AGREEMENT AND PLAN OF MERGER BY AND AMONG EPIX PHARMACEUTICALS, INC., EPIX DELAWARE, INC. AND PREDIX PHARMACEUTICALS HOLDINGS, INC. Dated as of April 3, 2006
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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
EPIX DELAWARE, INC.
AND
PREDIX PHARMACEUTICALS HOLDINGS, INC.
Dated as of April 3, 2006
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|
Exhibit A
|
Form of Voting Agreement | |
|
Exhibit B
|
Form of Certificate of Merger | |
|
Exhibit C
|
Form of Predix Affiliate Agreement | |
|
Exhibit D
|
Form of Lockup Agreement | |
|
Exhibit E
|
Form of Opinion of Predix’s Counsel | |
|
Exhibit F
|
Form of Opinion of EPIX’s Counsel | |
|
Schedule 1
|
List of Predix Management for purpose of knowledge qualifiers | |
|
Schedule 2
|
List of Key Predix Employees under Section 2.15 | |
|
Schedule 3
|
List of EPIX Management for purpose of knowledge qualifiers | |
|
Schedule 4
|
List of Key EPIX Employees under Section 3.20 | |
|
Schedule 5
|
List of Predix Stockholders who are signatories to the Lockup Agreement | |
|
Schedule 6
|
Employees not entitled to severance payments and amount of severance payments | |
|
Schedule 7
|
List of Affiliate Stockholders for S-3 Registration Statement | |
|
Schedule 8
|
List of consents under Predix agreements to be obtained by Predix as a condition to closing | |
|
Schedule 9
|
Management | |
| Predix Disclosure Schedule | ||
| EPIX Disclosure Schedule | ||
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of April 3, 2006
(the “Agreement”), among EPIX Pharmaceuticals,
Inc., a Delaware corporation (“EPIX”), EPIX
Delaware, Inc., a Delaware corporation and wholly-owned
subsidiary of EPIX (“Merger Sub”), and Predix
Pharmaceuticals Holdings, Inc., a Delaware corporation
(“Predix”).
RECITALS:
WHEREAS, the Boards of Directors of EPIX, Merger Sub and Predix
have each determined that it is advisable and in the best
interests of their respective stockholders for such parties to
enter into a business combination upon the terms and subject to
the conditions set forth herein;
WHEREAS, in furtherance of such combination, the Boards of
Directors of EPIX, Merger Sub and Predix have determined that it
is in the best interests of their respective corporations and
their stockholders to consummate the business combination
transaction provided for herein in which Predix will, in
accordance with the Delaware General Corporation Law
(“Delaware Law”) and subject to the terms and
conditions set forth herein, merge (the
“Merger”) with and into Merger Sub, with Merger
Sub referred to herein as the “Surviving
Corporation” and becoming a wholly-owned subsidiary of
EPIX;
WHEREAS, pursuant to the Merger, EPIX will acquire all of the
outstanding equity securities of Predix by way of merger of
Predix with and into Merger Sub and EPIX will issue not more
than 23,275,484 shares (subject to adjustment in accordance
with Section 1.7(e) of the Agreement) of common stock, par
value $.01 per share, of EPIX (the “EPIX Common
Stock”), to Predix (and cash in lieu of fractional
shares) in consideration for the Merger, with such shares to
include approximately 3,022,225 shares of EPIX Common Stock
subject to stock options and warrants of Predix outstanding on
the date of this Agreement;
WHEREAS, EPIX, Merger Sub and Predix intend, by approving
resolutions authorizing this Agreement, to adopt this Agreement
as a plan of reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as
amended (the “Code”), and the regulations
thereunder, and to cause the Merger to qualify as a
reorganization under the provisions of Section 368(a) of
the Code;
WHEREAS, as a condition to the willingness of, and an inducement
to EPIX to enter into this Agreement, contemporaneously with the
execution and delivery of this Agreement, stockholders of Predix
holding approximately forty percent (40%) of the voting shares
of Predix are entering into a voting agreement in substantially
the form of Exhibit A hereto (the “Voting
Agreement”); and
WHEREAS, EPIX, Merger Sub and Predix desire to make certain
representations and warranties and other agreements in
connection with the Merger and pursuant to the terms of this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, EPIX, Merger Sub and
Predix hereby agree as follows:
ARTICLE I
THE MERGER
1.1. THE MERGER.
(a) Effective Time. At the Effective Time,
and subject to and upon the terms and conditions of this
Agreement and Delaware Law, Predix shall be merged with and into
Merger Sub, the separate corporate existence of Predix shall
cease, and Merger Sub shall continue as the Surviving
Corporation.
(b) Closing. Unless this Agreement shall have
been terminated and the transactions herein contemplated shall
have been abandoned pursuant to Section 7.1, and subject to
the satisfaction or waiver of the conditions set forth in
Article VI, the consummation of the Merger will take place
as promptly as practicable (and in any event within two
(2) business days) after satisfaction or waiver of the
conditions set forth in Article VI, at the offices of
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., One
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Financial Center, Xxxxxx, Xxxxxxxxxxxxx 00000, unless another
date, time or place is agreed to in writing by the parties
hereto (the “Closing”).
1.2. EFFECTIVE TIME. As
promptly as practicable after the satisfaction or waiver of the
conditions set forth in Article VI (and in any event within
two (2) business days), the parties hereto shall cause the
Merger to be consummated by filing a Certificate of Merger in
accordance with the relevant provisions of Delaware Law (the
“Certificate of Merger”), in substantially the
form of Exhibit B hereto, together with any required
related certificates, 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, Delaware Law (the
time of such filing being the “Effective Time”
and the date on which the Effective Time occurs shall be the
“Effective Date”).
1.3. EFFECT OF THE MERGER.
At the Effective Time, the effect of the Merger shall be as
provided in this Agreement, the Certificate of Merger and the
applicable provisions of Delaware Law. Without limiting the
generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers and
franchises of Predix shall vest in the Surviving Corporation,
and all debts, liabilities, obligations and duties of Predix
shall become the debts, liabilities, obligations and duties of
the Surviving Corporation.
1.4. CERTIFICATE OF
INCORPORATION; BYLAWS.
(a) Certificate of Incorporation. The
Certificate of Incorporation of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation until
thereafter amended as provided by Delaware Law and such
Certificate of Incorporation.
(b) Bylaws. The Bylaws of Merger Sub, as in
effect immediately prior to the Effective Time, shall be the
Bylaws of the Surviving Corporation until thereafter amended as
provided by Delaware Law, the Certificate of Incorporation of
the Surviving Corporation and such Bylaws.
1.5. DIRECTORS AND OFFICERS.
The directors of Merger Sub immediately prior to the Effective
Time shall be the initial directors of the Surviving
Corporation, each to hold office in accordance with the
Certificate of Incorporation and Bylaws of the Surviving
Corporation, and the officers of Merger Sub immediately prior to
the Effective Time shall be the initial officers of the
Surviving Corporation, in each case until their respective
successors are duly elected or appointed and qualified.
1.6. CONVERSION OF MERGER SUB
COMMON STOCK. Each of the shares of the common stock, par
value $.01 per share, of Merger Sub issued and outstanding
immediately prior to the Effective Time shall become shares of
the Surviving Corporation after the Merger and shall thereafter
constitute all of the issued and outstanding shares of the
Surviving Corporation.
1.7. EFFECT ON CAPITAL
STOCK. At the Effective Time, by virtue of the Merger and
pursuant to the terms provided herein, and without any action on
the part of EPIX, Predix or the holders of any of the following
securities except as provided herein:
| (a) Conversion of Predix Shares. Every Share (as defined in Section 1.17) issued and outstanding immediately prior to the Effective Time (other than the Dissenting Shares as defined in Section 1.14) shall be automatically converted into the right to receive 1.248509 shares (the “Exchange Ratio”) of validly issued, fully paid and non-assessable EPIX Common Stock (the “Initial Merger Consideration”). | |
| (b) Cancellation. Each Share held in the treasury of Predix and each Share owned by EPIX or by any direct or indirect wholly-owned subsidiary of Predix or EPIX immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of the holder thereof, cease to be outstanding, be canceled and retired without payment of any consideration therefor other than pursuant to the terms herein and cease to exist. | |
| (c) Stock Options. All options to purchase Predix Common Stock then outstanding under Predix’s Amended and Restated 2003 Stock Incentive Plan (the “Predix 2003 Stock Plan”) and the |
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| Physiome Sciences, Inc. 1997 Stock Option Plan (the “Physiome 1997 Stock Option Plan,” together with the Predix 2003 Stock Plan, the “Predix Stock Plans”) shall be assumed by EPIX in accordance with Section 5.5. | |
| (d) Warrants. All warrants outstanding at the Effective Time to purchase Predix Common Stock or Predix Preferred Stock (collectively, the “Predix Warrants”), shall be assumed by EPIX in accordance with Section 5.5. | |
| (e) Adjustments. If, after the date of this Agreement, (i) Predix grants additional options to purchase Predix Common Stock pursuant to Section 4.1(c) or (ii) EPIX issues additional shares of EPIX Common Stock before the Effective Time, the Exchange Ratio shall be adjusted to reflect fully the effect of the issuance of any such options to purchase Predix Common Stock or additional shares of EPIX Common Stock, as the case may be. The Exchange Ratio shall be adjusted to reflect fully the effect of any stock split, reverse split, stock dividend (including any dividend or distribution of securities convertible into EPIX Common Stock or Shares), reorganization, recapitalization or other like change with respect to EPIX Common Stock or Shares occurring after the date hereof and prior to the Effective Time. For the avoidance of doubt, the Exchange Ratio shall equal the quotient of (i) the sum of (A) the number of outstanding shares of EPIX Common Stock immediately prior to the Effective Time divided by .5001 minus (B) the number of outstanding shares of EPIX Common Stock immediately prior to the Effective Time, divided by (ii) the number of outstanding Shares and shares of Predix Common Stock or Predix Preferred Stock reserved for issuance upon the exercise of outstanding warrants and options, in each case, as of immediately prior to the Effective Time. | |
| (f) Fractional Shares. No fraction of a share of EPIX Common Stock will be issued, but in lieu thereof each holder of Predix Common Stock and Predix Preferred Stock who would otherwise be entitled to a fraction of a share of EPIX Common Stock (after aggregating all fractional shares of EPIX Common Stock to be received by such holder) shall receive from EPIX an amount of cash (rounded to the nearest whole cent), without interest, equal to the product of (i) such fraction, multiplied by (ii) the applicable price per share calculated in accordance with Section 1.7(a) based on the average closing price of a share of EPIX Common Stock on The NASDAQ National Market (the “NASDAQ”) over the five (5) trading days ending on the trading day prior to the Effective Time. | |
| (g) Limitations. Notwithstanding anything contained in this Section 1.7, the aggregate number of shares of EPIX Common Stock issuable under this Section 1.7 (as a result of the conversion of the Shares and the exercise of the options and warrants, if any, to purchase Predix Common Stock or Predix Preferred Stock assumed by EPIX) shall in no event exceed forty-nine and ninety-nine hundredths percent (49.99%) of the outstanding shares of EPIX Common Stock immediately after the Effective Time. |
1.8. MILESTONE PAYMENT. In
addition to the shares of EPIX Common Stock to be issued
pursuant to Section 1.7(a) hereof, EPIX shall make a
milestone payment (the “Milestone Payment,”
together with the Initial Merger Consideration, the
“Merger Consideration”) as follows:
| (a) Amount of Milestone Payment. The Milestone Payment shall equal $35,000,000. | |
| (b) Timing of Milestone Payment. EPIX shall make the Milestone Payment on a date that is within ninety (90) days following the Achievement of the Milestone (the “Milestone Payment Date”); provided, that in no case shall the Milestone Payment Date occur before the Effective Time; and, further provided, that a portion of the Milestone Payment may be deferred in accordance with paragraph (d)(ii) below. |
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| (c) Achievement of the Milestone. For purposes of this Agreement, the term “Achievement of the Milestone” shall mean EPIX’s determination (in accordance with Section 5.16), whether before or after the Effective Time, that either of the following occurs on or before June 30, 2008: |
| (i) Clinical Milestone — the occurrence of one of the following: |
| (A) Receipt of Positive Data from a randomized, placebo- or active comparator-controlled, double-blinded Phase II or Phase III clinical trial of PRX-00023 for the treatment of Generalized Anxiety Disorder, Depression, ADHD, or other neuropsychiatric disorder with at least 100 patients. | |
| (B) Receipt of Positive Data from a randomized, placebo- or active comparator-controlled, double-blinded Phase II or Phase III clinical trial of PRX-03140 for the treatment of Alzheimer’s disease or other cognitive disorders with at least 60 patients. | |
| (C) Receipt of Positive Data from a randomized, placebo- or active comparator-controlled, double-blinded Phase II or Phase III clinical trial of PRX-08066 for the treatment of Pulmonary Artery Hypertension, COPD or a different indication as selected by Predix or after the Effective Time by EPIX with at least 60 patients. | |
| (D) Receipt of Positive Data from a randomized, placebo-or active comparator-controlled, double-blinded Phase II or Phase III clinical trial of PRX-07034 for the treatment of Obesity, Cognitive Disorders or a different indication as selected by Predix or after the Effective Time by EPIX with at least 60 patients. |
| The term “Positive Data” shall mean that PRX-00023, PRX-03140, PRX-08066 or PRX-07034, as the case may be, shall have demonstrated statistically significant final results (meaning a p-value of less than 0.05) against the primary endpoints of the clinical trial in question as set forth in the applicable protocols of such clinical trial. |
| (ii) Predix or the Surviving Corporation, entering into a strategic partnership for any drug candidate discovered or to be discovered by Predix that provides for the strategic partner to make upfront, milestone and research funding payments to Predix or the Surviving Corporation of greater than $50,000,000, $20,000,000 of which must be in Unrestricted Cash through (A) non-refundable license fees, (B) committed and non-refundable research funding payments; and/or (C) premiums paid in connection with an equity investment by the strategic partner upon entering into the strategic partnership or in less than sixty (60) days following entry into the strategic partnership. “Unrestricted Cash” for purposes of this Section 1.8(c)(ii) shall mean cash payments received by Predix or the Surviving Corporation by June 30, 2008 that may be used to fund Predix’s or the Surviving Corporation’s existing or planned research and development programs as of the Effective Time and reflected in Predix’s 2006 operating plan and budget provided to EPIX or the 2007 operating plan and budget approved by the Board of Directors of EPIX. |
| (d) Form and Value of Payment. The Milestone Payment shall be paid at the option of EPIX (determined in accordance with Section 5.16), either: |
| (i) in cash, additional shares of validly issued, fully paid and non-assessable EPIX Common Stock or any combination thereof. The number of shares of EPIX Common Stock, if any, to be issued in connection with this option shall equal (i) the amount of the Milestone Payment EPIX determines to pay in shares of EPIX Common Stock, divided by (ii) the amount that is equal to the average closing price of a share of EPIX Common Stock on the NASDAQ over the five (5) trading days ending on the trading day that is ten (10) days prior to the Milestone Payment Date; or | |
| (ii) (x) $20,000,000 payable in accordance with paragraph (i) above on the Milestone Payment Date and (y) $15,000,000 (the “Deferred Amount”) payable on the date that is twelve (12) months therafter (the “Deferred Payment Date”) in accordance with Section 1.8(e) below. |
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| Notwithstanding the foregoing, the Milestone Payment paid to each holder of an option or warrant to purchase Predix Common Stock or Predix Preferred Stock at the Effective Time shall be made solely in cash and, provided, further that EPIX will not issue fractional shares of EPIX Common Stock pursuant to this Section 1.8, but will pay cash in lieu thereof. | |
| (e) Deferred Payment. In the event that EPIX elects to pay the Milestone Payment pursuant to Section 1.8(d)(ii) above, the Deferred Amount shall be paid in shares of validly issued, fully paid and non-assessable EPIX Common Stock to the fullest extent permissible under Section 1.8(f) below, with any remaining balance paid in cash plus interest on such cash amount at an annual rate (using a 360-day year) of ten percent (10%) calculated from the Milestone Payment Date. The number of shares of EPIX Common Stock to be issued in connection with this Section 1.8(e) shall equal (i) the Deferred Amount, divided by (ii) seventy-five percent (75%) of the amount that is equal to the average closing price of a share of EPIX Common Stock on the NASDAQ over the thirty (30) trading days ending on the trading day that is ten (10) days prior to the Deferred Payment Date. | |
| (f) Limitations. Notwithstanding anything else contained herein, in no event shall the aggregate number of shares of EPIX Common Stock that may be issued pursuant to this Section 1.8, when combined with the aggregate Initial Merger Consideration and shares of EPIX Common Stock issued or issuable as a result of the exercise of the options and warrants, if any, to purchase Predix Common Stock or Predix Preferred Stock assumed by EPIX, exceed forty-nine and ninety-nine hundredths percent (49.99%) of the outstanding shares of EPIX Common Stock immediately after such issuance. | |
| (g) Allocation of Milestone Payment. The Milestone Payment shall be allocated and paid to each holder of record at the Effective Time of a Share, Predix Warrant or an option to purchase Predix Common Stock, in each case, pro rata based upon the percentage of the Initial Merger Consideration that such holder would have received pursuant to Section 1.7(a), assuming that for these purposes that each Predix Warrant and option to purchase Predix Common Stock or Predix Preferred Stock (whether or not vested) was exercised in full immediately prior to the Effective Time. |
1.9. EXCHANGE OF
CERTIFICATES.
(a) Exchange Agent. EPIX shall make available
or cause to be made available, to or for the account of a bank
or trust company designated by EPIX (the “Exchange
Agent”), in trust for the benefit of the holders of
Predix Common Stock and Predix Preferred Stock, for exchange in
accordance with Section 1.7 and this Section 1.9,
through the Exchange Agent, (i) certificates evidencing the
EPIX Common Stock issuable pursuant to this Agreement in
exchange for outstanding Shares, and (ii) an amount of cash
sufficient to permit the Exchange Agent to make necessary
payments of cash in lieu of fractional shares of EPIX Common
Stock in accordance with Section 1.7(f).
(b) Exchange Procedures. As soon as
reasonably practicable after the Effective Time, EPIX will
instruct the Exchange Agent to mail to each holder of record of
a certificate or certificates which immediately prior to the
Effective Time evidenced outstanding Shares (the
“Certificates”) (i) a letter of
transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall
pass, only upon proper delivery of the Certificates to the
Exchange Agent and shall be in such form and have such other
provisions as EPIX may reasonably specify after review by
Predix) and (ii) instructions to effect the surrender of
the Certificates in exchange for the certificates evidencing
shares of EPIX Common Stock and, in lieu of any fractional
shares thereof, cash. Upon surrender of a Certificate for
cancellation to the Exchange Agent together with such letter of
transmittal, duly executed, and such other customary documents
as may be required pursuant to such instructions, the holder of
such Certificate shall be entitled to receive in exchange
therefore: (A) certificates evidencing that number of whole
shares of EPIX Common Stock which such holder has the right to
receive in accordance with the Exchange Ratio, in respect of the
Shares formerly evidenced by such Certificate, (B) the
Milestone Payment, (C) any dividends or other distributions
to which such holder is entitled pursuant to
Section 1.7(e), and (D) cash in lieu of fractional
shares of EPIX Common Stock to which such holder is
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entitled pursuant to Section 1.7(f), and the Certificate so
surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Shares which are not registered in the
transfer records of Predix as of the Effective Time, EPIX Common
Stock and cash may be issued and paid in accordance with this
Article I to a transferee if the Certificate evidencing
such Shares are presented to the Exchange Agent, accompanied by
all documents required to evidence and effect such transfer
pursuant to this Section 1.9(b) and by evidence that any
applicable stock transfer taxes have been paid. Until so
surrendered, each outstanding Certificate that, prior to the
Effective Time, represented Shares will be deemed from and after
the Effective Time, for all corporate purposes, other than the
payment of dividends, if any, to evidence the right to receive
the number of full shares of EPIX Common Stock into which such
Shares shall have been so converted, the right to receive the
Milestone Payment and the right to receive an amount in cash in
lieu of the issuance of any fractional shares in accordance with
Section 1.7.
(c) Distributions with Respect to Unexchanged
Shares. No dividends or other distributions declared or
made after the Effective Time, with respect to EPIX Common Stock
with a record date after the Effective Time, shall be paid to
the holder of any unsurrendered Certificate until the holder of
such Certificate shall surrender such Certificate. Subject to
applicable law, following surrender of any such Certificate,
there shall be paid to the record holder of the certificates
representing whole shares of EPIX Common Stock issued in
exchange therefor, without interest, at the time of such
surrender, the amount of dividends or other distributions with a
record date after the Effective Time theretofore paid with
respect to such whole shares of EPIX Common Stock.
(d) Transfers of Ownership. If any
certificate for shares of EPIX Common Stock is to be issued in a
name other than that in which the Certificate surrendered in
exchange therefor is registered, it will be a condition of the
issuance thereof that the Certificate so surrendered will be
properly endorsed and otherwise in proper form for transfer and
that the person requesting such exchange will have paid to EPIX
or any person designated by it any transfer or other taxes
required by reason of the issuance of a certificate for shares
of EPIX Common Stock in any name other than that of the
registered holder of the certificate surrendered, or established
to the satisfaction of EPIX or any agent designated by it that
such tax has been paid or is not payable.
(e) No Liability. Notwithstanding anything to
the contrary in this Section 1.9, neither EPIX nor Predix
shall be liable to any holder of Predix Common Stock, Predix
Preferred Stock, options or warrants to purchase Predix Common
Stock or Predix Preferred Stock at the Effective Time or EPIX
Common Stock for any Merger Consideration (or dividends or
distributions with respect thereto) delivered to a public
official pursuant to any applicable abandoned property, escheat
or similar law.
(f) Withholding Rights. EPIX, the Surviving
Corporation and the Exchange Agent shall be entitled to deduct
and withhold from the Merger Consideration otherwise payable
pursuant to this Agreement to any holder of Shares, such amounts
as EPIX, the Surviving Corporation or the Exchange Agent is
required to deduct and withhold with respect to the making of
such payment under the Code or any provision of state, local,
provincial or foreign tax law. To the extent that amounts are so
withheld, 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 EPIX, the Surviving Corporation or the Exchange
Agent.
(g) Return of Merger Consideration to Surviving
Corporation. Any portion of the Initial Merger
Consideration that remains undistributed to the holders of
Predix Common Stock or Predix Preferred Stock six
(6) months after the Effective Time and any portion of the
Milestone Payment that remains undistributed to the holders of
EPIX Common Stock or options or warrants to purchase Predix
Common Stock or Predix Preferred Stock assumed by EPIX pursuant
to this Agreement six (6) months after the payment of the
Milestone Payment (or termination of the Achievement of the
Milestone), shall be delivered to the Surviving Corporation,
upon demand, and any such holders of Predix Common Stock, Predix
Preferred Stock, EPIX Common Stock and options or warrants to
purchase Predix Common Stock or Predix Preferred Stock assumed
by EPIX pursuant to this Agreement who have not theretofore
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complied with the provisions of this Article I shall
thereafter look only to the Surviving Corporation for the Merger
Consideration to which they are entitled hereunder.
