee of the Company or any of its Subsidiaries, and
pertaining to any matter existing or occurring, or any acts or omissions
occurring, at or prior to the Effective Time, whether asserted or claimed prior
to, or at or after, the Effective Time (including matters, acts or omissions
occurring in connection with the approval of this Agreement and the consummation
of the transactions contemplated hereby) to the same extent such Persons are
entitled to be indemnified or have the right to advancement of expenses as of
the date of this Agreement by the Company or any of its Subsidiaries pursuant to
the Charter Documents and indemnification agreements of the Company and its
Subsidiaries, if any, in existence on the date hereof with any directors,
officers and employees of the Company and its Subsidiaries.
(b) For a period of six (6) years after the Effective Time, Parent
shall cause to be maintained in effect the current directors' and officers'
liability insurance policies maintained by the Company with respect to claims
arising from facts or events that occurred prior to the Effective Time
(including matters, acts or omissions occurring in connection with the approval
of this Agreement and the consummation of the transactions contemplated hereby);
provided that if the existing directors' and officers' liability insurance
policy expires, is terminated or cancelled during such 6-year period, Parent
shall cause to be substituted therefor policies containing terms and conditions
which are no less favorable to the former officers and directors of the Company
and its Subsidiaries only with respect to claims arising from facts or events
that occurred prior to the Effective Time (including matters, acts or omissions
occurring in connection with the approval of this Agreement and the consummation
of the transactions contemplated hereby); provided that such premiums shall not
exceed $662,500 in the aggregate.
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(c) This Section 6.3 is intended to be for the benefit of, and shall
be enforceable by, the Indemnified Parties and their heirs and personal
representatives and shall be binding on the Surviving Corporation and its
successors and assigns.
(d) In the event the Surviving Corporation or any of its successors
or assigns (i) consolidates with or merges into any other Person and shall not
be the continuing or surviving corporation or entity in such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any person, then, and in each case, proper provision shall be made so that
the successors and assigns of the Surviving Corporation honor the
indemnification obligations set forth in this Section 6.3.
ARTICLE VII
COVENANTS OF THE COMPANY AND PARENT
7.1 Regulatory Approvals.
(a) Each of Parent, Merger Sub and the Company shall promptly apply
for, and take all reasonably necessary actions to obtain or make, as applicable,
all Authorizations, Orders, declarations and filings with, and notices to, any
Governmental Entity or other Person required to be obtained or made by it for
the consummation of the transactions contemplated hereby. Each party shall
cooperate with and promptly furnish information to the other party necessary in
connection with any requirements imposed upon such other party in connection
with the consummation of the Merger.
(b) Parent and the Company shall instruct their respective counsel
to cooperate with each other and use reasonable best efforts to facilitate and
expedite the identification and resolution of any issues arising under any Laws
in order to expeditiously obtain all Authorizations, Orders and declarations of
applicable Governmental Entities . Such reasonable best efforts and cooperation
include counsel's undertaking (i) to keep each other appropriately informed of
communications from and to personnel of the reviewing Governmental Entity and
(ii) to confer with each other regarding appropriate contacts with and response
to personnel of any Governmental Entity.
7.2 Public Announcements. The initial press release relating to this
Agreement shall be a joint press release the text of which shall have been
agreed to by each of Parent and the Company. Thereafter, each of Parent and the
Company shall not issue any press release or otherwise make any public
statements with respect to this Agreement, the Merger or any of the other
transactions contemplated by this Agreement without the prior consent of the
other party (such consent not to be unreasonably withheld or delayed); provided
that a party may, without such consent (but after prior consultation to the
extent practicable in the circumstances), issue such press releases and make
such public statements that it believes are required by applicable Law or the
rules of NASDAQ. Notwithstanding the foregoing, a party may make public
statements in response to questions from the press, analysts, investors and make
internal announcements to employees, so long as such statements and
announcements are consistent with previous press releases or public statements
made jointly by the Company and Parent and do not violate the terms of the
Confidentiality Agreement.
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7.3 Further Assurances. Upon the terms and subject to the conditions
hereof each of the parties hereto shall execute such documents and other
instruments and take such further actions as may be reasonably required to carry
out the provisions hereof and consummate the Merger and the transactions
contemplated by this Agreement.
7.4 Voting Agreements. The Company shall use its best efforts to obtain
Voting Agreements from stockholders of the Company owning five percent (5%) or
more of the issued and outstanding capital stock of the Company on the date
hereof.
