Exhibit 4.15
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
March 28, 2002 by and among QIAGEN N.V., a Netherlands corporation ("QIAGEN"),
XENOPUS MERGER SUB, INC., a Delaware corporation and a wholly-owned subsidiary
of QIAGEN ("Merger Sub"), XERAGON, INC., an Alabama corporation (the "Company"),
and the shareholders of the Company listed on Schedule I attached hereto (the
"Company Shareholders").
WHEREAS, the Boards of Directors of QIAGEN, Merger Sub and the
Company have each determined that it is in the best interests of their
respective stockholders for QIAGEN to acquire the Company upon the terms and
subject to the conditions set forth herein;
WHEREAS, in furtherance of such acquisition, the Boards of
Directors of QIAGEN, Merger Sub and the Company have each approved the merger
(the "Merger") of Merger Sub with and into the Company, and the Company
Shareholders have consented to the Merger, each in accordance with the General
Corporation Law of the State of Delaware (the "DGCL"), and the Alabama Business
Corporation Act (the "ABCA"), as the case may be, subject to the conditions set
forth herein, which Merger will result in, among other things, the Company
becoming a wholly owned subsidiary of QIAGEN, and all of the issued and
outstanding shares of the common stock of the Company, $0.0001 par value per
share (the "Company Shares"), of the Company, held by the Company Shareholders
will be exchanged and converted into shares of Common Stock, Eur. 0.01 par
value, of QIAGEN (the "QIAGEN Common Stock") on the terms described herein;
WHEREAS, the shares of QIAGEN Common Stock issuable hereunder
are not and will not be offered to persons who are established, domiciled or
have their residence in the Netherlands. The offer of the shares of QIAGEN
Common Stock issued hereunder, each announcement thereof and this Agreement
comply with the law and regulations of any State where persons to whom the offer
is made are resident.
WHEREAS, the Company Shareholders have voted by written
consent in favor of the Merger and to approve this Agreement;
WHEREAS, for federal income tax purposes, it is intended that
the Merger shall qualify as a tax-free reorganization with the meaning of
Section 368(a) of the Code and the United States Treasury Regulations
promulgated thereunder; and
WHEREAS, the Company and Xeragon AG, a Swiss corporation
("XAG") are parties to that certain License Agreement, dated as of August 1,
2001, (the "Old XAG License Agreement"), pursuant to which XAG has granted to
the Company an exclusive (subject to one limited license agreement with Xxxx
Research Corporation) license to XAG's Intellectual Property Rights (as defined
herein), and XAG joins in this Agreement in order to assist in the consummation
of the Merger and in anticipation of its relationship with QIAGEN following the
Merger;
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, the Company, QIAGEN, Merger Sub and the
Company Shareholders hereby agree as follows:
ARTICLE 1
THE MERGER
1.1 The Merger. At the Effective Time (as defined in Section 1.2) and
subject to and upon the terms and conditions of this Agreement and the
provisions of the DGCL and the ABCA, Merger Sub shall be merged with and into
the Company, the separate corporate existence of Merger Sub shall cease and the
Company shall, as the surviving corporation in the Merger, continue its
existence under the provisions of the ABCA as a wholly-owned subsidiary of
QIAGEN. The Company, as the surviving corporation after the Merger, is
hereinafter sometimes referred to as the "Surviving Corporation."
1.2 Effective Time. As promptly as practicable after the satisfaction or,
to the extent permitted hereunder, waiver of the conditions set forth in Article
7 of this Agreement, the parties hereto shall cause the Merger to be consummated
by filing the Certificate of Merger and the Agreement of Merger, substantially
in the forms set forth in Exhibits A and B attached hereto (the "Certificates of
Merger"), along with a certified copy of this Agreement, if required, and such
other documents as may be required, with the Secretary of State of the State of
Delaware and the Secretary of State of the State of Alabama, executed in
accordance with the relevant provisions of the DGCL and the ABCA (the date and
time of such filing, or such later date and time as may be specified in the
Certificate of Merger by mutual agreement of QIAGEN, Merger Sub and the Company,
being the "Effective Time").
1.3 Effect of the Merger. At the Effective Time, the effect of the Merger
shall be as provided in the applicable provisions of the DGCL and the ABCA.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, all the property, rights, privileges, powers and franchises of
the Company and Merger Sub shall vest in the Surviving Corporation, and all
debts, liabilities and duties of the Company and Merger Sub shall become the
debts, liabilities and duties of the Surviving Corporation.
1.4 Articles of Incorporation and By-Laws of Surviving Corporation.
Unless otherwise determined by QIAGEN prior to the Effective Time, at the
Effective Time, the Articles of Incorporation of the Company, as amended by the
Certificates of Merger, shall be the Articles of Incorporation of the Surviving
Corporation until thereafter amended as provided by the ABCA. The by-laws of the
Merger Sub shall be the by-laws of the Surviving Corporation until thereafter
amended as provided by the ABCA.
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 Articles of
Incorporation of the Surviving Corporation. The officers of the 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 or until their earlier death, resignation or
removal in accordance with the Surviving
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Corporation's Articles of Incorporation and by-laws. Prior to the Effective
Time, the Company shall deliver to QIAGEN resignation letters of each of the
directors of the Company to be effective as of such Effective Time.
1.6 Maximum Merger Consideration; Conversion of Company Shares; Escrow.
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(a) At the Effective Time, by virtue of the Merger and without
any action on the part of the parties hereto:
(i) Subject to the other provisions of this Article 1, each
Company Share issued and outstanding immediately prior to the Effective
Time (other than any Company Shares to be canceled pursuant to Section
1.7 and any Dissenting Shares (as described in Section 1.16)) shall be
converted automatically into the right to receive (A) the Exchange Ratio
Fraction of a fully paid and non-assessable share of QIAGEN Common Stock
(the "Merger Shares") and (B) at the sole election of QIAGEN, either (x)
the Performance Ratio Fraction of a fully paid and non-assessable share
of QIAGEN Common Stock (the "Performance Shares") or (y) the Performance
Payment Amount (the "Performance Cash"), in the case of Merger Shares and
Performance Shares, together with cash, if any, in lieu of any fraction
of a share of QIAGEN Common Stock pursuant to Section 1.09 (collectively,
the "Merger Consideration").
(ii) For purposes of this Agreement:
(A) the term "Acquisition Amount" shall mean $8,000,000
(which Acquisition Amount represents the aggregate fixed
portion of the purchase price for the Company Shares);
(B) the term "Company Shares Number" means (A) the sum
of all Company Shares outstanding immediately prior to the
Effective Time, minus (B) Company Shares to be canceled
pursuant to Section 1.7;
(C) the term "Closing Date Average" shall mean the
average of the closing prices of QIAGEN Common Stock
(rounded to the nearest cent) on the Nasdaq National Market
(as reported on the Nasdaq web site) on the ten (10)
consecutive trading days ending on the trading day
immediately prior to the Effective Time; provided, however,
that if the Closing Date Average is lower than $14.00, the
Closing Date Average shall be deemed to be $14.00 for
purposes of this Section 1.6;
(D) the term "Exchange Ratio Fraction" shall mean the
quotient (calculated to the nearest five (5) decimal places)
obtained by (I) dividing (x) the Acquisition Amount by (y)
the Closing Date Average, and (II) dividing the quotient
computed thereby by the Company Shares Number;
(E) the term "Performance Amount" shall mean $600,000
multiplied by the sum of the Performance Expense Multiplier
and the Performance Revenue Multiplier (which Performance
Amount represents
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the aggregate variable portion of the purchase price for the
Company Shares);
(F) the term "Performance Average" shall mean the average
of the closing prices of QIAGEN Common Stock (rounded to the
nearest cent) on the Nasdaq National Market (as reported on the
Nasdaq web site) on the ten (10) consecutive trading days ending
on December 31, 2003; provided, however, that the Performance
Average shall in no event be less than $14.00 (adjusted for any
stock dividend, stock split, combination, or similar
recapitalization occurring from and after the date of this
Agreement and before December 31, 2003);
(G) the term "Performance Expense Multiplier" shall mean
(I) zero if the Xeragon Expense Percentage is greater than or
equal to 42%, (II) one if the Xeragon Expense Percentage is less
than or equal to 35% and (III) otherwise the result obtained by
dividing (y) the difference between 42% and the Xeragon Expense
Percentage by (z) 7%;
(H) the term "Performance Ratio Fraction" shall mean the
quotient (calculated to the nearest five (5) decimal places)
obtained by (I) dividing (x) the Performance Amount by (y) the
Performance Average, and (II) dividing the quotient computed
thereby by the Company Shares Number;
(I) the term "Performance Payment Amount" shall mean the
quotient (calculated to the nearest five (5) decimal places)
obtained by (I) dividing (x) the Performance Amount by (y) the
Company Shares Number;
(J) the term "Performance Revenue Multiplier" shall mean
(I) zero if the Xeragon Revenues are less than or equal to
$8,800,000, (II) one if the Xeragon Revenues are equal to or
greater than $11,000,000 and (III) otherwise the result obtained
by dividing (y) the difference between the Xeragon Revenues and
$8,800,000 by (z) $2,200,000;
(K) the term "Xeragon Business" shall mean the sale of
custom or pre-manufactured synthetic RNA; provided, that the term
"Xeragon Business" shall not include any products which (i) QIAGEN
offers as of the date hereof or (ii) which QIAGEN may offer in the
future which are not based on the XAG's Intellectual Property
Rights;
(L) the term "Xeragon Revenues" shall mean, for the one
year period ending on December 31, 2003, the aggregate of all
revenues realized by QIAGEN directly from the Xeragon Business
during such period, net of any trade, cash or quantity discounts
or rebates, credits or allowances given or made and sales,
transfer and other excise taxes and
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customs duties levied (including any tax such as a value added or
similar tax or government charge); and
(M) the term "Xeragon Expense Percentage" shall mean, for
the one-year period ending on December 31, 2003, the sum of the
cost of goods sold and research and development expenses
attributable to the Xeragon Business for such period expressed as
a percentage of the aggregate of all operating expenses
attributable to the Xeragon Business for such period.
(iii) Notwithstanding the foregoing, under no circumstances shall
QIAGEN be obligated to issue any shares of QIAGEN Common Stock as
Performance Shares to the extent that, such shares, when aggregated with the
other shares of QIAGEN Common Stock previously issued pursuant to this
Agreement, would result in the issuance of a number of shares of QIAGEN
Common Stock that exceeds 657,143 shares of QIAGEN Common Stock (the
"Issuance Limit"); provided, however, that the Issuance Limit shall be
appropriately adjusted for any stock dividend, stock split, combination, or
similar recapitalization occurring from and after the date of this
Agreement.
(b) As of the Effective Time, each Company Share issued and
outstanding immediately prior to the Effective Time shall no longer be
outstanding, shall automatically be canceled and retired and shall cease to
exist, and each Company Shareholder shall cease to have any rights with respect
thereto, except the right to receive such Company Shareholder's portion of the
Merger Consideration in the form of Merger Shares upon surrender of such
certificate in accordance with Section 1.10 hereof and the contingent right to
receive the either the Performance Shares or, at the sole election of QIAGEN,
the Performance Cash, if any, in accordance with Section 1.18 hereof.
(c) The shares of QIAGEN Common Stock to be issued to the Company
Shareholders in connection with the Merger will be issued in a transaction
exempt from registration under the Securities Act of 1933, as amended (the
"Securities Act"), by reason of Section 4(2) thereof, will be "restricted
securities" which have not been registered under the Securities Act, and must be
held until they are either registered or an exemption from registration becomes
available for their resale. As provided in Section 6.3 hereof, QIAGEN shall use
its best efforts to prepare and file as promptly as practicable, and, in any
event, within thirty (30) days following the Effective Time, a registration
statement on Form F-3 with the Securities and Exchange Commission ("SEC")
covering the resale of the Merger Shares (the "Resale Registration Statement"),
and QIAGEN shall use reasonable efforts to cause the Resale Registration
Statement to become effective within ninety (90) days after the Effective Time
(the date of effectiveness of such Resale Registration Statement being referred
to herein as the "Registration Statement Effective Date").
(d) Within twenty-five (25) Business Days after the Closing Date,
QIAGEN will deposit in escrow certificates representing 15% of the Merger Shares
(the "Escrow Shares"), to be held in accordance with the terms of the Escrow
Agreement, a form of which is attached hereto as Exhibit C (the "Escrow
Agreement").
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1.7 Cancellation of Treasury Shares. Each Company Share held in the
treasury of the Company immediately prior to the Effective Time shall be
canceled and extinguished without any conversion thereof.
1.8 Capital Stock of Merger Sub. Each share of common stock, par value
$.001 per share, of Merger Sub (the "Merger Sub Common Stock"), issued and
outstanding immediately prior to the Effective Time shall be converted into and
exchanged for one validly issued, fully paid and non-assessable share of Common
Stock, par value $.0001 per share, of the Surviving Corporation. Each stock
certificate of Merger Sub evidencing ownership of any Merger Sub Common Stock
shall continue to evidence ownership of such shares of capital stock of the
Surviving Corporation.
1.9 Fractional Shares. No fraction of a share of QIAGEN Common Stock
will be issued hereunder, but in lieu thereof each holder of Company Shares who
would otherwise be entitled to a fraction of a share of QIAGEN Common Stock
(after aggregating all fractional shares of QIAGEN Common Stock to be received
by such holder) shall receive from QIAGEN an amount of cash (rounded to the
nearest whole cent) equal to the product of such fraction multiplied by the
Closing Date Average (with respect to fractional Merger Shares) or the
Performance Average (with respect to fractional Performance Shares).
1.10 Surrender of Certificates.
(a) QIAGEN to Provide QIAGEN Common Stock. Not later than
twenty-five (25) Business Days after the Effective Time, QIAGEN shall cause to
be delivered to the Exchange Agent, for exchange in accordance with this Article
1, the Merger Shares (exclusive of the Escrow Shares) issuable pursuant to
Section 1.6 in exchange for outstanding Company Shares paid pursuant to Section
1.6.
(b) Exchange Procedures. Promptly after the Effective Time, QIAGEN
shall cause the Exchange Agent to mail to each holder of record of a certificate
or certificates (the "Certificates") which immediately prior to the Effective
Time represented outstanding Company Shares whose shares were converted into the
right to receive shares of QIAGEN Common Stock pursuant to Section 1.6, (i) a
letter of transmittal in the form of Exhibit D hereto and instructions for use
in effecting the surrender of the Certificates in exchange for certificates
representing shares of QIAGEN Common Stock, (ii) a notice specifying the number
of whole Merger Shares to which such holder is entitled pursuant to Section 1.6
hereof and (iii) a notice specifying the amount of cash in lieu of the fraction
of a Merger Share, if any, to which such holder is entitled pursuant to Section
1.9 hereof. Upon surrender of a Certificate for cancellation to the Exchange
Agent, together with such letter of transmittal, duly completed and validly
executed in accordance with the instructions thereto, the holder of such
Certificate shall be entitled to receive in exchange therefor, (x) a certificate
representing the number of whole Merger Shares (less the shares of QIAGEN Common
Stock representing such holder's pro rata contribution to the Escrow Fund), and
(y) cash in lieu of fractional Merger Shares which such holder has the right to
receive pursuant to Section 1.9, and the Certificate so surrendered shall
forthwith be canceled. Until so surrendered, each outstanding Certificate that,
prior to the Effective Time, represented Company Shares will be deemed from and
after the Effective Time, for all corporate purposes, other than the payment of
dividends, to evidence the right to receive, upon surrender of such
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Certificate, the number of full Merger Shares into which the Company Shares
represented by such Certificate shall have been so converted and the contingent
right to receive Performance Shares, or at the sole election of QIAGEN,
Performance Cash, if any, in the case of Merger Shares or Performance Shares
together with an amount in cash in lieu of fractional shares, if any, in
accordance with Section 1.9. Any portion of the shares of QIAGEN Common Stock
deposited with the Exchange Agent pursuant to this Section 1.10(b) which remains
undistributed to the holders of the Certificates representing Company Shares for
one hundred and eighty (180) days after the Effective Time shall be delivered to
QIAGEN, upon demand, and any holders of Company Shares who have not theretofore
complied with this Article 1 shall thereafter look only to QIAGEN for such
portion of QIAGEN Common Stock, any dividends or distributions with respect to
QIAGEN Common Stock and the amount of cash in lieu of the fraction of a share of
QIAGEN Common Stock, if any, to which such holders may be entitled.