1.10. STOCK TRANSFER BOOKS.
At the Effective Time, the stock transfer books of Merger Sub
and Predix shall be closed, and there shall be no further
registration of transfers of Merger Sub common stock or Predix
Common Stock or Predix Preferred Stock thereafter on the records
of Merger Sub or Predix, respectively.
1.11. NO FURTHER OWNERSHIP
RIGHTS IN PREDIX COMMON STOCK AND PREDIX PREFERRED STOCK.
The portion of the Merger Consideration delivered upon the
surrender for exchange of Shares in accordance with the terms
hereof shall be deemed to have been issued in full satisfaction
of all rights pertaining to such Shares, and there shall be no
further registration of transfers on the records of the
Surviving Corporation of Shares which were outstanding
immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation
for any reason, they shall be canceled and exchanged as provided
in this Article I.
1.12. LOST, STOLEN OR DESTROYED
CERTIFICATES. In the event any Certificates shall have been
lost, stolen or destroyed, the Exchange Agent shall issue in
exchange for such lost, stolen or destroyed Certificates, upon
the making of an affidavit of that fact by the holder thereof,
such shares of EPIX Common Stock as may be required pursuant to
Section 1.7; provided, however, that EPIX
may, in its sole discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or
destroyed Certificates to deliver a bond in such sum as it may
reasonably direct as indemnity against any claim that may be
made against EPIX, the Surviving Corporation or the Exchange
Agent with respect to the Certificates alleged to have been
lost, stolen or destroyed.
1.13. TAX CONSEQUENCES. It
is intended by the parties hereto that the Merger shall
constitute a reorganization within the meaning of
Section 368 of the Code. The parties hereto hereby adopt
this Agreement as a “plan of reorganization” within
the meaning of Sections 1.368-2(g) and 1.368-3(a) of the
United States Treasury Regulations.
1.14. APPRAISAL RIGHTS.
Notwithstanding anything in this Agreement to the contrary,
Shares issued and outstanding immediately prior to the Effective
Time and held by a Predix stockholder who has not voted in favor
of the Merger, consented thereto in writing or otherwise
contractually waived their rights to appraisal and who has
complied with all of the relevant provisions of Section 262
of the Delaware Law, (a “Dissenting
Shareholder”) shall not be converted into the right to
receive the Merger Consideration provided in Section 1.9(b)
hereof unless and until such holder fails to perfect or
effectively withdraws or otherwise loses such holder’s
right to appraisal under Delaware Law. A Dissenting Shareholder
may receive payment of the fair value of the Shares issued and
outstanding immediately prior to the Effective Time and held by
such Dissenting Shareholder (“Dissenting
Shares”) in accordance with the provisions of Delaware
Law, provided, that such Dissenting Shareholder complies
with Section 262 of Delaware Law. At the Effective Time,
all Dissenting Shares shall be cancelled and cease to exist and
shall represent only the right to receive the fair value thereof
in accordance with Delaware Law. If, after the Effective Time,
any Dissenting Shareholder fails to perfect or effectively
withdraws or otherwise loses such Dissenting Shareholder’s
right to appraisal, such Dissenting Shareholder’s
Dissenting Shares shall thereupon be treated as if they had been
converted, as of the Effective Time, into the right to receive
the Merger Consideration set forth in Section 1.9(b)
hereof. Predix shall give EPIX (a) prompt notice of any
written demands for appraisal, withdrawals of demands for
appraisal and any other instruments served under Delaware Law
and (b) the opportunity to participate in and direct all
negotiations, proceedings or settlements with respect to demands
for appraisal under Delaware Law. Predix shall not voluntarily
make any payment with respect to any demands for appraisal and
shall not, except with EPIX’s prior written consent, settle
or offer to settle any such demands.
1.15. TAKING OF NECESSARY
ACTION; FURTHER ACTION. Each of EPIX, Merger Sub and Predix
in good faith will take all such commercially reasonable and
lawful action as may be necessary or appropriate in order to
effectuate the Merger in accordance with this Agreement as
promptly as possible. If, at any time after the Effective Time,
any such further action is necessary or desirable to carry out
the
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purposes of this Agreement and to vest the Surviving Corporation
with full right, title and possession to all assets, property,
rights, privileges, powers and franchises of Predix, the
officers and directors of Merger Sub and Predix are fully
authorized in the name of the corporation or otherwise to take,
and will take, all such lawful and necessary action.
1.16. MATERIAL ADVERSE
EFFECT. When used in this Agreement with respect to EPIX or
Predix as the case may be, the term “Material Adverse
Effect” means any change or effect that, individually
or when taken together with all other such changes or effects
that have occurred prior to the date of determination of the
occurrence of the Material Adverse Effect, is or is reasonably
likely to be materially adverse to the business, assets
(including intangible assets), condition (financial or
otherwise) or results of operations of EPIX or Predix and/or its
subsidiaries, as the case may be.
1.17. SHARES. When used in
this Agreement, the term “Shares” shall mean the
Predix Common Stock and Predix Preferred Stock on the following
basis: (i) with respect to the Predix Common Stock, one
Share shall represent one share of Predix Common Stock and
(ii) with respect to the Predix Preferred Stock, one Share
shall represent 18 shares of Predix Preferred Stock.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PREDIX
Predix hereby represents and warrants to EPIX and Merger Sub as
follows, except as set forth in the written disclosure schedule
delivered by Predix to EPIX (the “Predix Disclosure
Schedule”). The Predix Disclosure Schedule shall be
arranged in sections and subsections corresponding to the
numbered and lettered sections and subsections contained in this
Article II. The inclusion of any information in the Predix
Disclosure Schedule (or any update thereto) shall not be deemed
to be an admission or acknowledgment, in and of itself, that
such information is required by the terms hereof to be
disclosed, is material, has resulted in or would result in a
Material Adverse Effect, or is outside the ordinary course of
business. For purposes of this Agreement, the phrase “to
the knowledge of Predix” or “its subsidiaries” or
any phrase of similar import shall mean and be limited to the
actual knowledge of the individuals set forth on
Schedule 1 hereto.
2.1. ORGANIZATION OF PREDIX.
Predix and each of its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, has all requisite
corporate power and authority to own, lease and operate its
property and to carry on its business as now being conducted and
as proposed to be conducted, and is duly qualified to do
business and in good standing as a foreign corporation in each
jurisdiction in which the failure to be so qualified would have
a Material Adverse Effect on Predix. Predix has delivered or
made available a true and correct copy of its and its
subsidiaries’ Certificates of Incorporation and Bylaws,
each as amended to date, to EPIX. Section 2.1 of the Predix
Disclosure Schedule lists each subsidiary of Predix, including
its jurisdiction of incorporation.
2.2. CAPITAL STRUCTURE. As
of the date hereof, the authorized capital stock of Predix
consists of 338,085,813 shares of Common Stock, par value
$.01 per share (the “Predix Common
Stock”), of which 1,044,059 shares are issued and
outstanding and 275,298,740 shares of Preferred Stock, par
value $.01 per share, of which 76,771,672 shares are
designated Series AB Convertible Preferred Stock, par value
$.01 per share (the “Series AB Preferred
Stock”), of which 76,771,672 are issued and outstanding
and such shares are convertible on an eighteen (18) shares
for one (1) share basis into 4,265,060 shares of
Predix Common Stock and 198,527,068 shares are designated
Series C Convertible Preferred Stock, par value
$.01 per share (the “Series C Preferred
Stock,” together with the Series AB Preferred
Stock, the “Predix Preferred Stock”), of which
196,431,820 are issued and outstanding and such shares are
convertible on an eighteen (18) shares for one
(1) share basis into 10,912,838 shares of Predix
Common Stock. No shares of capital stock are held in
Predix’s treasury. All outstanding shares of Predix Common
Stock and Predix Preferred Stock are duly authorized, validly
issued, fully paid and non-assessable and are not subject to
preemptive rights created by statute, the Certificate of
Incorporation or Bylaws of Predix or
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any agreement or document to which Predix or any of its
subsidiaries is a party or by which it or any of its
subsidiaries is bound, and were issued in compliance with all
applicable federal and state securities laws. As of the date
hereof, Predix has reserved an aggregate of
3,648,905 shares of Predix Common Stock, net of exercises,
for issuance to employees, consultants and non-employee
directors pursuant to the Predix 2003 Stock Plan under which
options are outstanding for an aggregate of
2,202,498 shares, an aggregate of 4,482 shares of
Predix Common Stock, net of exercises, for issuance to
employees, consultants and non-employee directors pursuant to
the Physiome 1997 Stock Option Plan under which options are
outstanding for an aggregate of 4,482 shares and
213,687 shares of Predix Common Stock are reserved for
issuance to holders of Predix Warrants upon their exercise. All
shares of Predix Common Stock subject to issuance as aforesaid,
upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, would be duly
authorized, validly issued, fully paid and non-assessable.
Section 2.2 of the Predix Disclosure Schedule lists each
holder of Predix Common Stock and Predix Preferred Stock, each
outstanding option and warrant to acquire shares of Predix
Common Stock or Predix Preferred Stock, as applicable, the name
of the holder of such option or warrant, the number of shares
subject to such option or warrant, the exercise price of such
option or warrant, the number of shares as to which such option
or warrant will have vested at such date, the vesting schedule
and termination date of such option or warrant and whether the
exercisability of such option or warrant will be accelerated in
any way by the transactions contemplated by this Agreement or
for any other reason, indicating the extent of acceleration, if
any.
2.3. OBLIGATIONS WITH RESPECT TO
CAPITAL STOCK. Except as set forth in Section 2.2 of
the Predix Disclosure Schedule and except for the convertibility
of the Predix Preferred Stock into Predix Common Stock, there
are no equity securities of any class of Predix, or any
securities exchangeable or convertible into or exercisable for
such equity securities, authorized, issued, reserved for
issuance or outstanding. Except for securities Predix or its
subsidiaries owns, directly or indirectly through one or more
subsidiaries, there are no equity securities of any class of any
subsidiary of Predix or its subsidiaries or any security
exchangeable or convertible into or exercisable for such equity
securities, issued, reserved for issuance or outstanding. Except
as set forth in Section 2.2 of the Predix Disclosure
Schedule, there are no options, warrants, equity securities,
calls, rights (including preemptive rights), commitments or
agreements of any character to which Predix or any of its
subsidiaries is a party or by which it or any of its
subsidiaries is bound obligating Predix or its subsidiaries to
issue, deliver or sell, or cause to be issued, delivered or
sold, or to repurchase, redeem or otherwise acquire, or cause
the repurchase, redemption or acquisition of, any shares of
capital stock of Predix or its subsidiaries or obligating Predix
or its subsidiaries to grant, extend, accelerate the vesting of
or enter into any such option, warrant, equity security, call,
right, commitment or agreement. Except as set forth in
Section 2.2 of the Predix Disclosure Schedule, there are no
registration rights and, to the knowledge of Predix and its
subsidiaries, there are no voting trusts, proxies or other
agreements or understandings with respect to any equity security
of any class of Predix or its subsidiaries.
2.4. AUTHORITY.
(a) Predix has all requisite corporate power and authority
to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate
action on the part of Predix, subject only to the approval of
the Merger by Predix’s stockholders as contemplated in
Section 5.2 and to the filing and recordation of the
Certificate of Merger pursuant to Delaware Law. This Agreement
has been duly executed and delivered by Predix and, assuming the
due authorization, execution and delivery of this Agreement by
the other parties hereto, this Agreement constitutes the valid
and binding obligation of Predix, enforceable in accordance with
its terms, except as enforceability may be limited by bankruptcy
and other similar laws and general principles of equity. Except
as set forth in Section 2.4(a) of the Predix Disclosure
Schedule, the execution and delivery of this Agreement does not,
and the performance of this Agreement will not,
(i) conflict with or violate the Certificate of
Incorporation or Bylaws of Predix, (ii) subject to
obtaining the approval of the Merger by Predix’s
stockholders as contemplated in Section 5.2 and compliance
with the requirements set forth in Section 2.4(b) below,
conflict with or violate any law, rule, regulation, order,
judgment or decree
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applicable to Predix or its subsidiaries or by which its or its
subsidiaries’ properties are bound or affected, or
(iii) except as would not reasonably be expected to have a
Material Adverse Effect and subject to obtaining the consents
set forth in Section 2.4(a) of the Predix Disclosure
Schedule, result in any breach of or constitute a default (or an
event that with notice or lapse of time or both would become a
default) under, or impair Predix’s or its
subsidiaries’ rights or alter the rights of obligations of
any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or
result in the creation of a lien or encumbrance on any of the
properties or assets of Predix or its subsidiaries pursuant to,
any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to
which Predix or any of its subsidiaries is a party or by which
Predix or its subsidiaries or its or its subsidiaries’
properties are bound or affected, except, with respect to
clauses (ii) and (iii), for any such conflicts, violations,
defaults or other occurrences that would not have a Material
Adverse Effect on Predix. Section 2.4 of the Predix
Disclosure Schedule lists all material consents, waivers and
approvals under any of Predix’s or its subsidiaries’
agreements, contracts, licenses or leases required to be
obtained in connection with the consummation of the transactions
contemplated hereby.
(b) No consent, approval, license, permit, registration,
waiver, qualification, order or authorization, or registration,
declaration or filing, with or of, as appropriate
(“Approval”) of (i) any person or
(ii) any Governmental Authority (as defined in
Section 6.1(b) hereof) is required by or with respect to
Predix or its subsidiaries in connection with the execution and
delivery of this Agreement or any related agreements required to
be executed by this Agreement or the consummation of the
transactions contemplated hereby and thereby, except for
(i) the filing of a
Form S-4
Registration Statement (the “Registration
Statement”) with the Securities and Exchange Commission
(“SEC”) in accordance with the Securities Act
of 1933, as amended (the “Securities Act”),
(ii) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware, (iii) such
Approvals as may be required under applicable federal and state
securities laws and the laws of any foreign country including,
without limitation, the HSR Act (as defined below), and
(iv) such other Approvals which, if not obtained or made,
would not have a Material Adverse Effect on Predix or would not
have a material adverse effect on the ability of the parties
hereto to consummate the Merger.
2.5. PREDIX FINANCIAL
STATEMENTS.
(a) The audited consolidated financial statements
(including any related notes thereto) representing the financial
condition of Predix and its subsidiaries as of December 31,
2005 (collectively, the “Predix Financials”)
(x) complied, or will comply as to form in all material
respects prior to the filing of the Registration Statement, with
the published rules and regulations of the SEC with respect
thereto, (y) were prepared in accordance with United States
generally accepted accounting principles
(“GAAP”) applied on a consistent basis
throughout the periods involved (except as may be indicated in
the notes thereto, and (z) fairly presented the financial
position of Predix as at the respective dates thereof and the
consolidated results of its operations and cash flows for the
periods indicated. The balance sheet of Predix as of
December 31, 2005 is hereinafter referred to as the
“Predix Balance Sheet.” Except as disclosed in
the Predix Financials, Predix and its subsidiaries have no
liabilities (absolute, accrued, contingent or otherwise) of a
nature required to be disclosed on a balance sheet or in the
related notes to consolidated financial statements prepared in
accordance with GAAP which are, individually or in the
aggregate, material to the business, results of operations or
financial condition of Predix and its subsidiaries, except
liabilities (i) provided for in the Predix Balance Sheet,
or (ii) incurred since the date of the Predix Balance Sheet
in the ordinary course of business consistent with either past
practices in both type and amount.
(b) Predix maintains adequate disclosure controls and
procedures designed to ensure that material information relating
to Predix, including its subsidiaries, is made known to the
Chief Executive Officer and the Chief Financial Officer of
Predix by others within those entities. To Predix’s
knowledge, there are no (i) significant deficiencies and
material weaknesses in the design or operation of internal
controls over financial reporting which are reasonably likely to
adversely affect in any material respect Predix’s ability
to record, process, summarize and report financial information
and (ii) fraud, or allegation of fraud, whether
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or not material, that involves management or other employees who
have a significant role in Predix’s internal controls over
financial reporting.
(c) Predix maintains a system of internal accounting
controls designed to provide reasonable assurance that:
(i) transactions are executed in accordance with
management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP
principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and
(iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
2.6. ABSENCE OF CERTAIN CHANGES
OR EVENTS. Since the date of the Predix Balance Sheet
through the date of this Agreement, Predix and its subsidiaries
have conducted their business only in the ordinary course of
business consistent with past practice, and there has not been:
(i) any event that has had, or that would be reasonably
expected to result in, a Material Adverse Effect on Predix,
(ii) any material change by Predix or any of its
subsidiaries in its accounting methods, principles or practices,
except as required by concurrent changes in GAAP, (iii) any
revaluation or disposition by Predix or its subsidiaries of any
of its assets having a Material Adverse Effect on Predix or
(iv) any other action, event or occurrence that would have
required the consent of EPIX pursuant to Section 4.1 of
this Agreement had such action, event or occurrence taken place
after the execution and delivery of this Agreement.
2.7. TAXES. Predix and its
subsidiaries have accurately prepared and timely filed or had
prepared and timely filed on their behalf, all returns,
declarations, reports, statements, information statements and
other documents filed or required to be filed (“Predix
Tax Returns”) with respect to any and all federal,
state, local and foreign taxes, assessments and other
governmental charges, duties, impositions and liabilities,
including, without limitation, taxes based upon or measured by
gross receipts, income, profits, sales, use and occupation,
value added, ad valorem, transfer, franchise, withholding,
payroll, recapture, employment, excise and property taxes,
together with all interest, penalties and additions imposed with
respect to such amounts and any obligations under any agreements
or arrangements with any other person with respect to such
amounts and including any liability for taxes of a predecessor
entity concerning or attributable to Predix or its subsidiaries
or to their operations (“Predix Taxes”), and
all such Predix Tax Returns are true, complete and correct in
all material respects. Copies of all such returns filed after
January 1, 2003 have been delivered to EPIX.
In addition:
| (a) Predix and its subsidiaries: (i) have paid all Taxes they are obligated to pay as reflected on the Tax Returns or otherwise; and (ii) have withheld all federal, state, local and foreign Taxes required to be withheld with respect to their employees or otherwise. | |
| (b) There is no Tax deficiency outstanding, proposed or assessed against Predix and its subsidiaries that is not accurately reflected as a liability on the Predix Balance Sheet, nor have Predix or its subsidiaries executed any waiver of any statute of limitations on or extending the period for the assessment or collection of any Tax. | |
| (c) Predix and its subsidiaries do not have any liability for unpaid Taxes that has not been properly accrued for under GAAP and reserved for on the Predix Balance Sheet, whether asserted or unasserted, contingent or otherwise. | |
| (d) Predix and its subsidiaries are not a party to any agreement, plan, arrangement or other contract covering any employee or independent contractor or former employee or independent contractor that, individually or collectively with any other such contracts, would reasonably be expected to give rise directly or indirectly to the payment of any amount that would not be deductible pursuant to Section 280G or Section 162(m) of the Code (or any comparable provision of state or foreign tax laws). |
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| (e) Predix and its subsidiaries are not, nor have ever been, a party to or bound by any tax indemnity agreement, tax sharing agreement, tax allocation agreement or similar contract or agreement. |
2.8. INTELLECTUAL PROPERTY.
(a) Predix owns, or has the right to use, sell or license,
and has the right to bring actions for the infringement of, all
intellectual property utilized in its business as presently
conducted or that of its subsidiaries, which intellectual
property is listed on Section 2.8(a) of the Predix
Disclosure Schedule (such intellectual property and the rights
thereto are collectively referred to herein as the
“Predix IP Rights”), except for any failure to
own or have the right to use, sell or license that would not
reasonably be expected to have a Material Adverse Effect on
Predix.
(b) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated
hereby will not constitute a breach of any instrument or
agreement governing any Predix IP Rights (the “Predix IP
Rights Agreements”), will not cause the forfeiture or
termination or give rise to a right of forfeiture or termination
of any Predix IP Rights or impair the right of Predix, its
subsidiaries or the Surviving Corporation to use, sell or
license any Predix IP Rights or portion thereof, except for the
occurrence of any such breach, forfeiture, termination or
impairment that would not individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect on
Predix. Each of the Predix IP Rights Agreements is valid and
binding on Predix or its subsidiaries and in full force and
effect; (ii) Predix and its subsidiaries have not received
any notice of termination or cancellation under such agreement,
or received any notice of breach or default under such
agreement, which breach has not been cured or waived; and
(iii) Predix and its subsidiaries, and to the knowledge of
Predix and its subsidiaries, any other party to such agreement,
is not in breach or default thereof in any material respect.
(c) (i) Neither the manufacture, marketing, license,
sale or intended use of any product or technology currently
licensed or sold or under development by Predix or its
subsidiaries violates any license or agreement between Predix or
its subsidiaries and any third party or, to the knowledge of
Predix and its subsidiaries, infringes any intellectual property
right of any other party; (ii) to the knowledge of Predix
and its subsidiaries, no third party is infringing upon, or
violating any license or agreement with Predix or its
subsidiaries relating to any Predix IP Rights; and (iii) to
the knowledge of Predix and its subsidiaries, there is no
pending or threatened claim or litigation contesting the
validity, ownership or right to use, sell, license or dispose of
any Predix IP Rights, nor has Predix or any of its subsidiaries
received any written notice asserting that any Predix IP Rights
or the proposed use, sale, license or disposition thereof
conflicts or will conflict with the rights of any other party.
(d) Predix and its subsidiaries have used reasonable
efforts to maintain their material trade secrets in confidence,
including entering into licenses and contracts that generally
require licensees, contractors and other third persons with
access to such trade secrets to keep such trade secrets
confidential and have otherwise taken reasonable and practicable
steps designed to safeguard and maintain the secrecy and
confidentiality of, and its proprietary rights in, all Predix IP
Rights.
2.9. COMPLIANCE; PERMITS;
RESTRICTIONS.
(a) Predix and its subsidiaries are not in conflict with,
or in default or violation of (i) any law, rule,
regulation, order, judgment or decree applicable to them or by
which their properties are bound or affected, or (ii) any
note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to
which Predix or any of its subsidiaries is a party or by which
Predix or any of its subsidiaries or their properties are bound
or affected, except for any conflicts, defaults or violations
which would not reasonably be expected to have a Material
Adverse Effect on Predix. No investigation or review by any
governmental or regulatory body or authority is pending or, to
the knowledge of Predix and its subsidiaries, threatened against
Predix or its subsidiaries, nor has any governmental or
regulatory body or authority indicated to Predix or its
subsidiaries an intention to conduct the same.
