INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "AGREEMENT") dated as of June 4,
1999 is by and among QUIDEL CORPORATION, a Delaware corporation ("PARENT"),
METRA BIOSYSTEMS, INC., a California corporation, ("COMPANY"), and MBS
ACQUISITION CORPORATION, a Delaware corporation and wholly-owned subsidiary of
Parent ("PURCHASER").
WHEREAS, Parent, Company and Purchaser have entered into that certain
Agreement and Plan of Merger dated as of June 4, 1999 (the "MERGER AGREEMENT"),
pursuant to which (i) Parent shall cause Purchaser to make and Purchaser shall
make a tender offer (the "OFFER") to purchase for cash any and all of the issued
and outstanding shares of Company common stock (including the Company Rights (as
defined in the Merger Agreement) attached thereto, the "SHARES") and (ii)
Purchaser will thereafter be merged with and into Company (the "MERGER"), with
Company remaining as the surviving corporation;
WHEREAS, SECTION 3.4 of the Merger Agreement provides that as of the
date Purchaser accepts for payment and pays for Shares in the Offer, Company
will have a cash balance in an account at Bank of America;
WHEREAS, the funds which are to compose the BofA Cash are currently in
the form of Cash Balances (as defined in the Merger Agreement) and by
liquidating such Cash Balances and transferring the proceeds thereof to Bank of
America, Company shall incur certain bank charges, prepayment penalties and
Opportunity Costs (defined below) (collectively, the "Conversion Costs"); and
WHEREAS, Parent and Purchaser desire to indemnify Company for all
Conversion Costs in the event that Parent and Purchaser terminate the Offer for
any reason other than those reasons set forth in SECTIONS 7.1(d)(i), (ii),
(iii), (iv) and (vi) of the Merger Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and the
covenants herein contained and intending to be legally bound hereby, Company,
Parent, and Purchaser hereby agree as follows:
1. LIQUIDATION AND TRANSFER. Company shall liquidate such Cash
Balances on or before such date (the "Transfer Date") and in such amounts as
are necessary to enable it to satisfy its obligations pursuant to the Merger
Agreement.
2. INDEMNIFICATION.
(a) In the event Parent and Purchaser terminate the Merger Agreement
after the Transfer Date and abandon the Offer for any reason other than those
reasons set forth in SECTIONS 7.1(d)(i), (ii), (iii), (iv) and (vi) of the
Merger Agreement, Parent and Purchaser shall indemnify and hold Company harmless
from and against all Conversion Costs required to be incurred by Company in
order to comply with its covenant contained in SECTION 1 hereof. Such Conversion
Costs will be paid by wire transfer within five (5) business days after notice
of termination is given pursuant to SECTION 9.4 of the Merger Agreement.
(b) Within two business days after the Transfer Date, Company shall
provide Parent and Purchaser a good faith written estimate of all Conversion
Costs. Company shall use its commercially reasonable efforts to mitigate the
amount of the Conversion Costs.
(c) For purposes of this Agreement, the "Opportunity Costs" resulting
from the liquidation of Cash Balances and transfer to cash on account at Bank of
America shall be, for the period from the Transfer Date to the date of
termination described in SECTION 2(a) hereof, the difference between the
interest rate that would have been earned on the Cash Balances had they not been
liquidated and the interest rate, if lower, that is paid by Bank of America on
the proceeds thereof.
3. GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of California without regard to the
principles of conflicts of law thereof.
4. DESCRIPTIVE HEADINGS. The descriptive headings herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
5. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original but all of which
will constitute one and the same agreement.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed on its behalf as of the day and year first above written.
QUIDEL CORPORATION
By: /s/ Xxxxx xx Xxxxx
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Name: Xxxxx xx Xxxxx
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Title: President and Chief Executive Officer
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METRA BIOSYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
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Name: Xxxxxx X. Xxxxxx, Xx.
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Title: President and Chief Executive Officer
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MBS ACQUISITION CORPORATION
By: /s/ Xxxxx xx Xxxxx
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Name: Xxxxx xx Xxxxx
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Title: President
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