(c) Distributions With Respect to Unexchanged Shares. No dividends or
other distributions declared or made after the Effective Time with respect to
QIAGEN Common Stock with a record date after the Effective Time will be paid to
the holder of any unsurrendered Certificate with respect to the shares of QIAGEN
Common Stock represented thereby until the holder of record of such Certificate
shall surrender such Certificate. Subject to applicable escheat Law, following
surrender of any such Certificate, there shall be paid to the record holder of
the certificates representing whole shares of QIAGEN 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 QIAGEN Common Stock.
(d) Transfers of Ownership. If any certificate for shares of QIAGEN
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 QIAGEN, or any agent designated by it, any transfer
or other taxes required by reason of the issuance of a certificate for shares of
QIAGEN Common Stock in any name other than that of the registered holder of the
certificate surrendered, or established to the satisfaction of QIAGEN 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
Agreement, none of the Exchange Agent, QIAGEN, Merger Sub or the Surviving
Corporation shall be liable to a holder of Company Shares for any QIAGEN Common
Stock or any amount properly paid to a public official pursuant to any
applicable abandoned property, escheat or similar Law.
(f) Withholding of Tax. QIAGEN or the Exchange Agent will be entitled to
deduct and withhold from the consideration otherwise payable pursuant to this
Agreement to any holder of Company Shares such amounts as QIAGEN (or any
Affiliate thereof) or the Exchange Agent are required to deduct and withhold
with respect to the making by such holder of payment required under the Code, or
any provision of federal, state, local or foreign tax law as a result of the
Merger. To the extent that amounts are so withheld by QIAGEN or the Exchange
Agent, such withheld amounts will be treated for all purposes of this Agreement
as having been paid to
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the holder of the Company Shares in respect of whom such deduction and
withholding were made by QIAGEN.
1.11 Further Ownership Rights in Company Shares. All shares of QIAGEN
Common Stock issued upon the surrender for exchange of Company Shares in
accordance with the terms of this Agreement (including any cash paid for
fractional shares paid in respect thereof) shall be deemed to have been issued
in full satisfaction of all rights pertaining to such Company Shares under this
Agreement other than the contingent right to receive Performance Shares, or at
the sole election of QIAGEN, Performance Cash, if any, and there shall be no
further registration of transfers on the records of the Surviving Corporation of
Company 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 1.
1.12 Closing. Unless this Agreement shall have been terminated and the
transactions contemplated by this Agreement abandoned pursuant to the provisions
of Article 9, and subject to the provisions of Article 7, the closing of the
Merger (the "Closing") will take place at 10:00 a.m. (Eastern time) on a date
(the "Closing Date") to be mutually agreed upon by the parties, which date shall
be not later than the third Business Day after all the conditions set forth in
Article 7 shall have been satisfied (or waived in accordance with Article 7, to
the extent the same may be waived), unless another time and/or date is agreed to
in writing by the parties. The Closing shall take place at the offices of Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C., One Financial Center, Boston,
Massachusetts, unless another place is agreed to in writing by the parties.
1.13 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 QIAGEN
Common Stock (and cash for fractional shares, if any), as may be required
pursuant to Sections 1.6 or 1.9; provided, however, that QIAGEN may, as a
condition precedent to the issuance or payment thereof, require the owner of
such lost, stolen or destroyed certificates to indemnify QIAGEN against any
claim that may be made against QIAGEN or the Exchange Agent with respect to the
Certificates alleged to have been lost, stolen or destroyed.
1.14 Dissenters' Rights. All persons who have executed and delivered a
Stockholder Agreement shall have consented to the Merger and shall have
delivered their stock certificates in accordance with the terms hereof.
Notwithstanding anything in this Agreement to the contrary, any Company Shares
outstanding immediately prior to the Effective Time and held by a holder who has
not voted in favor of the Merger or delivered a valid, unrevoked proxy in favor
of the Merger, or consented thereto in writing and who has delivered written
notice to the Company objecting to the Merger and demanding payment for his
shares as required in accordance, and has otherwise complied, with the
applicable provisions of the ABCA ("Dissenting Shares"), shall not be converted
into the right to receive the QIAGEN Common Stock, unless and until such holder
fails to elect to dissent from the Merger or effectively withdraws or otherwise
loses his right to payment of the fair value of his shares under the provisions
of the ABCA. If, after the Effective Time, any such holder fails to perfect or
effectively withdraws or loses his right to such payment, such Dissenting Shares
shall thereupon be treated as if they had been converted as of
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the Effective Time into the right to receive that portion of the Merger
Consideration to which such holder is entitled, without interest thereon. Any
amounts paid to holders of Dissenting Shares in an appraisal proceeding will be
paid by the Surviving Corporation out of its own funds and will not be paid by
QIAGEN or Merger Sub. The Company shall not, except with the prior written
consent of QIAGEN, make any payment with respect to any such demands or offer to
settle or settle any such demands.
1.15 Further Assurances. If at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments or assurances or any other acts or things are necessary,
desirable or proper (a) to vest, perfect or confirm, of record or otherwise, in
the Surviving Corporation its right, title or interest in, to or under any of
the rights, privileges, immunities, powers, purposes, franchises, properties or
assets of the Company or Merger Sub, or (b) otherwise to carry out the purposes
of this Agreement, the Surviving Corporation and its proper officers and
directors or their designees shall be authorized to solicit in the name of the
Company or Merger Sub any third party consents or other documents required to be
delivered by any third party, to execute and deliver, in the name and on behalf
of the Company or Merger Sub, all such deeds, bills of sale, assignments and
assurances and do, in the name and on behalf of the Company or Merger Sub, all
such other acts and things necessary, desirable or proper to vest, perfect or
confirm its right, title or interest in, to or under any of the rights,
privileges, immunities, powers, purposes, franchises, properties or assets of
the Company or Merger Sub and otherwise to carry out the purposes of this
Agreement.
1.16 Closing of Company Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed and no transfer of Company Shares
shall thereafter be made. If, after the Effective Time, certificates
representing shares of Company Shares are presented to the Surviving
Corporation, they shall be canceled and presented to the Exchange Agent in
accordance with Section 1.10.
1.17 Tax Consequences. It is intended by the parties hereto that the
Merger shall be treated for federal income tax purposes as a reorganization
within the meaning of Section 368(a)(1)(A) and 368(a)(2)(E) of the Code, and
that this Agreement shall be, and is hereby, adopted as a plan of reorganization
for purposes of Section 368 of the Code. The parties shall not take a position,
whether on any Tax Return or otherwise, that is inconsistent with this Section
1.17.
1.18 Performance Calculation.
(a) As soon as practical after December 31, 2003, QIAGEN will
determine (i) the amount of Xeragon Revenues and (ii) the Xeragon Expense
Percentage, each to be determined in accordance with generally accepted
accounting principles, and shall deliver written notice of such determination to
Xxxxxxx Xxxxx as representative of the Company Shareholders (the "Dispute
Representative") at his address as set forth on the signature page hereto (or
such other address as he shall have furnished in writing to QIAGEN prior to such
time).
(b) If the Dispute Representative objects to QIAGEN's
determination of the Xeragon Revenues or Xeragon Expense Percentage, he shall
deliver to QIAGEN written notice
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of such objection within 30 calendar days after his receipt of notice thereof (a
"Dispute Notice") setting forth, with specificity, the nature of his dispute and
his alternative calculation of the Xeragon Revenues and the Xeragon Expense
Percentage, as applicable. If the Dispute Representative does not timely deliver
to QIAGEN a Dispute Notice the Company Shareholders shall be deemed to have
agreed to QIAGEN's determination of the Xeragon Revenues and the Xeragon Expense
Percentage. If the Dispute Representative does timely deliver to QIAGEN a
Dispute Notice, QIAGEN and the Dispute Representative shall meet within 15
calendar days after QIAGEN's receipt of the Dispute Notice to attempt to resolve
any dispute referenced therein. Any dispute not able to be resolved within such
15 calendar day period shall be submitted to QIAGEN's independent accounting
representative, or another firm chosen by QIAGEN ("QIAGEN's Accountant"), and
another firm chosen by the Dispute Representative ("Shareholders' Accountant"
and together with QIAGEN's Accountant, (the "Accountants"), which shall endeavor
in good faith to resolve any disputed item(s). If the Accountants are unable to
resolve the disputed item(s) within thirty (30) calendar days after submission
to them, the Accountants shall together, within ten (10) Business Days
thereafter, appoint a representative from a "big five" accounting firm (other
than either of the Accountants) to arbitrate the dispute (the "Arbitrator").
QIAGEN and the Dispute Representative shall, within the next twenty (20)
calendar days thereafter, present their positions with respect to the disputed
item(s) to the Arbitrator together with such other materials as the Arbitrator
deems appropriate. The Arbitrator shall, after the submission of the evidentiary
materials, submit its written decision on each disputed item to QIAGEN and the
Dispute Representative. Any determination by the Arbitrator with respect to any
disputed item shall be final, binding and conclusive on each party to this
Agreement. QIAGEN and the Dispute Representative agree that the cost of the
Arbitrator shall be borne one-half (1/2) by QIAGEN and one-half (1/2) by the
Dispute Representative. QIAGEN shall be responsible for the cost of QIAGEN's
Accountant and the Dispute Representative shall be responsible for the cost of
the Shareholders' Accountant.
(c) Upon final determination of the Xeragon Revenues and the
Expense Percentage (whether upon agreement of the parties, by the Accountants
or by the Arbitrator), QIAGEN shall, as soon as practical after such final
determination but subject to provisions of Section 1.6(a)(iii), issue and
deliver to the Company Shareholders either (A) the Performance Shares and cash
in lieu of any fractional Performance Shares in accordance with Section 1.6(a)
hereof or (B) the Performance Cash (rounded to the nearest $0.01 for each
Company Stockholder).
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to QIAGEN and Merger Sub
that the statements contained in this Article 2 are correct and complete as of
the date of this Agreement and will be correct and complete at the Effective
Time, except as disclosed in the disclosure schedule dated the date hereof,
certified by the President and Chief Executive Officer of the Company and
delivered by the Company to QIAGEN and Merger Sub simultaneously herewith (which
disclosure schedule shall contain specific references to the representations and
warranties to which the disclosures contained therein relate, and an item on
such disclosure schedule shall be deemed to qualify only the particular
subsection or subsections specified for such item) (the "Company Disclosure
Schedule") as follows:
10
2.1 Organization and Qualification; Subsidiaries.
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation. The
Company has all the requisite corporate power and authority and is in possession
of all franchises, grants, authorizations, licenses, permits, easements,
consents, certificates, approvals and Orders (collectively, "Company Approvals")
necessary to own, lease and operate its properties and to carry on its business
as it is now being conducted, except where the failure to be so organized,
existing and in good standing or to have such power, authority and Company
Approvals would not, individually or in the aggregate, have a Material Adverse
Effect.
(b) The Company is duly qualified or licensed as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of the properties owned, leased or operated by it or the nature of
its activities makes such qualification or licensing necessary, except for such
failures to be so duly qualified or licensed and in good standing which would
not, individually or in the aggregate, have a Material Adverse Effect.
(c) The Company has no Subsidiaries and does not own any equity
interest in, or any interest convertible into or exchangeable or exercisable for
directly or indirectly, any equity or similar interest in, any Person.
(d) The ownership of XAG is described on Section 2.1 of the Company
Disclosure Schedule.
2.2 Articles of Incorporation and By-laws. The Company has heretofore
furnished to QIAGEN a complete and correct copy of its Articles of Incorporation
and by-laws or equivalent organizational documents, as amended or restated to
the date hereof. Such Articles of Incorporation and by-laws, or equivalent
organizational documents of the Company, are in full force and effect. The
Company is not in violation of any of the provisions of its Articles of
Incorporation or by-laws or equivalent organizational documents.
2.3 Capitalization.
(a) The authorized capital stock of the Company consists of
1,000,000 shares of common stock, $0.0001 par value per share (previously
defined herein as the "Company Shares"). Of such shares, (i) 1,000,000 Company
Shares are issued and outstanding; (ii) no Company Shares are held in the
treasury of the Company; (iii) no Company Shares are duly reserved for future
issuance and (iv) no options or warrants to purchase Company Shares are issued
and outstanding. Except as set forth above (x) no shares of voting or non-voting
capital stock, other equity interests, or other voting securities of the Company
were issued, reserved for issuance or outstanding and (y) there are no
outstanding stock appreciation rights of the Company and no outstanding limited
stock appreciation rights. All outstanding shares of capital stock of the
Company are duly authorized, validly issued, fully paid and non-assessable and
not subject to preemptive rights. None of the outstanding equity securities or
other securities of the Company was issued in violation of the Securities Act or
any other Law, Regulation or Order. There are no outstanding bonds, debentures,
notes or other indebtedness of the Company with voting rights (or convertible
into, or exchangeable for, securities with voting rights) on any
11
matters on which stockholders of the Company may vote. The Company Shares
owned by the Company Shareholders and being purchased pursuant to this Agreement
represent one hundred percent (100%) of the outstanding capital stock of the
Company of all classes.
(b) Section 2.3(b) of the Company Disclosure Schedule sets forth the
names of the owners of record of all Company Shares. Except as set forth in
Section 2.3(b) of the Company Disclosure Schedule there are no outstanding
securities, options, warrants, calls, rights, commitments, agreements,
arrangements, understandings or undertakings of any kind (contingent or
otherwise) to which the Company is a party or by which it is bound obligating
the Company to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of its capital stock or other voting securities of the Company
or obligating the Company to issue, grant, extend or enter into any such
security, option, warrant, call, right, commitment, agreement, arrangement or
undertaking. There are no outstanding contractual obligations of the Company to
repurchase, redeem or otherwise acquire any shares of capital stock (or options
to acquire any such shares) of the Company.
(c) There are no voting trusts, proxies or other agreements,
commitments or understandings of any character to which the Company is a party
or by which the Company is bound with respect to the voting of any shares of
capital stock of the Company, except for the Voting Agreements. There are no
agreements, arrangements or commitments of any character (contingent or
otherwise) pursuant to which any person is or may be entitled or to cause the
Company or any successor corporation (including QIAGEN) to file a registration
statement under the Securities Act or which otherwise relate to the registration
of any securities of the Company or such successor corporation, except as
disclosed in Section 2.3(b) of the Company Disclosure Schedule.
2.4 Authority Relative to this Agreement; Required Vote.
(a) The Company has all necessary corporate power and authority to
execute and deliver this Agreement, and each instrument required to be executed
and delivered by it at the Closing, to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
The execution and delivery by the Company of this Agreement, the performance of
its obligations hereunder, and the consummation by the Company of the
transactions contemplated hereby, have been duly and validly authorized by all
corporate action, 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 and, constitutes the legal, valid and binding obligation of the
Company except to the extent that enforcement hereof may be limited by (A)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (B) general
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law).