ARTICLE VIII
CONDITIONS TO MERGER
8.1 Conditions to Each Party's Obligation to Effect the Merger. The
obligations of Parent, Merger Sub and the Company to consummate the Merger are
subject to the satisfaction on or prior to the Closing Date of the following
conditions:
(a) The Company Stockholder Approval shall have been obtained.
(b) All Authorizations and Orders of, declarations and filings with,
and notices to any Governmental Entity required to permit the consummation of
the Merger shall have been obtained or made and shall be in full force and
effect.
(c) No temporary restraining order, preliminary or permanent
injunction or other Order preventing the consummation of the Merger shall be in
effect. No Law shall have been enacted or shall be deemed applicable to the
Merger which makes the consummation of the Merger illegal.
(d) The Company shall have filed its definitive Proxy Statement in
accordance with the provisions of the Exchange Act, and the SEC shall not have
initiated an enforcement action or otherwise sought to prevent the solicitation
of proxies with regard to the Merger.
8.2 Conditions to Obligations of Parent and Merger Sub to Effect the
Merger. The obligations of Parent and Merger Sub to effect the Merger are
subject to the satisfaction (or waiver by Parent in its sole discretion) of the
following further conditions:
(a) The representations and warranties of the Company set forth in
this Agreement that are qualified by materiality (considered collectively and
individually) shall have been true and correct at and as of the date hereof and
shall be true and correct at and as of the Closing Date as if made at and as of
the Closing Date, and the representations and warranties that are not so
qualified (considered collectively and individually) shall have been true and
correct in all material respects at and as of the date hereof and shall be true
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and correct in all material respects at and as of the Closing Date as if made at
and as of the Closing Date, except to the extent that such representations and
warranties refer specifically to an earlier date, in which case such
representations and warranties shall have been true and correct as of such
earlier date, and Parent shall have received a certificate dated the Closing
Date signed on behalf of the Company by the President of the Company to such
effect.
(b) 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; provided that, with respect to obligations that are qualified
by materiality, the Company shall have performed such obligations, as so
qualified, in all respects. Parent shall have received a certificate signed on
behalf of the Company by the President of the Company to such effect.
(c) There shall not have occurred any event, occurrence or change
that has had, or would reasonably be expected to have, a Company Material
Adverse Effect, which shall include, without limitation, that the Company's
auditors have indicated that their audit report relating to the Company's most
recently completed fiscal year must be qualified to reflect that there is doubt
that the Company can continue as a "going concern."
(d) No Action shall be pending or threatened before any court or
other Governmental Entity, in each case that has a reasonable likelihood of
success, (i) seeking to prevent consummation of the Merger or seeking to obtain
from the Company or Parent damages that are material in relation to the Company
and its Subsidiaries, taken as a whole, or Parent and its Subsidiaries, taken as
a whole, as the case may be, (ii) seeking to impose any material limitation on
the right of Parent to control the Company and its Subsidiaries or any other
Affiliate of Parent, (iii) seeking to restrain or prohibit the Company's or
Parent's ownership or operation (or that of their respective Subsidiaries or
Affiliates) of any portion of the business or assets of the Company and its
Subsidiaries, taken as a whole, or of Parent and its Subsidiaries, taken as a
whole, or to compel the Company or Parent or any of their respective
Subsidiaries or Affiliates to dispose of or hold separate any portion of the
business or assets of the Company and its Subsidiaries, taken as a whole, or of
Parent and its Subsidiaries, taken as a whole, and if such business or assets
relate to the Company or any of its Subsidiaries, such business or assets are
material to the financial condition, results of operations or prospects of the
Company and its Subsidiaries, taken as a whole, and if such business or assets
relate to Parent or any of its Subsidiaries, such business or assets are
material to the financial condition, results of operations or prospects of
Parent and its Subsidiaries, taken as a whole. No Order shall be in effect, and
no Law shall have been enacted or shall be deemed applicable to the Merger,
which has any of the effects set forth in clauses (i) through (iii) in this
Section 8.2(d).
(e) The Company shall have obtained the Consent of each Person whose
Consent is required under the Material Contracts set forth in the Company
Disclosure Schedule and shall have provided evidence of each such Consent in
form and substance satisfactory to Parent.
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(f) The Company shall have delivered to Parent resignations from the
directors of the Company and each Subsidiary of the Company holding such
position immediately prior to the Effective Time.
(g) The Company shall have delivered to Parent satisfactory evidence
of the cancellation of all of the Company Stock Options and Other Purchase
Rights and the termination of all Company Stock Option Plans.
