EXHIBIT 4.1
TRANSACTION OPTION AGREEMENT
THIS TRANSACTION OPTION AGREEMENT (this "Agreement") is entered into as
of February 19, 2002, by and between Cytyc Corporation, a Delaware corporation
("Parent"), and Digene Corporation, a Delaware corporation (the "Company").
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Company, Parent and Merger Sub, a Delaware corporation and a
newly-formed, wholly-owned direct subsidiary of Parent ("Merger Sub"), are
entering into an Agreement and Plan of Merger, dated as of the date hereof (the
"Merger Agreement"), which provides, among other things, for a business
combination between Parent and the Company to be effected by the merger of
Merger Sub with and into the Company upon the terms and subject to the
conditions of the Merger Agreement; and
WHEREAS, as a condition to Parent's willingness to enter into the
Merger Agreement, Parent has requested that the Company agree, and the Company
has agreed, to grant the Option (as hereinafter defined) to Parent upon the
terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein and in the Merger Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereby agree as follows:
SECTION 1. Grant of Option. The Company hereby grants to Parent an
irrevocable option (the "Option") to purchase, subject to the terms hereof, up
to a number of shares (the "Option Shares") of fully paid and nonassessable
common stock, par value $0.01 per share, of the Company ("Company Common
Stock"), equal to 19.9% of the number of shares of Company Common Stock issued
and outstanding (before giving effect to the exercise of the Option) in
accordance with Section 2 of this Agreement at a purchase price per share in
cash equal to $28.81 (the "Option Price"). The number and type of Option Shares
and the Option Price are subject to adjustment as set forth herein.
SECTION 2. Exercise of Option.
(a) Parent may exercise the Option, in whole or in part and
from time to time on or after the Appointment Time if, but only if, after giving
effect to the exercise of the Option and as a result of such exercise, the
number of shares of the Company Common Stock then owned by Parent and Merger Sub
will represent at least 90.1% of the shares of the Company Common Stock then
outstanding.
(b) In the event that Parent desires to exercise the Option,
it shall deliver to the Company a written notice (such notice being herein
referred to as an "Exercise Notice" and the date of issuance of an Exercise
Notice being herein referred to as the "Notice Date") specifying (i) the total
number of Option Shares it desires to purchase pursuant to such exercise and
(ii) a place and date, not earlier than three (3) business days nor later than
ten (10) business days from the Notice Date, for the closing of such purchase
(the "Option Closing Date"); provided, that if the closing of the purchase and
sale pursuant to the Option (the "Option
Closing") cannot be consummated, by reason of any applicable decree, injunction
or order, the period of time that otherwise would run pursuant to this Section
2(b) shall run instead from the date on which such restriction on consummation
has expired or been terminated; and provided further, without limiting the
foregoing, that if, in the reasonable opinion of Parent, prior notification to
or approval of any regulatory agency is required in connection with such
purchase, the Company or Parent, as the case may be, shall promptly file the
required notice or application for approval and shall expeditiously process the
same and the period of time that otherwise would run pursuant to this sentence
shall run instead from the date on which any required notification periods have
expired or been terminated or such approvals have been obtained and any
requisite waiting period or periods shall have passed.
(c) At the Option Closing, Parent shall pay to the Company
the aggregate Option Price for the number of shares of Company Common Stock or
other securities being purchased pursuant to the exercise of the Option in
immediately available funds by wire transfer to a bank account designated by the
Company; provided that failure or refusal of the Company to designate such a
bank account shall not preclude Parent from exercising the Option; and provided,
further, that failure or refusal of the Company to designate such a bank account
shall not preclude Parent from exercising the Option by delivering a bank check
in the amount of the aggregate Option Price to the Company at the address set
forth in the Merger Agreement for the Company no later than Option Closing Date.
(d) At the Option Closing, simultaneously with the delivery
of immediately available funds or bank check as provided in Section 2(c) hereof,
the Company shall deliver to Parent a certificate or certificates representing
the number of Option Shares purchased by Parent and, if the Option should be
exercised in part only, a new agreement substantially similar to this Agreement
evidencing the rights of Parent thereof to purchase the balance of the Option
Shares purchasable hereunder. If at the time of issuance of any Option Shares
pursuant to an exercise of all or part of the Option hereunder, the Company
shall have issued any rights or other securities which are attached to or
otherwise associated with the Company Common Stock, then each Option Share
issued pursuant to such exercise shall also represent such rights or other
securities with terms substantially the same as and at least as favorable to
Parent as are provided to stockholders generally and, if applicable, under any
stockholder rights agreement or similar agreement of the Company then in effect.
(e) Certificates for Option Shares delivered at an Option
Closing hereunder may be endorsed with a restrictive legend that shall read
substantially as follows:
"THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM."