(b) The Board of Directors of the Company has directed that this
Agreement be submitted to the Company Shareholders for their approval and
authorization. The affirmative votes of holders of at least a majority of all
outstanding Company Shares are the only votes of the holders of any class or
series of capital stock of the Company necessary to approve and authorize this
Agreement, the Merger, the Related Agreements and the other transactions
12
contemplated hereby and thereby. The Company Shareholders beneficially own and
have the right to vote, in the aggregate, all of the total issued and
outstanding Company Shares.
2.5 No Conflict; Required Filings and Consents.
(a) The execution and delivery by the Company of this Agreement or
any instrument required by this Agreement to be executed and delivered by the
Company at the Closing do not, and the performance by the Company of its
obligations under this Agreement or any instrument required by this Agreement to
be executed and delivered by the Company at the Closing, shall not (i) conflict
with or violate the Articles of Incorporation or by-laws or equivalent
organizational documents of the Company, (ii) conflict with or violate any Law,
Regulation or Order applicable to the Company or by which any of its properties
is bound or affected, (iii) result in any breach or violation of or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or impair the Company'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 the
Company pursuant to, any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation to which the
Company is a party or by which the Company or any of its properties is bound or
affected, (iv) cause QIAGEN, the Merger Sub or the Company to become subject to,
or to become liable for the payment of, any Tax imposed by any state or local
Tax authority on the Company or any of its properties, or (v) cause any of the
assets owned by the Company to be reassessed or revalued by any state or local
Tax authority.
(b) The execution and delivery by the Company of this Agreement or
any instrument required by this Agreement to be executed and delivered by the
Company at Closing do not, and the performance by the Company of its obligations
under this Agreement and any instrument required by this Agreement to be
executed and delivered by the Company at Closing, shall not, require the Company
to obtain any consent or waiver of any Person or the consent, approval,
authorization or action by, license, waiver, qualification, Order or Permit,
observe any waiting period imposed by, or make any filing with or notification
to, any Court or Governmental Authority, domestic or foreign, except (A)
compliance with applicable requirements, if any, of the Securities Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), state
securities laws ("Blue Sky Laws"), (B) the filing of appropriate Merger or other
documents as required by Delaware or Alabama Law, or (C) such other third party
consents, approvals, authorization, licenses, waivers, qualifications, Orders or
Permits set forth in Section 2.5(b) of the Company Disclosure Schedule.
2.6 Material Agreements. Section 2.6 of the Company Disclosure Schedule
sets forth a true and complete list and a description of (i) all contracts,
licenses, agreements, permits and instruments to which the Company is a party or
by which it or any of its properties or assets may be bound, which are material
to the Company (in the case of contracts, licenses and agreements, "material"
meaning that the aggregate dollar value of obligations or commitments to or by
the Company thereunder shall be at least $5,000), (ii) each agreement pursuant
to which the Company or XAG has granted, or been granted, exclusive rights,
(iii) each agreement which has a term of one year or longer, and (iv) each
agreement which is related in any way to the Company's or XAG's Intellectual
Property Rights (collectively, the "Material Agreements").
13
Complete copies of all Material Agreements have been made available by the
Company to QIAGEN, and no oral Material Agreements exist. Each such Material
Agreement is in full force and effect, is a valid and binding obligation of the
Company and is enforceable against the Company in accordance with its terms, and
the Company does not have Knowledge that any Material Agreement is not a valid
and binding agreement of the other parties thereto. Each Material Agreement is
enforceable against the Company in accordance with its terms, and enforceable
against each other party thereto, in each case in each case except that the
enforcement thereof may be limited by (A) bankruptcy, insolvency,
reorganization, moratorium or other similar law now or hereafter in effect
relating to creditors' rights generally and (B) general principles of equity
(regardless of whether enforceability is considered in and there has not
occurred any material default by the Company or any other party thereto, which
remains unremedied. No condition exists or, event has occurred which (whether
with or without notice or lapse of time or both, or the happening or occurrence
of any other event) would result in a loss of rights or an acceleration of an
obligation or result in the creation of any Lien thereunder or pursuant thereto,
or would constitute a default by the Company or, to the Company's Knowledge, any
other party thereto under, or result in a right in termination of, any Material
Agreement. The Company is in compliance with the terms of the Company Approvals,
except where any failures to so comply would not, individually or in the
aggregate, have a Material Adverse Effect. The continuation, validity,
enforceability and effectiveness of each Material Agreement will not be affected
by the consummation of the transactions contemplated by this Agreement.
Furthermore, no party to a Material Agreement has repudiated any provision
thereof and communicated such repudiation to the Company, and there are no
negotiations pending or in progress to revise any material terms of any Material
Agreement.
2.7 Compliance. The Company is not in conflict with, or in default or
violation of, any Law, Regulation or Order applicable to the Company or by which
its or any of its properties is bound or affected (other than any Law,
Regulation or Order relating to emissions, pollution or other environmental
matters, which are separately addressed in Section 2.21 hereof), except for any
such conflicts, defaults or violations which would not, individually or in the
aggregate, have a Material Adverse Effect. The Company has all requisite
licenses, permits, certificates, authorizations and approvals, including health
and safety and employee health and safety permits, from foreign, federal, state
and local authorities necessary to conduct its business as currently conducted
(collectively, the "Permits"), all of which Permits are set forth in Section 2.7
of the Company Disclosure Schedule, except where any failure to have such
Permits will not, individually or in the aggregate, have a Material Adverse
Effect. All of the Permits identified in Section 2.7 of the Company Disclosure
Schedule are in full force and effect no party thereto is in default under any
of such Permits and no event has occurred and no condition exists which, with
the giving of notice, the passage of time, or both, would constitute a default
thereunder. No action or claim is pending or, to the Company's Knowledge,
threatened, to revoke or terminate any Permit identified in Section 2.7 of the
Company Disclosure Schedule. The Company is not, nor has it been, in violation
of any Law, rule, Regulation, ordinance or court or administrative order
(including, without limitation, those relating to building, zoning, land use,
health and safety and employee health and safety matters), except where any such
violations would not, individually or in the aggregate, have a Material Adverse
Effect. The Company has not received any notice or communication from any
foreign, federal, state or local governmental or regulatory authority or
otherwise of any such violation and, to the Company's Knowledge, no such notice
or communication is threatened.
14
2.8 Financial Statements. The Company has delivered to the QIAGEN: (a) an
unaudited balance sheet of the Company as of December 31, 2001 and the related
unaudited consolidated statements of income and cash flow for the fiscal year
then ended and (b) an unaudited balance sheet of the Company as of February 28,
2002 (the most recent of which is referred to as the "Company Balance Sheet").
Except as set forth on Section 2.8 of the Company Disclosure Schedule, such
financial statements (collectively, the "Company Financial Statements"), are
true, correct and complete and fairly present the financial condition, the
results of operations and cash flows of the Company as at the respective dates
of and for the periods referred to in such financial statements, all in
accordance with generally accepted accounting principles ("GAAP"), subject, in
the case of interim financial statements, to normal recurring year-end
adjustments and the absence of notes (the effect of which will not, individually
or in the aggregate, be materially adverse). Except as disclosed therein, the
Company Financial Statements reflect the consistent application of such
accounting principles throughout the periods involved. No financial statements
of any Person other than the Company are required by GAAP to be included in the
Company Financial Statements.
2.9 Books and Records. The books of account, minute books, stock record
books, and other records of the Company, all of which have been made available
to QIAGEN, are complete and correct in all material respects. The Company
maintains a system of internal financial and accounting controls that was deemed
adequate by the Company's independent auditors based on their review of such
controls in connection with the most recent audit of the Company's financial
statements. The minute book of the Company contains accurate and complete
records of all meetings held of, and corporate action taken by, the
stockholders, the Boards of Directors, and committees of the Board of Directors
of the Company, and no meeting of any such stockholders, Board of Directors, or
committee has been held, or corporate action taken, for which minutes have not
been prepared and are not contained in such minute books.
2.10 Accounts and Notes Receivable. All accounts and notes receivable
reflected in the Company Financial Statements and all accounts receivable
insofar as it represents income earned arising after December 31, 2001
(collectively, the "Company Accounts Receivable") have arisen in the ordinary
course of business of the Company, represent valid and enforceable obligations
due to the Company, and are not subject to and discount, set-off or
counter-claim. All such Company Accounts Receivable have been collected or, to
the Knowledge of the Company, are fully collectible in the ordinary course of
business of the Company in the aggregate amounts thereof in accordance with
their terms.
2.11 Inventory. All inventory of the Company, whether or not reflected in
the Company Balance Sheet, consists of a quality and quantity usable and salable
in the ordinary course of business in all material respects, except for obsolete
items and items of below-standard quality, all of which have been written off or
written down to net realizable value in the Company Balance Sheet. All
inventories not written off have been priced at the lower of cost or market on a
first in, first out basis. The quantities of each item of inventory (whether raw
materials, work-in-process, or finished goods) are not excessive, but are
reasonable in the present circumstances of the Company.
2.12 Customers and Distributors. Section 2.12 of the Company Disclosure
Schedule sets forth (i) all representatives and distributors of the Company's
products (whether pursuant to
15
commission, royalty or other arrangement) and (ii) a list of the Company's top
ten customers (determined by twelve-month trailing revenues from such customers)
(collectively, the "Customers and Distributors"). To the Knowledge of the
Company, the relationships of the Company with its Customers and Distributors
and its suppliers are good. There is no plan or intention of any such Customer,
Distributor, or supplier, and the Company has not received any written or oral
threat from any Customer, Distributor, or supplier, to terminate, cancel or
otherwise adversely modify its relationship with the Company or to decrease
materially or limit its services, supplies or materials to the Company or its
usage, purchase or distribution of the services or products of the Company.
2.13 Absence of Certain Changes or Events.
(a) Since February 28, 2002, the Company has conducted its business
only in the ordinary and usual course and in a manner consistent with past
practice and, since such date, there has not been any (i) purchase, redemption,
retirement, or other acquisition by the Company from the Company Shareholders of
any shares of any such capital stock; or declaration or payment of any dividend
or other distribution or payment in respect of shares of capital stock; (ii)
payment or increase by the Company of any bonuses, salaries, or other
compensation to any stockholder, director, officer, or (except in the ordinary
course of business) employee or entry into any employment, severance, or similar
contract with any director, officer, or employee; (iii) adoption of, or increase
in the payments to or benefits under, any Company Benefit Plan (as defined in
Section 2.16(a)); (iv) damage to or destruction or loss of any asset or property
of the Company, whether or not covered by insurance, that is reasonably likely
to have a Material Adverse Effect; (v) entry into, termination of, or receipt of
notice of termination of (A) any license, distributorship, dealer, sales
representative, joint venture, credit, or similar agreement, or (B) any Material
Agreement or transaction involving a total remaining commitment by or to the
Company of at least $5,000; (vii) sale (other than sales of inventory in the
ordinary course of business), lease, or other disposition of any asset or
property of the Company or mortgage, pledge, or imposition of any Lien on any
material asset or property of the Company, including the sale, lease, or other
disposition of any of the Intellectual Property Rights; (vii) cancellation or
waiver of any claims or rights with a value to the Company in excess of $5,000;
(viii) material change in the accounting methods used by the Company; (ix)
incurrence of any indebtedness for borrowed money or capital lease obligations
outside the ordinary course of business; (x) guaranty of any indebtedness of
another Person; (xi) acquisition by merger or consolidation with, or by
purchasing a substantial equity interest in, or by any other manner, any
business or any Person; (xii) acceleration, termination (other than end-of-term
expirations), modification, cancellation, declaration of a default under or
indication of an intent to terminate any Material Agreement (or series of
related Material Agreements) involving more than $5,000 to which the Company is
a party or by which it is bound; (xiii) any capital expenditure (or series of
related capital expenditures) either involving more than $5,000 or outside the
ordinary course of business; (xiv) delay or postponement of the collection of
accounts receivable or the payment of accounts payable and other liabilities
outside the ordinary course of business; (xvi) loan to, or, except in the
ordinary course of business, entry into any other transaction with, any of its
directors, officers and employees; (xvi) entry into any transaction other than
in the ordinary course of business; (xvii) agreement, whether oral or written,
by the Company to do any of the foregoing; and (xviii) any other change, event,
development or circumstance affecting the
16
Company which, individually or in the aggregate, has, or is reasonably likely to
have, a Material Adverse Effect.
(b) Since December 31, 2001, there has not been any change by the
Company in its accounting methods, principles or practices, any revaluation by
the Company of any of its assets, including, writing down the value of inventory
or writing off notes or accounts receivable other than in the ordinary course of
business, or any condition, event or occurrence which could reasonably be
expected to prevent, hinder or materially delay the ability of the Company to
consummate the transactions contemplated by this Agreement.
2.14 No Undisclosed Liabilities. The Company has no liabilities or
obligations of any nature (whether absolute, accrued, fixed, contingent or
otherwise), except (a) liabilities or obligations reflected in the Company
Balance Sheet, (b) liabilities or obligations incurred in the ordinary course of
business consistent with past practice since February 28, 2002 which are not,
and will not have, individually or in the aggregate, a Material Adverse Effect
on the Company and (c) liabilities or obligations which are not and will not
have, individually or in the aggregate, a Material Adverse Effect on the
Company.
2.15 Absence of Litigation. There is no Litigation pending against the
Company or, to the Company's Knowledge, against any licensors of Intellectual
Property to the Company, or, to the Company's Knowledge, threatened against the
Company and there is no basis for such Litigation. The Company is not subject to
any outstanding Claim or Order which, individually or in the aggregate, has, or
in the future might have, a Material Adverse Effect or would prevent, hinder or
delay the Company from consummating the transactions contemplated by this
Agreement.
2.16 Employee Benefit Plans.
(a) The Company has no deferred compensation, incentive
compensation, stock purchase, restricted stock option and other equity
compensation plan, "welfare" plan, fund or program (within the meaning of
Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"); "pension" plan, fund or program (within the meaning of Section 3(2)
of ERISA); or any other employee benefit plan, fund, program, agreement or
arrangement, including but not limited to vacation plans, cafeteria plans,
educational assistance or reimbursement plans, spending account plans (for
medical expenses, dependent care expenses, or other expenses), severance, golden
parachute, termination, supplemental unemployment, plant closing or similar
benefits, active health or life or other post-employment welfare or insurance
plans, bonus or performance based compensation plans or arrangements,
supplemental executive retirement plans or other supplemental or excess benefit
plans in each case, that is sponsored, maintained or contributed to or required
to be contributed to by the Company, any trade or business (whether or not
incorporated) which is a member of a controlled group or which is under common
control with the Company within the meaning of Section 414 of the Code or which
could be deemed a "single employer" within the meaning of Section 4001(b) of
ERISA (an "ERISA Affiliate"), or to which the Company or an ERISA Affiliate is a
party, whether written or oral, for the benefit of any officer, director,
employee or former employee of the Company or any of its ERISA Affiliates,
whether or not such plan has been terminated ("Company Benefit Plans").
17
(b) No liability under Title IV or Section 302 of ERISA has been
incurred by the Company or any ERISA Affiliate that has not been satisfied in
full, and no condition exists that presents a risk to the Company or any ERISA
Affiliate of incurring any such liability.