(b) Predix and its subsidiaries hold all permits, licenses,
variances, exemptions, orders and approvals from governmental
authorities which are material to the operation of the business
of Predix and its
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subsidiaries (collectively, the “Predix
Permits”). Predix and its subsidiaries are in
compliance with the terms of the Predix Permits, except where
the failure to so comply would not reasonably be expected to
have a Material Adverse Effect on Predix. No action, proceeding,
revocation proceeding, amendment procedure, writ, injunction or
claim is pending or, to the knowledge of Predix and its
subsidiaries, threatened, which seeks to revoke or limit any
Predix Permit. A true, complete and correct list of the material
Predix Permits is set forth in Section 2.9(b) of the Predix
Disclosure Schedule. The rights and benefits of each material
Predix Permit will be available to the Surviving Corporation or
its subsidiaries immediately after the Effective Time on terms
substantially identical to those enjoyed by Predix and its
subsidiaries immediately prior to the Effective Time.
(c) All biological and drug products being manufactured,
distributed, developed or tested by or on behalf of Predix or
its subsidiaries (“Predix Pharmaceutical
Products”) that are subject to the jurisdiction of the
Food and Drug Administration (“FDA”) are being
manufactured, labeled, stored, tested, distributed, and marketed
in compliance in all material respects with all applicable
requirements under the Federal Food, Drug, and Cosmetic Act
(“FDCA”), the Public Health Service Act, their
applicable implementing regulations, and all comparable state
laws and regulations.
(d) All clinical trials conducted by or on behalf of Predix
or its subsidiaries are being conducted in material compliance
with the applicable requirements of Good Clinical Practice,
Informed Consent, and all applicable requirements relating to
protection of human subjects contained in 21 CFR Parts 50,
54, and 56.
(e) All manufacturing operations for Predix Pharmaceutical
Products conducted by or for the benefit of Predix or its
subsidiaries are being conducted in accordance, in all material
respects, with the FDA’s current Good Manufacturing
Practices for drug and biological products. In addition, Predix
and its subsidiaries are in material compliance with all
applicable registration and listing requirements set forth in
21 U.S.C. Section 360 and 21 CFR Part 207
and all similar applicable laws and regulations.
(f) Neither Predix or its subsidiaries, nor any
representative of Predix or its subsidiaries, nor, to the
knowledge of Predix or its subsidiaries, any of Predix’s or
its subsidiaries’ licensees or assignees of Predix IP
Rights has received any notice that the FDA or any other
Governmental Authority has initiated, or threatened to initiate,
any action to suspend any clinical trial, suspend or terminate
any Investigational New Drug Application sponsored by Predix or
its subsidiaries or otherwise restrict the preclinical research
on or clinical study of any Predix Pharmaceutical Product or any
biological or drug product being developed by any licensee or
assignee of Predix IP Rights based on such intellectual
property, or to recall, suspend or otherwise restrict the
development or manufacture of any Predix Pharmaceutical Product.
(g) Neither Predix or its subsidiaries nor, to the
knowledge of Predix or its subsidiaries, any of their officers,
employees, agents or clinical investigators acting for Predix or
its subsidiaries, has committed any act, made any statement or
failed to make any statement that would reasonably be expected
to provide a basis for the FDA to invoke its policy with respect
to “Fraud, Untrue Statements of Material Facts, Bribery,
and Illegal Gratuities” set forth in 56 Fed. Reg. 46191
(September 10, 1991) and any amendments thereof.
Additionally, neither Predix or its subsidiaries, nor to the
knowledge of Predix or its subsidiaries, any officer, key
employee or agent of Predix or its subsidiaries has been
convicted of any crime or engaged in any conduct that would
reasonably be expected to result in (i) debarment under
21 U.S.C. Section 335a or any similar state law or
(ii) exclusion under 42 U.S.C.
Section 1320a-7 or
any similar state law or regulation.
(h) All animal studies or other preclinical tests performed
as the basis for any regulatory approval required for the Predix
Pharmaceutical Products (1) either (x) have been
conducted in accordance, in all material respects, with
applicable Good Laboratory Practice requirements contained in
21 CFR Part 58, or (y) were not required to be
conducted in accordance with Good Laboratory Practice
requirements contained in 21 CFR Part 58 and
(2) have employed the procedures and controls generally
used by qualified experts in animal or preclinical study of
products comparable to those being developed by Predix or its
subsidiaries.
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(i) Predix and its subsidiaries have made available to EPIX
copies of any and all written notices of inspectional
observations, establishment inspection reports and any other
documents received from the FDA, that indicate or suggest lack
of compliance with the regulatory requirements of the FDA.
Predix and its subsidiaries have made available to EPIX for
review all correspondence to or from the FDA, minutes of
meetings, written reports of phone conversations, visits or
other contact with the FDA, notices of inspectional
observations, establishment inspection reports, and all other
documents concerning communications to or from the FDA, or
prepared by the FDA or which bear in any way on Predix’s
and its subsidiaries’ compliance with regulatory
requirements of the FDA, or on the likelihood of timing of
approval of any Predix Pharmaceutical Products.
(j) There are no proceedings pending with respect to a
violation by Predix or its subsidiaries of the FDCA, FDA
regulations adopted thereunder, the Controlled Substance Act or
any other legislation or regulation promulgated by any other
United States Governmental Authority.
2.10. LITIGATION. As of the
date of this Agreement, there is no action, suit, proceeding,
claim, arbitration or investigation pending, or as to which
Predix or its subsidiaries have received any written notice of
assertion, nor, to the knowledge of Predix or its subsidiaries,
is there any threatened action, suit, proceeding, claim for
arbitration or investigation against Predix or its subsidiaries,
which, if adversely determined, would have a Material Adverse
Effect on Predix.
2.11. BROKERS’ AND
FINDERS’ FEES. Other then Xxxxxx Brothers Inc., Predix
and its subsidiaries have not incurred, nor will they incur,
directly or indirectly, any liability for brokerage or
finders’ fees or agents’ commissions or any similar
charges in connection with this Agreement or any transaction
contemplated hereby.
2.12. EMPLOYEE BENEFIT PLANS.
(a) Section 2.12(a) of the Predix Disclosure Schedule
lists all written and describes all non-written employee benefit
plans (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended
(“ERISA”)) and all bonus, stock or other
security option, stock or other security purchase, stock or
other security appreciation rights, incentive, deferred
compensation, retirement or supplemental retirement, profit
sharing, severance, golden parachute, vacation, cafeteria,
dependent care, medical care, employee assistance program,
education or tuition assistance programs, insurance and other
similar fringe or employee benefit plans, programs or
arrangements, and any current or former employment or executive
compensation or severance agreements, written or otherwise,
which are currently sponsored, maintained, contributed to or
entered into for the benefit of, or relating to, any present or
former employee or director of Predix, or any trade or business
(whether or not incorporated) which is a member of a controlled
group or which is under common control with Predix within the
meaning of Section 414 of the Code (an “ERISA
Affiliate”), whether or not such plan is terminated
(collectively, the “Predix Employee Plans”).
(b) With respect to each Predix Employee Plan, Predix has
provided to EPIX a true and complete copy of, to the extent
applicable, (i) such Predix Employee Plan, (ii) the
most recent annual reports (Form 5500) as filed with the
United States Internal Revenue Service (the
“IRS”), (iii) each trust agreement related
to such Predix Employee Plan, (iv) the most recent summary
plan description for each Predix Employee Plan for which such
description is required, along with all summaries of material
modifications, amendments, resolutions and all other material
plan documentation related thereto, (v) the most recent
actuarial report relating to any Predix Employee Plan subject to
Title IV of ERISA and (vi) the most recent IRS
determination letter issued with respect to any Predix Employee
Plan.
(c) There are no actions or claims pending (other than
routine claims for benefits), or to the knowledge of Predix
threatened, against any Predix Employee Plan or against the
assets of any Predix Employee Plan, nor are there any current,
or to the knowledge of Predix threatened, encumbrances or liens
on the assets of any Predix Employee Plan. Each Predix Employee
Plan which is intended to be qualified under Section 401(a)
of the Code has received a favorable determination for the IRS
covering the provisions of the Tax Reform Act of 1986 and GUST
stating that such Predix Employee Plan is so
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qualified and nothing has occurred since the date of such letter
that could reasonably be expected to affect the qualified status
of such plan. Each Predix Employee Plan has been operated in all
material respects in accordance with its terms and the
requirements of all applicable law.
(d) No Predix Employee Plan is an “employee pension
benefit plan” (within the meaning of Section 3(2) of
ERISA) subject to Title IV of ERISA, and neither Predix nor
any ERISA Affiliate has ever maintained, contributed to or
partially or fully withdrawn from any such plan. No Predix
Employee Plan is a Multiemployer Plan or “single-employer
plan under multiple controlled groups” as described in
Section 4063 of ERISA, and neither Predix nor any ERISA
Affiliate has ever contributed to or had an obligation to
contribute, or incurred any liability in respect of a
contribution, to any Multiemployer Plan. No Predix Employee Plan
is a “multiple employer plan” within the meaning of
Section 413(c) of the Code or Section 3(40) of ERISA.
(e) With respect to the employees and former employees of
Predix, there are no employee post-retirement medical or health
plans or agreements in effect, except as required by
Section 4980B of the Code or similar state law.
(f) Based on Predix’s good faith interpretation of the
provisions of Section 409A of the Code and the guidance
issued thereunder, any Predix Employee Plan that is a
“nonqualified deferred compensation plan” within the
meaning of Section 409A of the Code has been operated in
accordance with the requirements of Section 409A (including
the Notices issued by the IRS thereunder).
2.13. ABSENCE OF LIENS AND
ENCUMBRANCES; CONDITION OF EQUIPMENT. Predix and its
subsidiaries have good and valid title to, or, in the case of
leased properties and assets, valid leasehold interests in, all
material tangible properties and assets, real, personal and
mixed, necessary for use in their business, free and clear of
any liens or encumbrances except as reflected in the Predix
Financials and except for (a) liens for taxes not yet due
and payable; (b) liens which secure a payment not yet due
that arises, and is customarily discharged, in the ordinary
course of Predix’s or its subsidiaries’ business;
(c) liens relating to capitalized lease financings or
purchase money financings that have been entered into in the
ordinary course of business and (d) liens arising solely by
the action of EPIX (collectively, “Permitted
Liens”). Each of the material tangible assets is in a
good state of maintenance and repair, and in good operating
condition (subject to normal wear and tear) and is suitable for
the purposes for which it presently is used.
2.14. ENVIRONMENTAL MATTERS.
(a) Hazardous Material. No underground
storage tanks and no amount of any substance that has been
designated by any Governmental Authority or by applicable
federal, state or local law, to be radioactive, toxic, hazardous
or otherwise a danger to health or the environment, including,
without limitation, PCBs, asbestos, petroleum, urea-formaldehyde
and all substances listed as hazardous substances pursuant to
the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, or defined as a hazardous
waste pursuant to the United States Resource Conservation and
Recovery Act of 1976, as amended, and the regulations
promulgated pursuant to said laws, but excluding office and
janitorial supplies (a “Hazardous Material”),
are present, as a result of the deliberate actions of Predix or
its subsidiaries, or, to Predix’s and its
subsidiaries’ knowledge, as a result of any actions of any
third party or otherwise, in, on or under any property,
including the land and the improvements, ground water and
surface water thereof, that Predix or any of its subsidiaries
have at any time owned, operated, occupied or leased.
(b) Hazardous Material Activities. Except as
would not reasonably be expected to have a Material Adverse
Effect on Predix, Predix and its subsidiaries have not
transported, stored, used, manufactured, disposed of, released
or exposed their employees or others to Hazardous Materials in
violation of any law in effect on or before the date hereof, nor
has Predix or its subsidiaries disposed of, transported, sold,
or manufactured any product containing a Hazardous Material
(collectively, “Hazardous Material Activities”)
in violation of any rule, regulation, treaty or statute
promulgated by any Governmental
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Authority in effect prior to or as of the date hereof to
prohibit, regulate or control Hazardous Materials or any
Hazardous Material Activity.
(c) Permits. Predix and its subsidiaries
currently hold all environmental approvals, permits, licenses,
clearances and consents (the “Predix Environmental
Permits”) necessary for the conduct of Predix’s
and its subsidiaries’ Hazardous Material Activities and
other businesses of Predix and its subsidiaries as such
activities and businesses are currently being conducted, except
where the failure to so hold would not reasonably be expected to
have a Material Adverse Effect on Predix.
(d) Environmental Liabilities. No material
action, proceeding, revocation proceeding, amendment procedure,
writ, injunction or claim is pending, or to the knowledge of
Predix or its subsidiaries, threatened concerning any Predix
Environmental Permit, Hazardous Material or any Hazardous
Material Activity of Predix or its subsidiaries. Neither Predix
or its subsidiaries are aware of any fact or circumstance which
could involve Predix or its subsidiaries in any environmental
litigation or impose upon Predix or its subsidiaries any
environmental liability.
2.15. LABOR MATTERS.
(a) Section 2.15(a) of the Predix Disclosure Schedule
sets forth a true, complete and correct list of all employees of
Predix and its subsidiaries along with their position and actual
annual rate of compensation. All employees have entered into
nondisclosure and assignment of inventions agreements with
Predix or its subsidiaries, true, complete and correct copies of
which have previously been made available to EPIX. To the
knowledge of Predix and its subsidiaries, no employee of Predix
or its subsidiaries is in violation of any term of any patent
disclosure agreement, non-competition agreement, or any
restrictive covenant (i) to Predix or its subsidiaries, or
(ii) to a former employer relating to the right of any such
employee to be employed because of the nature of the business
conducted by Predix or its subsidiaries or to the use of trade
secrets or proprietary information of others. No key employee or
group of employees has threatened to terminate employment with
Predix or its subsidiaries nor, to the knowledge of Predix or
its subsidiaries (which, for purposes of this representation
only, shall mean actual knowledge), has plans to terminate such
employment. Key employees are listed in Schedule 2
hereto.
(b) Neither Predix or any of its subsidiaries are parties
to or bound by any collective bargaining agreement, nor has it
experienced any strikes, grievances, claims of unfair labor
practices or other collective bargaining disputes.
(c) Except as disclosed in Section 2.15(c) of the
Predix Disclosure Schedule, neither Predix or any of its
subsidiaries are parties to any written or oral:
(i) agreement with any current or former employee the
benefits of which are contingent upon, or the terms of which
will be materially altered by, the consummation of the Merger or
other transactions contemplated by this Agreement;
(ii) agreement with any current or former employee of
Predix or its subsidiaries providing any term of employment or
compensation guarantee extending for a period longer than one
year from the date hereof or for the payment of compensation in
excess of $100,000 per annum; or (iii) agreement or
plan the benefits of which will be increased, or the vesting of
the benefits of which will be accelerated, upon the consummation
of the Merger.
2.16. AGREEMENTS, CONTRACTS AND
COMMITMENTS. Predix and its subsidiaries are not parties to
or bound by:
| (a) except as described in Section 2.12(a) of the Predix Disclosure Schedule, any bonus, deferred compensation, incentive compensation, pension, profit-sharing or retirement plans, or any other employee benefit plans or arrangements; | |
| (b) except as described in Section 2.12(a) of the Predix Disclosure Schedule, any employment or consulting agreement, contract or commitment with any officer or director level employee, not terminable by Predix or its subsidiaries on thirty (30) days notice without liability, except to the extent general principles of wrongful termination law may limit Predix’s or its subsidiaries’ ability to terminate employees at will; |
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| (c) except as described in Section 2.12(a) of the Predix Disclosure Schedule, any agreement or plan, including, without limitation, any stock option plan, stock appreciation right plan or stock purchase plan, any of the benefits of which will be increased, or the vesting of benefits of which will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement; | |
| (d) any agreement of indemnification or guaranty not entered into in the ordinary course of business other than indemnification agreements between Predix or its subsidiaries and any of their officers or directors; | |
| (e) any agreement, contract or commitment containing any covenant limiting the freedom of Predix or its subsidiaries to engage in any line of business or compete with any person; | |
| (f) any agreement, contract or commitment relating to capital expenditures and involving future obligations in excess of $25,000 and not cancelable without penalty; | |
| (g) any agreement, contract or commitment currently in force relating to the disposition or acquisition of assets not in the ordinary course of business or any ownership interest in any corporation, partnership, joint venture or other business enterprise; | |
| (h) any mortgages, indentures, loans or credit agreements, security agreements or other agreements or instruments relating to the borrowing of money or extension of credit in excess of $25,000; | |
| (i) any joint marketing or development agreement; | |
| (j) any distribution agreement (identifying any that contain exclusivity provisions); or | |
| (k) any other agreement, contract or commitment (excluding real and personal property leases) which involve payment by Predix or its subsidiaries under any such agreement, contract or commitment of $25,000 or more in the aggregate. |
Predix and its subsidiaries have not, nor to Predix’s or
its subsidiaries’ knowledge has any other party to a Predix
Contract (as defined below), breached, violated or defaulted
under, or received notice that it has breached, violated, or
defaulted under, any of the terms or conditions of, or
terminated any of the agreements, contracts or commitments to
which Predix or its subsidiaries are a party or by which they
are bound of the type described in clauses (a) through
(k) above (any such agreement, contract or commitment, a
“Predix Contract”) in such manner as would
permit any other party to cancel or terminate any such Predix
Contract, or would permit any other party to seek damages which
would reasonably be expected to have a Material Adverse Effect
on Predix. As to Predix and its subsidiaries, each Predix
Contract is valid, binding, enforceable and in full force and
effect, except as enforceability may be limited by bankruptcy
and other similar laws and general principles of equity.
2.17. CHANGE OF CONTROL
PAYMENTS. Section 2.17 of the Predix Disclosure
Schedule sets forth each plan or agreement pursuant to which any
material amounts may become payable (whether currently or in the
future) to current or former officers and directors of Predix or
its subsidiaries as a result of or in connection with the Merger.
2.18. BOARD APPROVAL. The
Board of Directors of Predix, as of the date of this Agreement,
has (i) declared the advisability of the Merger and the
Merger Agreement, and (ii) recommended that the
stockholders of Predix approve this Agreement and the Merger.
2.19. BOOKS AND RECORDS. The
minute books of Predix and its subsidiaries made available to
counsel for EPIX are the only minute books of Predix and its
subsidiaries and contain accurate summaries, in all material
respects, of all meetings of directors (or committees thereof)
and stockholders or actions by written consent since the time of
incorporation of Predix and its subsidiaries, as the case may
be. The books and records of Predix and its subsidiaries
accurately reflect in all material respects the
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assets, liabilities, business, financial condition and results
of operations of Predix and its subsidiaries and have been
maintained in accordance with good business and bookkeeping
practices.
2.20. RESTRICTIONS ON BUSINESS
ACTIVITIES. Other than as contemplated by this Agreement,
there is no agreement, judgment, injunction, order or decree
binding upon or otherwise applicable to Predix or its
subsidiaries which has, or would reasonably be expected to have,
the effect of prohibiting or materially impairing (i) any
current business practice of Predix or its subsidiaries; or
(ii) any acquisition of any person or property by Predix or
its subsidiaries.
2.21. REAL PROPERTY LEASES.
Section 2.21 of the Predix Disclosure Schedule sets forth
all real property leases or subleases to or by Predix or its
subsidiaries. Predix has delivered to EPIX true, complete and
correct copies of the leases and subleases (as amended to date)
listed in Section 2.21 of the Predix Disclosure Schedule.
With respect to each lease and sublease listed in
Section 2.21 of the Predix Disclosure Schedule:
| (a) As to Predix or its subsidiaries, each lease or sublease is legal, valid, binding, enforceable and in full force and effect, except as enforceability may be limited by bankruptcy and other similar laws and general principles of equity; | |
| (b) Neither Predix or any of its subsidiaries are in breach or violation of, or default under, any such lease or sublease, and no event has occurred, is pending or, to the knowledge of Predix or its subsidiaries, is threatened, which, after the giving of notice, with lapse of time, or otherwise, would constitute a breach or default by Predix or its subsidiaries or, to the knowledge of Predix and its subsidiaries, any other party under such lease or sublease, except as would not reasonably be expected to have a Material Adverse Effect; | |
| (c) Neither Predix or its subsidiaries have assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in any lease or sublease; and | |
| (d) there are no liens, easements, covenants or other restrictions applicable to the real property subject to such lease, except for Permitted Liens. |
2.22. INSURANCE.
(a) Section 2.22(a) of the Predix Disclosure Schedule
sets forth each insurance policy (including fire, theft,
casualty, general liability, workers compensation, business
interruption, environmental, product liability and automobile
insurance policies and bond and surety arrangements) to which
Predix or its subsidiaries are a party (the “Insurance
Policies”). The Insurance Policies are in full force
and effect, maintained with reputable companies against normal
losses relating to the business, operations and properties and
such other losses as companies engaged in similar business as
Predix or its subsidiaries would, in accordance with good
business practice, customarily insure. All premiums due and
payable under the Insurance Policies have been paid on a timely
basis and Predix and its subsidiaries are in compliance in all
material respects with all other terms thereof. True, complete
and correct copies of the Insurance Policies have been made
available to EPIX.
(b) There are no material claims pending as to which
coverage has been questioned, denied or disputed. All material
claims thereunder have been filed in a due and timely fashion
and neither Predix or any of its subsidiaries have been refused
insurance for which it has applied or had any policy of
insurance terminated (other than at its request), nor has Predix
or its subsidiaries received notice from any insurance carrier
that: (i) such insurance will be canceled or that coverage
thereunder will be reduced or eliminated; or (ii) premium
costs with respect to such insurance will be increased, other
than premium increases in the ordinary course of business
applicable on their terms to all holders of similar policies.
(c) Predix has made available to EPIX accurate and complete
copies of the existing policies (primary and excess) of
directors’ and officers’ liability insurance
maintained by Predix as of the date of this Agreement.
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2.23. CERTAIN BUSINESS
PRACTICES. Neither Predix or its subsidiaries nor, to the
knowledge of Predix or its subsidiaries, any director, officer,
employee or agent of Predix or its subsidiaries has:
(i) used any funds for unlawful contributions, gifts,
entertainment or other unlawful payments relating to political
activity; (ii) made any unlawful payment to any foreign or
domestic government official or employee or to any foreign or
domestic political party or campaign or violated any provision
of the Foreign Corrupt Practices Act of 1977, as amended; or
(iii) made any other unlawful payment.
2.24. SUPPLIERS AND
MANUFACTURERS; EFFECT OF TRANSACTION.
(a) Section 2.24(a) of the Predix Disclosure Schedule
sets forth a true, complete and correct list of each supplier
and manufacturer that is the sole supplier or manufacturer of
any material product or service to Predix or its subsidiaries.
