EXHIBIT 2.1
EXECUTION COPY
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
NPS PHARMACEUTICALS, INC.
ENZON PHARMACEUTICALS, INC.
MOMENTUM MERGER CORPORATION
XXXXXX ACQUISITION CORPORATION
AND
EINSTEIN ACQUISITION CORPORATION
Dated as of February 19, 2003
TABLE OF CONTENTS
Page
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ARTICLE I THE PLAN OF REORGANIZATION.....................................................................2
1.1 ORGANIZATION OF HOLDCO, NPS MERGER SUB AND ENZON MERGER SUB............................2
1.2 THE NPS MERGER.........................................................................3
1.3 THE ENZON MERGER.......................................................................3
1.4 THE CLOSING............................................................................3
1.5 EFFECTIVE TIME.........................................................................4
1.6 EFFECTS OF THE MERGERS.................................................................4
1.7 CERTIFICATE OF INCORPORATION AND BYLAWS OF THE SURVIVING CORPORATIONS..................4
1.8 DIRECTORS AND OFFICERS.................................................................5
1.9 EFFECT OF NPS MERGER ON CAPITAL STOCK..................................................6
1.10 EFFECT OF THE ENZON MERGER ON CAPITAL STOCK............................................6
1.11 EXCHANGE PROCEDURES....................................................................7
1.12 UNVESTED COMMON STOCK.................................................................10
1.13 NO FURTHER OWNERSHIP RIGHTS IN CAPITAL STOCK OF NPS AND ENZON.........................10
1.14 LOST, STOLEN OR DESTROYED CERTIFICATES................................................10
1.15 TAX CONSEQUENCES......................................................................11
1.16 FURTHER ACTION........................................................................11
ARTICLE II REPRESENTATIONS AND WARRANTIES OF ENZON......................................................11
2.1 ORGANIZATION; STANDING AND POWER; CHARTER DOCUMENTS; SUBSIDIARIES.....................11
2.2 CAPITAL STRUCTURE.....................................................................12
2.3 AUTHORITY; NON-CONTRAVENTION; NECESSARY CONSENTS......................................14
2.4 SEC FILINGS; FINANCIAL STATEMENTS.....................................................15
2.5 ABSENCE OF CERTAIN CHANGES OR EVENTS..................................................16
2.6 TAX MATTERS...........................................................................17
2.7 INTELLECTUAL PROPERTY MATTERS.........................................................19
2.8 LEGAL COMPLIANCE; PERMITS.............................................................22
2.9 REGULATORY COMPLIANCE.................................................................22
2.10 STUDIES...............................................................................24
2.11 LITIGATION............................................................................25
2.12 BROKERS' AND FINDERS' FEES............................................................25
2.13 TRANSACTIONS WITH AFFILIATES..........................................................25
2.14 EMPLOYEE MATTERS......................................................................25
2.15 ENVIRONMENTAL MATTERS.................................................................29
2.16 REAL ESTATE MATTERS; TITLE TO PROPERTY................................................30
2.17 CONTRACTS.............................................................................31
2.18 DISCLOSURE............................................................................33
2.19 BOARD APPROVAL........................................................................33
2.20 FAIRNESS OPINION......................................................................33
2.21 RIGHTS PLAN...........................................................................34
2.22 TAKEOVER STATUTES.....................................................................34
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF NPS.......................................................34
3.1 ORGANIZATION; STANDING AND POWER; CHARTER DOCUMENTS; SUBSIDIARIES.....................34
3.2 CAPITAL STRUCTURE.....................................................................35
3.3 AUTHORITY; NON-CONTRAVENTION; NECESSARY CONSENTS......................................37
3.4 SEC FILINGS; FINANCIAL STATEMENTS.....................................................38
3.5 ABSENCE OF CERTAIN CHANGES OR EVENTS..................................................39
3.6 TAX MATTERS...........................................................................40
3.7 INTELLECTUAL PROPERTY MATTERS.........................................................42
3.8 LEGAL COMPLIANCE; PERMITS.............................................................44
3.9 REGULATORY COMPLIANCE.................................................................45
3.10 STUDIES...............................................................................47
3.11 LITIGATION............................................................................47
3.12 BROKERS' AND FINDERS' FEES............................................................47
3.13 TRANSACTIONS WITH AFFILIATES..........................................................48
3.14 EMPLOYEE MATTERS......................................................................48
3.15 ENVIRONMENTAL MATTERS.................................................................52
3.16 REAL ESTATE MATTERS; TITLE TO PROPERTY................................................53
3.17 CONTRACTS.............................................................................54
3.18 DISCLOSURE............................................................................56
3.19 BOARD APPROVAL........................................................................56
3.20 FAIRNESS OPINION......................................................................57
3.21 RIGHTS PLAN...........................................................................57
3.22 TAKEOVER STATUTES.....................................................................57
ARTICLE IV INTERIM CONDUCT OF BUSINESS..................................................................57
4.1 CONDUCT OF BUSINESS...................................................................57
4.2 CONTROL OF OTHER PARTY'S BUSINESS.....................................................61