(c) The execution, delivery and performance, and consummation of the
transactions contemplated by, this Agreement and the Related Agreements will not
(i) entitle any current or former employee or officer of the Company or any
ERISA affiliate to severance pay, unemployment compensation or any other
payment, except as expressly provided in this Agreement, (ii) accelerate the
time of payment or vesting, or increase the amount of compensation due any such
employee or officer, or (iii) accelerate the vesting of any stock option or of
any shares of restricted stock.
(d) Section 2.16(d) of the Company Disclosure Schedule contains a
complete and accurate list of the following information for each retired
employee or director of the Company, or their dependents, receiving benefits or
scheduled to receive benefits in the future: name, pension benefit, pension
option election, retiree medical insurance coverage, retiree life insurance
coverage, and other benefits.
2.17 Employment and Labor Matters.
(a) Section 2.17(a) of the Company Disclosure Schedule identifies
all employees and consultants employed or engaged by the Company or XAG and sets
forth each such individual's rate of pay or annual compensation (and the
portions thereof attributable to salary and bonuses, respectively), job title
and date of hire. There are no employment, consulting, severance pay,
continuation pay, termination or indemnification agreements or other similar
agreements of any nature (whether in writing or not) between the Company or XAG
and any current or former stockholder, officer, director, employee, or any
consultant. No individual will accrue or receive additional benefits, service or
accelerated rights to payments under any Company Benefit Plan, including the
right to receive any parachute payment, as defined in Section 280G of the Code,
or become entitled to severance, termination allowance or similar payments as a
result of the transaction contemplated herein that could result in the payment
of any such benefits or payments. Neither the Company nor XAG is delinquent in
payments to any of its employees or consultants for any wages, salaries,
commissions, bonuses or other compensation for any services. To the Company's
Knowledge, none of the Company's employment policies or practices are currently
being audited or investigated by any Governmental Authority. There are no
pending, or to the Company's Knowledge, threatened, claims, charges, actions,
lawsuits or proceedings alleging claims against the Company or XAG brought by or
on behalf of any employee or other individual or any Governmental Authority with
respect to employment practices, and no facts or circumstances exist that could
give rise to any such claims, charges, actions, lawsuits or proceedings.
(b) There are no controversies pending or, to the Company's
Knowledge, threatened, between the Company or XAG and any of its employees, and
employee relations are, in general, considered to be good; the Company is not a
party to any collective bargaining agreement or other labor union contract
applicable to persons employed by the Company nor are there any activities or
proceedings of any labor union or by any employees to organize any such
employees of the Company; during the past five years there have been no strikes,
slowdowns,
18
work stoppages, lockouts, or threats thereof, by or with respect to any
employees of the Company. The Company does not have nor at the Closing will the
Company have any obligation under the Worker Adjustment and Retraining
Notification Act (the "WARN Act"). The Company is in compliance with all
applicable provisions of applicable state, local, federal and foreign
employment, wage and hour, labor and other applicable laws, except where any
failures to be in compliance therewith would not, individually or in the
aggregate, have a Material Adverse Effect.
2.18 Absence of Restrictions on Business Activities.
(a) There is no Material Agreement or Order binding upon the Company
or any of its properties which has had or could reasonably be expected to have
the effect of prohibiting or materially impairing any business practice of the
Company or the conduct of business by the Company as currently conducted. The
Company is not subject to any non-competition or similar restriction on its
business. The Company has not at any time entered into, or agreed to enter into,
any interest rate swaps, caps, floors or option agreements or any other interest
rate risk management arrangement or foreign exchange contracts.
(b) No employee or director of the Company is a party to, or is
otherwise bound by, any agreement or arrangement, including any confidentiality,
non-competition, or proprietary rights agreement, between such employee or
director and any other Person ("Proprietary Rights Agreement") that in any way
adversely affects or will adversely affect (i) the performance of his or her
duties as an employee or director of the Company, or (ii) the ability of the
Company to conduct its business, including any Proprietary Rights Agreement with
the Company by any such employee or director. To the Knowledge of the Company,
no director, officer, or other key employee of the Company intends to terminate
his or her employment with the Company.
(c) The Company acknowledges that it has been informed by QIAGEN
that after the Closing QIAGEN intends to move the business operations of the
Company to its U.S. headquarters in Germantown, Maryland.
2.19 Title to Assets; Leases.
(a) Except as described in Section 2.19 of the Company Disclosure
Schedule, the Company owns no real property. Section 2.19 of the Company
Disclosure Schedule sets forth a true and complete list of all real property
leased by the Company and the aggregate monthly rental or other fee payable
under such lease. The Company has good and marketable title to all of their
respective properties and assets, free and clear of all Liens, charges and
encumbrances, except Liens for Taxes (as defined below) not yet due and payable
and such Liens or other imperfections of title, if any, as do not materially
detract from the value of or interfere with the present use of the property
affected thereby. All leases pursuant to which the Company leases real or
personal property from others are valid and effective in accordance with their
respective terms, and there is not, under any of such leases, any existing
material default or event of material default (or event which with notice or
lapse of time, or both, would constitute a material default and in respect of
which the Company has not taken adequate steps to prevent
19
such a default from occurring or to cure such default) by the Company or, to the
Company's Knowledge, any third party.
(b) The Company has good and marketable title to or a valid
leasehold interest in all of the properties and assets that are necessary to the
conduct of the business of the Company as it is currently being conducted,
including all of the properties and assets reflected in the Company Balance
Sheet, other than any such properties or assets that have been sold or otherwise
disposed of in the ordinary course of business since February 28, 2002.
(c) The buildings, plants, structures, and equipment of the Company
are structurally sound, are in good operating condition and repair in all
material respects, and are adequate for the uses to which they are being put,
and none of such buildings, plants, structures, or equipment is in need of
maintenance or repairs except for ordinary, routine maintenance and repairs that
are not material in nature or cost. The building, plants, structures, and
equipment of the Company are sufficient for the continued conduct of the
Company's business after the Closing in substantially the same manner as
conducted prior to the Closing.
2.20 Taxes. For purposes of this Agreement, "Tax" or "Taxes" shall mean
taxes and governmental impositions of any kind in the nature of (or similar to)
taxes, payable to any federal, state, local or foreign taxing authority,
including but not limited to those on or measured by or referred to as income,
franchise, profits, gross receipts, capital ad valorem, custom duties,
alternative or add-on minimum taxes, estimated, environmental, disability,
registration, value added, sales, use, service, real or personal property,
capital stock, license, payroll, withholding, employment, social security,
workers' compensation, unemployment compensation, utility, severance,
production, excise, stamp, occupation, premiums, windfall profits, transfer and
gains taxes, and interest, penalties and additions to tax imposed with respect
thereto; and "Tax Returns" shall mean returns, reports and information
statements, including any schedule or attachment thereto, with respect to Taxes
required to be filed with the Internal Revenue Service or any other governmental
or taxing authority or agency, domestic or foreign, including consolidated,
combined and unitary tax returns.
(a) All federal, state, local and foreign Tax Returns required to be
filed (taking into account extensions) by or on behalf of the Company, and each
affiliated, combined, consolidated or unitary group of which the Company is or
has been a member, have been timely filed, and all such Tax Returns are true,
complete and correct.
(b) Except as set forth on Section 2.20 of the Company Disclosure
Schedule, all Taxes payable by or with respect to the Company have been timely
paid, or are adequately reserved for (other than a reserve for deferred Taxes
established to reflect timing differences between book and Tax treatment) in
accordance with GAAP on the Company Balance Sheet. No deficiencies for any Taxes
have been proposed, asserted or assessed either orally or in writing against the
Company that are not adequately reserved for in accordance with GAAP on the
respective Company Balance Sheet. All assessments for Taxes due and owing by or
with respect to the Company with respect to completed and settled examinations
or concluded litigation have been paid. The Company has not incurred a Tax
liability from the date of the latest Company Balance Sheet other than a Tax
liability in the ordinary course of business.
20
(c) The Company has not requested, or been granted any waiver
of any federal, state, local or foreign statute of limitations with respect to,
or any extension of a period for the assessment of, any Tax. No extension or
waiver of time within which to file any Tax Return of, or applicable to, the
Company has been granted or requested, except as set forth in Section 2.20 of
the Company Disclosure Schedule, which extension or waiver has not since
expired.
(d) The Company is not and has never been (nor does the Company
have any liability for unpaid Taxes because it once was) a member of an
affiliated, consolidated, combined or unitary group, and the Company is not a
party to any Tax allocation or sharing agreement or liable for the Taxes of any
other party, as transferee or successor, by contract, or otherwise.
(e) Prior to the date hereof, the Company has provided QIAGEN
with written schedules setting forth the taxable years of the Company for which
the statutes of limitations with respect to foreign, federal and material state
income Taxes have not expired, and with respect to foreign, federal and material
state income Taxes, those years for which examinations have been completed and
those years for which examinations are presently being conducted.
(f) Based on its current income, assets and activities, the
Company does not believe that it presently is a "foreign investment company" as
such term is defined in Section 1246(b) of the Code.
(g) The Company is not presently and has not been a "passive
foreign investment company" as such term is defined in Section 1297(a) of the
Code.
(h) The Company is not presently and has not been at any time
during the last five years a "controlled foreign corporation" as such term is
defined in Section 957(a) of the Code.
(i) The Company has not made any payments, is not obligated to
make any payments, and is not a party to any agreements that under any
circumstances could obligate it to make any payments that will not be deductible
under Section 280G of the Code.
(j) No unsatisfied deficiency, delinquency or default for any
Tax has been claimed, proposed or assessed against or with respect to the
Company, nor has the Company received notice of any such deficiency, delinquency
or default which, in any such case, may have a Material Adverse Effect.
(k) The Company has not been a United States real property
holding corporation within the meaning of Section 897(c)(2) of the Code during
the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
(l) The Company has complied with all applicable Laws relating
to the payment and withholding of Taxes (including, without limitation,
withholding of Taxes pursuant to Sections 1441, 1442 and 3406 of the Code or
similar provisions under any foreign Laws) and has, within the time and in the
manner required by Law, withheld from employee wages and paid over to the proper
Governmental Authorities all amounts required to be so withheld and paid over
under all applicable Laws.
21
(m) Section 2.20(m) of the Company Disclosure Schedule sets
forth: (i) the net operating loss ("NOL") and (ii) capital loss carry forwards
for foreign and federal income Tax purposes of the Company through the taxable
year ended December 31, 2001.
(n) The NOLs of the Company are not subject to Section 382 or
269 of the Code, Treasury Regulation Section 1.1502-21T(c), or any similar
provisions or regulations otherwise limiting the use of the NOLs of the Company.
(o) No property of the Company is "tax-exempt use property" as
such term is defined in Section 168 of the Code.
(p) The Company has never made an election under Section 341(f)
of the Code.
2.21 Environmental Matters.
(a) The Company is and has been in compliance with all
applicable Environmental Laws;
(b) The Company has obtained all Permits relating to the
business required by any applicable Environmental Law and all environmental
permits relating to the business of the Company and all such permits are in full
force and effect in all respects; the environmental Permits do not materially
limit or affect the processes, methods, capacity or operating hours of the
persons carrying on the business of the Company as it is currently carried on;
(c) The Company has not, and the Company has no Knowledge of
any other Person who has, caused any unlawful or improper release, threatened
release or disposal of any Hazardous Material at any properties or facilities
previously or currently owned, leased or occupied by the Company;
(d) The Company has no Knowledge that any of the Company's
facilities are adversely affected by any release, threatened release or disposal
of a Hazardous Material originating or emanating from any other property;
(e) The Company (i) has no liability for response or corrective
action, natural resources damage, or any other harm pursuant to any
Environmental Law, (ii) is not subject to, has notice or Knowledge of, or is
required to give any notice of any Environmental Claim involving an allegation
against the Company or any properties or facilities of the Company or (iii) has
no Knowledge of any condition or occurrence which could reasonably be expected
to form the basis of an Environmental Claim against the Company or any of its
properties or facilities;
(f) The Company is not subject to any, and the Company has no
Knowledge of any, imminent restriction on the ownership, occupancy, use or
transferability of their properties and facilities arising from any (i)
Environmental Law or (ii) release, threatened release or disposal of any
Hazardous Material; and
22
(g) There is no Environmental Claim pending, or, to the
Company's Knowledge, threatened, against the Company or, to the Company's
Knowledge, against any Person whose liability for any Environmental Claim the
Company has or may have retained or assumed either contractually or by operation
of law and no basis exists for any Environmental Claim against the Company. No
material capital expenditure is currently required for the Company in relation
to environmental matters in order to comply with, extend, renew or obtain any
environmental permit or comply with Environmental Laws. Copies of all
environmental audits and other assessments, reviews and reports have been
previously provided to QIAGEN.
2.22 Intellectual Property.
(a) Section 2.22(a) of the Company Disclosure Schedule sets
forth a true, correct and complete list of all of the Company's and XAG's United
States and foreign (i) patents and patent applications (the "Patents"), (ii)
registered and unregistered trademarks and trademark applications, including
material Internet domain name registrations (the "Trademarks"), (iii) service
marks, service xxxx applications and trade names (the "Tradenames"), (iv)
copyright registrations and copyright applications (the "Copyrights"), and (v)
licenses presently used by the Company, indicating for each, the applicable
jurisdiction, registration number (or applicable number), and date issued or
filed, as applicable, with respect to (i), (ii), (iii), and (iv) above and
including the terms of such licenses (all of which, together with patent rights,
trade secrets, confidential business information, formulas, processes, invention
records, procedures, research and development activity reports, laboratory
notebooks, copyrights, license rights and trademark rights which relate to or
are used or held for use in connection with the business of the Company or XAG,
are collectively referred to as, the "Intellectual Property Rights"). Copies of
all licenses listed in (v) above have been previously provided or made available
to QIAGEN. The Intellectual Property Rights are sufficient for the conduct of
the Company's business as presently conducted.
(b) Section 2.22(b) of the Company Disclosure Schedule sets
forth a true, correct and complete list, and where appropriate, a description of
all Intellectual Property Rights set forth in Section 2.22(a) of the Company
Disclosure Schedule to which the Company's rights are not exclusive, excluding
all Intellectual Property Rights which the Company has the right to use under a
shrinkwrap or similar mass marketing license. Except as otherwise disclosed in
Section 2.22(b) of the Company Disclosure Schedule and excluding all
Intellectual Property Rights subject to a shrinkwrap or similar mass marketing
license, the Company exclusively owns or has the exclusive right to use all of
the Intellectual Property Rights listed in Section 2.22(a) of the Company
Disclosure Schedule. It is not and will not be necessary to utilize any
inventions of any of its employees or consultants (or individuals it currently
intends to hire) made prior to their employment by the Company.
(c) All Trademarks, Patents, Tradenames and Copyrights are
currently in compliance with all legal requirements (including the timely
post-registration filing of affidavits of use and incontestability and renewal
applications with respect to Trademarks, and the payment of filing, examination
and maintenance fees and proof of working or use with respect to Patents), and
are, to the Company's Knowledge, valid and enforceable. No Trademark has been or
is now involved in any cancellation and, to the Company's Knowledge, no such
action is threatened with respect to any of the Trademarks. No Patent has been
or is now involved in any
23
interference, reissue, re-examination or opposition proceeding. To the Company's
Knowledge, there are no potentially conflicting trademarks or potentially
interfering patents of any third party. The Company has discussed with QIAGEN's
counsel the content of all reviews, assessments or analyses (whether written or
oral) pertaining to the Company's ability to use Patents (whether owned or
licensed).