Since the Predix Balance Sheet Date, there has not been:
(A) any materially adverse change in the business
relationship of Predix or its subsidiaries with any supplier or
manufacturer named in Section 2.24(a) of the Predix
Disclosure Schedule; or (B) any change in any material term
(including credit terms) of the sales agreements or related
agreements with any supplier or manufacturer named in
Section 2.24(a) of the Predix Disclosure Schedule.
(b) To the knowledge of Predix and its subsidiaries, no
creditor, supplier, employee, client, customer or other person
having a material business relationship with Predix or its
subsidiaries has informed Predix or its subsidiaries that such
person intends to materially change its relationship with Predix
or its subsidiaries because of the transactions contemplated by
this Agreement or otherwise.
2.25. GOVERNMENT CONTRACTS.
Predix and its subsidiaries have not been suspended or debarred
from bidding on contracts with any Governmental Authority, and
no such suspension or debarment has been initiated or
threatened. The consummation of the Merger and other
transactions contemplated by this Agreement will not result in
any such suspension or debarment of Predix or its subsidiaries.
2.26. INTERESTED PARTY
TRANSACTIONS. As of the date hereof, no affiliate of Predix
or its subsidiaries (a) owns any property or right,
tangible or intangible, which is used in the business of Predix
or its subsidiaries, (b) has any claim or cause of action
against Predix or its subsidiaries, or (c) owes any money
to, or is owed any money by, Predix or its subsidiaries.
Section 2.26 of the Predix Disclosure Schedule describes
any material transactions or relationships between Predix and
its subsidiaries and any affiliate thereof that would be
required to be disclosed pursuant to Item 404 of
Regulation S-K
promulgated by the SEC.
2.27. VOTING REQUIREMENTS.
The affirmative vote of the holders of a majority of the voting
power of the outstanding Predix capital stock, on an as
converted to common stock basis, the affirmative vote of the
holders of at least sixty percent (60%) of the outstanding
Predix Preferred Stock, voting together as a single class, and
the affirmative vote of the holders of at least sixty-six and
two-thirds percent
(662/3
%) of the outstanding Series C Preferred Stock,
voting as a separate class, are the only votes of the holders of
any Predix capital stock necessary to approve and adopt this
Agreement and the transactions contemplated hereby.
2.28. REGISTRATION STATEMENT;
JOINT PROXY STATEMENT/ PROSPECTUS. The information to be
supplied by Predix for inclusion in the Registration Statement
shall not at the time the Registration Statement is filed with
the SEC and at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not
misleading. The information to be supplied by Predix for
inclusion in the joint proxy statement/ prospectus to be sent to
the stockholders of Predix and EPIX in connection with the
meeting of Predix’s stockholders to consider the approval
of this Agreement and the Merger (the “Predix
Stockholders’ Meeting”) and in connection with the
meeting of EPIX’s stockholders to consider the approval of
this Agreement, the Merger and the issuance of shares of EPIX
Common Stock pursuant to the terms of the Merger (the
“EPIX Stockholders’ Meeting”) (such joint
proxy statement/ prospectus as amended or supplemented is
referred to herein as the “Joint Proxy
Statement”) shall not, on the date the Joint Proxy
Statement is first mailed to EPIX’s stockholders, and
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at the time of the EPIX Stockholders’ Meeting, contain any
untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they are made, not false or
misleading; or omit to state any material fact necessary to
correct any statement in any earlier communication with respect
to the solicitation of proxies for the EPIX Stockholders’
Meeting which has become false or misleading. If at any time
prior to the Effective Time, any event relating to Predix, its
subsidiaries or any of their affiliates, officers or directors
should be discovered by Predix or its subsidiaries which should
be set forth in an amendment to the Registration Statement or a
supplement to the Joint Proxy Statement, Predix shall promptly
inform EPIX of such event. The Joint Proxy Statement will comply
as to form in all material respects with the provisions of the
Exchange Act and the rules and regulations thereunder.
Notwithstanding the foregoing, Predix makes no representation or
warranty with respect to any information supplied by EPIX which
is contained in any of the foregoing documents.
2.29. DISCLOSURE. None of
the representations or warranties of Predix contained herein and
none of the information contained in the Predix Disclosure
Schedule is false or misleading in any material respect or omits
to state a fact herein or therein necessary to make the
statements herein or therein, in light of the circumstance in
which they were made, not misleading in any material respect.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF EPIX AND MERGER SUB
EPIX and Merger Sub hereby jointly and severally represent and
warrant to Predix as follows, except as set forth in the EPIX
SEC Reports (as defined in Section 3.6 below), or in the
written disclosure schedule delivered by EPIX to Predix (the
“EPIX Disclosure Schedule”). The EPIX
Disclosure Schedule shall be arranged in sections and
subsections corresponding to the numbered and lettered sections
and subsections contained in this Article III. The
inclusion of any information in the EPIX Disclosure Schedule (or
any update thereto) shall not be deemed to be an admission or
acknowledgment, in and of itself, that such information is
required by the terms hereof to be disclosed, is material, has
resulted in or would result in a Material Adverse Effect, or is
outside the ordinary course of business. For purposes of this
Agreement, the phrase “to the knowledge of EPIX” or
any phrase of similar import shall mean and be limited to the
actual knowledge of the individuals set forth on
Schedule 3 hereto.
3.1. ORGANIZATION OF EPIX AND
MERGER SUB. Each of EPIX and Merger Sub (a) is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, (b) has
all requisite corporate power and authority to own, lease and
operate its property and to carry on its business as now being
conducted and as proposed to be conducted, and (c) is duly
qualified to do business and in good standing as a foreign
corporation in each jurisdiction in which the failure to be so
qualified would have a Material Adverse Effect on EPIX. Each of
EPIX and Merger Sub has delivered or made available a true and
correct copy of its respective Certificate of Incorporation and
Bylaws, each as amended to date, as applicable, to Predix.
3.2. OWNERSHIP OF MERGER SUB; NO
PRIOR ACTIVITIES. Merger Sub is a direct, wholly-owned
subsidiary of EPIX and at the Effective Time will cease to exist
pursuant to Section 1.1(a). Merger Sub was formed in
connection with the transactions contemplated by this Agreement
and has engaged in no business activity other than in connection
with the transactions contemplated by this Agreement.
3.3. EPIX AND MERGER SUB CAPITAL
STRUCTURE. The authorized capital stock of EPIX consists of
40,000,000 shares of EPIX Common Stock, of which there were
23,284,810 shares issued and outstanding as of
February 28, 2006 and 1,000,000 shares of Preferred
Stock, par value $.01 per share, none of which were issued
and outstanding as of such date. All outstanding shares of the
EPIX Common Stock are duly authorized, validly issued, fully
paid and non-assessable and are not subject to preemptive rights
created by statute, the Certificate of Incorporation or Bylaws
of EPIX or any agreement or document to which EPIX is a party or
by which it is bound. As of February 28, 2006, EPIX had
reserved
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an aggregate of 4,379,656 shares of EPIX Common Stock, net
of exercises, for issuance to employees and consultants pursuant
to the EPIX Amended and Restated 1992 Incentive Plan (the
“EPIX 1992 Plan”) under which options were
outstanding for an aggregate of 2,934,164 shares and an
aggregate of 394,668 shares of EPIX Common Stock, net of
exercises, for issuance to non-employee directors pursuant to
the EPIX Amended and Restated 1996 Director Stock Option
Plan (the “EPIX 1996 Plan,” together with the
EPIX 1992 Plan, the “EPIX Stock Plans”) under
which options were outstanding for an aggregate of
210,000 shares. As of February 28, 2006, EPIX had
reserved an aggregate of 16,750 shares of EPIX Common Stock
for issuance to employees pursuant to the EPIX Employee Stock
Purchase Plan (the “EPIX ESPP”). All shares of
the EPIX Common Stock subject to issuance as aforesaid, upon
issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, would be duly
authorized, validly issued, fully paid and non-assessable.
3.4. OBLIGATIONS WITH RESPECT TO
CAPITAL STOCK. Except as set forth in Section 3.3,
there are no equity securities of any class of EPIX or Merger
Sub, or any securities exchangeable or convertible into or
exercisable for such equity securities, authorized, issued,
reserved for issuance or outstanding. Except for securities EPIX
or Merger Sub owns, directly or indirectly through one or more
subsidiaries, there are no equity securities of any class of any
subsidiary of EPIX or Merger Sub, respectively, or any security
exchangeable or convertible into or exercisable for such equity
securities, issued, reserved for issuance or outstanding. Except
as set forth in Section 3.3 of this Agreement or
Section 3.4 of the EPIX Disclosure Schedule, there are no
options, warrants, equity securities, calls, rights (including
preemptive rights), commitments or agreements or any character
to which EPIX or any of its subsidiaries is a party or by which
they are bound obligating EPIX or any of its subsidiaries to
issue, deliver or sell, or cause to be issued, delivered or
sold, or repurchase, redeem or otherwise acquire, or cause the
repurchase, redemption or acquisition of, any shares of capital
stock of EPIX or Merger Sub or obligating EPIX or Merger Sub to
grant, extend, accelerate the vesting of or enter into any such
option, warrant, equity security, call, right, commitment or
agreement. There are no registration rights and, to the
knowledge of EPIX there are no voting trusts, proxies or other
agreements or understandings with respect to any equity security
of any class of EPIX or Merger Sub.
3.5. AUTHORITY.
(a) Each of EPIX and Merger Sub has all requisite corporate
power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of EPIX and Merger
Sub, subject only to the approval of the Merger by EPIX’s
stockholders as contemplated in Section 5.2 and to the
filing and recordation of the Certificate of Merger pursuant to
Delaware Law. This Agreement has been duly executed and
delivered by EPIX and Merger Sub and, assuming the due
authorization, execution and delivery of this Agreement by the
other parties hereto, this Agreement constitutes the valid and
binding obligation of EPIX and Merger Sub, enforceable
against such party in accordance with its terms, except as
enforceability may be limited by bankruptcy and other similar
laws and general principles of equity. The execution and
delivery of this Agreement by EPIX and Merger Sub does not, and
the performance of this Agreement by EPIX and Merger Sub will
not, (i) conflict with or violate the Certificate of
Incorporation or Bylaws of EPIX or Merger Sub, (ii) subject
to obtaining the approval of the Merger by EPIX’s
stockholders as contemplated in Section 5.2 and compliance
with the requirements set forth in Section 3.5(b) below,
conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to EPIX or Merger Sub or by which
its properties are bound or affected, or (iii) except as
would not reasonably be expected to have a Material Adverse
Effect and subject to obtaining the consents set forth in
Section 3.5 of the EPIX Disclosure Schedule, result in any
breach of or constitute a default (or an event that with notice
or lapse of time or both would become a default) under, or
impair EPIX’s or Merger Sub’s rights or alter the
rights or obligations of any third party under, or give to
others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or
encumbrance on any of the properties or assets of EPIX or Merger
Sub pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument
or obligation to which EPIX or Merger Sub is a party or by which
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EPIX or Merger Sub or each of its properties are bound or
affected, except, with respect to clauses (ii) and (iii),
for any such conflicts, violations, defaults or other
occurrences that would not have a Material Adverse Effect on
EPIX. Section 3.5 of the EPIX Disclosure Schedule lists all
material consents, waivers and approvals under any of
EPIX’s or Merger Sub’s agreements, contracts, licenses
or leases required to be obtained in connection with the
consummation of the transactions contemplated hereby.
(b) No Approval of any person or any Governmental Authority
is required by or with respect to EPIX or Merger Sub in
connection with the execution and delivery of this Agreement or
any related agreements required to be executed by this Agreement
or the consummation of the transactions contemplated hereby and
thereby, except for (i) the filing of the Registration
Statement with the SEC in accordance with the Securities Act,
(ii) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware, (iii) the
filing of the Joint Proxy Statement with the SEC in accordance
with the Exchange Act, (iv) EPIX’s filing of a Current
Report on Form 8-K
with the SEC, (v) the listing of the EPIX Common Stock
issuable pursuant to this Agreement on the NASDAQ,
(vi) such Approvals as may be required under applicable
federal and state securities laws and the laws of any foreign
country including, without limitation, the HSR Act, and
(vii) such other Approvals which, if not obtained or made,
would not have a Material Adverse Effect on EPIX or would not
have a material adverse effect on the ability of the parties
hereto to consummate the Merger.
3.6. EPIX FINANCIAL
STATEMENTS.
(a) EPIX has filed all forms, reports and documents
required to be filed with the SEC since January 1, 2005 and
all such required forms, reports and documents are referred to
herein as the “EPIX SEC Reports.” As of their
respective dates, the EPIX SEC Reports (i) were prepared in
accordance with the requirements of the Securities Act or the
Securities Exchange Act of 1934, as amended (the
“Exchange Act”), as the case may be, and the
rules and regulations of the SEC thereunder applicable to such
EPIX SEC Reports, and (ii) did not at the time they were
filed (or if amended or superseded by a filing prior to the date
of this Agreement, then on the date of such filing) contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading. The certifications and
statements required by
(A) Rule 13a-14
under the Exchange Act and (B) 18 U.S.C. §1350
(Section 906 of the Xxxxxxxx-Xxxxx Act) relating to the
EPIX SEC Reports are accurate and complete and comply as to form
and content with all applicable legal requirements.
(b) The audited financial statements (including any related
notes thereto) contained in the EPIX SEC Reports or delivered to
Predix representing the balance sheet of EPIX at
December 31, 2005 and the statements of operations,
stockholders’ equity and cash flows for the three-year
period then ended (the “EPIX Financials”),
(x) complied with the published rules and regulations of
the SEC with respect thereto, (y) were prepared in
accordance with GAAP applied on a consistent basis throughout
the periods involved (except as may be indicated in the notes
thereto) and (z) fairly presented the results of its
operations and cash flows for the periods indicated. The balance
sheet of EPIX as of December 31, 2005 is hereinafter
referred to as the “EPIX Balance Sheet.” Except
as disclosed in the EPIX Financials, EPIX has no liabilities
(absolute, accrued, contingent or otherwise) of a nature
required to be disclosed on a balance sheet or in the related
notes to the financial statements prepared in accordance with
GAAP which are, individually or in the aggregate, material to
the business, results of operations or financial condition of
EPIX except liabilities (i) provided for in the EPIX
Balance Sheet, or (ii) incurred since the date of the EPIX
Balance Sheet in the ordinary course of business consistent with
past practices in both type and amount.
(c) EPIX maintains adequate disclosure controls and
procedures designed to ensure that material information relating
to EPIX, is made known to the Chief Executive Officer and the
Principal Accounting Officer of EPIX by others within that
entity. To EPIX’s knowledge, there are no
(i) significant deficiencies and material weaknesses in the
design or operation of internal controls over financial
reporting which are reasonably likely to adversely affect in any
material respect EPIX’s ability to record, process,
summarize and report financial information and (ii) fraud,
or allegation of fraud, whether or not material,
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that involves management or other employees who have a
significant role in EPIX’s internal controls over financial
reporting.
(d) EPIX maintains a system of internal accounting controls
designed to provide reasonable assurance that:
(i) transactions are executed in accordance with
management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP
principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and
(iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
3.7. ABSENCE OF CERTAIN CHANGES
OR EVENTS. Since the date of the EPIX Balance Sheet through
the date of this Agreement, EPIX has conducted its business only
in the ordinary course of business consistent with past
practice, and there has not been: (i) any event that has
had, or that would be reasonably expected to result in, a
Material Adverse Effect on EPIX, (ii) any material change
by EPIX in its accounting methods, principles or practices,
except as required by concurrent changes in GAAP, (iii) any
revaluation or disposition by EPIX of any of its assets having a
Material Adverse Effect on EPIX or (iv) any other action,
event or occurrence that would have required the consent of
Predix pursuant to Section 4.3 of this Agreement had such
action, event or occurrence taken place after the execution and
delivery of this Agreement.
3.8. TAXES. EPIX has
accurately prepared and timely filed or had prepared and timely
filed on its behalf all returns, declarations, reports,
statements, information statements and other documents filed or
required to be filed (“EPIX Tax Returns”) with
respect to any and all federal, state, local and foreign taxes,
assessments and other governmental charges, duties, impositions
and liabilities, including, without limitation, taxes based upon
or measured by gross receipts, income, profits, sales, use and
occupation, value added, ad valorem, transfer, franchise,
withholding, payroll, recapture, employment, excise and property
taxes, together with all interest, penalties and additions
imposed with respect to such amounts and any obligations under
any agreements or arrangements with any other person with
respect to such amounts and including any liability for taxes of
a predecessor entity concerning or attributable to EPIX or to
their operations (“EPIX Taxes”), and all such
Tax Returns are true, complete and correct in all material
respects. Copies of all such returns filed after January 1,
2003 have been delivered to Predix.
In addition:
| (a) EPIX: (i) have paid all Taxes they are obligated to pay as reflected on the Tax Returns or otherwise; and (ii) have withheld all federal, state, local and foreign Taxes required to be withheld with respect to their employees or otherwise. | |
| (b) There is no Tax deficiency outstanding, proposed or assessed against EPIX and its subsidiaries that is not accurately reflected as a liability on the EPIX Balance Sheet, nor has EPIX executed any waiver of any statute of limitations on or extending the period for the assessment or collection of any Tax. | |
| (c) EPIX does not have any liability for unpaid Taxes that has not been properly accrued for under GAAP and reserved for on the EPIX Balance Sheet, whether asserted or unasserted, contingent or otherwise. | |
| (d) EPIX is not a party to any agreement, plan, arrangement or other contract covering any employee or independent contractor or former employee or independent contractor that, individually or collectively with any other such contracts, would reasonably be expected to give rise directly or indirectly to the payment of any amount that would not be deductible pursuant to Section 280G or Section 162(m) of the Code (or any comparable provision of state or foreign tax laws). | |
| (e) EPIX is not, nor has ever been, a party to or bound by any tax indemnity agreement, tax sharing agreement, tax allocation agreement or similar contract or agreement. |
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3.9. BROKERS’ AND
FINDERS’ FEES. Other than Xxxxxxx & Company,
LLC and Chestnut Securities, Inc., EPIX has not incurred, nor
will it incur, directly or indirectly, any liability for
brokerage or finders’ fees or agents’ commissions or
any similar charges in connection with this Agreement or any
transaction contemplated hereby.
3.10. BOARD APPROVAL. The
Boards of Directors of EPIX and Merger Sub, as of the date of
this Agreement, have approved this Agreement and the Merger. The
Board of Directors of Merger Sub has declared the advisability
of the Agreement and the Merger and recommended to the
stockholders of Merger Sub to approve the Agreement and the
Merger. The Board of Directors of EPIX has approved the issuance
of the EPIX Common Stock in the Merger. The Board of Directors
of EPIX has, as of the date of this Agreement, determined to
recommend that the stockholders of EPIX approve this Agreement
and the Merger and the issuance of the EPIX Common Stock in the
Merger.
3.11. VALID ISSUANCE. The
EPIX Common Stock to be issued in the Merger, when issued in
accordance with the provisions of this Agreement, shall be
validly issued, fully paid and non-assessable, and shall be
issued in compliance with all federal and state securities laws.
3.12. VOTING REQUIREMENTS.
The affirmative vote of the holders of a majority of the voting
power of the outstanding capital stock of EPIX is required to
approve this Agreement, the Merger and the Issuance of the EPIX
Common Stock as a result of the Merger. The affirmative vote of
the holders of a majority of the voting power of the outstanding
capital stock of Merger Sub has approved the Merger.
3.13. FAIRNESS OPINION. The
Board of Directors of EPIX has received the written opinion of
Xxxxxxx & Company, LLC, financial advisor to EPIX,
dated March 30, 2006, to the effect that the consideration
payable by EPIX in the Merger is fair to EPIX and its
stockholders from a financial point of view.
3.14. INTELLECTUAL PROPERTY.
(a) EPIX owns, or has the right to use, sell or license,
and has the right to bring actions for the infringement of, all
intellectual property utilized in its business as presently
conducted, which intellectual property is listed on
Section 3.14 of the EPIX Disclosure Schedule (such
intellectual property and the rights thereto are collectively
referred to herein as the “EPIX IP Rights”),
except for any failure to own or have the right to use, sell or
license that would not reasonably be expected to have a Material
Adverse Effect on EPIX.
(b) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated
hereby will not constitute a breach of any instrument or
agreement governing any EPIX IP Rights (the “EPIX IP
Rights Agreements”), will not cause the forfeiture or
termination or give rise to a right of forfeiture or termination
of any EPIX IP Rights or impair the right of EPIX or the
Surviving Corporation to use, sell or license any EPIX IP Rights
or portion thereof, except for the occurrence of any such
breach, forfeiture, termination or impairment that would not
individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect on EPIX. Each of the EPIX IP
Rights Agreements (i) is valid and binding on EPIX and in
full force and effect; (ii) EPIX has not received any
notice of termination or cancellation under such agreement, or
received any notice of breach or default under such agreement,
which breach has not been cured or waived; and (iii) EPIX,
and to the knowledge of EPIX, any other party to such agreement,
is not in breach or default thereof in any material respect.
(c) (i) Neither the manufacture, marketing, license,
sale or intended use of any product or technology currently
licensed or sold or under development by EPIX violates any
license or agreement between EPIX and any third party or, to the
knowledge of EPIX, infringes any intellectual property right of
any other party; (ii) to the knowledge of EPIX, no third
party is infringing upon, or violating any license or agreement
with EPIX relating to any EPIX IP Rights; and (iii) to the
knowledge of EPIX, there is no pending or threatened claim or
litigation contesting the validity, ownership or right to use,
sell, license or dispose of any EPIX IP Rights, nor has EPIX
received any written notice asserting that any
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EPIX IP Rights or the proposed use, sale, license or disposition
thereof conflicts or will conflict with the rights of any other
party.
(d) EPIX has used reasonable efforts to maintain its
material trade secrets in confidence, including entering into
licenses and contracts that generally require licensees,
contractors and other third persons with access to such trade
secrets to keep such trade secrets confidential and has
otherwise taken reasonable and practicable steps designed to
safeguard and maintain the secrecy and confidentiality of, and
its proprietary rights in, all EPIX IP Rights.
3.15. COMPLIANCE; PERMITS;
RESTRICTIONS.
(a) EPIX is not in conflict with, or in default or
violation of (i) any law, rule, regulation, order, judgment
or decree applicable to it or by which its properties are bound
or affected, or (ii) any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which EPIX is a party or by which
EPIX or its properties are bound or affected, except for any
conflicts, defaults or violations which would not reasonably be
expected to have a Material Adverse Effect on EPIX. No
investigation or review by any governmental or regulatory body
or authority is pending or, to the knowledge of EPIX, threatened
against EPIX, nor has any governmental or regulatory body or
authority indicated to EPIX an intention to conduct the same.