(h) The Company shall have delivered to Parent certificates of good
standing for the Company from the Secretary of State of the State of Delaware
and New Jersey, each dated a reasonable date prior to the Closing Date, and
certificates of good standing for the Subsidiaries of the Company from the
Secretary of State of the State of Delaware.
(i) Each of the executive officers and directors of the Company
shall have delivered a Voting Agreement on the date hereof and shall have
complied with and not be in breach of their respective obligations under the
Voting Agreement and all of the Company Common Stock subject to a Voting
Agreement shall have been voted in favor of the approval and adoption of this
Agreement and the Merger (which vote shall not have been revoked).
(j) The Company shall have delivered to Parent and Merger Sub (i) a
certificate dated as of the date of Closing, signed on its behalf by its chief
executive officer and its chief financial officer to the effect that the
obligations under Section 8.2(a) through (e) and (g) of this Agreement have been
satisfied and (ii) copies of all documents that Parent may reasonably request
relating to the existence of the Company and certified copies of resolutions or
written consents duly adopted by the Board of Directors of the Company and any
of its Subsidiaries evidencing the taking of all corporate action necessary to
authorize the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby, all in such reasonable
detail as Parent and its counsel may request.
(k) The number of shares of Company Common Stock held by holders
demanding appraisal rights pursuant to the provisions of Section 262 of the DGCL
shall represent not more than ten percent (10%) of the outstanding Company
Common Stock as of the Effective Date.
(l) The Company not accepting any buy out of royalties from
Progenics without prior consultation with Parent.
(m) The Company shall have filed its Annual Report on Form 10-K with
the Securities and Exchange Commission, including audited financial statements
for the year ended December 31, 2007, no later than March 17, 2008.
8.3 Conditions to Obligation of the Company to Effect the Merger. The
obligation of the Company to effect the Merger is subject to the satisfaction
(or waiver by the Company in its sole discretion) of the following further
conditions:
56
(a) The representations and warranties of Parent and Merger Sub set
forth in this Agreement shall have been true and correct at and as of the date
hereof and shall be true and correct at and as of the Closing Date as if made at
and as of the Closing Date, except to the extent that such representations and
warranties refer specifically to an earlier date, in which case such
representations and warranties shall have been true and correct as of such
earlier date, and the Company shall have received a certificate dated the
Closing Date signed on behalf of Parent by the President of Parent to such
effect.
(b) Parent and Merger 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. The Company shall have received a certificate
signed on behalf of Parent by the President or Chief Financial Officer of Parent
to such effect.
(c) Parent (or its designated affiliate) shall have entered into a
Sublicense Agreement with the Company for the sublicense of European and Asian
rights to the Company's Caphosol product substantially on the terms attached
hereto as Exhibit B which agreement shall be effective on the date that the
Company files its preliminary Proxy Statement with the SEC, no later than March
17, 2008.
ARTICLE IX
TERMINATION
9.1 Termination.
(a) This Agreement may be terminated and the Merger abandoned at any
time prior to the Effective Time (with any termination by Parent also being an
effective termination by Merger Sub):
(i) by mutual written consent of Parent and the Company;
(ii) by Parent or the Company if:
(A) the Merger is not consummated on or before December
31, 2008 (the "Outside Date"); provided, however, that the right to terminate
this Agreement under this clause (ii) (A) shall not be available to any party
whose breach of a representation, warranty, covenant or agreement under this
Agreement has been the cause of or resulted in the failure of the Closing to
occur on or before such date;
(B) a Governmental Entity shall have issued an Order or
taken any other action, in any case having the effect of permanently
restraining, enjoining or otherwise prohibiting the Merger, which Order or other
action is final and non-appealable; or
(C) the Company Stockholder Approval shall not have been
obtained at the Company Stockholders' Meeting or any adjournment or postponement
thereof;
57
(iii) by Parent if:
(A) any condition to the obligations of Parent hereunder
becomes incapable of fulfillment other than as a result of a breach by Parent of
any covenant or agreement contained in this Agreement, and such condition is not
waived by Parent;
(B) there has been a breach by the Company of any