(d) Except as disclosed on Section 2.22(d) of the Company
Disclosure Schedule:
(i) The Company owns free and clear of all Liens, all
owned Intellectual Property Rights, and has a valid and enforceable right
to use in accordance with the applicable license agreement, if any, all of
the Intellectual Property Rights licensed to the Company and used in the
Company's business;
(ii) The Company has taken all necessary steps to protect
and preserve the Intellectual Property Rights which the Company owns or
has licensed;
(iii) The conduct of the Company's businesses as currently
conducted, or as contemplated to fulfill the Company's business plan for
fiscal year 2002, does not and will not infringe upon any intellectual
property rights owned or controlled by any third party;
(iv) There is no Litigation pending or, to the Company's
Knowledge, threatened, nor has the Company received any written
communication of, and there is no basis for, a claim against it (1)
alleging that the Company's or XAG's activities, products, publications or
the conduct of its businesses infringes upon, violates, or constitutes the
unauthorized use of the intellectual property rights of any third party,
or (2) challenging the ownership, use, validity or enforceability of any
Intellectual Property Rights of the Company or XAG;
(v) No third party is misappropriating, infringing,
diluting, or violating any Intellectual Property Rights of the Company or
XAG, and no such claims have been brought against any third party by the
Company or XAG, and the Company has not knowingly misappropriated the
trade secrets of any third party; and
(vi) The execution, delivery and performance by the
Company of this Agreement, and the consummation of the transactions
contemplated hereby will not result in the loss or impairment of or give
rise to any right of any third party to terminate any of the Company's
rights to own any of the Intellectual Property Rights owned by the Company
or to use any Intellectual Property Rights licensed to the Company
pursuant to the license agreements, nor require the consent of any
Governmental Authority or third party in respect of any such Intellectual
Property Rights.
(e) All Trademarks have been in continuous use by the Company
or XAG. To the Company's Knowledge (i) there has been no prior use of such
Trademarks by any third party which would confer upon said third party superior
rights in such trademarks, and (ii) the registered Trademarks have been
continuously used in the form appearing in, and in connection with the goods and
services listed in, their respective registration certificates.
24
(f) The Company has taken all reasonable steps in accordance
with normal industry practice to protect the Company's rights in confidential
information and trade secrets of the Company. Without limiting the foregoing and
except as would not be materially adverse to the Company, the Company has and
enforces a policy of requiring each employee, consultant and contractor to
execute proprietary information, confidentiality and assignment agreements
substantially consistent with the Company's standard forms thereof. All of the
Company's employees, consultants and contractors have executed such a
proprietary information, confidentiality and assignment agreement. Except under
confidentiality obligations, there has been no material disclosure by the
Company of the Company's material confidential information or trade secrets.
2.23 Insurance.
(a) Section 2.23 of the Company Disclosure Schedule sets forth
a true and complete list of all insurance policies and fidelity bonds covering
the assets, business, equipment, properties, operations, employees, officers and
directors of the Company including: (i) a summary of the loss experience under
each policy; (ii) a statement describing each claim under an insurance policy
for an amount in excess of $5,000, which sets forth: (A) the name of the
claimant; (B) a description of the policy by insurer, type of insurance, and
period of coverage; and (C) the amount and a brief description of the claim; and
(iii) a statement describing the loss experience for all claims that were
self-insured, including the number and aggregate cost of such claims. There is
no claim by the Company pending under any of such policies or bonds as to which
coverage has been questioned, denied or disputed by the underwriters of such
policies or bonds. All premiums payable under all such policies and bonds have
been paid, and the Company is otherwise in full compliance with the terms of
such policies and bonds (or other policies and bonds providing substantially
similar insurance coverage). Such policies of insurance and bonds are of the
type and in amounts customarily carried by Persons conducting businesses similar
to those of the Company and reasonable in light of the assets of the Company. As
of the date hereof, the Company has not received notice of any, and to Company's
Knowledge, there is no threatened, termination of or material premium increase
with respect to any of such policies or bonds.
(b) All policies to which the Company is a party or that
provide coverage to either the Company, or any director or officer of the
Company: (A) are valid, outstanding, and enforceable; (B) are issued by an
insurer that is financially sound and reputable; (C) taken together, provide
adequate insurance coverage for the assets and the operations of the Company for
all risks normally insured against by a Person carrying on the same business as
the Company; (D) are sufficient for compliance with all Laws and Material
Agreements to which the Company is a party or by which it is bound; (E) will
continue in full force and effect following the consummation of the transactions
contemplated by this Agreement; and (F) do not provide for any retrospective
premium adjustment or other experienced-based liability on the part of the
Company.
(c) The Company has not received (A) any refusal of coverage
from the issuer of any insurance policy of the Company or any notice that a
defense will be afforded with reservation of rights, or (B) any notice of
cancellation or any other indication that any insurance
25
policy is no longer in full force or effect or will or will not be renewed or
that the issuer of any policy is not willing or able to perform its obligations
thereunder.
(d) The Company has paid all premiums due, and has otherwise
performed all of its respective obligations, under each policy to which the
Company is a party or that provides coverage to the Company or a director
thereof.
(e) The Company has given notice to the insurer of all claims
that may be insured thereby.
2.24 Brokers. No broker, financial advisor, finder or investment
banker or other Person is entitled to any broker's, financial advisor's,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Company.
2.25 Certain Business Practices. Neither the Company nor any director,
officer, employee or agent of the Company 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, (iii) consummated any transaction, made any payment, entered into
any agreement or arrangement or taken any other action in violation of Section
1128B(b) of the Social Security Act, as amended, or (iv) made any other unlawful
payment.
2.26 Interested Party Transactions. The Company is not indebted to any
director, officer, employee or agent of the Company (except for amounts due as
normal salaries and bonuses and in reimbursement of ordinary expenses), and no
such Person is indebted to the Company.
2.27 Disclosure. The representations and warranties of the Company
contained in this Agreement (including the Company Disclosure Schedule) do not
contain, and will not contain at the Closing Date, any untrue statement of a
material fact, and do not omit, and will not omit at the Closing Date, to state
any material fact necessary to make such representations and warranties, in
light of the circumstances under which they are made, not misleading. There is
no fact known to the Company that has not been disclosed to QIAGEN and Merger
Sub in this Agreement (including in the Company Disclosure Schedule) that is
reasonably likely to have a Material Adverse Effect.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE FOUNDERS
Each of Xx. Xxxxx and Xx. Xxxxxx (each a "Founder" and collectively, the
"Founders") severally represents and warrants to QIAGEN as follows:
3.1 Conflicting Agreements. The Founder is not, and will not be as a
result of the nature of the business conducted or proposed to be conducted by
the Surviving Corporation or QIAGEN after the Closing or for any other reason,
in violation of (i) any fiduciary or confidential relationship, (ii) any term of
any contact or covenant (either with the Company or
26
with another entity) relating to employment, patents, assignment of inventions,
proprietary information disclosure, non-competition or non-solicitation, or
(iii) any other contract or agreement, or any judgment, decree or order of any
court or administrative agency, relating to or affecting the Founder to be
employed or retained as a consultant by the Company. No such relationship, term,
contract, agreement, judgment, decree, or order conflicts with the Founder's
obligations to use his best efforts to promote the interests of the Company, nor
does the execution and delivery of this Agreement or the Related Agreements, nor
the carrying on of the Company's business as an officer, consultant or employee
of the Company, conflict with any such relationship, term, contract, agreement,
judgment, decree or order.
3.2 Litigation. There is no Litigation pending or, to the best of the
Founder's knowledge, threatened against the Founder, and, to the best of the
Founder's knowledge, there is no basis for any such Litigation.
3.3 Intellectual Property.
(a) Set forth on Section 3.4 of the Company Disclosure Schedule
is a list and brief description of all Intellectual Property Rights assigned to
the Company or XAG by the Founder, proposed to be assigned to the Company or XAG
by the Founder, or licensed to the Company or XAG by the Founder (or any entity
affiliated with the Founder) (collectively, "Founder Intellectual Property").
(b) there is no adverse claim or, to the best of the Founder's
knowledge, any threatened claim that would interfere with the Surviving
Corporation or QIAGEN's exclusive right to use the Founder Intellectual
Property. No product, service or process presently used or proposed to be
manufactured, marketed, offered, sold or used by the Company which was
originally Founder Intellectual Property will violate any license or infringe on
any intellectual property rights of any other person; and neither the Company's
intellectual property rights in the Founder Intellectual Property nor the
operation of the Company's business nor proposed operation of the Surviving
Corporation's business shall conflict with the asserted rights of others, nor
does there exist any known basis for any such conflict. No claim is pending or
threatened to the effect that any Founder Intellectual Property is invalid or
unenforceable by the Company, and none of the Founder Intellectual Property may
be invalid. Except as set forth in Section 3.4 of the Company Disclosure
Schedule, the Company has no obligation to compensate any person for the use of
any of the Founder Intellectual Property.
3.4 Indemnification by Founders.
(a) Each of the Founders shall, with respect to the
representations, warranties and agreements made by him in this Article 3 jointly
and severally with the Company and the Company Shareholders as provided in
Article 8, indemnify, defend and hold QIAGEN harmless against all liability,
loss or damage, together with all reasonable costs and expenses related thereto
(including legal and accounting fees and expenses), arising from the untruth,
inaccuracy or breach of any such representations, warranties or agreements of
the Founder. Without limiting the generality of the foregoing, QIAGEN shall be
deemed to have suffered liability, loss or damage as a result of the material
untruth, inaccuracy or breach of any such representations or
27
warranties if such liability, loss or damage shall be suffered by QIAGEN as a
result of such material untruth, inaccuracy or breach of any facts or
circumstances constituting such material untruth, inaccuracy or breach.
(b) Nothing in this Section 3.6 shall limit or in any way
diminish the liability of the Company or the Company Shareholders to QIAGEN with
respect to any breach of any representation or warranty of the Company contained
herein.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY SHAREHOLDERS
Each of the Company Shareholders represents and warrants to QIAGEN that
such Company Shareholder is the record and beneficial owner of all of the
outstanding Company Shares set forth opposite his, her or its name on Schedule I
attached hereto, and such Company Shares are owned by such Company Shareholder
free and clear of all Liens, claims, encumbrances, interests of, and rights in,
others.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF QIAGEN AND MERGER SUB
QIAGEN and Merger Sub hereby, jointly and severally, represent and
warrant to the Company that:
5.1 Organization and Qualification.
(a) Each of QIAGEN and Merger Sub is a corporation duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation or organization, and each has the
requisite corporate power and authority, and is in possession of all franchises,
grants, authorizations, licenses, permits, consents, certificates, approvals and
Orders ("QIAGEN Approvals") necessary to own, lease and operate its properties
and to carry on its business as it is now being conducted, except where the
failure to be so qualified, existing and in good standing or to have such power,
authority and QIAGEN Approvals would not, either individually or in the
aggregate, have a Material Adverse Effect.
(b) Each of QIAGEN and Merger Sub is duly qualified or licensed
as a foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its activities makes such qualification or licensing
necessary, except for such failures to be so duly qualified or licensed and in
good standing that would not, either individually or in the aggregate, have a
Material Adverse Effect.
28
(c) Merger Sub is a newly-formed single purpose entity which
has been formed solely for the purposes of the Merger, has carried on no
business to date and will not carry on any business or engage in any activities
other than those necessary to the Merger.
5.2 Authorization of Agreement. Each of QIAGEN and Merger Sub has all
requisite corporate power and authority to execute and deliver this Agreement
and each instrument required hereby to be executed and delivered by it at the
Closing, to perform its obligations hereunder and thereunder and to consummate
the transactions contemplated hereby and thereby. The execution and delivery by
each of QIAGEN and Merger Sub of this Agreement and each instrument required
hereby to be executed and delivered by it at the Closing, the performance of
obligations hereunder and thereunder and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by the
Board of Supervisory Directors and the Board of Directors, respectively, of
QIAGEN and Merger Sub, and by QIAGEN as the sole stockholder of Merger Sub, and
except for the filing of the Certificates of Merger, no other corporate
proceedings on the part of QIAGEN or Merger Sub are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. This Agreement
has been duly executed and delivered by each of QIAGEN and Merger Sub and,
assuming due authorization, execution and delivery hereof by the Company and the
Company Shareholders, constitutes a legal, valid and binding obligation of each
of QIAGEN and Merger Sub, enforceable against each of QIAGEN and Merger Sub in
accordance with its terms, in each case except to the extent that the
enforcement hereof may be limited by (A) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (B) general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at law).
5.3 Approvals. The execution and delivery by QIAGEN and Merger Sub of
this Agreement or any instrument required by this Agreement to be executed and
delivered by QIAGEN or Merger Sub at the Closing do not, and the performance by
each of QIAGEN and Merger Sub of its respective obligations under this Agreement
or any instrument required by this Agreement to be executed and delivered by
QIAGEN or Merger Sub at the Closing shall not, require QIAGEN or Merger Sub to
obtain any consent, approval, authorization, license, waiver, qualification,
Order or permit of, observe any waiting period imposed by, or require QIAGEN or
Merger Sub to make any filing with or notification to, any Court or Governmental
Authority, except (A) compliance with applicable requirements, if any, of the
Securities Act, the Exchange Act or Blue Sky Laws, (B) the filing of appropriate
Merger or other documents as required by Delaware or Alabama Law, (C) such other
consents, approvals, authorizations, licenses, waivers, qualifications, Orders
or permits, filings or notifications, the failure to obtain or make which would
not have, individually or in the aggregate, a Material Adverse Effect, or (D) as
may arise in any foreign jurisdiction as a consequence of QIAGEN's listing of
the QIAGEN Common Stock on the Neuer Markt division of the Frankfurt Stock
Exchange.
5.4 No Violation. Assuming effectuation of all filings,
notifications, and registrations with, termination or expiration of any
applicable waiting periods imposed by and receipt of all permits or Orders of
Courts and/or Governmental Authorities set forth in Section 2.4 above, the
execution and delivery by QIAGEN and Merger Sub of this Agreement or any
instrument required by this Agreement to be executed and delivered by QIAGEN or
Merger Sub at the Closing do not, and the performance of this Agreement by each
of QIAGEN or Merger
29
Sub of its respective obligations under this Agreement or any instrument
required by this Agreement to be executed and delivered by QIAGEN or Merger Sub
at the Closing will not, (i) conflict with or violate the Articles of
Association of QIAGEN, or the Certificate of Incorporation or By-laws of Merger
Sub, (ii) conflict with or violate any Law, Order or Regulation in each case
applicable to QIAGEN or Merger Sub or by which any of their respective
properties is bound or affected, or (iii) result in any breach or violation of
or constitute a default (or an event that with notice or lapse of time or both
would become a default) under any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the QIAGEN or Merger Sub is a party or by which QIAGEN or Merger Sub or
any of their respective properties is bound or affected.
ARTICLE 6
ADDITIONAL OBLIGATIONS
6.1 Employee Benefits.
(a) QIAGEN agrees that individuals who are employed by the
Company immediately prior to the Effective Time shall become employees of the
Surviving Corporation upon the Effective Time (each such employee, a "Company
Employee"); provided, however, that this Section 6.1 shall not be construed to
limit the ability of the Company or any of its Subsidiaries to terminate the
employment of any Company Employee at any time.
(b) QIAGEN will, or will cause the Surviving Corporation to,
give Company Employees full credit for purposes of eligibility (including
service and waiting period requirements), vesting, benefit accrual and
determination of the level of benefits under any employee benefit plans or
arrangements maintained by the QIAGEN or the Surviving Corporation in which the
Company Employees are eligible to participate or to be covered after the
Effective Time, for such Company Employees' service with the Company to the same
extent recognized by the Company immediately prior to the Effective Time.