(b) EPIX holds all permits, licenses, variances,
exemptions, orders and approvals from governmental authorities
which are material to the operation of its business
(collectively, the “EPIX Permits”). EPIX is in
compliance with the terms of the EPIX Permits, except where the
failure to so comply would not reasonably be expected to have a
Material Adverse Effect on EPIX. No action, proceeding,
revocation proceeding, amendment procedure, writ, injunction or
claim is pending or, to the knowledge of EPIX, threatened, which
seeks to revoke or limit any EPIX Permit. A true, complete and
correct list of the material EPIX Permits is set forth in
Section 3.15 of the EPIX Disclosure Schedule. The rights
and benefits of each material EPIX Permit will be available to
the Surviving Corporation or its subsidiaries immediately after
the Effective Time on terms substantially identical to those
enjoyed by EPIX immediately prior to the Effective Time.
(c) All products being manufactured, distributed, developed
or tested by or on behalf of EPIX (“EPIX
Products”) that are subject to the jurisdiction of the
FDA are being manufactured, labeled, stored, tested,
distributed, and marketed in compliance in all material respects
with all applicable requirements under the FDCA, the Public
Health Service Act, their applicable implementing regulations,
and all comparable state laws and regulations.
(d) All clinical trials conducted by or on behalf of EPIX
are being conducted in material compliance with the applicable
requirements of Good Clinical Practice, Informed Consent, and
all applicable requirements relating to protection of human
subjects contained in 21 CFR Parts 50, 54, and 56.
(e) All manufacturing operations for EPIX Products
conducted by or for the benefit of EPIX are being conducted in
accordance, in all material respects, with the FDA’s
current Good Manufacturing Practices. In addition, EPIX is in
material compliance with all applicable registration and listing
requirements set forth in 21 U.S.C. Section 360 and
21 CFR Part 207 and all similar applicable laws and
regulations.
(f) Neither EPIX, nor any representative of EPIX, nor, to
the knowledge of EPIX, any of EPIX’s licensees or assignees
of EPIX IP Rights has received any notice that the FDA or any
other Governmental Authority has initiated, or threatened to
initiate, any action to suspend any clinical trial sponsored by
EPIX or otherwise restrict the preclinical research on or
clinical study of any EPIX Product being developed by any
licensee or assignee of EPIX IP Rights based on such
intellectual property, or to recall, suspend or otherwise
restrict the development or manufacture of any EPIX Product.
(g) Neither EPIX, nor, to the knowledge of EPIX, any of its
officers, employees, agents or clinical investigators acting for
EPIX has committed any act, made any statement or failed to make
any statement that would reasonably be expected to provide a
basis for the FDA to invoke its policy with respect to
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“Fraud, Untrue Statements of Material Facts, Bribery, and
Illegal Gratuities” set forth in 56 Fed. Reg. 46191
(September 10, 1991) and any amendments thereof.
Additionally, neither EPIX, nor, to the knowledge of EPIX, any
of its officers, key employees or agents has been convicted of
any crime or engaged in any conduct that would reasonably be
expected to result in (i) debarment under 21 U.S.C.
Section 335a or any similar state law or
(ii) exclusion under 42 U.S.C.
Section 1320a-7 or
any similar state law or regulation.
(h) All animal studies or other preclinical tests performed
as the basis for any regulatory approval required for the EPIX
Products (1) either (x) have been conducted in
accordance, in all material respects, with applicable Good
Laboratory Practice requirements contained in 21 CFR
Part 58, or (y) were not required to be conducted in
accordance with Good Laboratory Practice requirements contained
in 21 CFR Part 58 and (2) have employed the
procedures and controls generally used by qualified experts in
animal or preclinical study of products comparable to those
being developed by EPIX.
(i) EPIX has made available to Predix copies of any and all
written notices of inspectional observations, establishment
inspection reports and any other documents received from the
FDA, that indicate or suggest lack of compliance with the
regulatory requirements of the FDA. EPIX has made available to
Predix for review all correspondence to or from the FDA, minutes
of meetings, written reports of phone conversations, visits or
other contact with the FDA, notices of inspectional
observations, establishment inspection reports, and all other
documents concerning communications to or from the FDA, or
prepared by the FDA or which bear in any way on EPIX’s
compliance with regulatory requirements of the FDA, or on the
likelihood of timing of approval of any EPIX Products.
(j) There are no proceedings pending with respect to a
violation by EPIX of the FDCA, FDA regulations adopted
thereunder, the Controlled Substance Act or any other
legislation or regulation promulgated by any other United States
Governmental Authority.
3.16. LITIGATION. Except as
described in Section 3.16 of the EPIX Disclosure Schedule,
as of the date of this Agreement, there is no action, suit,
proceeding, claim, arbitration or investigation pending, or as
to which EPIX has received any written notice of assertion, nor,
to the knowledge of EPIX, is there any threatened action, suit,
proceeding, claim for arbitration or investigation against EPIX,
which, if adversely determined, would have a Material Adverse
Effect on EPIX.
3.17. EMPLOYEE BENEFIT PLANS.
(a) Section 3.17 of the EPIX Disclosure Schedule lists
all written and describes all non-written employee benefit plans
of ERISA and all bonus, stock or other security option, stock or
other security purchase, stock or other security appreciation
rights, incentive, deferred compensation, retirement or
supplemental retirement, profit sharing, severance, golden
parachute, vacation, cafeteria, dependent care, medical care,
employee assistance program, education or tuition assistance
programs, insurance and other similar fringe or employee benefit
plans, programs or arrangements, and any current or former
employment or executive compensation or severance agreements,
written or otherwise, which are currently sponsored, maintained,
contributed to or entered into for the benefit of, or relating
to, any present or former employee or director of EPIX, or any
trade or business (whether or not incorporated) which is a
member of a controlled group or which is under common control
with Predix within the meaning of Section 414 of the Code
(an “ERISA Affiliate”), whether or not such
plan is terminated (collectively, the “EPIX Employee
Plans”).
(b) With respect to each EPIX Employee Plan, EPIX has
provided to Predix a true and complete copy of, to the extent
applicable, (i) such EPIX Employee Plan, (ii) the most
recent annual reports (Form 5500) as filed with the IRS,
(iii) each trust agreement related to such EPIX Employee
Plan, (iv) the most recent summary plan description for
each EPIX Employee Plan for which such description is required,
along with all summaries of material modifications, amendments,
resolutions and all other material plan documentation related
thereto, (v) the most recent actuarial report relating to
any EPIX Employee Plan subject to Title IV of ERISA and
(vi) the most recent IRS determination letter issued with
respect to any EPIX Employee Plan.
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(c) There are no actions or claims pending (other than
routine claims for benefits), or to the knowledge of EPIX
threatened, against any EPIX Employee Plan or against the assets
of any EPIX Employee Plan, nor are there any current, or to the
knowledge of EPIX threatened, encumbrances or liens on the
assets of any EPIX Employee Plan. Each EPIX Employee Plan which
is intended to be qualified under Section 401(a) of the
Code has received a favorable determination for the IRS covering
the provisions of the Tax Reform Act of 1986 and GUST stating
that such EPIX Employee Plan is so qualified and nothing has
occurred since the date of such letter that could reasonably be
expected to affect the qualified status of such plan. Each EPIX
Employee Plan has been operated in all material respects in
accordance with its terms and the requirements of all applicable
law.
(d) No EPIX Employee Plan is an “employee pension
benefit plan” (within the meaning of Section 3(2) of
ERISA) subject to Title IV of ERISA, and neither EPIX nor
any ERISA Affiliate has ever maintained, contributed to or
partially or fully withdrawn from any such plan. No EPIX
Employee Plan is a Multiemployer Plan or “single-employer
plan under multiple controlled groups” as described in
Section 4063 of ERISA, and neither EPIX nor any ERISA
Affiliate has ever contributed to or had an obligation to
contribute, or incurred any liability in respect of a
contribution, to any Multiemployer Plan. No Predix Employee Plan
is a “multiple employer plan” within the meaning of
Section 413(c) of the Code or Section 3(40) of ERISA.
(e) With respect to the employees and former employees of
EPIX, there are no employee post-retirement medical or health
plans or agreements in effect, except as required by
Section 4980B of the Code or similar state law.
(f) Based on EPIX’s good faith interpretation of the
provisions of Section 409A of the Code and the guidance
issued thereunder, any EPIX Employee Plan that is a
“nonqualified deferred compensation plan” within the
meaning of Section 409A of the Code has been operated in
accordance with the requirements of Section 409A (including
the Notices issued by the IRS thereunder).
3.18. ABSENCE OF LIENS AND
ENCUMBRANCES; CONDITION OF EQUIPMENT. EPIX has good and
valid title to, or, in the case of leased properties and assets,
valid leasehold interests in, all material tangible properties
and assets, real, personal and mixed, necessary for use in its
business, free and clear of any liens or encumbrances except as
reflected in the EPIX Financials and except for (a) liens
for taxes not yet due and payable; (b) liens which secure a
payment not yet due that arises, and is customarily discharged,
in the ordinary course of EPIX’s business; (c) liens
relating to capitalized lease financings or purchase money
financings that have been entered into in the ordinary course of
business and (d) liens arising solely by the action of
Predix (collectively, “Permitted Liens”). Each
of the material tangible assets is in a good state of
maintenance and repair, and in good operating condition (subject
to normal wear and tear) and is suitable for the purposes for
which it presently is used.
3.19. ENVIRONMENTAL MATTERS.
(a) Hazardous Material. No underground
storage tanks and no amount of any Hazardous Materials are
present, as a result of the deliberate actions of EPIX, or, to
EPIX’s knowledge, as a result of any actions of any third
party or otherwise, in, on or under any property, including the
land and the improvements, ground water and surface water
thereof, that EPIX has at any time owned, operated, occupied or
leased.
(b) Hazardous Material Activities. Except as
would not reasonably be expected to have a Material Adverse
Effect on EPIX, EPIX has not engaged in any Hazardous Material
Activities in violation of any rule, regulation, treaty or
statute promulgated by any Governmental Authority in effect
prior to or as of the date hereof to prohibit, regulate or
control Hazardous Materials or any Hazardous Material Activity.
(c) Permits. EPIX currently holds all
environmental approvals, permits, licenses, clearances and
consents (the “EPIX Environmental Permits”)
necessary for the conduct of EPIX’s Hazardous Material
Activities and other businesses of EPIX as such activities and
businesses are currently being conducted, except where the
failure to so hold would not reasonably be expected to have a
Material Adverse Effect on EPIX.
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(d) Environmental Liabilities. No material
action, proceeding, revocation proceeding, amendment procedure,
writ, injunction or claim is pending, or to the knowledge of
EPIX, threatened concerning any EPIX Environmental Permit,
Hazardous Material or any Hazardous Material Activity of EPIX.
3.20. LABOR MATTERS.
(a) Section 3.20 of the EPIX Disclosure Schedule sets
forth a true, complete and correct list of all employees of EPIX
along with their position and actual annual rate of
compensation. All employees have entered into nondisclosure and
assignment of inventions agreements with EPIX, true, complete
and correct copies of which have previously been made available
to Predix. To the knowledge of EPIX, no employee of EPIX is in
violation of any term of any patent disclosure agreement,
non-competition agreement, or any restrictive covenant
(i) to EPIX, or (ii) to a former employer relating to
the right of any such employee to be employed because of the
nature of the business conducted by EPIX or to the use of trade
secrets or proprietary information of others. No key employee or
group of employees has threatened to terminate employment with
EPIX nor, to the knowledge of EPIX (which, for purposes of this
representation only, shall mean actual knowledge), has plans to
terminate such employment. Key employees are listed in
Schedule 4 hereto.
(b) EPIX is not a party to or bound by any collective
bargaining agreement, nor has it experienced any strikes,
grievances, claims of unfair labor practices or other collective
bargaining disputes.
(c) Except as disclosed in Section 3.20 of the EPIX
Disclosure Schedule, EPIX is not a party to any written or oral:
(i) agreement with any current or former employee the
benefits of which are contingent upon, or the terms of which
will be materially altered by, the consummation of the Merger or
other transactions contemplated by this Agreement;
(ii) agreement with any current or former employee of EPIX
providing any term of employment or compensation guarantee
extending for a period longer than one year from the date hereof
or for the payment of compensation in excess of
$100,000 per annum; or (iii) agreement or plan the
benefits of which will be increased, or the vesting of the
benefits of which will be accelerated, upon the consummation of
the Merger.
3.21. AGREEMENTS, CONTRACTS AND
COMMITMENTS. EPIX is not a party to or bound by:
| (a) except as described in Section 3.17 of the EPIX Disclosure Schedule, any bonus, deferred compensation, incentive compensation, pension, profit-sharing or retirement plans, or any other employee benefit plans or arrangements; | |
| (b) except as described in Section 3.17 of the EPIX Disclosure Schedule, any employment or consulting agreement, contract or commitment with any officer or director level employee, not terminable by EPIX on thirty (30) days notice without liability, except to the extent general principles of wrongful termination law may limit EPIX’s ability to terminate employees at will; | |
| (c) except as described in Section 3.17 of the EPIX Disclosure Schedule, any agreement or plan, including, without limitation, any stock option plan, stock appreciation right plan or stock purchase plan, any of the benefits of which will be increased, or the vesting of benefits of which will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement; | |
| (d) any agreement of indemnification or guaranty not entered into in the ordinary course of business other than indemnification agreements between EPIX and any of their officers or directors; | |
| (e) any agreement, contract or commitment containing any covenant limiting the freedom of EPIX to engage in any line of business or compete with any person; | |
| (f) any agreement, contract or commitment relating to capital expenditures and involving future obligations in excess of $25,000 and not cancelable without penalty; |
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| (g) any agreement, contract or commitment currently in force relating to the disposition or acquisition of assets not in the ordinary course of business or any ownership interest in any corporation, partnership, joint venture or other business enterprise; | |
| (h) any mortgages, indentures, loans or credit agreements, security agreements or other agreements or instruments relating to the borrowing of money or extension of credit in excess of $25,000; | |
| (i) any joint marketing or development agreement; | |
| (j) any distribution agreement (identifying any that contain exclusivity provisions); or | |
| (k) any other agreement, contract or commitment (excluding real and personal property leases) which involve payment by EPIX under any such agreement, contract or commitment of $25,000 or more in the aggregate. |
EPIX has not, nor to EPIX’s knowledge has any other party
to an EPIX Contract (as defined below), breached, violated or
defaulted under, or received notice that it has breached,
violated, or defaulted under, any of the terms or conditions of,
or terminated any of the agreements, contracts or commitments to
which EPIX is a party or by which they are bound of the type
described in clauses (a) through (k) above (any such
agreement, contract or commitment, a “EPIX
Contract”) in such manner as would permit any other
party to cancel or terminate any such EPIX Contract, or would
permit any other party to seek damages which would reasonably be
expected to have a Material Adverse Effect on EPIX. As to EPIX,
each EPIX Contract is valid, binding, enforceable and in full
force and effect, except as enforceability may be limited by
bankruptcy and other similar laws and general principles of
equity.
3.22. SEVERANCE PAYMENTS.
Section 3.22 of the EPIX Disclosure Schedule sets forth
each plan or agreement pursuant to which any material amounts
may become payable (whether currently or in the future) to
current or former officers and directors of EPIX as a result of
or in connection with the Merger.
3.23. BOOKS AND RECORDS. The
minute books of EPIX made available to counsel for Predix are
the only minute books of EPIX and contain accurate summaries, in
all material respects, of all meetings of directors (or
committees thereof) and stockholders or actions by written
consent since the time of incorporation of EPIX. The books and
records of EPIX accurately reflect in all material respects the
assets, liabilities, business, financial condition and results
of operations of EPIX and have been maintained in accordance
with good business and bookkeeping practices.
3.24. RESTRICTIONS ON BUSINESS
ACTIVITIES. Other than as contemplated by this Agreement,
there is no agreement, judgment, injunction, order or decree
binding upon or otherwise applicable to EPIX which has, or would
reasonably be expected to have, the effect of prohibiting or
materially impairing (i) any current business practice of
EPIX; or (ii) any acquisition of any person or property by
EPIX.
3.25. REAL PROPERTY LEASES.
Section 3.25 of the EPIX Disclosure Schedule sets forth all
real property leases or subleases to or by EPIX. EPIX has
delivered to Predix true, complete and correct copies of the
leases and subleases (as amended to date) listed in
Section 3.25 of the EPIX Disclosure Schedule. With respect
to each lease and sublease listed in Section 3.25 of the
EPIX Disclosure Schedule:
| (a) As to EPIX, each lease or sublease is legal, valid, binding, enforceable and in full force and effect, except as enforceability may be limited by bankruptcy and other similar laws and general principles of equity; | |
| (b) EPIX is not in breach or violation of, or default under, any such lease or sublease, and no event has occurred, is pending or, to the knowledge of EPIX, is threatened, which, after the giving of notice, with lapse of time, or otherwise, would constitute a breach or default by EPIX or, to the knowledge of EPIX, any other party under such lease or sublease, except as would not reasonably be expected to have a Material Adverse Effect; |
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| (c) EPIX has not assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in any lease or sublease; and | |
| (d) there are no liens, easements, covenants or other restrictions applicable to the real property subject to such lease, except for Permitted Liens. |
3.26. INSURANCE.
(a) Section 3.26(a) of the EPIX Disclosure Schedule
sets forth each insurance policy (including fire, theft,
casualty, general liability, workers compensation, business
interruption, environmental, product liability and automobile
insurance policies and bond and surety arrangements) to which
EPIX is a party (the “EPIX Insurance
Policies”). The EPIX Insurance Policies are in full
force and effect, maintained with reputable companies against
normal losses relating to the business, operations and
properties and such other losses as companies engaged in similar
business as EPIX would, in accordance with good business
practice, customarily insure. All premiums due and payable under
the EPIX Insurance Policies have been paid on a timely basis and
EPIX is in compliance in all material respects with all other
terms thereof. True, complete and correct copies of the EPIX
Insurance Policies have been made available to Predix.
(b) There are no material claims pending as to which
coverage has been questioned, denied or disputed. All material
claims thereunder have been filed in a due and timely fashion
and EPIX has not been refused insurance for which it has applied
or had any policy of insurance terminated (other than at its
request), nor has EPIX received notice from any insurance
carrier that: (i) such insurance will be canceled or that
coverage thereunder will be reduced or eliminated; or
(ii) premium costs with respect to such insurance will be
increased, other than premium increases in the ordinary course
of business applicable on their terms to all holders of similar
policies.
(c) EPIX has made available to Predix accurate and complete
copies of the existing policies (primary and excess) of
directors’ and officers’ liability insurance
maintained by EPIX as of the date of this Agreement.
3.27. CERTAIN BUSINESS
PRACTICES. Neither EPIX nor, to the knowledge of EPIX, any
director, officer, employee or agent of EPIX has: (i) used
any funds for unlawful contributions, gifts, entertainment or
other unlawful payments relating to political activity;
(ii) made any unlawful payment to any foreign or domestic
government official or employee or to any foreign or domestic
political party or campaign or violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or
(iii) made any other unlawful payment.
3.28. SUPPLIERS AND
MANUFACTURERS; EFFECT OF TRANSACTION.
(a) Section 3.28 of the EPIX Disclosure Schedule sets
forth a true, complete and correct list of each supplier and
manufacturer that is the sole supplier or manufacturer of any
material product or service to EPIX. Since the EPIX Balance
Sheet Date, there has not been: (A) any materially adverse
change in the business relationship of EPIX with any supplier or
manufacturer named in the EPIX Disclosure Schedule; or
(B) any change in any material term (including credit
terms) of the sales agreements or related agreements with any
supplier or manufacturer named in Section 3.28 of the EPIX
Disclosure Schedule.
(b) To the knowledge of EPIX, no creditor, supplier,
employee, client, customer or other person having a material
business relationship with EPIX has informed EPIX that such
person intends to materially change its relationship with EPIX
because of the transactions contemplated by this Agreement or
otherwise.
3.29. GOVERNMENT CONTRACTS.
EPIX has not been suspended or debarred from bidding on
contracts with any Governmental Authority, and no such
suspension or debarment has been initiated or threatened. The
consummation of the Merger and other transactions contemplated
by this Agreement will not result in any such suspension or
debarment of EPIX.
3.30. INTERESTED PARTY
TRANSACTIONS. As of the date hereof, no affiliate of EPIX
(a) owns any property or right, tangible or intangible,
which is used in the business of EPIX, (b) has any
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claim or cause of action against EPIX, or (c) owes any
money to, or is owed any money by, EPIX. Except as set forth in
the EPIX SEC Documents, since the date of EPIX’s last proxy
statement filed with the SEC, no event has occurred that would
be required to be reported by EPIX pursuant to Item 404 of
Regulation S-K
promulgated by the SEC.
3.31. REGISTRATION STATEMENT;
JOINT PROXY STATEMENT/ PROSPECTUS. The Registration
Statement shall not at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not
misleading. The Registration Statement shall, as of the time it
becomes effective under the Securities Act be prepared in
accordance with the requirements of the Securities Act and the
rules and regulations of the SEC thereunder applicable thereto.
The information in the Joint Proxy Statement shall not, on the
date the Joint Proxy Statement is first mailed to Predix’s
stockholders, and at the time of the Predix Stockholders’
Meeting, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of
circumstances under which they are made, not false or
misleading; or omit to state any material fact necessary to
correct any statement in any earlier communication with respect
to the solicitation of proxies for the Predix Stockholders’
Meeting which has become false or misleading. The Joint Proxy
Statement will comply as to form in all material respect with
the provisions of the Exchange Act and the rules and regulations
thereunder. If at any time prior to the Effective Time, any
event relating to EPIX or any of its affiliates, officers or
directors should be discovered by EPIX which should be set forth
in an amendment to the Registration Statement or a supplement to
the Joint Proxy Statement, EPIX shall promptly inform Predix,
and EPIX shall promptly commence preparation of such amendment
or supplement in accordance with Section 5.01.
Notwithstanding the foregoing, EPIX makes no representation or
warranty with respect to any information supplied by Predix and
its subsidiaries which is contained in any of the foregoing
documents.
3.32. DISCLOSURE. None of
the representations or warranties of EPIX contained herein and
none of the information contained in the EPIX Disclosure
Schedule is false or misleading in any material respect or omits
to state a fact herein or therein necessary to make the
statements herein or therein, in light of the circumstance in
which they were made, not misleading in any material respect.