representation, warranty, covenant or agreement contained in this Agreement or
if any representation or warranty of the Company shall have become untrue, in
either case such that the conditions set forth in Section 8.2(a) or Section
8.2(b) would not be satisfied; provided however, that, if such breach is curable
by the Company through its good faith efforts and for so long as the Company
continues to exercise its good faith efforts, the Parent may not terminate this
Agreement under this Section 9.1(a)(iii)(B) for a period ending upon the earlier
of (1) the Outside Date and (2) thirty (30) days following written notice to the
Company by Parent of such breach;
(C) (i) the Board of Directors of the Company fails to
call the Company Stockholders' Meeting in accordance with Section 5.8(a) and to
hold such meeting no later than December 30, 2008, (ii) the Company fails to
include in the Proxy Statement the unanimous recommendation of the Board of
Directors of the Company in favor of the Company Stockholder Approval, (iii) the
Board of Directors of the Company effects a Change of Recommendation or resolves
to do so, (iv) the Company recommends to the Company Stockholders or approves or
endorses a Third Party Proposal or enters into any letter of intent, memorandum
of understanding or similar document or any Contract (other than a nondisclosure
agreement) constituting, accepting or directly related to, or which is
reasonably likely to lead to, any Third Party Proposal, (v) the Board of
Directors of the Company fails to reject a Third Party Proposal within ten (10)
Business Days following receipt by the Company of the Third Party Proposal, (vi)
the Company breaches its obligations under Section 5.7, (vii) a tender offer or
exchange offer relating to the outstanding shares of capital stock of the
Company is commenced, and the Board of Directors of the Company fails to
recommend within ten (10) Business Days against acceptance of such tender offer
or exchange offer by the Company Stockholders (including by taking no position
with respect to the acceptance of such tender offer or exchange offer by the
Company Stockholders) or (viii) resolves, agrees or proposes publicly to take
any such actions in response to a Third Party Proposal; or
(iv) by the Company if:
(A) any condition to the obligations of the Company
hereunder becomes incapable of fulfillment other than as a result of a breach by
the Company of any covenant or agreement contained in this Agreement, and such
condition is not waived by the Company; or
58
(B) there has been a breach by Parent of any
representation, warranty, covenant or agreement contained in this Agreement or
if any representation or warranty of Parent shall have become untrue, in either
case such that the conditions set forth in Section 8.3(a) or Section 8.3(b)
would not be satisfied; provided however, that, if such breach is curable by the
Parent through its good faith efforts and for so long as the Company continues
to exercise its good faith efforts, the Company may not terminate this Agreement
under this Section 9.1(a)(iv)(B) for a period ending upon the earlier of (1) the
Outside Date and (2) thirty (30) days following written notice to the Parent by
the Company of such breach.
(b) The party desiring to terminate this Agreement pursuant to
Sections 9.1(a)(ii), 9.1(a)(iii) or 9.1(a)(iv) shall give written notice of such
termination to the other parties hereto.
9.2 Effect of Termination. In the event of termination of this Agreement
as provided in Section 9.1, this Agreement shall immediately become void and
there shall be no liability or obligation on the part of the Company or Parent
or their respective officers, directors, stockholders or Affiliates, except as
set forth in Sections 9.3 and 9.4; provided, however, that the provisions of
Section 7.2 (Public Announcements) and Section 9.3 (Remedies), Section 9.4
(Termination Fee) and ARTICLE X of this Agreement shall remain in full force and
effect and survive any termination of this Agreement.
9.3 Remedies.
(a) Any party terminating this Agreement pursuant to Section 9.1
shall have the right to recover damages sustained by such party as a result of
any breach by the other party of any representation, warranty, covenant or
agreement contained in this Agreement or fraud or willful misrepresentation;
provided, however, that the party seeking relief is not in breach of any
representation, warranty, covenant or agreement contained in this Agreement
under circumstances which would have permitted the other party to terminate the
Agreement under Section 9.1. Payments made pursuant to Section 9.4 shall be in
addition to any other rights, remedies and relief of the parties hereto or with
respect to the subject matter of this Agreement.
(b) Unless otherwise provided for in Sections 9.3(a) or 9.4, any
termination of this Agreement by Parent or the Company will not result in any
financial payment by the party or any other remedy in equity or law.