(c) QIAGEN will, or will cause the Surviving Corporation to,
(i) waive all limitations as to preexisting conditions, exclusions and waiting
periods and service requirements with respect to participation and coverage
requirements applicable to the Company Employees under any welfare benefit plans
of QIAGEN or the Surviving Corporation in which Company Employees are eligible
to participate or to be covered after the Effective Time, other than
limitations, waiting periods or service requirements that are already in effect
with respect to such Company Employees and that have not been satisfied under
any welfare plan previously maintained for the Company Employees, and (ii)
provide each Company Employee with credit for any co-payments and deductibles
paid in the year in which the Effective Time occurs under the welfare benefit
plans of the Company or the Surviving Corporation (as shown on the Company's or
the Surviving Corporation's records) in satisfying any applicable deductible or
out-of-pocket requirements under any welfare benefit plans of QIAGEN in which
Company Employees are eligible to participate or to be covered in the year in
which the Effective Time occurs.
(d) It is QIAGEN's present intention that the operations of the
Company shall be relocated to QIAGEN's U.S. headquarters in Germantown,
Maryland.
30
6.2 Listings. QIAGEN shall use commercially reasonable efforts to cause
the QIAGEN Common Stock to be issued in the Merger to be approved for listing on
(i) the Nasdaq National Market not later than the effectiveness of the Resale
Registration Statement (as defined in Section 1.6(c) hereof) and (ii) the Neuer
Markt division of the Frankfurt Stock Exchange as soon as practicable after the
Effective Time.
6.3 Registration of Shares Issued in the Merger.
(a) Registrable Shares. For purposes of this Agreement,
"Registrable Shares" shall mean the Merger Shares issued to the Company
Shareholders in accordance with Section 1.6 of this Agreement, but shall exclude
any Escrow Shares or Performance Shares.
(b) Required Registration. Within thirty (30) days after the
Effective Time, QIAGEN shall prepare and file with the SEC a Resale Registration
Statement under the Securities Act with respect to the sale of the Registrable
Shares by the Company Shareholders or their permitted distributees. QIAGEN shall
use its commercially reasonable efforts to cause the Resale Registration
Statement and all registrations, qualifications and compliances (including,
without limitation, obtaining appropriate qualifications under applicable state
securities or "blue sky" laws and compliance with any other applicable
governmental requirements or regulations) as the Company Shareholders may
reasonably request and that would permit or facilitate the sale of Registrable
Shares to become effective within ninety (90) days after the Effective Time;
provided, however, that QIAGEN shall not be required in connection therewith to
qualify to do business or to file a general consent to service of process in any
such state or jurisdiction. QIAGEN will provide the Company Shareholders upon
request with as many copies of the prospectus contained in the Resale
Registration Statement as the Company Shareholders may reasonably request.
(c) Effectiveness; Suspension Right.
(i) From and after the effectiveness of the Resale
Registration Statement as contemplated by Section 6.3(b), QIAGEN will use
its best efforts to maintain such effectiveness and other applicable
registrations, qualifications and compliances until the earlier of (A) such
time as the Company Shareholders may sell all of the Registrable Shares
held by them without registration pursuant to Rule 144 under the Securities
Act within a three-month period or pursuant to Regulation S under the
Securities Act or (B) such time as all of the Registrable Shares have been
sold by the Company Shareholders (the "Registration Effective Period"), and
from time to time QIAGEN will amend or supplement the Resale Registration
Statement and the prospectus contained therein as and to the extent
necessary to comply with the Securities Act, the Exchange Act and any
applicable state securities statute or regulation, subject to the following
limitations and qualifications.
(ii) Following the Registration Statement Effective Date,
the Company Shareholders will be permitted, subject to the Suspension Right
(as defined in paragraph (iii) below), to offer and sell Registrable Shares
during the Registration Effective Period in the manner described in the
Resale Registration Statement provided that the Resale
31
Registration Statement remains effective and no stop order or suspension of
the use of the Resale Registration Statement has been imposed by the SEC.
(iii) Subject to the provisions of this Section 6.3, QIAGEN
shall have the right at any time to require that the Company Shareholders
suspend further open market offers and sales of Registrable Shares
whenever, and for so long as, in the reasonable judgment of QIAGEN after
consultation with counsel there is in existence material undisclosed
information or events with respect to QIAGEN (the "Suspension Right"). In
the event QIAGEN exercises the Suspension Right, such suspension will
continue for a period of time reasonably necessary for disclosure to occur
at a time that is not detrimental to QIAGEN and its stockholders or until
such time as the information or event is no longer material, each as
determined in good faith by QIAGEN after consultation with counsel. QIAGEN
will promptly give the Company Shareholders notice of any such suspension
and will use commercially reasonable efforts to limit the length of the
suspension to ten (10) days. Notwithstanding any other provision of this
Section 6.3, such suspension shall not exceed twenty (20) Business Days. In
addition, during any period when a suspension is in effect hereunder,
QIAGEN will suspend the use of, and not file, any other registration
statements.
(d) Expenses. QIAGEN shall bear all costs and expenses of
registration under this Section 6.3, including, without limitation, printing
expenses, legal fees and disbursements of counsel for QIAGEN, legal fees and
disbursements (not to exceed $10,000 in aggregate) of one counsel for the
Company Shareholders, "blue sky" expenses, accounting fees and filing fees, but
excluding underwriting commissions or similar charges in connection with the
resale of the QIAGEN Common.
(e) Indemnification.
(i) To the fullest extent permitted by law, QIAGEN will
indemnify and hold harmless the Company Shareholders, each underwriter of QIAGEN
Common Stock being sold by such Company Shareholders pursuant to this Section
6.3 and each person, if any, who controls the Company Shareholders or
underwriter within the meaning of the Securities Act or the Exchange Act (for
purposes of this Section 6.3(e) only, a "Company Indemnified Person") against
all actions, claims, losses, damages, liabilities and expenses to which they or
any of them become subject under the Securities Act, the Exchange Act or under
any other Law and, except as hereinafter provided, will promptly reimburse as
incurred the Company Indemnified Persons for any legal or other expenses
reasonably incurred by them or any of them in connection with investigating or
defending any actions, whether or not resulting in any liability, insofar as
such losses, claims, damages, expenses, liabilities or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact in any registration statement and any prospectus filed pursuant to Section
6.3 or any post-effective amendment thereto, or arise out of or are based upon
any omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or any violation by
QIAGEN of any rule or regulation promulgated under the Securities Act or the
Exchange Act applicable to QIAGEN and relating to action or inaction required of
QIAGEN in
32
connection with such registration; provided, however, that QIAGEN shall not
be liable to any such Company Indemnified Person in respect of any claims,
losses, damages, liabilities and expenses resulting from any untrue
statement or alleged untrue statement, or omission or alleged omission made
in reliance upon and in conformity with information furnished to QIAGEN by
the Company Indemnified Person specifically for use in connection with such
registration statement and prospectus or post-effective amendment.
(ii) To the fullest extent permitted by law, the Company
Shareholders will, severally and not jointly, indemnify QIAGEN, each
person, if any, who controls QIAGEN within the meaning of the Securities
Act or the Exchange Act, each director of QIAGEN and each officer of QIAGEN
who signs the Resale Registration Statement and each underwriter of QIAGEN
Common Stock (for purposes of this Section 6.3 only, a "QIAGEN Indemnified
Person") against any actions, claims, losses, damages, liabilities and
expenses to which they or any of them may become subject under the
Securities Act, the Exchange Act or under any other Law, and, except as
hereinafter provided, will promptly reimburse such QIAGEN Indemnified
Person for any legal or other expenses reasonably incurred by them or any
of them in connection with investigating or defending any actions, whether
or not resulting in any liability, insofar as such losses, claims, damages,
expenses, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact in any
registration statement and any prospectus filed pursuant to Section 6.3 or
any post-effective amendment thereto, or any omission or alleged omission
to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, which untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity
with information furnished QIAGEN by the Company Shareholders specifically
for use in connection with such registration statement, prospectus or
post-effective amendment.
(iii) Each Company Indemnified Person or QIAGEN Indemnified
Person entitled to indemnification under this Section 6.3 (an "Indemnified
Person") shall give notice to the party required to provide indemnification
(the "Indemnifying Person") promptly after such Indemnified Person has
actual knowledge of any claim as to which indemnity may be sought and shall
permit the Indemnifying Person to assume the defense of any such claim and
any litigation resulting therefrom, provided that counsel for the
Indemnifying Person who conducts the defense of such claim or any
litigation resulting therefrom shall be approved by the Indemnified Person
(whose approval shall not unreasonably be withheld), and the Indemnified
Person may participate in such defense at such party's expense, and
provided further that the failure of any Indemnified Person to give notice
as provided herein shall not relieve the Indemnifying Person of its
obligations under this Section 6.3 except to the extent the Indemnifying
Person is materially prejudiced thereby. No Indemnifying Person, in the
defense of any such claim or litigation, shall (except with the consent of
each Indemnified Person) consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to each Indemnified Person of a
complete release from all liability in respect to such claim or litigation.
Each Indemnified Person shall furnish such information regarding itself or
the claim in question as an
33
Indemnifying Person may reasonably request in writing and as shall be
reasonably required in connection with the defense of such claim and
litigation resulting therefrom.
To the extent that the indemnification provided for in this Section 6.3 is held
by a court of competent jurisdiction to be unavailable to an Indemnified Person
with respect to any loss, liability, claim, damage or expense referred to
herein, then the Indemnifying Person, in lieu of indemnifying such Indemnified
Person hereunder, shall contribute to the amount paid or payable by such
Indemnified Person as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Person on the one hand and of the Indemnified Person on the other
in connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Person and of the
Indemnified Person shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Indemnifying Person or by the Indemnified Person and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(f) "Market Stand-Off" Agreement. Each Company Shareholder agrees,
if requested by QIAGEN and an underwriter of any securities of the Company, (i)
not to lend, offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of QIAGEN Common Stock or any securities convertible into
or exercisable or exchangeable for QIAGEN Common Stock (whether such shares or
any such securities are then owned by such holder or are thereafter acquired),
or (ii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the QIAGEN
Common Stock, whether any such transaction described in clause (i) or (ii) above
is to be settled by delivery of QIAGEN Common Stock or such other securities, in
cash or otherwise, whether in privately negotiated or open market transactions,
any QIAGEN Common Stock or other securities of QIAGEN held by it during the one
hundred eighty (180) day period following the effective date of a registration
statement. Such agreement shall be in writing in form and substance satisfactory
to QIAGEN and such underwriter. QAGEN may impose stop-transfer instructions with
respect to the shares subject to the foregoing restrictions until the end of the
"market stand-off" period.
6.4 Agreement Not to Compete.
(a) Each of Xxxxxxx Xxxxx, Xxxxxxxx Xxxxx and Xxxxxx Xxxxxx agrees
that for a period of three (3) years after the Closing Date, that he, she or it
will not, directly or indirectly, own, manage, control or participate in the
ownership, management or control of, or be employed or engaged by or otherwise
affiliated or associated as a consultant, independent contractor or otherwise
with, any other corporation, partnership, proprietorship, firm, association or
other business entity, or otherwise engage in any business, that is engaged in
any manner in or otherwise competes with the services and business of the
Company or QIAGEN and its subsidiaries in any state in the United States or any
foreign country in which the Company or QIAGEN or any of its subsidiaries is
then doing business; provided, however, that (i) the ownership of not more than
1% of the stock of any publicly traded corporation shall not be
34
deemed a violation of this covenant, (ii) holding a position in a college,
university or other academic institution in which research is conducted by other
persons in other laboratories that may be competitive with the business of the
Company or QIAGEN shall not be deemed a violation of this covenant so long as
such academic position is not directly or indirectly related to sponsored
research that would otherwise violate this subsection (a), and (iii), the
activities described on Section 6.4 of the Company Disclosure Schedule shall not
be deemed a violation of this covenant.
A business will be deemed to "compete with the services and
business" of the Company or QIAGEN and its subsidiaries if its businesses is (i)
the selling marketing, brokering, manufacturing or distributing of products or
the provision of services related to the handling, preparation, purification,
modification or detection of nucleic acids, or the preparation and supply of
synthetic nucleic acids or (ii) any activities that are intended to reduce or
could result in the reduction of the need for the products and services
described in the foregoing clause (i).
(b) Each party hereto expressly agrees and understands that the
remedy at law for any breach by it of this Agreement will be inadequate and that
the damages flowing from such breach are not readily susceptible to being
measured in monetary terms. Accordingly, it is acknowledged that QIAGEN shall be
entitled, among other remedies, to immediate injunctive relief for any such
breach and to obtain a temporary order restraining any threatened or further
breach. Any covenant contained hereinabove shall nevertheless, if breached, give
rise to monetary damages in accordance with the other provisions of this
Agreement.
(c) In the event a party shall violate any legally enforceable
provision of this Section 6.4 as to which there is a specific time period during
which such party is prohibited from taking certain actions or from engaging in
certain activities, as set forth in this Section 6.4, then, in such event, such
violation shall toll the running of such time period from the date of such
violation until such violation shall cease.
6.5 Conduct of Business Pending Closing. The Company covenants and
agrees that, between the date hereof and the Effective Time, except as expressly
required or permitted by this Agreement or unless QIAGEN shall otherwise agree
in writing, the Company shall conduct and shall cause the businesses of each of
its Subsidiaries to be conducted only in, and the Company and its Subsidiaries
shall not take any action except in, the ordinary course of business, consistent
with past practices. The Company shall use its best efforts to preserve intact
the business organization and assets of the Company and each of its
Subsidiaries, and to operate, and cause each of its Subsidiaries to operate,
according to plans and budgets provided to QIAGEN, to keep available the
services of the present officers, employees and consultants of the Company and
each of its Subsidiaries, to maintain in effect Material Agreements and to
preserve the present relationships of the Company and each of its Subsidiaries
with advertisers, sponsors, customers, licensees, suppliers and other Persons
with which the Company or any of its Subsidiaries has business relations. The
Company shall immediately notify QIAGEN of any breach of the covenant contained
in this Section 6.5.
6.6 ETH Agreement. The Company covenants and agrees that the Company
shall immediately provide to QIAGEN a copy of any notices or other
communications given to ETH Transfer on behalf of, or received from ETH Transfer
by, Xxxxxxx Xxxxx, Xxxxxxx Xxxxxx, Xxxx
35
Xxxxx or any entity formed or controlled by any of them (individually or in
the aggregate) under the ETH Agreement (as defined in the Option Agreement) at
the same time as such notices are given or received.
6.7 SouthTrust Bank. As soon as practicable following the Closing, QIAGEN
shall cause SouthTrust Bank to release Xxxxxxx Xxxxx, Xxxxxxxx Xxxxx and Xxxxxxx
Xxxxxx from their personal guarantees of the indebtedness evidenced by that
certain $400,000 Promissory Note of the Company originally issued to SouthTrust
Bank and dated November 22, 2001 (the "SouthTrust Note").
6.8 Acknowledgement of ETH Transfer. The Founders shall use their efforts
to deliver within two weeks following the closing, and in any event shall
deliver on or prior to May 30, 2002, written evidence, in form and substance
satisfactory to QIAGEN in its sole discretion, that ETH Transfer: (i)
acknowledges that there are no defaults or breaches under the ETH Agreement (as
defined in the Option Agreement) and consents to the structure pursuant to which
the inventions which are the subject matter of the ETH Agreement have been, and
are proposed to be, commercialized and (ii) agrees to send a copy to QIAGEN of
any notices or other communications given or received by ETH Transfer under the
ETH Agreement at the same time as such notices are given or received by ETH
Transfer.