ARTICLE IV
CONDUCT OF BUSINESS PENDING THE MERGER
4.1. CONDUCT OF BUSINESS BY
PREDIX. Predix covenants and agrees that between the date
hereof and the earlier of a termination of this Agreement in
accordance with its terms or the Effective Time, Predix shall
not, and shall not permit each of its subsidiaries to, conduct
its business other than in the ordinary course and consistent
with past practice. Without limiting the generality of the
foregoing, Predix shall, and shall cause each of its
subsidiaries to, (i) continue its research and development,
clinical investigation and activities relating to the Predix IP
Rights in accordance with past practice; (ii) use its
commercially reasonable efforts to (A) preserve intact its
business organization, (B) keep available to EPIX the
services of its officers, employees and consultants,
(C) continue in full force and effect without material
modification all existing policies or binders of insurance
currently maintained in respect of Predix or its subsidiaries
and their business and (D) preserve its current
relationships with its clinical investigators, suppliers,
manufacturers and other persons with which it has significant
business relationships; and (iii) not modify, amend, renew
or replace, without providing prior notice to EPIX and receiving
EPIX’s prior written approval, any agreements set forth in
Section 4.1 of the Predix Disclosure Schedule. In addition,
except as set forth in Section 4.1 of the Predix Disclosure
Schedule or as may be reasonably necessary to result in an
Achievement of the Milestone pursuant to
Section 1.8(c)(ii), without the prior written consent of
EPIX, Predix shall not, and shall not permit any of its
subsidiaries to, do any of the following:
| (a) amend or otherwise change its Certificate of Incorporation or Bylaws, or otherwise alter its corporate structure through merger, liquidation, reorganization or otherwise; | |
| (b) sell, pledge, dispose of or encumber any assets (except for (i) sales of assets in the ordinary course of business and (ii) dispositions of obsolete or worthless assets); |
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| (c) issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including, without limitation, any phantom interest) (except for (i) the issuance of options or shares of Predix Common Stock issuable pursuant to employee stock options under the Predix Stock Plans or the Predix Warrants, as the case may be, which in the case of Predix Warrants are outstanding on the date hereof and (ii) actions taken by Predix or its subsidiaries in furtherance of the Merger or the other transactions contemplated hereby, as to which actions Predix or its subsidiaries shall first consult with and obtain written approval from EPIX); | |
| (d) accelerate, amend or change the period of exercisability of options granted under the Predix Stock Plans or the Predix Warrants, as the case may be, or authorize cash payments in exchange for (i) any options granted under the Predix Stock Plans or (ii) the Predix Warrants, except as contemplated by this Agreement; | |
| (e) (i) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, except that a wholly-owned subsidiary may declare and pay a dividend to its parent, (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (iii) amend the terms of, repurchase, redeem or otherwise acquire, or permit any subsidiary to repurchase, redeem or otherwise acquire, any of its securities, or propose to do any of the foregoing (except for (A) the repurchase of shares of restricted stock under, and in accordance with the terms of, the applicable restricted stock agreements, if Predix or its subsidiaries have notified EPIX in writing at least five (5) business days prior to any such repurchase and included in such notification is a description of the circumstances giving rise to, and permitting, such repurchase and (B) transactions in furtherance of the Merger or the other transactions contemplated hereby, as to which actions Predix or its subsidiaries shall first consult with and obtain written approval from EPIX); | |
| (f) sell, transfer, license, sublicense or otherwise dispose of any Predix IP Rights, or amend or modify any existing agreements with respect to any Predix IP Rights; | |
| (g) (i) acquire (by merger, consolidation, or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances in excess of $100,000 except in the ordinary course of business consistent with past practice; (iii) enter into or amend any material contract or agreement and any Predix Contract other than in the ordinary course of business; (iv) authorize any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $100,000, taken as a whole (except pursuant to a capital expenditure budget approved in writing by both parties); or (v) enter into or amend any contract, agreement, commitment or arrangement and any Predix Contract to effect any of the matters prohibited by this Section 4.1(g); | |
| (h) increase the compensation payable or to become payable to its officers, employees or consultants, except for increases in salary or wages of employees who are not officers in accordance with past practices, or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer (except for officers who are terminated on an involuntary basis) or other employee, or establish, adopt, enter into or amend any employee benefit plan, provided, that Predix and its subsidiaries may provide their officers and employees retention bonuses to retain such officer’s or employee’s services through the Effective Time, valued at not more than twenty percent (20%) of such officer’s or employee’s yearly base salary as of the date hereof, payable in cash, stock or an option to purchase stock that becomes payable or vests on or after the Effective Time, if Predix or its subsidiaries have notified EPIX in writing at least five (5) business days prior to granting any such retention bonus and included in such notification is a description of |
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| the circumstances giving rise to such retention bonus, provided, further, that the aggregate value of all retention bonuses granted by Predix shall not exceed $350,000; | |
| (i) take any action, other than as required by GAAP, to change accounting policies or procedures; | |
| (j) make any material tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of any tax; | |
| (k) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in its financial statements, or incurred in the ordinary course of business and consistent with past practice; | |
| (l) enter into any material partnership arrangements, joint development agreements, strategic alliances or collaborations; | |
| (m) except as may be required by law, take any action to terminate or amend any of the Predix Employee Plans other than in connection with the Merger; or | |
| (n) take, or agree in writing or otherwise to take, any of the actions described in Sections 4.1(a) through (m) above, or any action which would make any of the representations or warranties of Predix contained in this Agreement untrue or incorrect or prevent Predix from performing or cause Predix not to perform its covenants hereunder or result in any of the conditions to the Merger set forth herein not being satisfied. | |
| If Predix or its subsidiaries wish to obtain the consent of EPIX to take actions for which prior consent is required pursuant to this Section 4.1, Predix shall request such consent in writing by telecopy to the attention of the Chief Executive Officer of EPIX. A consent signed by either such officer shall be deemed sufficient for purposes hereof. In addition, if EPIX receives such a request but does not respond in writing (which may include an e-mailed response) to such request within five (5) business days after the date the request is telecopied, EPIX shall be deemed to have consented to the requested action for all purposes of this Agreement. |
4.2. MUTUAL NON-SOLICITATION
(a) Without the prior written consent of the other party,
neither Predix and its subsidiaries nor EPIX shall directly or
indirectly through any officer, director, employee,
representative or agent, solicit, encourage, have negotiations
with respect to (including by way of furnishing information) or
take any action that could reasonably be expected to result in
the initiation or submission of any inquiries, proposals or
offers regarding, or approve, endorse or recommend, any
acquisition, merger, take-over bid, sale of substantial assets,
sale of shares of capital stock (including without limitation by
way of a tender offer) or similar transactions (any of the
foregoing inquiries or proposals being referred to herein as an
“Acquisition Proposal”); provided,
however, that (A) prior to the adoption and approval
of this Agreement by the stockholders of EPIX, EPIX may furnish
nonpublic information regarding EPIX to any third party in
response to an EPIX Superior Offer (as defined below) that is
submitted to EPIX by such third party (and not withdrawn) if:
(i) EPIX shall not have breached this Section 4.2;
(ii) the EPIX Board of Directors reasonably concludes in
good faith, after having received the advice of its outside
legal counsel, that not taking such actions would be
inconsistent with the Board of Directors’ fiduciary duties
under applicable law; (iii) EPIX complies with the
provisions of this Section 4.2; and (iv) EPIX receives
from such third party an executed confidentiality agreement
containing provisions at least as favorable to EPIX as those
contained in the Confidentiality Agreement (as defined in
Section 5.3(b) hereof), and (B) prior to the adoption
and approval of this Agreement by the stockholders of Predix,
Predix may furnish nonpublic information regarding Predix to any
third party in response to a Predix Superior Offer (as defined
below) that is submitted to Predix by such third-party (and not
withdrawn) if: (i) Predix shall not have breached this
Section 4.2; (ii) the Predix Board of Directors
reasonably concludes in good faith, after
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having received the advice of its outside legal counsel, that
taking such actions is required in order for the Board of
Directors of Predix to comply with its fiduciary obligations to
Predix’s stockholders under applicable law;
(iii) Predix complies with the provisions of this
Section 4.2; and (iv) Predix receives from such
third-party an executed confidentiality agreement containing
provisions at least as favorable to Predix as those contained in
the Confidentiality Agreement (as defined in Section 5.3(b)
hereof). “EPIX Superior Offer” shall mean an
unsolicited bona fide written offer by a third party to enter
into (i) a merger, consolidation, amalgamation, share
exchange, business combination, issuance of securities,
acquisition of securities, reorganization, recapitalization,
tender offer, exchange offer or other similar transaction or
(ii) a sale, lease, exchange transfer, license, acquisition
or disposition of any business or other disposition of at least
50% of the assets of the party in a single transaction or series
of related transactions that: (a) was not obtained or made
as a direct or indirect result of a breach of (or in violation
of) this Agreement; and (b) is on terms and conditions that
the board of directors of EPIX determines, in its reasonable,
good faith judgment, after obtaining and taking into account
such matters that its board of directors deems relevant
following consultation with its outside legal counsel and
financial advisor: (x) is more favorable, from a financial
point of view, to EPIX’s stockholders than the terms of the
Merger; and (y) is reasonably capable of being consummated.
“Predix Superior Offer” shall mean an
unsolicited bona fide written offer by a third party to enter
into a merger, consolidation, amalgamation, share exchange,
business combination, issuance of securities, acquisition of
securities, reorganization, recapitalization, tender offer,
exchange offer, or sale, lease, exchange transfer, license,
acquisition or disposition of assets, or other similar
transaction that would, if consummated, result in the
acquisition of all, but not less than all, of the issued and
outstanding shares of Predix capital stock or all, or
substantially all, of the assets of Predix and its subsidiaries
on a consolidated basis, and that (a) was not obtained or
made as a direct or indirect result of a breach of (or in
violation of) this Agreement; and (b) is on terms and
conditions that the Board of Directors of Predix determines, in
its reasonable, good faith judgment, after obtaining and taking
into account such matters that its board of directors deems
relevant following consultation with its outside legal counsel
and financial advisor: (x) is more favorable, from a
financial point of view, to Predix’s stockholders than the
terms of the Merger; (y) is not conditioned upon obtaining
additional financing or any regulatory approvals, or subject to
any additional conditions beyond those contemplated by this
Agreement; and (z) is reasonably capable of being
consummated.
(b) Both Predix (and its subsidiaries) and EPIX shall
immediately notify the other after receipt of any Acquisition
Proposal or any request for nonpublic information relating to it
or its subsidiaries in connection with an Acquisition Proposal
or for access to its properties, books or records by any person
or entity that informs its Board of Directors that it is
considering making, or has made, an Acquisition Proposal. Such
notice shall be made orally and in writing and shall indicate in
reasonable detail the identity of the offeror and the terms and
conditions of such proposal, inquiry or contact.
(c) Both Predix (and its subsidiaries) and EPIX shall
immediately cease and cause to be terminated any existing
discussions or negotiations with any other parties conducted
heretofore with respect to any acquisition, merger, take-over
bid, sale of substantial assets, sale of shares of capital stock
(including without limitation by way of a tender offer) or
similar transactions. Predix and EPIX agree not (and Predix
shall not permit its subsidiaries), to release any third party
from any confidentiality or standstill agreement to which it (or
its subsidiaries) is a party.
(d) Notwithstanding anything to the contrary contained in
this Agreement, (i) the obligation of EPIX to call, give
notice of, convene and hold the EPIX Stockholders’ Meeting
shall not be limited or otherwise affected by the commencement,
disclosure, announcement or submission to EPIX of any EPIX
Superior Offer with respect to it, and (ii) the obligation
of Predix to call, give notice of, convene and hold the Predix
Stockholders’ Meeting shall not be limited or otherwise
affected by the commencement, disclosure, announcement or
submission to Predix of any Predix Superior Offer with respect
to it.
(e) Both Predix (and its subsidiaries) and EPIX shall
ensure that the officers, directors and employees and any
investment banker or other retained advisor or representative
are aware of the restrictions described in this Section, and
shall be responsible for any breach of this Section 4.2 by
such officers, directors, employees, bankers, advisors and
representatives.
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4.3. CONDUCT OF BUSINESS BY
EPIX. EPIX covenants and agrees that between the date hereof
and the earlier of a termination of this Agreement in accordance
with its terms or the Effective Time, EPIX shall not conduct its
business other than in the ordinary course and consistent with
past practice. Without limiting the generality of the foregoing,
EPIX shall (i) continue its research and development,
clinical investigation and activities relating to the EPIX IP
Rights in accordance with past practice; (ii) use its
commercially reasonable efforts to (A) preserve intact its
business organization, (B) keep available to Predix the
services of its officers, employees and consultants,
(C) continue in full force and effect without material
modification all existing policies or binders of insurance
currently maintained in respect of EPIX and its business and
(D) preserve its current relationships with its clinical
investigators, suppliers, manufacturers and other persons with
which it has significant business relationships; and
(iii) not modify, amend, renew or replace, without
providing prior notice to Predix and receiving Predix’s
prior written approval, any agreements set forth in
Section 4.3 of the EPIX Disclosure Schedule. In addition,
except as provided in Section 4.3 of the EPIX Disclosure
Schedule, without the prior written consent of Predix, EPIX
shall not do any of the following:
| (a) amend or otherwise change its Certificate of Incorporation or By-Laws, or otherwise alter its corporate structure through merger, liquidation, reorganization or otherwise (other than the appointment of up to two (2) additional members of the Board of Directors); | |
| (b) sell, pledge, dispose of or encumber any assets (except for (i) sales of assets in the ordinary course of business and (ii) dispositions of obsolete or worthless assets); | |
| (c) issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including, without limitation, any phantom interest) (except for (i) the issuance of shares of EPIX Common Stock issuable pursuant to the exercise of employee stock options outstanding on the date of this Agreement under the EPIX Stock Plans or pursuant to purchase rights under the EPIX ESPP, and (ii) actions taken by EPIX in furtherance of the Merger or the other transactions contemplated hereby, as to which actions EPIX shall first consult with and obtain written approval from Predix); | |
| (d) accelerate, amend or change the period of exercisability of options granted under the EPIX Stock Plans or authorize cash payments in exchange for any options granted under the EPIX Stock Plans except as contemplated by this Agreement; | |
| (e) (i) declare, set aside, make or pay any dividend or other distribution (whether in case, stock or property or any combination thereof) in respect of any of its capital stock, (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (iii) amend the terms of, repurchase, redeem or otherwise acquire, any of its securities, or propose to do any of the foregoing (except for (A) the repurchase of shares of restricted stock under, and in accordance with the terms of, the applicable restricted stock agreements, if EPIX has notified Predix in writing at least five (5) business days prior to any such repurchase and included in such notification is a description of the circumstances giving rise to, and permitting, such repurchase and (B) transactions in furtherance of the Merger or the other transactions contemplated hereby, as to which actions EPIX shall first consult with and obtain written approval from Predix); | |
| (f) sell, transfer, license, sublicense or otherwise dispose of any EPIX IP Rights, or amend or modify any existing agreements with respect to any EPIX IP Rights; | |
| (g) (i) acquire (by merger, consolidation, or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances in excess of $100,000 except in the ordinary course of business consistent with past practice; |
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| (iii) enter into or amend any material contract or agreement other than in the ordinary course of business; (iv) authorize any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $100,000, taken as a whole (except pursuant to a capital expenditure budget approved in writing by both parties); or (v) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 4.3(g); | |
| (h) increase the compensation payable or to become payable to its officers, employees or consultants, except for increases in salary or wages of employees who are not officers in accordance with past practices, or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer (except for officers who are terminated on an involuntary basis) or other employee, or establish, adopt, enter into or amend any employee benefit plan, provided, that EPIX may provide its officers and employees retention bonuses to retain such officer’s or employee’s services through the Effective Time, valued at not more than twenty percent (20%) of such officer’s or employee’s yearly base salary as of the date hereof, payable in cash, stock or an option to purchase stock that becomes payable or vests on or after the Effective Time, if EPIX has notified Predix in writing at least five (5) business days prior to granting any such retention bonus, provided, further, that the aggregate value of all retention bonuses granted by EPIX shall not exceed $350,000; | |
| (i) take any action, other than as required by GAAP, to change accounting policies or procedures; | |
| (j) make any material tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of any tax; | |
| (k) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in its financial statements, or incurred in the ordinary course of business and consistent with past practice; | |
| (l) enter into any material partnership arrangements, joint development agreements, strategic alliances or collaborations; | |
| (m) except as may be required by law, take any action to terminate or amend any of EPIX’s employee benefit plans (as defined in Section 3(3) of ERISA) other than in connection with the Merger; or | |
| (n) take, or agree in writing or otherwise to take, any of the actions described in Sections 4.3(a) through (m), or any action which would make any of the representations or warranties of EPIX contained in this Agreement untrue or incorrect or prevent EPIX from performing or cause EPIX not to perform its covenants hereunder or result in any of the conditions to the Merger set forth herein not being satisfied. | |
| If EPIX wishes to obtain the consent of Predix to take actions for which prior consent is required pursuant to this Section 4.3, it shall request such consent in writing by telecopy to the attention of the Chief Executive Officer and the Chief Financial Officer of Predix. A consent signed by such officer shall be deemed sufficient for purposes hereof. In addition, if Predix receives such a request but does not respond in writing (which may include an e-mailed response) to such request within five (5) business days after the date the request is telecopied, Predix shall be deemed to have consented to the requested action for all purposes of this Agreement. |
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ARTICLE V
ADDITIONAL AGREEMENTS
5.1. JOINT PROXY STATEMENT/
PROSPECTUS; REGISTRATION STATEMENT; OTHER. As promptly as
practicable after the execution of this Agreement, EPIX and
Predix will cooperate to prepare and file the Joint Proxy
Statement with the SEC, and EPIX will prepare and file with the
SEC the Registration Statement in which the Joint Proxy
Statement will be included as a prospectus. Each of EPIX and
Predix will respond to any comments of the SEC and will use its
commercially reasonable efforts to cause the Registration
Statement to be declared effective under the Securities Act as
promptly as practicable after such filing and will cause the
Joint Proxy Statement to be mailed to its stockholders at the
earliest practicable time. As promptly as practicable after the
execution of this Agreement, EPIX and Predix will prepare and
file any other filings required under the Exchange Act, the
Securities Act or any other federal or state securities laws
relating to the Merger and the transactions contemplated by this
Agreement, (collectively, the “Other Filings”).
Predix will cooperate with all reasonable requests of EPIX in
connection with the preparation, filing and response to comments
on the Registration Statement, Joint Proxy Statement and Other
Filings. Each party will notify the other party promptly upon
the receipt of any comments from the SEC or its staff and of any
request by the SEC or its staff or any other governmental
officials for amendments or supplements to the Registration
Statement, the Joint Proxy Statement or any Other Filing or for
additional information and will supply the other party with
copies of all correspondence between such party or any of its
representatives, on the one hand, and the SEC, or its staff or
other government officials, on the other hand, with respect to
the Registration Statement, the Joint Proxy Statement, the
Merger or any Other Filing. The Joint Proxy Statement, the
Registration Statement and the Other Filings will comply in all
material respects with all applicable requirements of law and
the rules and regulations promulgated thereunder. Whenever any
event occurs which is required to be set forth in an amendment
or supplement to the Joint Proxy Statement, the Registration
Statement or any Other Filing, EPIX or Predix, as the case may
be, will promptly inform the other party of such occurrence and
cooperate in filing with the SEC or its staff or any other
government officials, and/or mailing to stockholders of EPIX and
Predix, such amendment or supplement. The Joint Proxy Statement
will also include the recommendations of (i) the Board of
Directors of EPIX in favor of approval of this Agreement, the
Merger and the issuance of shares of EPIX Common Stock in the
Merger (except that the Board of Directors of EPIX may withdraw,
modify or refrain from making such recommendation if the EPIX
Board of Directors reasonably concludes in good faith, after
having received the advice of its outside legal counsel, that
not taking such actions would be inconsistent with the Board of
Directors’ fiduciary duties under applicable law) and
(ii) the Board of Directors of Predix in favor of approval
of this Agreement and the Merger, provided, however, that the
Board of Directors of Predix may withdraw, modify or refrain
from making such recommendation only if: (1) Predix has
received an unsolicited bona fide written Predix Superior Offer,
(2) Predix has notified EPIX, at least seven (7) days
in advance of the date upon which it intends to withdraw or
effect a change in its recommendation to Predix’s
stockholders specifying the material terms and conditions of
such Predix Superior Offer and furnishing to EPIX complete and
unredacted copies of any relevant proposed transaction term
sheets, letters of intent or agreements with the party making
such Predix Superior Offer and any other material documents
received by it or its representatives, (3) Predix, prior to
effecting such a withdrawal or change in recommendation, has
negotiated, and has caused its financial and legal advisors to
negotiate with EPIX i n good faith for ten (10) days to
make such adjustments in the terms and conditions of this
Agreement such that such Predix Superior Offer would no longer
constitute a Predix Superior Offer, (4) Predix’s Board
of Directors has considered such adjustments in the terms and
conditions of this Agreement resulting from such negotiations,
and has concluded in good faith, based upon consultation with
its financial advisors and with Predix’s outside legal
counsel, that such proposal for a Predix Superior Offer remains
a Predix Superior Offer even after giving effect to the
adjustments proposed during such negotiations with EPIX, and
(5) the Predix Board of Directors reasonably concludes in
good faith, after having received the advice of its outside
legal counsel, that taking such actions is required in order for
the Board of Directors of Predix to comply with its fiduciary
obligations to Predix’s stockholders under applicable law.
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5.2. MEETINGS OF
STOCKHOLDERS. Promptly after the date hereof, Predix will
take all action necessary in accordance with Delaware Law and
its Certificate of Incorporation and Bylaws to convene the
Predix Stockholders’ Meeting to consider the approval of
this Agreement and the Merger as promptly as practicable, and in
any event within twenty (20) days after the declaration of
effectiveness of the Registration Statement, for the purpose of
voting upon this Agreement and the Merger. Promptly after the
date hereof, EPIX will take all action necessary in accordance
with Delaware Law and its Certificate of Incorporation and
Bylaws to convene the EPIX Stockholders’ Meeting to be held
as promptly as practicable, and in any event within twenty
(20) days after the declaration of effectiveness of the
Registration Statement, for the purpose of (i) voting upon
this Agreement and the Merger and (ii) the issuance of
shares of EPIX Common Stock by virtue of the Merger. EPIX and
Predix will each use its commercially reasonable efforts to
solicit from its stockholders proxies in favor of the approval
of the foregoing proposals and to take all other action
necessary or advisable to secure the vote or consent of their
respective stockholders required by the rules of the SEC, the
National Association of Securities Dealers, Inc. or Delaware
Law, as applicable, to obtain such approvals, except,
(i) in the case of EPIX, if the Board of Directors of EPIX
reasonably concludes in good faith, after having received the
advice of its outside legal counsel, that taking such actions
would be inconsistent with the Board of Directors’
fiduciary duties under applicable law, and (ii) in the case
of Predix, Predix has taken the actions set forth in the last
sentence of Section 5.1. EPIX may also include proposals
for the ratification of its independent auditors and election of
directors for approval at the EPIX stockholder meeting, and
other matters as may be mutually agreed upon by EPIX and Predix.