9.4 Termination Fee.
(a) The Company shall pay Parent, by wire transfer of immediately
available funds to an account designated by Parent, a fee equal to five percent
(5%) of the Total Merger Consideration, which shall include reimbursement of up
to $500,000 for all reasonable costs and expenses incurred by Parent in
connection with this Agreement and the transactions contemplated hereby (the
"Termination Fee") if this Agreement is terminated as follows:
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(i) if Parent terminates this Agreement pursuant to Section
9.1(a)(iii)(C) the Company shall pay Parent, by wire transfer of immediately
available funds to an account designated by Parent, the Termination Fee in full
on the Business Day following the date of such termination; or
(ii) if (A) (1) Parent or the Company terminates this
Agreement pursuant to Section 9.1(a)(ii)(C) or (2) Parent terminates this
Agreement pursuant to Section 9.1(a)(iii)(B) and (B) in each case, prior to any
such termination but following the date hereof any Person shall have made to the
Company or the Company Stockholders, or publicly announced, a proposal, offer or
indication of interest relating to any Acquisition Transaction (such Person
being referred to herein as the "Third Party Bidder"), the Company shall pay
Parent, by wire transfer of immediately available funds to an account designated
by Parent, one half of the Termination Fee in full on the Business Day following
such termination and (C) if within 12 months of the date of any such
termination, an Acquisition Transaction is consummated with the Third Party
Bidder or the Company enters into an agreement, letter of intent or similar
arrangement with the Third Party Bidder relating to an Acquisition Transaction,
the Company shall pay Parent, by wire transfer of immediately available funds to
an account designated by Parent, the remaining one half of the Termination Fee
upon the earlier of such execution or consummation. For purposes of this Section
9.4, the term "Acquisition Transaction" means: (A) any sale, lease or other
disposition, direct or indirect (and however structured), of any business or
assets of the Company and/or any of its Subsidiaries (which business or assets
represent fifty percent (50%) of more of the consolidated revenues, net income
or assets of the Company an/or its Subsidiaries taken as a whole), (B) any
tender offer (including a self-tender offer) or exchange offer that, if
consummated, would result in a third party beneficially owning fifty percent
(50%) or more of any class of securities of the Company, (C) a merger,
consolidation, share exchange, business combination, reorganization, joint
venture, recapitalization, liquidation, dissolution or other similar transaction
involving the Company and/or any of its Subsidiaries (which Subsidiaries
represent ten percent (10%) or more of the consolidated revenues, net income or
assets of the Company and its Subsidiaries taken as a whole), (D) the issuance,
sale or other disposition, direct or indirect (and however structured), of
securities (or securities or other rights convertible into, or exercisable or
exchangeable for, such securities) representing fifty percent (50%) or more of
the voting power or capital stock of the Company and/or any of its Subsidiaries
(which Subsidiaries represent twenty percent (20%) or more of the consolidated
revenues, net income or assets of the Company and its Subsidiaries taken as a
whole) or (E) any combination of the foregoing (other than the Merger).
(b) Parent shall pay the Company, by wire transfer of immediately
available funds to an account designated by the Company, the Termination Fee if
this Agreement is terminated by the Company pursuant to Section 9.1(a)(iv)(B).
Parent shall pay the Company the Termination Fee in full on the Business Day
following the date of such termination.
(c) In the event that the Company fails to pay the Termination Fee
when due, the Company will also pay the costs and expenses of Parent or Merger
Sub in connection with a legal action to enforce this Agreement, together with
interest on such Termination Fee, commencing on the date that such Termination
Fee became due, at a rate equal to the prime rate as reported in the Wall Street
Journal on the date the foregoing amounts were due.
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ARTICLE X
MISCELLANEOUS
10.1 Notices. Any notice, request, demand, waiver, consent, approval or
other communication which is required or permitted hereunder shall be in writing
and shall be deemed given: (a) on the date established by the sender as having
been delivered personally; (b) on the date delivered by a private courier as
established by the sender by evidence obtained from the courier; (c) on the date
sent by facsimile, with confirmation of transmission, if sent during normal
business hours of the recipient, if not, then on the next Business Day; or (d)
on the fifth day after the date mailed, by certified or registered mail, return
receipt requested, postage prepaid. Such communications, to be valid, must be
addressed as follows:
If to Parent or Sub, to:
EUSA Pharma Inc.
Heritage Gateway Centre
0000 X. Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: General Counsel
Facsimile:(000) 000-0000
and
EUSA Pharma
The Magdalen Centre
Xxxxxx Xxxxxxx Xxxx
Xxxxxx
XX0 0XX
Xxxxxxx
Attn: General Counsel
Facsimile: 00 (0) 0000000000
With a required copy to:
XxXxxxxx & English, LLP
Four Gateway Center
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
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If to the Company, to:
Cytogen Corporation
000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx, Chief Financial Officer
Facsimile: (000) 000-0000
With a required copy to:
Xxxxxx, Xxxxx & Bockius LLP
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxx
Facsimile: (000) 000-0000
or to such other address or to the attention of such Person or Persons as the
recipient party has specified by prior written notice to the sending party (or
in the case of counsel, to such other readily ascertainable business address as
such counsel may hereafter maintain). If more than one method for sending notice
as set forth above is used, the earliest notice date established as set forth
above shall control.