6.9 XAG Change of Name. As soon as practicable following the Closing, and
in any event within two weeks after the Closing, the Founders shall provide
evidence to QIAGEN that XAG has changed its name to a name reasonably
satisfactory to QIAGEN which shall not contain the word "XERAGON" or any
derivation thereof.
ARTICLE 7
CONDITIONS OF MERGER
7.1 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,
any or all of which may be waived by the party entitled to the benefit thereof,
in whole or in part, the extent permitted by applicable Law:
(a) Shareholder Approval. This Agreement and the Merger shall have
been authorized by the requisite vote of the shareholders of the Company in
accordance with the provisions of the ABCA and the Articles of Incorporation or
equivalent organizational documents and by-laws of the Company.
(b) Regulatory Approvals. All approvals and consents of applicable
Courts and/or Governmental Authorities required to consummate the Merger shall
have been received, except for such approvals and consents, the failure of which
to have been so received, shall not have a Material Adverse Effect, shall have
expired or been terminated.
(c) 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 shall be in effect which is
non-appealable, nor shall any proceeding brought by any administrative agency or
commission or
36
other Governmental Authority, domestic or foreign, 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 illegal.
(d) No Order. No Court or Governmental Authority having jurisdiction
over the Company or QIAGEN shall have enacted, issued, promulgated, enforced or
entered any Law, Regulation or Order (whether temporary, preliminary or
permanent) which is then in effect and which has the effect of making the Merger
illegal or otherwise prohibiting consummation of the Merger substantially on the
terms contemplated by this Agreement without an opportunity for appeal by either
party.
7.2 Additional Conditions to Obligations of QIAGEN and Merger Sub. The
obligations of QIAGEN and Merger Sub to effect the Merger are also subject to
the following conditions, any or all of which may be waived by QIAGEN and Merger
Sub, in whole or in part, to the extent permitted by applicable Law:
(a) Representations and Warranties. The representations and
warranties of the Company contained in this Agreement and the Related Agreements
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) changes contemplated by this Agreement (including the Company
Disclosure Schedule), (ii) 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 (iii) representations
and warranties which address matters only as of a particular date, in which case
such representations and warranties qualified as to materiality or Material
Adverse Effect shall be true and correct in all respects, and those not so
qualified shall be true and correct in all material respects, on and as of such
particular date; and QIAGEN shall have received a certificate to such effect
signed by the President of the Company.
(b) Agreements and Covenants. The Company shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement and the Related Agreements to be performed or complied with by it
on or prior to the Effective Time. QIAGEN shall have received a certificate to
such effect signed by the President of the Company.
(c) Third Party Consents. QIAGEN shall have received evidence, in
form and substance reasonably satisfactory to it, that those licenses, Permits,
consents, waivers, approvals, authorizations, qualifications or Orders
(including all United States and foreign governmental and regulatory rulings and
approvals) of Governmental Authorities and other third parties described in
Section 2.5(a) or (b) of the Company Disclosure Schedule (or not described in
Section 2.5(a) or (b) of the Company Disclosure Schedule but required as
described in Section 2.5(a) or (b) of this Agreement) have been obtained.
(d) No Material Adverse Effect. There shall not have occurred any
event and no circumstance shall exist which, alone or together with any one or
more other events or
37
circumstances has had, is having or would reasonably be expected to have a
Material Adverse Effect on the Company.
(e) Certificates of Merger. The Company shall have executed and
delivered the Certificates of Merger.
(f) Opinion of Counsel to the Company. QIAGEN shall have received
the opinion of Xxxxxx Xxxx Xxxxxx & Xxxxx P.C., dated as of the Effective Time,
substantially in the form of Exhibit E.
(g) New XAG License Agreement. The Old XAG License Agreement shall
have been terminated and QIAGEN or one of its Affiliates and XAG shall have
entered into a license agreement with respect to XAG's Intellectual Property
Rights, substantially in the form of Exhibit F (the "New XAG License
Agreement").
(h) Releases. QIAGEN shall have received Release Agreements
substantially in the form of Exhibit G executed and delivered by each Company
Shareholder (the "Release Agreements").
(i) Dissenting Shares. The Dissenting Shares shall comprise less
than 5% of the issued and outstanding Company Shares.
(j) Shareholder Agreements. Each of the Company Shareholders shall
have executed and delivered to QIAGEN a Shareholder Agreement in substantially
the form attached hereto as Exhibit H (the "Shareholder Agreement").
(k) Acceptance of Employment. Xxxxxxx Xxxxx and Xxxxxxxx Xxxxx shall
have agreed to become employees of QIAGEN or one of its Affiliates.
(l) Escrow Agreement. QIAGEN and the Shareholders' Committee (as
defined therein) shall have entered into the Escrow Agreement with the Escrow
Agent.
(m) Restriction Agreement. QIAGEN, Xxxxxxx Xxxxx, Xxxx Xxxxx (by
virtue of a power of attorney granted to Xxxxxxx Xxxxx), Xxxxxx Xxxxxx, Xxxxxx
XX and Xxxxx Xxxxxxxxxxx shall have entered into a Restriction Agreement in
substantially the form attached hereto as Exhibit I (the "Restriction
Agreement").
(n) Option Agreement. QIAGEN, Xxxxxxx Xxxxx, Xxxx Xxxxx (by virtue of
a power of attorney granted to Xxxxxxx Xxxxx), Xxxxxx Xxxxxx and XAG shall have
entered into an Option Agreement in substantially the form attached hereto as
Exhibit J (the "Option Agreement").
(o) Declaration. Xxxx Xxxxx shall have delivered a Declaration in
substantially the form attached hereto as Exhibit L (the "Declaration").
(p) Subscription Agreement. Each of the Company Stockholders shall
have entered into a Subscription Agreement in substantially the form attached
hereto as Exhibit M (the "Subscription Agreement").
38
(q) XAG. QIAGEN shall have received evidence satisfactory to it that
XAG has terminated all of its distribution agreements (other than the agreements
with Xxxx Research Corporation).
(r) No Indebtedness. QIAGEN shall have received evidence
satisfactory to it that the Company has no indebtedness outstanding as of the
Closing Date other than a maximum of $330,000 evidenced by the SouthTrust Note.
(s) Amendment of Lease. QIAGEN shall have received evidence
satisfactory to it that the Lease Agreement between the Company and Xxxxx X.
Xxxxxx, Xx. and Xxxxxx Xxxxxx has been amended to its satisfaction.
(t) QIAGEN Satisfaction with Intellectual Property Issues. QIAGEN
shall be satisfied in all respects, in its sole discretion, with the
Intellectual Property Rights including without limitation being satisfied: (i)
with its due diligence investigation of the Intellectual Property Rights, (ii)
that the Intellectual Property Rights, including without limitation rights
granted under the New XAG License Agreement, are sufficient to conduct its
business in the manner QIAGEN intends to do so and (iii) that this Agreement and
the Related Agreements sufficiently protect QIAGEN's interest in the
Intellectual Property Rights, including without limitation rights granted under
the New XAG License Agreement, from and after the Effective Time.
7.3 Additional Conditions to Obligations of the Company. The obligation of
the Company to effect the Merger is also subject to the following conditions,
any or all of which may be waived by Company, in whole or in part, to the extent
permitted by applicable Law:
(a) Representations and Warranties. The representations and
warranties of QIAGEN and Merger Sub contained in this Agreement and the Related
Agreements 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) changes contemplated by this Agreement, (ii)
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 (iii) representations and warranties which
address matters only as of a particular date, in which case such representations
and warranties qualified as to materiality or Material Adverse Effect shall be
true and correct in all respects, and those not so qualified shall be true and
correct in all material respects, on and as of such particular date; and the
Company shall have received a certificate to such effect signed by the Chief
Financial Officer of QIAGEN.
(b) Agreements and Covenants. QIAGEN and Merger Sub shall have
performed or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by them on or prior
to the Effective Time, and the Company shall have received a certificate to such
effect signed by the Chief Financial Officer of QIAGEN.
(c) Certificates of Merger. Merger Sub shall have executed and
delivered the Certificates of Merger.
39
(d) Opinion of Counsel to QIAGEN. The Company shall have received the
opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. dated as of the
Effective Time, substantially in the form of Exhibit K.
(e) No Material Adverse Effect. From and including the date hereof,
there shall not have occurred any event and no circumstance shall exist which,
alone or together with any one or more other events or circumstances has had, is
having or would reasonably be expected to have a Material Adverse Effect on
QIAGEN; provided, however, that no change in the market price of QIAGEN Common
Stock shall constitute a Material Adverse Effect.
ARTICLE 8
INDEMNIFICATION; ESCROW
8.1 Survival. Subject to Section 8.5 hereof, all representations and
warranties of the parties in this Agreement, in the Related Agreements or in any
other agreement, instrument or document furnished in connection with this
Agreement or the transactions contemplated hereby, shall survive the Closing and
shall expire on the date which is eighteen months after the Closing (the
"Expiration Date").
8.2 Indemnification. Each of the Company Shareholders (including the
Founders) shall severally indemnify, defend and hold harmless QIAGEN and the
Surviving Corporation and their respective officers, directors, employees and
stockholders (other than the Company Shareholders and their successors in
interest) and their successors and assigns from, against and with respect to any
claim, liability, obligation, loss, damage, assessment, judgment, cost and
expense (including, without limitation, reasonable attorneys' and accountants'
fees and costs and expenses reasonably incurred in investigating, preparing,
defending against or prosecuting any litigation or claim, action, suit,
proceeding or demand) of any kind or character ("Damages") arising out of or in
any manner incident, relating or attributable to:
(i) any material inaccuracy in any representation or material
breach of warranty by the Company or an indemnifying party contained in
this Agreement (other than the representations and warranties given in
Sections 2.1, 2.2, 2.3, 2.4, 2.8, 2.14, 2.20, 2.21 and 2.22 of this
Agreement);
(ii) any material inaccuracy in any representation, or material
breach of warranty by the Company or an indemnifying party, contained in
Sections 2.1, 2.2, 2.3, 2.4, 2.8, 2.14, 2.20, 2.21 and 2.22 of this
Agreement, any Related Agreement or in any certificate, instrument of
transfer or other document or agreement executed in connection with this
Agreement or otherwise made or given in connection with this Agreement;
(iii) any failure by the Company, XAG or an indemnifying party
to perform or observe, or to have performed or observed, in full, any
covenant, agreement or condition to be performed or observed by it under
this Agreement, any Related Agreement or under any certificates or other
documents or agreements executed in connection with this Agreement;
40
(iv) reliance by QIAGEN on any books or records of the
Company or reliance by QIAGEN on any information furnished to QIAGEN
pursuant to this Agreement by or on behalf of the Company or the Company
Shareholders;
(v) any claim arising out of or relating to the operation of
the business of the Company on or prior to the Closing Date or facts and
circumstances existing at or prior to the Closing Date, whether or not such
liabilities or obligations were known on such date;
(vi) any breach by XAG of the New XAG License Agreement; and
(vi) any claims by any shareholder, licensor, licensee or
customer of XAG against QIAGEN, the Company or the Surviving Corporation.
8.3 Claims for Indemnification. In the event of the occurrence of any
event which any party asserts is an indemnifiable event pursuant to this Article
7, the party claiming indemnification (the "Indemnified Party") shall provide
prompt notice to the party required to provide indemnification (the
"Indemnifying Party"), specifying in detail the facts and circumstances with
respect to such claim and the basis for which indemnification is available
hereunder. If such event involves the claim of any third party, the Indemnifying
Party shall have the right to control the defense or settlement of such claim;
provided, however, that (i) the Indemnified Party shall be entitled to
participate in the defense of such claim at its own expense, (ii) the
Indemnifying Party shall obtain the prior written approval of the Indemnified
Party (which approval shall not be unreasonably withheld or delayed) before
entering into any settlement of such claim which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to the
Indemnified Party of a complete release from all liability in respect to such
claim or litigation, (iii) the Indemnifying Party shall not be entitled to
control (but shall be entitled to participate at its own expense in the defense
of), and the Indemnified Party shall be entitled to have sole control over, and
shall assume all expense with respect to, the defense or settlement of any claim
to the extent such claim seeks an order, injunction or other equitable relief
against the Indemnified Party which, if successful, could materially interfere
with the business, operations, assets, condition (financial or otherwise) or
prospects of the Indemnified Party; provided, that, the Indemnified Party shall
provide written notice to the Indemnifying Party of its election to assume
control over the defense of such claim pursuant to this clause (iii), and (iv)
if the Indemnifying Party is entitled to but fails to assume control over the
defense of a claim as provided in this Section 8.3, providing that Damages
associated with such claim are covered by the indemnity provisions of Section
8.2, the Indemnified Party shall have the right to defend such claim, provided
further that the Indemnified Party shall obtain the prior written approval of
the Indemnifying Party (which approval shall not be unreasonably withheld or
delayed) before entering into any settlement of such claim if, pursuant to or as
a result of such settlement, injunctive or other non-monetary relief would
imposed against the Indemnifying Party.
In the event that the Indemnifying Party shall be obligated to indemnify
the Indemnified Party pursuant to this Article 7, the Indemnifying Party shall,
upon payment of such indemnity in full, be subrogated to all rights of the
Indemnified Party with respect to the claim to which such indemnification
relates.
41
8.4 Deductible with Respect to Indemnification. Subject to Section 8.5
hereof, no claim by QIAGEN (on behalf of itself and the Surviving Corporation,
as the case may be) shall be made against the Company Shareholders for
indemnification pursuant to this Article 8 with respect to any item of Damages
arising out of, relating to or attributable to this Agreement or the
transactions contemplated hereby, unless such item, together with the aggregate
of all prior Damages of QIAGEN and its Affiliates for which indemnification
could be sought pursuant to this Article 8, shall exceed $20,000 (the
"Deductible Amount"), in which event QIAGEN shall be entitled, subject to the
provisions of this Article 8, to make claims for indemnification hereunder to
the extent of any and all of such Damages in excess of the Deductible Amount.
8.5 Limitations of Indemnification. Notwithstanding anything in this
Article 8 to the contrary, any Damages to QIAGEN or its Affiliates resulting
from fraud or intentional misrepresentation by any executive officer or director
of the Company or more than 10% beneficial owner of outstanding Company Shares
with respect to a representation or warranty contained herein at the time such
representation or warranty was made or at the time of the Closing (i) shall not
be subject to the Deductible Amount or the Expiration Date and (ii) QIAGEN's
recovery shall not be limited to the Escrow Fund.
8.6 Escrow Arrangements.
(a) On the Effective Time, the Company Shareholders will be deemed to
have received and deposited with the Escrow Agent (as defined below) the Escrow
Shares plus any additional shares as may be issued with respect to the Escrow
Shares upon any stock split (including a stock split effected through a dividend
of stock) or recapitalization effected by QIAGEN after the Effective Time,
without any act of any Company Shareholders. Within twenty-five (25) Business
Days after the Effective Time, the Escrow Shares, without any act of any Company
Shareholders, will be deposited with State Street Bank (or another institution
acceptable to QIAGEN and the Company Shareholders) as Escrow Agent (the "Escrow
Agent"), such deposit to constitute an escrow fund (the "Escrow Fund") to be
governed by the terms of the Escrow Agreement. The Escrow Fund shall be
available to fund the indemnification of QIAGEN and the Surviving Corporation
with respect to Damages incurred by QIAGEN and the Surviving Corporation after
the Effective Time. Subject to Section 8.5 hereof, the indemnification
obligations of the Company Shareholders pursuant to clause (i) of Section 8.2
hereof shall be limited to amounts deposited in the Escrow Fund.