5.3. ACCESS TO INFORMATION;
CONFIDENTIALITY.
(a) Upon reasonable notice and subject to restrictions
contained in confidentiality agreements to which such party is
subject, Predix and EPIX shall each afford to the officers,
employees, accountants, counsel and other representatives of the
other, reasonable access, during the period prior to the
Effective Time, to all its and its subsidiaries’
properties, books, contracts, commitments and records and,
during such period, Predix and EPIX each shall furnish promptly
to the other all information concerning its and its
subsidiaries’ business, properties and personnel as such
other party may reasonably request, and each shall make
available to the other the appropriate individuals (including
attorneys, accountants and other professionals) for discussion
of the other’s business, properties and personnel as either
party may reasonably request.
(b) Each party shall keep such information confidential in
accordance with the terms of the confidentiality agreement dated
October 28, 2005 (the “Confidentiality
Agreement”) between EPIX and Predix. This
Section 5.3(b) shall survive the termination of this
Agreement.
5.4. CONSENTS; APPROVALS.
Merger Sub, Predix and its subsidiaries and EPIX shall each use
their commercially reasonable efforts to obtain all consents,
waivers, approvals, authorizations or orders (including, without
limitation, all United States and foreign governmental and
regulatory rulings and approvals), and each party shall make all
filings (including, without limitation, all filings with
United States and foreign governmental or regulatory
agencies) required in connection with the authorization,
execution and delivery of this Agreement by each respective
party and the consummation by them of the transactions
contemplated hereby. Predix and EPIX shall furnish all
information required to be included in the Joint Proxy Statement
and the Registration Statement, or for any application or other
filing to be made pursuant to the rules and regulations of any
United States, or foreign governmental body in connection with
the transactions contemplated by this Agreement. As soon as
practicable following the date hereof, EPIX and Predix and its
subsidiaries will each use its commercially reasonable efforts
to obtain all material consents, waivers and approvals under any
of its or its subsidiaries’ agreements, contracts, licenses
or leases required to be obtained in connection with the
consummation of the Merger and the other transactions
contemplated herein. In addition, Merger Sub, Predix and its
subsidiaries and EPIX shall use commercially reasonable efforts
to file or otherwise submit, as soon as practicable after the
date of this Agreement, all applications, notices, reports and
other documents reasonably required to be filed by such party
with or otherwise submitted by such party to any Governmental
Authority with respect to the Merger and to submit promptly any
additional information requested by any such Governmental
Authority. Without limiting the generality of
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the foregoing, Merger Sub, Predix and EPIX shall, promptly after
the date of this Agreement, prepare and file, if any,
(i) the notification and report any forms required to be
filed under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended (the “HSR Act”),
and (ii) as promptly as practicable thereafter respond in
compliance with any inquiries or requests received from the
Federal Trade Commission or the Department of Justice for
additional information or documentation and any inquiries or
requests received from any state attorney general, foreign
antitrust or competition authority or other Governmental
Authority in connection with antitrust or competition matters.
Each of EPIX and Predix will notify the other promptly upon
receipt of (i) any comments from any officials of any
Governmental Authority in connection with any filings made
pursuant hereto and (ii) any request by any officials of
any Governmental Authority for amendments or supplements to any
filings made pursuant to, or information provided to comply in
all material respects with, any legal requirements. Whenever any
event occurs that is required to be set forth in an amendment or
supplement to any filing made pursuant to this Section 5.4,
EPIX or Predix, as the case may be, will promptly inform the
other of such occurrence and cooperate in filing with the
applicable Governmental Authority such amendment of supplement.
EPIX and Predix agree that the costs and expenses incurred by
each party in connection with complying with this
Section 5.4 with respect to seeking and obtaining approval
of the transactions contemplated by this Agreement under the HSR
Act shall be borne by EPIX. For purposes of this Agreement,
“Governmental Authority” shall mean any
governmental or administrative agency, authority, department,
commission, instrumentality, board, bureau, court or arbitration
tribunal of the United States, any domestic state, locality or
any foreign country, and any political subdivision or agency
thereof, and includes any authority having governmental or
quasi-governmental powers, including any administrative agency
or commission, and any Self-Regulatory Organization, as defined
in Section 3(a)(26) of the Exchange Act.
5.5. STOCK OPTIONS AND
WARRANTS.
(a) At the Effective Time, Predix’s obligations with
respect to each outstanding option to purchase shares of Predix
Common Stock (each, a “Predix Option” and
collectively, the “Predix Options”) under the
Predix Stock Plans, whether vested or unvested, will be assumed
by EPIX. Each Predix Option so assumed by EPIX under this
Agreement shall be subject to substantially the same terms and
conditions set forth in the Predix Stock Plans (which plans
shall be adopted upon substantially the same terms and
conditions by EPIX) or agreement pursuant to which such Predix
Option was issued as in effect immediately prior to the
Effective Time, except as follows (A) (i) such Predix
Option will be exercisable for that number of shares of EPIX
Common Stock equal to the product of the number of shares of
Predix Common Stock that were purchasable under such Predix
Option immediately prior to the Effective Time multiplied by the
Exchange Ratio, rounded down to the nearest whole number
of shares of EPIX Common Stock, and (ii) the per share
exercise price for the shares of EPIX Common Stock issuable upon
exercise of such assumed Predix Option will be equal to the
quotient determined by dividing the exercise price per share of
Predix Common Stock at which such Predix Option was exercisable
immediately prior to the Effective Time by the Exchange Ratio,
and rounding the resulting exercise price up to the nearest
whole cent and (B) each Predix Option shall entitle the
holder thereof at the Effective Time the right to receive in
cash such holder’s pro rata portion of the Milestone
Payment in accordance with Section 1.8. Following the
Effective Time, EPIX will send to the holders of the assumed
Predix Options a written notice setting forth (i) the
number of shares of EPIX Common Stock that are subject to such
assumed Predix Option, and (ii) the exercise price per
share of EPIX Common Stock issuable upon exercise of such
assumed Predix Option. In addition, EPIX shall file with the
SEC, no later than ninety (90) days after the Effective
Time, a registration statement on
Form S-8
registering the exercise of any Predix Options issued under the
Predix Stock Plans assumed by EPIX pursuant to this
Section 5.5 (to the extent the exercise of such options is
eligible to be registered using a
Form S-8
registration statement).
(b) EPIX and Predix shall take all action that may be
reasonably necessary to effectuate the provisions of this
Section 5.5. The Predix Options assumed by EPIX shall
retain their existing vesting schedules following the Effective
Time.
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(c) It is the intention of the parties that Predix Options
assumed by EPIX qualify following the Effective Time as
incentive stock options as defined in the Code
(“ISO’s”) to the extent such Predix
Options qualified as ISO’s prior to the Effective Time.
(d) At the Effective Time, Predix’s obligations with
respect to each Predix Warrant will be assumed by EPIX. Each
Predix Warrant so assumed by EPIX under this Agreement shall be
subject to substantially the same terms and conditions set forth
in the warrant or agreement pursuant to which such Predix
Warrant was issued as in effect immediately prior to the
Effective Time, except as follows (A) (i) such Predix
Warrant will be exercisable for that number of shares of EPIX
Common Stock equal to the product of the number of shares of
Predix Common Stock that were purchasable under such Predix
Warrant immediately prior to the Effective Time, or in the case
of a Predix Warrant exercisable for Predix Preferred Stock that
number of shares of Predix Common Stock the Predix Preferred
Stock issuable upon exercise of such Predix Warrant was
convertible into immediately prior to the Effective Time,
multiplied by the Exchange Ratio, rounded down to the nearest
whole number of shares of EPIX Common Stock, and (ii) the
per share exercise price for the shares of EPIX Common Stock
issuable upon exercise of such PURCHASE Warrant will be equal to
the quotient determined by dividing the exercise price per share
of Predix Common Stock or Predix Preferred Stock, as the case
may be, at which such Predix Warrant was exercisable immediately
prior to the Effective Time by the Exchange Ratio, and rounding
the resulting exercise price up to the nearest whole cent and
(B) each Predix Warrant shall entitle the holder thereof at
the Effective Time the right to receive in cash such
holder’s pro rata portion of the Milestone Payment in
accordance with Section 1.8.
(e) EPIX will reserve sufficient shares of EPIX Common
Stock for issuance under this Section 5.5.
5.6. PREDIX AFFILIATE
AGREEMENTS. Set forth in Section 5.6 of the Predix
Disclosure Schedule is a list of those persons who may be deemed
to be, in Predix’s reasonable judgment, affiliates of
Predix within the meaning of Rule 145 promulgated under the
Securities Act (a “Predix Affiliate”). Predix
will provide EPIX with such information and documents as EPIX
reasonably requests for purposes of reviewing such list. Predix
will use its commercially reasonable efforts to deliver or cause
to be delivered to EPIX prior to the Effective Time from each
Predix Affiliate an executed affiliate agreement in
substantially the form of Exhibit C hereto (the
“Predix Affiliate Agreement”), each of which
will be in full force and effect as of the Effective Time. EPIX
will be entitled to place appropriate legends on the certificate
evidencing any EPIX Common Stock to be received by a Predix
Affiliate pursuant to the terms of this Agreement, and to issue
appropriate stop transfer instructions to the transfer agent for
the EPIX Common Stock, consistent with the terms of the Predix
Affiliate Agreement.
5.7. LOCKUP AGREEMENTS. Each
member of Predix’s management, each of Predix’s
directors, the Chairman of the Board of Directors of EPIX and
each Predix stockholder set forth on Schedule 5
hereto shall execute a lockup agreement, in substantially the
form of Exhibit D hereto (the “Lockup
Agreement”), each of which will be in full force and
effect as of the Effective Time. EPIX will be entitled to place
appropriate legends on the certificate evidencing any EPIX
Common Stock to be received by the persons and entities set
forth on Schedule 5 hereto and to issue appropriate
stop-transfer instructions to the transfer agent for the EPIX
Common Stock, consistent with the terms of the Lockup Agreement.
5.8. INDEMNIFICATION AND
INSURANCE.
(a) From and after the Effective Time, the Surviving
Corporation will fulfill and honor in all respects the
obligations of Predix which exist prior to the date hereof to
indemnify Predix’s present and former directors, officers,
employees and their heirs, executors and assigns. The
Certificate of Incorporation and Bylaws of the Surviving
Corporation will contain provisions with respect to
indemnification and elimination of liability for monetary
damages set forth in Predix’s Certificate of Incorporation
and Bylaws on the date hereof, which provisions will not be
amended, repealed or otherwise modified for a period of six
(6) years from the Effective Time in any manner that would
adversely affect the rights thereunder of individuals who, at
the Effective Time, were directors, officers, employees or
agents of Predix, unless such modification is required by law
and then only to the minimum extent required by such law.
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(b) After the Effective Time the Surviving Corporation
will, to the fullest extent permitted under applicable law or
under the Surviving Corporation’s Certificate of
Incorporation or Bylaws, indemnify and hold harmless, each
present and former director, officer or employee of Predix and
his or her heirs, executors and assigns (collectively, the
“Indemnified Parties”) against any costs or
expenses (including attorneys’ fees), judgments, fines,
losses, claims, damages, liabilities and amounts paid in
settlement in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or pertaining to
the transactions contemplated by this Agreement or otherwise
pertaining to any action or omission in his or her capacity as a
director, officer, employee or agent of Predix occurring prior
to the Effective Time to the same extent as provided in
Predix’s Certificate of Incorporation and Bylaws or any
applicable contract or agreement as in effect on the date hereof
and disclosed on Section 5.8(b) of the Predix Disclosure
Schedule, in each case for a period of six (6) years after
the Effective Time. In the event of any such claim, action,
suit, proceeding or investigation (whether arising before or
after the Effective Time) and subject to the specific terms of
any indemnification contract, (i) any counsel retained by
the Indemnified Parties for any period after the Effective Time
will be reasonably satisfactory to the Surviving Corporation,
(ii) after the Effective Time, the Surviving Corporation
will pay the reasonable fees and expenses of such counsel,
promptly after statements therefor are received and
(iii) the Surviving Corporation will cooperate in the
defense of any such matter; provided, however,
that the Surviving Corporation will not be liable for any
settlement effected without its prior written consent (which
consent will not be unreasonably withheld); and provided,
further, that, in the event that any claim or claims for
indemnification are asserted or made within such six-year
period, all rights to indemnification in respect of any such
claim or claims will continue until the disposition of any and
all such claims. The Indemnified Parties as a group may retain
only one law firm to represent them in each applicable
jurisdiction with respect to any single action unless there is,
under applicable standards of professional conduct, a conflict
on any significant issue between the positions of any two or
more Indemnified Parties, in which case each Indemnified Party
which respect to whom such a conflict exists (or group of such
Indemnified Parties who among them have no such conflict) may
retain one separate law firm in each applicable jurisdiction.
(c) Predix shall use commercially reasonable efforts, after
consultation with EPIX, to negotiate and secure a
“tail” on its existing Directors, Officers and Company
Liability insurance policies for a period of six (6) years,
at a total cost not to exceed $25,000 per year of coverage,
which cost shall be paid by EPIX.
(d) From and after the Effective Time, EPIX shall
unconditionally guarantee the timely payment of all funds owing
by, and the timely performance of all other obligations of, the
Surviving Corporation under this Section 5.8 if requested
to do so by the Surviving Corporation and if legally permitted
to do so.
(e) This Section 5.8 will survive any termination of
this Agreement and the consummation of the Merger at the
Effective Time, is intended to benefit Predix, the Surviving
Corporation and the Indemnified Parties, and will be binding on
all successors and assigns of the Surviving Corporation and
shall be enforceable by the Indemnified Parties.
(f) Nothing contained in this Section 5.8 is intended
to limit in any manner and at any time rights that any
Indemnified Party may have under and in accordance with all
provisions of Predix’s Certificate of Incorporation and
Bylaws, which rights shall survive the Effective Time and shall
be binding on the Surviving Corporation and all successors and
assigns of the Surviving Corporation, in accordance with their
respective terms.
5.9. NOTIFICATION OF CERTAIN
MATTERS.
(a) Predix shall give prompt notice to EPIX, and EPIX shall
give prompt notice to Predix, of (i) the occurrence, or
non-occurrence, of any event the occurrence or non-occurrence of
which would be likely to cause any representation or warranty
contained in this Agreement to be materially untrue or
inaccurate, and (ii) any failure of Predix or EPIX, as the
case may be, materially to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of
any notice pursuant to this Section shall not limit or otherwise
affect the remedies available hereunder to the party receiving
such notice; and provided, further, that failure
to give such notice shall
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not be treated as a breach of covenant for the purposes of
Sections 6.2(a) and (b) and 6.3(a) and (b) unless
the failure to give such notice results in material prejudice to
the other party.
(b) Each of Predix and EPIX shall give prompt notice to the
other of: (i) any notice or other communication from any
person alleging that the consent of such person is or may be
required in connection with the Merger or other transactions
contemplated by this Agreement; (ii) any notice or other
communication from any Governmental Authority in connection with
the Merger or other transactions contemplated by this Agreement;
(iii) any litigation relating to or involving or otherwise
affecting Predix, its subsidiaries or EPIX that relates to the
Merger or other transactions contemplated by this Agreement;
(iv) the occurrence of a default or event that, with notice
or lapse of time or both, is reasonably likely to become a
default under a Predix Contract; and (v) any change that
would be considered reasonably likely to result in a Material
Adverse Effect, or is likely to impair in any material respect
the ability of either Predix or EPIX to consummate the
transactions contemplated by this Agreement.
5.10. FURTHER ACTION. Upon
the terms and subject to the conditions hereof, each of the
parties hereto in good faith shall use all commercially
reasonable efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all other things necessary,
proper or advisable to consummate and make effective as promptly
as practicable the transactions contemplated by this Agreement,
to obtain in a timely manner all necessary waivers, consents and
approvals and to effect all necessary registrations and filings,
and to otherwise satisfy or cause to be satisfied all conditions
precedent to its obligations under this Agreement.
5.11. PUBLIC ANNOUNCEMENTS.
EPIX and Predix shall consult with each other before issuing any
press release or otherwise making any public statements with
respect to the Merger or this Agreement and shall not issue any
such press release or make any such public statement without the
prior consent of the other parties, which shall not be
unreasonably withheld or delayed; provided,
however, that, on the advice of legal counsel, EPIX may
comply with any SEC requirements under the Securities Act or
Exchange Act which requires any public disclosure, without the
consent of Predix.
5.12. LISTING OF EPIX COMMON
STOCK. EPIX shall use its reasonable best efforts to cause
the shares of EPIX Common Stock to be issued in the Merger to be
approved for listing on the NASDAQ prior to the Effective Time.
5.13. CONVEYANCE TAXES. EPIX
and Predix shall cooperate in the preparation, execution and
filing of all returns, questionnaires, applications or other
documents regarding any real property transfer or gains, sales,
use, transfer, value added, stock transfer and stamp taxes, any
transfer, recording, registration and other fees, and any
similar taxes which become payable in connection with the
transactions contemplated hereby that are required or permitted
to be filed on or before the Effective Time. EPIX shall pay all
such taxes and fees.
5.14. TAX-FREE
REORGANIZATION. Notwithstanding anything herein to the
contrary, each of Merger Sub, EPIX and Predix shall use
reasonable best efforts to cause the Merger to qualify, and will
not take any actions, or fail to take any action, which could
reasonably be expected to prevent the Merger from qualifying as
a reorganization under the provisions of Section 368(a) of
the Code. Merger Sub shall, and shall cause the Surviving
Corporation and EPIX to, report, to the extent required by the
Code or the regulations thereunder, the Merger for United States
federal income tax purposes as a reorganization within the
meaning of Section of 368(a) of the Code. EPIX and Predix will
each make available to the other party and their respective
legal counsel copies of all returns requested by the other party.
5.15. BOARD OF DIRECTORS AND
OFFICERS OF EPIX. The Board of Directors of EPIX shall cause
EPIX’s Board of Directors, immediately after the Effective
Time, to consist of no more than nine persons, and with respect
to such Board of Directors: (i) to appoint four Predix
nominees, which shall include Xxxxxxxxx Xxxxx, Xxxxxxx
Xxxxxxxx, M.D., Ph.D., Xxxxxxx X. Xxxxxxx, Ph.D.
and Xxx X. Xxxxx, (the “Predix Nominees”),
(ii) to appoint five EPIX nominees, which may include
EPIX’s directors immediately prior to the Effective Time.
In addition, EPIX shall cause the Chief Executive Officer of
Predix immediately prior to the Effective Time to be the Chief
Executive Officer of EPIX immediately
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after the Effective Time pursuant to an employment agreement
upon mutually agreeable terms and conditions.
5.16. ACTIONS BY EPIX AND MERGER
SUB. From and after the Effective Time, all action necessary
in connection with the implementation of this Agreement on
behalf of EPIX and Merger Sub or the settlement of any dispute,
including, without limitation, with regard to matters pertaining
to the indemnification provisions of this Agreement and all
additional action as is contemplated to be taken by or on behalf
of the EPIX and Merger Sub by the terms of this Agreement,
including the determination of whether there is an Achievement
of the Milestone pursuant to Section 1.8(c) and whether to
make the Milestone Payment in cash, shares of EPIX Common Stock
or a combination thereof pursuant to Section 1.8(d), shall
be taken only with the approval or upon the direction of a
majority of the members of the Board of Directors of EPIX that
are not Predix Nominees or were not members of the Board of
Directors of Predix before the Effective Time.
5.17. EMPLOYEE BENEFITS;
SEVERANCE PAYMENTS. If at any time between the Effective
Time and the twelve (12) month anniversary of the Effective
Time, EPIX, the Surviving Corporation or their subsidiaries
causes a Continuing Employee (as defined in
Schedule 6 hereto) (other than those employees
specifically listed as ineligible individuals on
Schedule 6 hereto) to suffer an Adverse Event (as
defined in Schedule 6 hereto), such Continuing
Employee shall be entitled to the payments set forth on
Schedule 6 hereto from EPIX, the Surviving
Corporation or their subsidiaries, as the case may be.
5.18. RESALE REGISTRATION
STATEMENT.
(a) As soon as practicable and in any event within
90 days after the Effective Time, EPIX shall file with the
SEC, and thereafter use its commercially reasonable efforts to
have declared effective as soon as practicable, a registration
statement on
Form S-3 (or if
EPIX is not eligible to use
Form S-3, any
other form that EPIX is eligible to use) (a
“S-3
Registration Statement”) under the Securities Act
covering the resale by (i) the Chairman of the Board of
Directors of EPIX and (ii) former affiliates of Predix
(including any former affiliates of Predix who may following the
Effective Time be current affiliates of EPIX) listed on
Schedule 7 hereto (collectively, the
“Affiliate Stockholders”) of shares of EPIX
Common Stock issued pursuant to this Agreement as Merger
Consideration (the “Registrable Merger
Shares”). In its discretion, EPIX will be permitted to
register any other shares for resale by other eligible selling
stockholders using
the S-3
Registration Statement. EPIX shall use commercially reasonable
efforts to keep
the S-3
Registration Statement continuously effective and usable for the
resale of the Registrable Merger Shares covered thereby for a
period commencing on the date on which the SEC declares the
S-3 Registration
Statement effective and ending on the earlier of (i) the
date upon which all of the Registrable Merger Shares first
become eligible for resale pursuant to Rule 145 under the
Securities Act without restriction or (ii) the first date
upon which all of the Registrable Merger Shares covered by
the S-3
Registration Statement have been sold pursuant to such
registration statement.
(b) EPIX may, by written notice to the Affiliate
Stockholders, (i) delay the filing or effectiveness of
the S-3
Registration Statement for up to thirty (30) days, or for
such longer period, as a result of restraints or restrictions
under applicable law or (ii) suspend
the S-3
Registration Statement after effectiveness and require that the
Affiliate Stockholders immediately cease sales of shares
pursuant to
the S-3
Registration Statement (A) for a period of not more than
thirty (30) consecutive days or seventy-five (75) days
in the aggregate during any twelve (12) consecutive
calendar months, in the event that EPIX files a registration
statement (other than a registration statement on
Form S-8 or its
successor form) with the SEC for a then pending public offering
of its securities or (B) following the effectiveness of
the S-3
Registration Statement, for no longer than ten
(10) consecutive trading days if an event has occurred or
EPIX has entered into a transaction which EPIX determines in
good faith must be disclosed in order for EPIX to comply with
the public disclosure requirements imposed on EPIX under the
Securities Act in connection with
the S-3
Registration Statement, provided, that in respect of all
such events or occurrences EPIX shall not suspend the
effectiveness of
the S-3
Registration Statement for more than thirty (30) trading
days in the aggregate in any twelve (12) consecutive
calendar months.