10.2 Survival. The representations and warranties and covenants and
agreements in this Agreement and in any certificate delivered pursuant hereto
shall terminate at the Effective Time, except that the covenants and agreements
set forth in ARTICLE I, ARTICLE II, ARTICLE VI, ARTICLE VII, ARTICLE IX and this
ARTICLE X shall survive the Effective Time.
10.3 Amendments and Waivers.
(a) Any provision of this Agreement may be amended or waived if, and
only if, such amendment or waiver is in writing and is signed, in the case of an
amendment, by each party to this Agreement, or in the case of a waiver, by the
party against whom the waiver is to be effective; provided that, after adoption
of this Agreement by the Company Stockholders, no amendment or waiver shall be
made which by Law requires further approval by the Company Stockholders without
such further approval.
(b) No failure or delay by any party in exercising any right or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
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(c) To the maximum extent permitted by Law, (i) no waiver that may
be given by a party shall be applicable except in the specific instance for
which it was given and (ii) no notice to or demand on one party shall be deemed
to be a waiver of any obligation of such party or the right of the party giving
such notice or demand to take further action without notice or demand.
10.4 Fees and Expenses. Except as set forth in this Section 10.4 or in
Section 9.4, all fees and expenses incurred in connection with the Merger, this
Agreement and the transactions contemplated by this Agreement shall be paid by
the party incurring such fees or expenses, whether or not the Merger is
consummated and shall not result in an adjustment to the Total Merger
Consideration.
10.5 Successors and Assigns. This Agreement may not be assigned by any
party hereto without the prior written consent of the other parties; provided
that Parent or Merger Sub may assign any of their respective rights and
obligations to any direct or indirect Subsidiary of Parent. Subject to the
foregoing, all of the terms and provisions of this Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
executors, heirs, personal representatives, successors and assigns.
10.6 Governing Law. This Agreement and the Exhibits and Schedules hereto
shall be governed by and interpreted and enforced in accordance with the Laws of
the State of New Jersey, without giving effect to any choice of Law or conflict
of Laws rules or provisions (whether of the State of New Jersey or any other
jurisdiction) that would cause the application of the Laws of any jurisdiction
other than the State of New Jersey.
10.7 Consent to Jurisdiction. Each party irrevocably submits to the
exclusive jurisdiction of (a) New Jersey, and (b) the United States District
Court for New Jersey, for the purposes of any Action arising out of this
Agreement or any transaction contemplated hereby. Each party agrees to commence
any such Action either in the circuit court in and for Xxxxxx County, New Jersey
or if such Action may not be brought in such court for jurisdictional reasons,
in the United States District Court for New Jersey. Each party further agrees
that service of any process, summons, notice or document by U.S. registered mail
to such party's respective address set forth above shall be effective service of
process for any Action in New Jersey with respect to any matters to which it has
submitted to jurisdiction in this Section 10.7. Each party irrevocably and
unconditionally waives any objection to the laying of venue of any Action
arising out of this Agreement or the transactions contemplated hereby in (i) the
circuit court in and for Xxxxxx County, New Jersey, or (ii) the United States
District Court for New Jersey, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such Action brought in any such court has been brought in an inconvenient
forum. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE ACTIONS OF SUCH PARTY IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
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10.8 Counterparts. This Agreement may be executed in any number of
counterparts, and any party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one and the same
instrument. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other parties hereto. The
parties agree that the delivery of this Agreement may be effected by means of an
exchange of facsimile signatures with original copies to follow by mail or
courier service.
10.9 Third Party Beneficiaries. No provision of this Agreement is intended
to confer upon any Person other than the parties hereto any rights or remedies
hereunder; except (i) that in the case of Section 6.3 hereof, the Indemnified
Parties and their respective heirs, executors, administrators, legal
representatives, successors and assigns, are intended third party beneficiaries
of such sections and shall have the right to enforce such sections in their own
names; (ii) the right of the Company, on behalf of the stockholders of the
Company, to pursue damages in the event of Parent's or Merger Sub's intentional
or wrongful breach of the Agreement or fraud, which right is hereby acknowledged
and agreed by Parent and Merger Sub; and (iii) the right of the stockholders of
the Company, in accordance with the terms and provisions of this Agreement, to
receive the Merger Consideration at the Effective Time.