It is understood and agreed that the reference to the resale
restrictions of the Securities Act of 1933, as amended (the "Securities Act"),
in the above legend shall be removed by delivery of substitute certificate(s)
without such reference if Parent shall have delivered to the Company a
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copy of a letter from the staff of the Securities and Exchange Commission (the
"SEC"), or an opinion of counsel reasonably satisfactory to the Company, to the
effect that such legend is not then required for purposes of the Securities Act.
(f) Upon the delivery by Parent to the Company of the
Exercise Notice, and the tender of the applicable Option Price in immediately
available funds or by bank check, Parent shall be deemed to be the holder of
record of the Option Shares issuable upon such exercise, notwithstanding that
the stock transfer books of the Company shall then be closed or that
certificates representing such Option Shares shall not then be actually
delivered to Parent or the Company shall have failed or refused to designate the
bank account described in Section 2(d). The Company shall pay all expenses that
may be payable in connection with the preparation, issuance and delivery of
stock certificates under this Section 2 in the name of Parent. Parent shall pay
all expenses that may be payable in connection with the issuance and delivery of
stock certificates or a substitute option agreement in the name of any assignee,
transferee or designee of Parent.
SECTION 3. Covenants of the Company. In addition to its other
agreements and covenants herein, the Company agrees (i) that it shall at all
times maintain, free from preemptive rights, sufficient authorized but unissued
or treasury shares of Company Common Stock (and other securities of the Company)
issuable pursuant to this Agreement so that the Option may be exercised without
additional authorization of Company Common Stock after giving effect to all
other options, warrants, convertible securities and other rights to purchase
Company Common Stock; (ii) that it will not, by charter amendment or through
reorganization, consolidation, merger, dissolution or sale of assets, or by any
other voluntary act, avoid or seek to avoid the observance or performance of any
of the covenants, stipulation or conditions to be observed or performed
hereunder by the Company; (iii) promptly to take any and all action as may from
time to time be required (including complying with all premerger notification,
reporting and waiting requirements under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder) in order to permit Parent to exercise the Option and the Company to
duly and effectively issue Option Shares pursuant hereto; and (iv) promptly to
take all action provided herein to protect the rights of Parent against dilution
in accordance with Section 5 hereof.
SECTION 4. Exchange; Replacement. This Agreement (and the Option
granted hereby) are exchangeable, without expense, at the option of Parent, upon
presentation and surrender of this Agreement at the principal office of the
Company, for other agreements providing for Options of different denominations
entitling the holder thereof to purchase, on the same terms and subject to the
same conditions as are set forth herein, in the aggregate the same number of
shares of Company Common Stock purchasable hereunder. The terms "Agreement" and
"Option" as used herein include any agreements and related options for which
this Agreement (and the Option granted hereby) may be exchanged. Upon receipt by
the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Agreement, and (in the case of loss, theft or
destruction) of reasonably satisfactory indemnification, and upon surrender and
cancellation of this Agreement, if mutilated, the Company will execute and
deliver a new Agreement of like tenor and date.
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SECTION 5. Adjustments. The number of shares of Company Common Stock
purchasable upon the exercise of the Option shall be subject to adjustment from
time to time as provided in this Section 5. In the event of any change in, or
distributions in respect of, Company Common Stock by reason of stock dividends,
splits, mergers, recapitalizations, combinations, subdivisions, conversions,
exchanges of shares or other similar transactions, then that which is then
purchasable upon exercise hereof shall be appropriately adjusted so that Parent
shall receive upon exercise of the Option and payment of the aggregate Option
Price hereunder the number and class of shares or other securities or property
(including cash) that Parent would have owned or been entitled to receive after
the happening of any of the events described above if the Option had been
exercised immediately prior to such event, or the record date therefor, as
applicable. Whenever the number of shares of Company Common Stock subject to
this Option is adjusted pursuant to this Section 5, the Option Price shall be
appropriately adjusted in such manner as shall fully preserve the economic
benefits provided hereunder and proper provision shall be made in any agreement
governing any such transaction to provide for such proper adjustment and the
full satisfaction of the Company's obligations hereunder.
SECTION 6. Representations and Warranties of the Company. The Company
hereby represents and warrants to Parent as follows:
(a) The Company has full corporate power and authority to
execute and deliver 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 and validly
authorized by the board of directors of the Company and no other corporate
proceedings on the part of the Company are necessary to authorize this Agreement
or to consummate the transactions so contemplated. This Agreement has been duly
and validly executed and delivered by the Company.
(b) The Company has taken all necessary corporate action to
authorize and reserve and to permit it to issue, and at all times from the date
hereof through the termination of this Agreement in accordance with its terms
will have reserved for issuance upon the exercise of the Option, that number of
shares of Company Common Stock equal to the maximum number of shares of Company
Common Stock at any time and from time to time issuable hereunder, and all such
shares of Company Common Stock, upon issuance pursuant hereto, will be duly
authorized, validly issued, fully paid, nonassessable, and will be delivered
free and clear of all liens and not subject to any preemptive rights.