(b) Subject to the terms of the Escrow Agreement, the Escrow Fund
shall be in existence immediately following the Effective Time and shall
terminate on the Expiration Date.
ARTICLE 9
TERMINATION, AMENDMENT AND WAIVER
9.1 Termination. This Agreement may be terminated and the Merger
contemplated hereby may be abandoned at any time prior to the Effective Time,
notwithstanding approval thereof by the stockholders of the Company:
42
(a) By mutual written consent duly authorized by the Boards of
Directors of QIAGEN and the Company; or
(b) By either QIAGEN or the Company if the Merger shall not have been
consummated on or before May 30, 2002; provided, however, that the right to
terminate this Agreement under this Section 9.1(b) shall not be available to any
party whose willful failure to fulfill any material obligation under this
Agreement has been the cause of, or resulted in, the failure of the Merger to
have been consummated on or before such date; or
(c) By either QIAGEN or the Company, if a Court or Governmental
Authority shall have issued an Order or taken any other action, in each case,
which has become final and non-appealable and which restrains, enjoins or
otherwise prohibits the Merger.
9.2 Effect of Termination. Except as provided in this Section 9.2, in the
event of the termination of this Agreement pursuant to Section 9.1, this
Agreement (other than this Section 9.2 and Sections 9.3 and Article 10, which
shall survive such termination) will forthwith become void, and there will be no
liability on the part of QIAGEN, Merger Sub or the Company or any of their
respective officers or directors to the other and all rights and obligations of
any party hereto will cease, except that nothing herein will relieve any party
from liability for any breach, prior to termination of this Agreement in
accordance with its terms, of any representation, warranty, covenant or
agreement contained in this Agreement.
9.3 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 approval of the
Merger by the stockholders of the Company, no amendment may be made which would
reduce the amount or change the type of consideration into which each Company
Share shall be converted upon consummation of the Merger. This Agreement may not
be amended except by an instrument in writing signed by QIAGEN, Merger Sub and
the Company.
9.4 Waiver. At any time prior to the Effective Time, any party hereto may
extend the time for the performance of any of the obligations or other acts
required hereunder, waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and 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 thereby.
ARTICLE 10
GENERAL PROVISIONS
10.1 Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered personally
or sent by nationally recognized overnight courier or by registered or certified
mail, postage prepaid, return receipt requested, or by electronic mail, with a
confirmatory copy thereof to be delivered by mail (as aforesaid) within 24 hours
of such electronic mail, or by telecopier, with confirmation as provided above,
addressed as follows:
43
(a) If to QIAGEN or Merger Sub:
QIAGEN N.V.
Xxxxxxxxxxx 00
XX 0000 Xxxxx
Xxx Xxxxxxxxxxx
Telephone: 000 00 00 000-0000
Telecopier: 011 31 77 320-8409
Attention: Xx. Xxxxx Xxxxxx, Chief Executive Officer
With a copy to:
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
(b) If to the Company:
Xeragon, Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000 0000
Telecopier: (000) 000 0000
Attention: President
With a copy to:
Xxxxxx Xxxx Xxxxxx & Xxxxx P.C.
000 Xxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. All such notices
or communications shall be deemed to be received (a) in the case of personal
delivery, on the date of such delivery, (b) in the case of nationally recognized
overnight courier, on the next Business Day after the date when delivered to the
courier (c) in the case of facsimile transmission or electronic mail, upon
confirmed receipt, and (d) in the case of mailing, on the fifth (5th) Business
Day following the date on which the piece of mail containing such communication
was posted.
10.2 Disclosure Schedules. The Company Disclosure Schedule shall be divided
into sections corresponding to the sections and subsections of this Agreement.
Disclosure of any fact or item in any section of the Company Disclosure Schedule
shall not, should the existence of the
44
fact or item or its contents be relevant to any other section of the Company
Disclosure Schedule, be deemed to be disclosed with respect to such sections.
10.3 Certain Definitions. For purposes of this Agreement, the term:
(a) "Affiliates" means, with respect to any Person, any other 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 the
Company (either alone, or through or together with any other Subsidiary) has,
directly or indirectly, an interest of 15% or more of the issued and outstanding
capital stock or other equity interests of such Person;
(b) "Business Day" means any day other than a Saturday, Sunday or
day on which banks are permitted to close in the State of Alabama or in the
State of Delaware.
(c) "Control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of stock, as trustee or executor, by contract or credit
arrangement or otherwise;
(d) "Court" means any court or arbitration tribunal of the United
States, any domestic state, or any foreign country, and any political
subdivision thereof.
(e) "Environmental Claim" means any claim, action, cause of action,
investigation or notice by any Person alleging potential liability (including,
without limitation, potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries or penalties) arising out of, based on or resulting from (a)
the presence, release or disposal of any Hazardous Materials at any location,
whether or not owned or operated by the Company, or (b) circumstances forming
the basis of any violation, or alleged violation, of any Environmental Law.
(f) "Environmental Laws" means any Law pertaining to: (i) the
protection of health, safety and the indoor or outdoor environment; (ii) the
conservation, management or use of natural resources and wildlife; (iii) the
protection or use of surface water and ground water; (iv) the management,
manufacture, possession, presence, use, generation, transportation, treatment,
storage, disposal, release, threatened release, abatement, removal, remediation
or handling of, or exposure to, any Hazardous Material; or (v) pollution
(including any release to air, land, surface water and ground water); and
includes, without limitation, the Comprehensive Environmental, Response,
Compensation, and Liability Act of 1980, as amended, and the Regulations
promulgated thereunder and the Solid Waste Disposal Act, as amended, 42 U.S.C.
xx.xx. 6901 et seq.
(g) "Exchange Agent" means Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C. or any other entity appointed to act in the capacities required
under Section 1.10.
(h) "Governmental Authority" means any governmental agency or
authority (other than a Court) of the United States, any domestic state, or any
foreign country, and any
45
political subdivision or agency thereof, and includes any authority having
governmental or quasi-governmental powers.
(i) "Hazardous Material" means any substance, chemical, compound,
product, solid, gas, liquid, waste, by-product, pollutant, contaminant or
material which is hazardous or toxic and is regulated under any Environmental
Law, and includes without limitation, asbestos or any substance containing
asbestos, polychlorinated biphenyls or petroleum (including crude oil or any
fraction thereof).
(j) "Intellectual Property Right" has the meaning ascribed to such
term in Section 2.22 of this Agreement.
(k) "Knowledge" means (i) in the case of an individual, the actual
knowledge possessed by the individual of a particular fact or other matter,
after making due inquiry, or (ii) in the case of an entity (other than an
individual), such entity will be deemed to have "Knowledge" of a particular fact
or other matter if any individual who is serving as a director, officer,
partner, in-house counsel, patent counsel (with respect to Intellectual Property
Rights only), executor or trustee of such entity (or in any similar capacity)
has, or at any time had, after due inquiry, actual knowledge of such fact or
other matter.
(l) "Law" means all laws, statutes and ordinances of any
Governmental Authority, including all decisions of Courts having the effect of
law in each such jurisdiction;
(m) "Lien" means any mortgage, pledge, security interest,
attachment, encumbrance, lien (statutory or otherwise), option, conditional sale
agreement, right of first refusal, first offer, termination, participation or
purchase or charge of any kind (including any agreement to give any of the
foregoing); provided, however, that the term "Lien" shall not include (i)
statutory liens for Taxes, which are not yet due and payable or are being
contested in good faith by appropriate proceedings, (ii) statutory or common law
liens to secure landlords, lessors or renters under leases or rental agreements
confined to the premises rented, (iii) deposits or pledges made in connection
with, or to secure payment of, workers' compensation, unemployment insurance,
old age, pension or other social security programs mandated under applicable
Laws, (iv) statutory or common law liens in favor of carriers, warehousemen,
mechanics and materialsmen, to secure claims for labor, materials or supplies
and other like liens, and (v) restrictions on transfer of securities imposed by
applicable state and federal securities Laws;
(n) "Litigation" means any suit, action, arbitration, cause of
action, claim, complaint, criminal prosecution, investigation, demand letter, or
governmental or other administrative proceeding, whether at law or at equity,
before or by any Governmental Authority, Court or other tribunal;
(o) "Material Adverse Effect" means any fact, event, change,
circumstance or effect that is materially adverse to the business, condition
(financial or otherwise), operations, results of operations, assets, liabilities
or prospects of (i) the Company (prior to the Effective Time) or the Surviving
Corporation (after the Effective Time, but based on the business, condition
(financial or otherwise), operations, result of operations, assets, liabilities
or prospects
46
of the Surviving Corporation as of the Effective Time) when such term is used in
a representation or warranty of, or otherwise in relation to, the Company, or
the context otherwise so requires, or (ii) QIAGEN or any of its subsidiaries
when such term is used in relation to QIAGEN, Merger Sub or the Surviving
Corporation, or the context otherwise so requires.
(p) "Order" means any judgment, order, writ, injunction or decree
of any Court or Governmental Authority.
(q) "Person" means an individual, corporation, partnership,
association, trust, unincorporated organization, limited liability company,
other entity or group (as defined in Section 13(d)(3) of the Exchange Act);
(r) "Regulation" means any rule or regulation of any Governmental
Authority having the effect of Law.
(s) "Related Agreements" means the Release Agreements, the
Shareholder Agreements, the Escrow Agreement, the Restriction Agreement, the
Option Agreement, the Declaration, the Subscription Agreement and the New XAG
License Agreement.
(t) "Subsidiary" or "Subsidiaries" of the Company, the Surviving
Corporation, QIAGEN or any other Person means any corporation, partnership,
joint venture, limited liability company or other legal entity of which the
Company, the Surviving Corporation, QIAGEN or such other Person, as the case may
be, either alone or through or together with any other Subsidiary, owns,
directly or indirectly, 50% or more 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.
10.4 Interpretation. When a reference is made in this Agreement to
Sections, subsections, Schedules or Exhibits, such reference shall be to a
Section, subsection, Schedule or Exhibit to this Agreement unless otherwise
indicated. The words "include," "includes" and "including" when used herein
shall be deemed in each case to be followed by the words "without limitation."
The word "herein" and similar references mean, except where a specific Section
or Article reference is expressly indicated, the entire Agreement rather than
any specific Section or Article. The table of contents and 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.
10.5 Severability. If any term or other provision of this Agreement is
determined by a Court of competent jurisdiction, without further opportunity to
appeal, to be invalid, illegal or incapable of being enforced in any respect,
then such term or provision shall be deemed to be limited to the extent that
such Court determines it enforceable, and as so limited shall remain in full
force and effect, and all other terms and provisions of this Agreement shall
remain in full force and effect. In the event that such Court shall determine
any such provision, or any portion thereof, to be wholly unenforceable, all
other terms and provisions of this Agreement shall nevertheless remain in full
force and effect. Upon any determination that any term or other provision, or
portion thereof, 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
47
parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the extent possible.
10.6 Entire Agreement. This Agreement (including all exhibits and
schedules hereto) constitutes the entire agreement of the parties hereto 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, is not intended to confer upon any other Person any rights or remedies
hereunder.
10.7 Assignment. This Agreement shall not be assigned by operation
of law or otherwise, except that QIAGEN and Merger Sub may assign all or any of
their rights hereunder to any Affiliate, provided that no such assignment shall
relieve the assigning party of its obligations hereunder.
10.8 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express 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.
10.9 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 will impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor will 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 to, and not exclusive
of, any rights or remedies otherwise available.
10.10 Governing Law. This agreement and the agreements, instruments
and documents contemplated hereby will be governed by and construed in
accordance with the Law of the State of Delaware (exclusive of conflicts of law
principles) ("Delaware Law"). Delaware Courts within the State of Delaware and,
more particularly, to the fullest extent such Court shall have subject matter
jurisdiction over the matter, the Court of Chancery of the State of Delaware,
will have exclusive jurisdiction over any and all disputes between the parties
hereto, whether in law or equity, arising out of or relating to this Agreement
and the agreements, instruments and documents contemplated hereby. The parties
consent to and agree to submit to the jurisdiction of such Courts, provided,
however, that such consent to jurisdiction is solely for the purpose referred to
in this Section 9.10 and shall not be deemed to be a general submission to the
jurisdiction of such Courts or in the State of Delaware other than for such
purpose. Each of the parties hereby waives, and agrees not to assert in any such
dispute, to the fullest extent permitted by applicable Delaware Law, any claim
that (i) such party is not personally subject to the jurisdiction of such
Courts, (ii) such party and such party's property is immune from any legal
process issued by such Courts or (iii) any Litigation commenced in such Courts
is brought in an inconvenient forum.
10.11 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
48
deemed to be an original, but all of which taken together shall constitute one
and the same agreement.
[Remainder of page intentionally left blank]
49
IN WITNESS WHEREOF, QIAGEN, Merger Sub, the Company and the Company
Shareholders have caused this Agreement and Plan of Merger to be executed as of
the date first written above, in the case of corporations, by their respective
officers thereunto duly authorized.
QIAGEN N.V.
By /s/ Peer Xxxxxx
---------------------------------------
Name: Peer Xxxxxx
Title: Managing Director and Chief Financial
Officer
XENOPUS MERGER SUB, INC.
By /s/ Peer Xxxxxx
---------------------------------------
Name: Peer Xxxxxx
Title: Treasurer
XERAGON, INC.
By /s/ Xxxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
50
COMPANY SHAREHOLDERS:
/s/ Xxxxxxx Xxxxx /s/ Xxxxxxxx Xxxxx
------------------------------------- ------------------------------------
Name: Xxxxxxx Xxxxx Name: Xxxxxxxx Xxxxx
Address: 00000 Xxxxx Xxxxx Address: 00000 Xxxxx Xxxxx
----------------------------- ----------------------------
Xxxxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
----------------------------- ----------------------------
/s/ Xxxxxx Xxxxxx /s/ Xxxxx X. Xxxxxx, III
------------------------------------- ------------------------------------
Name: Xxxxxx Xxxxxx Name: Xxxxx X. Xxxxxx, III
Address: XX Xxxxx 7 Address: 000 Xxxxxx Xxx, XX
----------------------------- ----------------------------
6H-1004 Lausanne Xxxxxxxxxx XX 00000
----------------------------- ----------------------------
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxx Xxxxxxxxxxx
------------------------------------- ------------------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxxx Xxxxxxxxxxx
Address: 000 Xxxxxx Xxx, XX Address: Xxxxxxxxxxxxxxxxxx 000
----------------------------- ----------------------------
Xxxxxxxxxx XX 00000 8047 Zurich
----------------------------- ----------------------------
/s/ Xxxx Xxxxxxx /s/ Xxxxx X. Xxxxxx, Xx.
------------------------------------- ------------------------------------
Name: Xxxx Xxxxxxx Name: Xxxxx X. Xxxxxx, Xx.
Address: Residence la Maison Address: 000 Xxxxxx Xxx, XX
----------------------------- ----------------------------
0000 Xxxxxxxxxxx/XX Xxxxxxxxxx XX 00000
----------------------------- ----------------------------
Switzerland
-----------------------------
/s/ Xxxxxxx X. Xxxxxx /s/ Xxxx Xxxxx
------------------------------------- ------------------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxx Xxxxx
Address: 000 Xxxxxx Xxx, XX Address: Xxxxxxxxxxxxxx 00
----------------------------- ----------------------------
Xxxxxxxxxx, XX 00000 0000 Xxxxxx
----------------------------- ----------------------------
51