10.10 Entire Agreement. This Agreement and the documents, instruments and
other agreements specifically referred to herein or delivered pursuant hereto
set forth the entire understanding of the parties hereto with respect to the
Merger. All Exhibits and Schedules referred to herein are intended to be and
hereby are specifically made a part of this Agreement. Any and all previous
agreements and understandings between or among the parties regarding the subject
matter hereof, whether written or oral, are superseded by this Agreement, other
than the Confidentiality Agreement which shall continue in full force and effect
in accordance with its terms.
10.11 Captions. All captions contained in this Agreement are for
convenience of reference only, do not form a part of this Agreement and shall
not affect in any way the meaning or interpretation of this Agreement.
10.12 Severability. Any provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining provisions hereof, and any such invalidity or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
10.13 Specific Performance. Parent and the Company each agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed by them in accordance with the terms hereof and
that each party shall be entitled to specific performance of the terms hereof,
in addition to any other remedy at Law or equity.
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ARTICLE XI
DEFINITIONS
11.1 Definitions. When used in this Agreement, the following terms shall
have the meanings assigned to them in this Section 11.1, or in the applicable
Section of this Agreement to which reference is made in this Section 11.1.
"Affiliate" means, with respect to any specified Person, any other
Person directly or indirectly controlling, controlled by or under common control
with such specified Person.
"Authorization" means any authorization, approval, consent,
certificate, license, permit or franchise of or from any Governmental Entity or
pursuant to any Law including, without limitation, any such authorization,
approval, consent, certificate, license or permit issued by the Federal Food and
Drug Administration.
"Business Day" means a day other than a Saturday, Sunday or other
day on which banks located in New York City are authorized or required by Law to
close.
"Company Material Adverse Effect" means any state of facts,
development, event, circumstance, condition, occurrence or effect that,
individually or taken collectively with all other states of facts, developments,
events, circumstances, conditions, occurrences or effects that have occurred
prior to the date of determination of the occurrence of the Company Material
Effect, (a) is materially adverse to the condition (financial or otherwise),
business operations, or results of operations of the Company and its
Subsidiaries taken as a whole, (b) impairs the ability of the Company to perform
its obligations hereunder or (c) delays the consummation of the Merger, other
than in the case of clause (a), any such state of facts, development, event,
circumstance, condition, occurrence or effect arising out of any changes
affecting the industry in which the Company and its Subsidiaries operate or any
changes in general economic conditions; provided that any such change or changes
do not disproportionately affect in any material respect the Company and its
Subsidiaries, taken as a whole; provided, however, in no event shall any of the
following be deemed to constitute, nor shall any of the following be taken into
account in determining whether there has been or will be, a Company Material
Adverse Effect: (i) any changes affecting the industry in which the Company and
its Subsidiaries operate that do not have a disproportionate impact in any
material respect on the Company and its Subsidiaries, taken as a whole, (ii) any
changes in general economic conditions or the capital markets that do not
disproportionately impact in any material respect the Company and its
Subsidiaries, taken as a whole, (iii) in and of itself, any change in the market
price or trading volume of Company Common Stock, (iv) in and of itself, a
failure by the Company to meet the revenue or earnings predictions of equity
analysts for any period ending (or for which earnings are released) on or after
the date of this Agreement and prior to the Closing Date, (v) the taking of any
action required by this Agreement or to which Parent has given its written
consent, (vi) any changes or effects to the extent attributable to the
announcement or the pendency of the transactions contemplated hereby, including
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disruption or loss of customer, business partner, supplier or employee
relationships (provided that the exception in this clause (vi) shall not be used
to excuse a breach of a representation or warranty of the Company contained in
this Agreement that arises from the execution and delivery of this Agreement or
the consummation of the transactions contemplated by this Agreement); (vii) any
changes or effects resulting from the actions of Parent or its Subsidiaries; or
(viii) changes in applicable Laws or GAAP.
"Contract" means any agreement, contract, license, lease,
commitment, arrangement or understanding, written or oral, including any sales
order and purchase order.
"Governmental Entity" means any entity or body exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to United States federal, state, local, or municipal government, foreign,
international, multinational or other government, including any department,
commission, board, agency, bureau, subdivision, instrumentality, official or
other regulatory, administrative or judicial authority thereof, and any
non-governmental regulatory body to the extent that the rules and regulations or
orders of such body have the force of Law.