(c) The execution and delivery of this Agreement does not,
and the consummation of the transactions contemplated hereby will not, conflict
with, or result in any violation pursuant to any provisions of the certificate
of incorporation or bylaws of the Company or any subsidiary of the Company, or
of any loan or credit agreement, note, mortgage, indenture, lease, plan or other
agreement, contractual obligation, instrument, permit, concession, franchise or
license applicable to the Company or any subsidiary of the Company or their
respective properties or assets.
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(d) No "fair price", "moratorium", "control share
acquisition" or other similar anti-takeover statute or regulation enacted under
state or federal laws applicable to the Company or any of its subsidiaries will
apply to this Agreement or the transactions contemplated hereby. The Company has
taken, and will in the future take, all steps necessary to irrevocably exempt
the transactions contemplated by this Agreement from any other applicable state
takeover law and from any applicable charter provision containing change of
control or anti-takeover provisions.
SECTION 7. Representations and Warranties of Parent. Parent hereby
represents and warrants to the Company as follows:
(a) Parent has full corporate power and authority to execute
and deliver 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 and validly authorized by the
board of directors of Parent and no other corporate proceedings on the part of
Parent are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly and validly executed
and delivered by Parent.
(b) Parent is entering into this Agreement and is acquiring
and/or will acquire the Option Shares for its own account and not with a view to
resale or distribution of all or any part of the Option Shares in violation of
applicable law.
SECTION 8. Assignment. Neither of the parties hereto may assign any of
its rights or obligations under this Agreement or the Option created hereunder
to any other person without the express written consent of the other party.
SECTION 9. Best Efforts. Each of Parent and the Company will use its
reasonable best efforts to make all filings with, and to obtain consents of, all
third parties and Governmental Entities necessary to the consummation of the
transactions contemplated by this Agreement, including without limitation, if
applicable, making application to list the shares of Company Common Stock
issuable hereunder on the Nasdaq National Market of The Nasdaq Stock Market upon
official notice of issuance.
SECTION 10. Specific Performance. The parties hereto acknowledge that
damages would be an inadequate remedy for a breach of this Agreement by either
party hereto and that the obligations of the parties hereto shall be enforceable
by either party hereto through injunctive or other equitable relief.
SECTION 11. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. 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 to the fullest
extent permitted by applicable law in a mutually acceptable manner in order that
the terms of this Agreement remain as originally contemplated to the fullest
extent possible.
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SECTION 12. Notices. All notices, claims, demands and other
communications hereunder shall be deemed to have been duly given or made when
delivered in person, by registered or certified mail (postage prepaid, return
receipt requested), by overnight courier or by facsimile at the respective
addresses of the parties set forth in the Merger Agreement,
SECTION 13. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
SECTION 14. Counterparts. This Agreement may be executed in any number
of counterparts, each of which will be deemed to be an original, but all of
which shall constitute one and the same agreement.
SECTION 15. Definitions. Capitalized terms used and not defined herein
shall have the meanings set forth in the Merger Agreement.
SECTION 16. Expenses. Notwithstanding anything to the contrary in the
Merger Agreement, each of the parties hereto shall bear and pay all costs and
expenses incurred by it or on its behalf in connection with the transactions
contemplated hereunder.
SECTION 17. Termination. This Agreement shall terminate upon the
earlier of the Effective Time or termination of the Merger Agreement for any
reason in accordance with its terms.
SECTION 18. Entire Agreement. Except as otherwise expressly provided
herein or in the Merger Agreement, this Agreement contains the entire agreement
between the parties with respect to the transactions contemplated hereunder and
supersedes all prior arrangements or understandings with respect thereof,
written or oral. The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement, express or implied,
is intended to confer upon any party, other than the parties hereto, and their
successors and permitted assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
herein. Any provision of this Agreement may be waived only in writing at any
time by the party that is entitled to the benefits of such provision. This
Agreement may not be modified, amended, altered or supplemented except upon the
execution and delivery of a written agreement executed by the parties hereto.
SECTION 19. Further Assurances. In the event of any exercise of the
Option by Parent, the Company and Parent shall execute and deliver all other
documents and instruments and take all other action that may be reasonably
necessary to the fullest extent permitted by law in order to consummate the
transactions provided for by such exercise. Nothing contained in this Agreement
shall be deemed to authorize the Company or Parent to breach any provision of
the Merger Agreement.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Transaction Option Agreement to be executed as of the date first written above
by their respective officers thereunto duly authorized.
CYTYC CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name. Xxxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
DIGENE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxxx
Title: President