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(c) If EPIX delays or suspends
the S-3
Registration Statement or requires the Affiliate Stockholders to
cease sales of shares pursuant to Section 5.18(b) above,
EPIX shall, as promptly as practicable (and in any event within
four (4) business days) following the termination of the
circumstance which entitled EPIX to do so, take such actions as
may be necessary to file or reinstate the effectiveness of the
S-3 Registration
Statement and/or give written notice to all Affiliate
Stockholders authorizing them to resume sales pursuant to
the S-3
Registration Statement. If as a result thereof the prospectus
included in
the S-3
Registration Statement has been amended to comply with the
requirements of the Securities Act, EPIX shall enclose such
revised prospectus with the notice to Affiliate Stockholders
given pursuant to this Section 5.18(c), and the Affiliate
Stockholders shall make no offers or sales of shares pursuant to
the
S-3 Registration
Statement other than by means of such revised prospectus.
5.19. ACCOUNTANT’S
LETTERS. Each of EPIX and Predix shall use its reasonable
best efforts to cause to be delivered to the other party a
“comfort” letter of Ernst & Young LLP dated
within two (2) business days before the date on which the
Registration Statement shall become effective and addressed to
such other party, in form and substance reasonably satisfactory
to such other party.
ARTICLE VI
CONDITIONS TO THE MERGER
6.1. CONDITIONS TO OBLIGATION OF
EACH PARTY TO EFFECT THE MERGER. The respective obligations
of each party to effect the Merger shall be subject to the
satisfaction at or prior to the Effective Time of the following
conditions:
| (a) Effectiveness of the Registration Statement. The Registration Statement shall have been declared effective by the SEC under the Securities Act. No stop order suspending the effectiveness of the Registration Statement shall have been issued by the SEC and no proceedings for that purpose and no similar proceeding in respect of the Joint Proxy Statement shall have been initiated or, to the knowledge of EPIX or Predix, threatened by the SEC; | |
| (b) Governmental Approvals. All approvals of, declarations or filings, with any Governmental Authority necessary for the consummation of the Merger, if any, shall have been obtained or made. The waiting period (and any extension thereof) under the HSR Act relating to the transaction contemplated hereby will have expired or terminated early, if required; | |
| (c) Stockholder Approval. This Agreement shall have been adopted by the requisite vote under Delaware Law of the stockholders of EPIX and Predix, respectively, and EPIX’s and Predix’s Certificate of Incorporation and Bylaws, respectively; and the issuance of shares of EPIX Common Stock by virtue of the Merger shall have been approved by the requisite vote under the rules of the SEC, the National Association of Securities Dealers, Inc. or Delaware Law by the stockholders of EPIX; | |
| (d) No Injunctions or Restraints; Illegality. No temporary restraining order, preliminary or permanent injunction or other order (whether temporary, preliminary or permanent) issued by any court of competent jurisdiction or other legal restraint or prohibition (an “Injunction”) preventing the consummation of the Merger on substantially identical terms and conferring upon the parties hereto substantially all the rights and benefits as contemplated herein, shall be in effect, nor shall any proceeding brought by any Governmental Authority seeking any of the foregoing be pending; and there shall not be any action taken, or any statute, rule, regulation or order enacted, entered, enforced or deemed applicable to the Merger, which makes the consummation of the Merger on substantially identical terms and conferring upon the parties hereto substantially all the rights and benefits as contemplated herein, illegal; | |
| (e) Tax Opinions. EPIX shall have received the written opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. and Predix shall have received the written opinion of Xxxxxxx Procter LLP, in form and substance reasonably satisfactory to them to the effect that the Merger will constitute a reorganization within the meaning of Section 368 of the Code; and |
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| (f) EPIX Notes. No Injunction, or final, non-appealable judgment, decree or order issued by any court of competent jurisdiction shall be in effect which Injunction, judgment, decree or order would result in the acceleration of payment of the amounts outstanding under that certain Indenture, dated as of June 7, 2004, between EPIX and U.S. Bank National Association, as trustee, or any notes issued thereunder. |
6.2. ADDITIONAL CONDITIONS TO
OBLIGATIONS OF EPIX. The obligations of EPIX to effect the
Merger are also subject to the following conditions:
| (a) Representations and Warranties. The representations and warranties of Predix contained in this Agreement (together with the Predix Disclosure Schedule) shall be true and correct in all material respects on and as of the Effective Time, with the same force and effect as if made on and as of the Effective Time, except for (i) those representations and warranties that are qualified by materiality or Material Adverse Effect, in which case such representations and warranties shall be true and correct in all respects and (ii) those representations and warranties which address matters only as of a particular date, in which case such representations and warranties that are qualified by materiality or Material Adverse Effect shall be true and correct in all respects, and those not so qualified shall remain true and correct as of such date; and EPIX shall have received a certificate to such effect signed by the President and Chief Executive Officer and Chief Financial Officer of Predix; | |
| (b) Agreements and Covenants. Predix shall have performed or complied with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Effective Time, and EPIX shall have received a certificate to such effect signed by the President and Chief Executive Officer and Chief Financial Officer of Predix; | |
| (c) Consents Obtained. EPIX shall have received evidence, in form and substance satisfactory to it, that the consents, waivers, approvals, authorizations or orders required to be obtained, and all filings to be made, by Predix shall have been obtained and made by Predix; | |
| (d) Governmental Actions. There shall not have been instituted, pending or threatened any action or proceeding (or any investigation or other inquiry that might result in such an action or proceeding) by any Governmental Authority, nor shall there be in effect any judgment, decree or order of any Governmental Authority, in either case, seeking to prohibit or limit EPIX from exercising all material rights and privileges pertaining to its ownership of the Surviving Corporation or the ownership or operation by EPIX or the Surviving Corporation of all or a material portion of the business or assets of EPIX or the Surviving Corporation, or seeking to compel EPIX, the Surviving Corporation or any of their subsidiaries to dispose of or hold separate all or any material portion of the business or assets of EPIX or the Surviving Corporation as a result of the Merger or the transactions contemplated by this Agreement; | |
| (e) Material Adverse Change. Since the date of this Agreement, there shall have been no change, occurrence or circumstance in the business, results of operations or financial condition of Predix or any subsidiary of Predix having or reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on Predix; | |
| (f) Affiliate Agreements. EPIX shall have received from each Predix Affiliate an Affiliate Agreement, and such agreement shall be in full force and effect; | |
| (g) Transfer of Material Agreements. Predix shall have received all consents and approvals required to consummate the Merger under Predix’s and its subsidiaries’ agreements listed on Schedule 8 hereto; | |
| (h) Other Deliveries. EPIX shall have received such other certificates and instruments (including without limitation certificates of good standing of Predix and each of its subsidiaries in its jurisdiction of organization and the various foreign jurisdictions in which it is qualified, certified charter documents, certificates as to the incumbency of officers and the adoption of authorizing resolutions) as it shall reasonably request in connection with the Closing; |
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| (i) Voting Agreement. Stockholders of Predix holding an aggregate of approximately forty percent (40%) of the voting shares of Predix shall have entered into a Voting Agreement, substantially in the form of Exhibit A hereto, and such agreement shall be in full force and effect; | |
| (j) Opinion of Predix’s Counsel. EPIX shall have received from Xxxxxxx Procter LLP, counsel to Predix, an opinion, substantially in the form of Exhibit E hereto, addressed to EPIX dated as of the Effective Date; and |
6.3. ADDITIONAL CONDITIONS TO
OBLIGATIONS OF PREDIX. The obligation of Predix to effect
the Merger is also subject to the following conditions:
| (a) Representations and Warranties. The representations and warranties of EPIX contained in this Agreement (together with the EPIX Disclosure Schedule) shall be true and correct in all material respects on and as of the Effective Time, with the same force and effect as if made on and as of the Effective Time, except for (i) those representations and warranties that are qualified by materiality or Material Adverse Effect, in which case such representations and warranties shall be true and correct in all respects and (ii) those representations and warranties which address matters only as of a particular date, in which case such representations and warranties that are qualified by materiality or Material Adverse Effect shall be true and correct in all respects, and those not so qualified shall remain true and correct as of such date; and Predix shall have received a certificate to such effect signed by the Chief Executive Officer and Principal Accounting Officer of EPIX; | |
| (b) Agreements and Covenants. EPIX shall have performed or complied with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Effective Time, except to the extent any such non-performance or non-compliance would not have a Material Adverse Effect on EPIX, and Predix shall have received a certificate to such effect signed by the Chief Executive Officer and Principal Accounting Officer of EPIX; | |
| (c) Consents Obtained. Predix shall have received evidence, in form and substance satisfactory to it, that all material consents, waivers, approvals, authorizations or orders required to be obtained, and all filings required to be made, by EPIX for the authorization, execution and delivery of this Agreement and the consummation by them of the transactions contemplated hereby shall have been obtained and made by EPIX; | |
| (d) Governmental Actions. There shall not have been instituted, pending or threatened any action or proceeding (or any investigation or other inquiry that might result in such an action or proceeding) by any Governmental Authority, nor shall there be in effect any judgment, decree or order of any Governmental Authority, in either case, seeking to prohibit or limit Predix from exercising all material rights and privileges pertaining to its ownership of the Surviving Corporation or the ownership or operation by Predix of all or a material portion of the business or assets of Predix and its subsidiaries, or seeking to compel Predix or its subsidiaries to dispose of or hold separate all or any material portion of the business or assets of Predix or its subsidiaries, as a result of the Merger or the transactions contemplated by this Agreement; | |
| (e) Material Adverse Change. Since the date of this Agreement, there shall have been no change, occurrence or circumstance in the business, results of operations or financial condition of EPIX having or reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on EPIX; | |
| (f) Opinion of EPIX’s Counsel. Predix shall have received from Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., counsel to EPIX, an opinion, substantially in the form of Exhibit F hereto, addressed to Predix dated as of the Effective Date; | |
| (g) NASDAQ Listing. The EPIX Common Stock shall be listed on the NASDAQ National Market as of and from the date of this Agreement through the Effective Time and the shares of EPIX Common Stock issued in the Merge shall have been approved for listing on the NASDAQ National Market as of the Effective Time; |
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| (h) Other Deliveries. Predix shall have received such other certificates and instruments (including without limitation certificates of good standing of EPIX in its jurisdiction of organization and the various foreign jurisdictions in which it is qualified, certified charter documents, certificates as to the incumbency of officers and the adoption of authorizing resolutions) as it shall reasonably request in connection with the Closing; | |
| (i) Closing Capital. EPIX’s cash, cash equivalents, restricted cash and securities available for sale at the Effective Time less the aggregate amount of any and all liabilities and obligations resulting from (i) severance or similar obligations of EPIX as of the Effective Time; (ii) fees payable to any financial advisor to EPIX; (iii) fees owed or payable to EPIX’s independent public accountants; (iv) bonus payments to employees upon consummation of the Merger; and (v) legal fees of EPIX in connection with the negotiation and execution of this Agreement and consummation of the Merger, shall be no less than the $110,000,000; | |
| (j) Board of Directors and Officers. EPIX shall have taken all actions necessary so that the Board of Directors of EPIX will be constituted as set forth in Section 5.15 of this Agreement immediately after the Effective Time. Each of the current officers of EPIX who is not listed on Schedule 9 hereto shall have delivered to EPIX their written resignations as officers of EPIX and each of the individuals on Schedule 9 hereto shall have been appointed officers of EPIX and shall serve in such capacity effective as of the Effective Time. |
ARTICLE VII
TERMINATION
7.1. TERMINATION. This
Agreement may be terminated at any time prior to the Effective
Time, notwithstanding approval thereof by the Board of Directors
and stockholders of Predix and EPIX:
| (a) by mutual written consent duly authorized by the Boards of Directors of EPIX and Predix; or | |
| (b) by either EPIX or Predix if the Merger shall not have been consummated by July 31, 2006; provided, that the right to terminate this Agreement under this Section 7.1(b) shall not be available to any party whose failure to fulfill any obligation under this Agreement has been the cause of or resulted in the failure of the Merger to occur on or before such date; or | |
| (c) by either EPIX or Predix if a court of competent jurisdiction or governmental, regulatory or administrative agency or commission shall have issued a non-appealable final order, decree or ruling or taken any other action, in each case having the effect of permanently restraining, enjoining or otherwise prohibiting the Merger; or | |
| (d) by EPIX, if the Board of Directors of Predix shall have withheld or withdrawn its recommendation in favor of the Merger; or | |
| (e) by EPIX, if there shall have occurred any Material Adverse Effect with respect to Predix since the date of this Agreement; or | |
| (f) by Predix, if the Board of Directors of EPIX shall have withheld or withdrawn its recommendation in favor of the Merger; or | |
| (g) by Predix, if there shall have occurred any Material Adverse Effect with respect to EPIX since the date of this Agreement; or | |
| (h) by either EPIX or Predix, if the required approval of the stockholders of EPIX or Predix contemplated by this Agreement shall not have been obtained by reason of the failure to obtain the requisite vote upon a vote taken at a meeting of stockholders convened therefor or at any adjournment thereof; provided, that the right to terminate this Agreement under this Section 7.1(h) shall not be |
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| available to any party where the failure to obtain stockholder approval of such party shall have been caused by the action or failure to act of such party in breach of this Agreement; or | |
| (i) by either EPIX or Predix, upon a breach of any covenant or agreement on the part of Predix or EPIX, respectively, set forth in this Agreement, in either case, such that the conditions set forth in Section 6.2(b) or Section 6.3(b), would not be satisfied (a “Terminating Breach”), provided, that, if such Terminating Breach is curable prior to the expiration of five (5) days from its occurrence (but in no event later than July 31, 2006) by EPIX or Predix, as the case may be, through the exercise of its commercially reasonable efforts and for so long as EPIX or Predix, as the case may be, continues to exercise such commercially reasonable efforts, neither Predix nor EPIX, respectively, may terminate this Agreement under this Section 7.1(i) unless such 5-day period expires without such Terminating Breach having been cured; or | |
| (j) by either EPIX or Predix, if either is not in material breach of any of its obligations under that agreement, if any representation or warranty on the part of the other party set forth in this Agreement proves to have been untrue on the date hereof, if such failure to be true would reasonably be likely to have a Material Adverse Effect. |
7.2. NOTICE OF TERMINATION;
EFFECT OF TERMINATION. Any termination of this Agreement
under Section 7.1 above will be effective immediately upon
the delivery of written notice of the terminating party to the
other parties hereto. In the event of the termination of this
Agreement pursuant to Section 7.1, this Agreement shall
forthwith become void and there shall be no liability on the
part of any party hereto or any of its affiliates, directors,
officers or stockholders except that nothing herein shall
relieve any party from liability for any willful breach hereof.
No termination of this Agreement shall affect the obligations of
the parties contained in the Confidentiality Agreement, all of
which obligations shall survive termination of this Agreement in
accordance with its terms.
7.3. FEES AND EXPENSES.
(a) Except as set forth in Section 5.4 and this
Section 7.3, all fees and expenses incurred in connection
with this Agreement and the transactions contemplated hereby
shall be paid by the party incurring such expenses, whether or
not the Merger is consummated; in addition, EPIX shall be solely
responsible for all fees and expenses incurred in relation to
the preparation, printing and filing of the Joint Proxy
Statement (including the preliminary materials related thereto)
and the Registration Statement, in each case, including without
limitation any amendments or supplements thereto.
(b) Predix shall pay EPIX a fee of $4,500,000 upon the
termination of this Agreement by EPIX pursuant to
Section 7.1(d), 7.1(e), 7.1(h) or 7.1(i).
(c) EPIX shall pay Predix a fee of $4,500,000 upon the
termination of this Agreement by Predix pursuant to
Section 7.1(f), 7.1(g), 7.1(h) or 7.1(i).
(d) The fee payable pursuant to Sections 7.3(b) and
7.3(c) shall be paid within three (3) business days after
the termination of this Agreement pursuant to Article VII.
ARTICLE VIII
GENERAL PROVISIONS
8.1. EFFECTIVENESS OF
REPRESENTATIONS, WARRANTIES AND AGREEMENTS. Except as
otherwise provided in this Agreement, the representations,
warranties and agreements of each party hereto shall remain
operative and in full force and effect regardless of any
investigation made by or on behalf of any other party hereto,
any person controlling any such party or any of their officers
or directors, whether prior to or after the execution of this
Agreement. Except as provided elsewhere in this Agreement, the
representations, warranties and agreements in this Agreement
shall terminate at the Effective Time or upon the termination of
this Agreement pursuant to Section 7.1, as the case may be,
except that the agreements which, by their terms, survive the
Effective Time shall survive the Effective Time indefinitely and
those set forth in Section 7.3 shall survive termination
indefinitely. The
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Confidentiality Agreement shall remain in full force and effect
and shall survive termination of this Agreement as provided
therein.
8.2. NOTICES. All notices
and other communications given or made pursuant hereto shall be
in writing and shall be deemed to have been duly given or made
as of the date delivered if delivered personally, three
(3) days after being sent by registered or certified mail
(postage prepaid, return receipt requested), one day after
dispatch by recognized overnight courier (provided delivery is
confirmed by the carrier) and upon transmission by telecopy,
confirmed received, to the parties at the following addresses
(or at such other address for a party as shall be specified by
like changes of address):
(a) If to EPIX or Merger Sub:
| EPIX Pharmaceuticals, Inc. | |
| 000 Xxxxx Xxxxxx | |
| Xxxxxxxxx, XX 00000 | |
| Attn: Chief Executive Officer | |
| With a copy to: | |
| Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. | |
| Xxx Xxxxxxxxx Xxxxxx | |
| Xxxxxx, XX 00000 | |
| Attn: Xxxxxxx X. Xxxxxx, Esq. |
(b) If to Predix:
| Predix Pharmaceuticals Holdings, Inc. | |
| 0 Xxxxxxx Xxxx | |
| Xxxxxxxxx, XX 00000 | |
| Attn: President and Chief Executive Officer | |
| With a copy to: | |
| Xxxxxxx Procter LLP | |
| Exchange Place | |
| 00 Xxxxx Xxxxxx | |
| Xxxxxx, XX 00000 | |
| Attn.: Xxxxxxxx X. Xxxxxxxxxx, Esq. |
8.3. CERTAIN DEFINITIONS.
For purposes of this Agreement, the term:
| (a) “affiliates” means a person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the first mentioned person, including, without limitation, any partnership or joint venture in which Predix or EPIX, as the case may be, (either alone, or through or together with any other subsidiary) has, directly or indirectly, an interest of ten percent (10%) or more; | |
| (b) “business day” means any day other than a day on which banks in Boston, Massachusetts are required or authorized to be closed; | |
| (c) “person” means a person, corporation, partnership, association, trust, unincorporated organization, other entity or group (as defined in Section 13(d)(3) of the Exchange Act); | |
| (d) “subsidiary” or “subsidiaries” of the Surviving Corporation, EPIX, Predix or any other person means any corporation, partnership, joint venture or other legal entity of which the Surviving Corporation, EPIX, Predix or such other person, as the case may be (either alone or through or together with any other subsidiary), owns, directly or indirectly, more than fifty percent (50%) of the stock or other equity interests the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such corporation or other legal entity; and |
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| (e) “trading day” means any day on which the NASDAQ is open and available for at least five (5) hours for the trading of EPIX Common Stock. |
8.4. AMENDMENT. This
Agreement may be amended by the parties hereto by action taken
by or on behalf of their respective Boards of Directors at any
time prior to the Effective Time; provided,
however, that, after the Boards of Directors of EPIX and
Predix approve this Agreement and declare its advisability and
after the stockholders of each of EPIX and Predix adopt this
Agreement, no amendment may be made which by law requires
further approval by such stockholders or Boards of Directors
without such further approval. This Agreement may not be amended
except by an instrument in writing signed by the parties hereto.
8.5. WAIVER. At any time
prior to the Effective Time, any party hereto may, with respect
to any other party hereto, (a) extend the time for the
performance of any of the obligations or other acts,
(b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the
agreements or conditions contained herein. Any such extension or
waiver shall be valid if set forth in an instrument in writing
signed by the party or parties to be bound.
8.6. HEADINGS. The headings
contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of
this Agreement.
8.7. SEVERABILITY. If any
term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as
the economic or legal substance of the transactions contemplated
hereby is not affected in any manner adverse to any party. Upon
such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an
acceptable manner to the end that transactions contemplated
hereby are fulfilled to the extent possible.
8.8. ENTIRE AGREEMENT. This
Agreement constitutes the entire agreement and supersedes all
prior agreements and undertakings (other than the
Confidentiality Agreement), both written and oral, among the
parties, or any of them, with respect to the subject matter
hereof and, except as otherwise expressly provided herein, are
not intended to confer upon any other person any rights or
remedies hereunder.
8.9. ASSIGNMENT. No party
may assign this Agreement or any of its rights, interests or
obligations hereunder without the prior written approval of the
other parties hereto.
8.10. PARTIES IN INTEREST.
This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and nothing in this Agreement,
expressed or implied, is intended to or shall confer upon any
other person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, other than
Section 5.8 (which is intended to be for the benefit of the
Indemnified Parties and may be enforced by such Indemnified
Parties).
8.11. FAILURE OR INDULGENCE NOT
WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part
of any party hereto in the exercise of any right hereunder shall
impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or
agreement herein, nor shall any single or partial exercise of
any such right preclude other or further exercise thereof or of
any other right. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
8.12. GOVERNING LAW. This
agreement shall be governed by, and construed in accordance
with, the internal laws of the State of Delaware applicable to
contracts executed and fully performed within the State of
Delaware.
8.13. OTHER REMEDIES; SPECIFIC
PERFORMANCE. Except as otherwise provided herein, any and
all remedies herein expressly conferred upon a party will be
deemed cumulative with and not
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exclusive of any other remedy conferred hereby, or by law or
equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The
parties hereto agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties
shall be entitled to seek an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being the addition
to any other remedy to which they are entitled at law or in
equity.
8.14. COUNTERPARTS. This
Agreement may be executed in one or more counterparts, and by
the different parties hereto in separate counterparts, each of
which when executed shall be deemed to be an original but all of
which taken together shall constitute one and the same agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, EPIX, Merger Sub, and Predix have caused
this Agreement to be executed as of the date first written above
by their respective officers or representatives thereunto duly
authorized.
| EPIX PHARMACEUTICALS, INC. |
| By: | /s/ Xxxxxxx X. Xxxxxx |
|
|
|
| Name: Xxxxxxx X. Xxxxxx | |
| Title: Chief Executive Officer | |
| EPIX DELAWARE, INC. |
| By: | /s/ Xxxxxx X. Xxxxx |
|
|
|
| Name: Xxxxxx X. Xxxxx | |
| Title: Treasurer and Secretary | |
| PREDIX PHARMACEUTICALS HOLDINGS, INC. |
| By: | /s/ Xxxxxxx X. Xxxxxxxx |
|
|
|
| Name: Xxxxxxx X. Xxxxxxxx, M.D., Ph.D. | |
| Title: President and Chief Executive Officer |
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