"Indebtedness" means any of the following: (a) any indebtedness for
borrowed money, (b) any obligations evidenced by bonds, debentures, notes or
other similar instruments, (c) any obligations to pay the deferred purchase
price of property or services, except trade accounts payable and other current
Liabilities arising in the ordinary course of business, (d) any obligations as
lessee under capitalized leases, (e) any indebtedness created or arising under
any conditional sale or other title retention agreement with respect to acquired
property, (f) any obligations, contingent or otherwise, under acceptance credit,
letters of credit or similar facilities, and (g) any guaranty of any of the
foregoing.
"Knowledge" of the Company or any similar phrase means, with respect
to any fact or matter, the actual knowledge of the directors and executive
officers of the Company and each of its Subsidiaries.
"Law" means any statute, law (including common law), constitution,
treaty, ordinance, code, order, decree, judgment, rule, regulation and any other
binding requirement or determination of any Governmental Entity.
"Order" means any award, injunction, judgment, decree, order,
ruling, subpoena, directive or verdict or other decision entered, issued or
rendered by any Governmental Entity.
"Parent Material Adverse Effect" means any state of facts,
development, event, circumstance, condition, occurrence or effect that,
individually or taken collectively with all other states of facts, developments,
events, circumstances, conditions, occurrences or effects that have occurred
prior to the date of determination of the occurrence of the Parent Material
Effect, (a) is materially adverse to the condition (financial or otherwise),
operations, prospects or results of operations of Parent and its Subsidiaries
taken as a whole, (b) impairs the ability of Parent to perform its obligations
hereunder or (c) delays the consummation of the Merger.
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"Per Share Merger Consideration" means $0.62, unless the formula
contained in Schedule 2.1 to the Company's Disclosure Schedules results in Total
Merger Consideration exceeding $22,600,000, then the Per Share Merger
Consideration shall be incrementally reduced, as mutually agreed to by the
Company and Parent, such that the Total Merger Consideration does not exceed
$22,600,000.
"Person" means an individual, a corporation, a partnership, a
limited liability company, a trust, an unincorporated association, a
Governmental Entity or any agency, instrumentality or political subdivision of a
Governmental Entity, or any other entity or body.
"Subsidiary" or "Subsidiaries" means, with respect to any party, any
Person, of which (i) such party or any Subsidiary of such party is a general
partner (excluding partnerships, the general partnership interests of which held
by such party or any Subsidiary of such party do not have a majority of the
voting interest in such partnership) or (ii) at least a majority of the
securities or other interests having by their terms ordinary voting power to
elect a majority of the Board of Directors or others performing similar
functions with respect to such Person is directly or indirectly owned or
controlled by such party and/or by any one or more of its Subsidiaries.
"$" means United States dollars.
11.2 Interpretation.
(a) The meaning assigned to each term defined herein shall be
equally applicable to both the singular and the plural forms of such term and
vice versa, and words denoting either gender shall include both genders as the
context requires. Where a word or phrase is defined herein, each of its other
grammatical forms shall have a corresponding meaning.
(b) The terms "hereof", "herein" and "herewith" and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement.
(c) When a reference is made in this Agreement to an Article,
Section, paragraph, Exhibit or Schedule, such reference is to an Article,
Section, paragraph, Exhibit or Schedule to this Agreement unless otherwise
specified.
(d) The word "include", "includes", and "including" when used in
this Agreement shall be deemed to be followed by the words "without limitation",
unless otherwise specified.
(e) A reference to any party to this Agreement or any other
agreement or document shall include such party's predecessors, successors and
permitted assigns.
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(f) Reference to any Law means such Law as amended, modified,
codified, replaced or reenacted, and all rules and regulations promulgated
thereunder.
(g) The parties have participated jointly in the negotiation and
drafting of this Agreement. Any rule of construction or interpretation otherwise
requiring this Agreement to be construed or interpreted against any party by
virtue of the authorship of this Agreement shall not apply to the construction
and interpretation hereof.
(h) All accounting terms used and not defined herein shall have the
respective meanings given to them under GAAP.
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IN WITNESS WHEREOF, Parent, Merger 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.
EUSA Pharma Inc.
By: /s/ Xxxxx Xxxxxx
--------------------------------
Name: Xxxxx Xxxxxx
Title: President and CEO
EUSA Pharma (USA), Inc.
By: /s/ Xxxxx Xxxxxx
--------------------------------
Name: Xxxxx Xxxxxx
Title: President
CYTOGEN CORPORATION
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: President and Chief Executive Officer
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