ARTICLE V ADDITIONAL AGREEMENTS.........................................................................62
5.1 PROXY STATEMENT/PROSPECTUS; REGISTRATION STATEMENT....................................62
5.2 MEETINGS OF STOCKHOLDERS; BOARD RECOMMENDATION........................................62
5.3 ACQUISITION PROPOSALS.................................................................63
5.4 CONFIDENTIALITY; ACCESS TO INFORMATION; NO MODIFICATION OF REPRESENTATIONS, WARRANTIES
OR COVENANTS..........................................................................66
5.5 PUBLIC DISCLOSURE.....................................................................67
5.6 REGULATORY FILINGS; REASONABLE EFFORTS................................................67
5.7 NOTIFICATION OF CERTAIN MATTERS.......................................................69
5.8 THIRD-PARTY CONSENTS..................................................................70
5.9 EMPLOYEE OPTIONS AND PURCHASE RIGHTS..................................................70
5.10 EMPLOYEE MATTERS......................................................................72
5.11 INDEMNIFICATION.......................................................................73
5.12 GOVERNANCE MATTERS....................................................................73
5.13 NASDAQ LISTINGS.......................................................................75
5.14 AFFILIATE AGREEMENTS..................................................................75
5.15 TREATMENT AS REORGANIZATION...........................................................75
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5.16 RIGHTS PLANS..........................................................................75
5.17 SECTION 16 MATTERS....................................................................76
5.18 ENZON INDEBTEDNESS....................................................................76
5.19 EXCHANGEABLE SHARES; CANADIAN SECURITIES LAWS.........................................77
5.20 REDEMPTION OF ENZON SERIES A PREFERRED STOCK..........................................77
5.21 CONVEYANCE TAXES......................................................................77
ARTICLE VI CONDITIONS TO THE MERGERS....................................................................77
6.1 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY TO EFFECT THE MERGERS.....................77
6.2 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF ENZON.....................................78
6.3 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF NPS.......................................79
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER...........................................................80
7.1 TERMINATION...........................................................................80
7.2 NOTICE OF TERMINATION; EFFECT OF TERMINATION..........................................81
7.3 FEES AND EXPENSES.....................................................................82
7.4 AMENDMENT.............................................................................83
7.5 EXTENSION; WAIVER.....................................................................83
ARTICLE VIII DEFINITIONS................................................................................84
8.1 CERTAIN DEFINITIONS...................................................................84
8.2 CERTAIN DEFINITIONS...................................................................93
ARTICLE IX GENERAL PROVISIONS...........................................................................95
9.1 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES........................................95
9.2 NOTICES...............................................................................95
9.3 CERTAIN INTERPRETATION................................................................97
9.4 COUNTERPARTS..........................................................................97
9.5 ENTIRE AGREEMENT......................................................................98
9.6 THIRD PARTY BENEFICIARIES.............................................................98
9.7 SEVERABILITY..........................................................................98
9.8 OTHER REMEDIES; SPECIFIC PERFORMANCE..................................................98
9.9 GOVERNING LAW.........................................................................99
9.10 SUBMISSION TO JURISDICTION............................................................99
9.11 RULES OF CONSTRUCTION.................................................................99
9.12 ASSIGNMENT............................................................................99
9.13 WAIVER OF JURY TRIAL..................................................................99
EXHIBITS
Exhibit A-1 Form of NPS Voting Agreements
Exhibit A-2 Form of Enzon Voting Agreements
Exhibit B-1 Form of Term Sheet Regarding Employment Agreement of Holdco Executive Chairman
Exhibit B-2 Form of Employment Agreement of Holdco Chief Executive Officer
Exhibit C-1 Form of Holdco Certificate of Incorporation
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Exhibit C-2 Form of Holdco Bylaws
Exhibit D Form of Affiliate Agreements
SCHEDULES
Schedule 5.12(c) Specified Initial Executive Officers of Holdco
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EXECUTION COPY
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made
and entered into as of February 19, 2003, by and among NPS Pharmaceuticals,
Inc., a Delaware corporation ("NPS"), Enzon Pharmaceuticals, Inc., a Delaware
corporation ("Enzon"), Momentum Merger Corporation, a Delaware corporation
("Holdco"), Xxxxxx Acquisition Corporation, a Delaware corporation ("NPS Merger
Sub"), and Einstein Acquisition Corporation, a Delaware corporation ("Enzon
Merger Sub"). Capitalized terms that are used herein shall have the respective
meanings ascribed thereto in Article VIII hereof.
RECITALS
A. Each of the Board of Directors of NPS (the "NPS Board") and the
Board of Directors of Enzon (the "Enzon Board") deem it advisable and in the
best interests of each corporation and its respective stockholders that NPS and
Enzon engage in a business combination to advance the long-term strategic
business interests of NPS and Enzon.
B. The parties hereto intend that, upon the terms and subject to the
conditions set forth in this Agreement, (i) NPS Merger Sub will be merged with
and into NPS, the separate corporate existence of NPS Merger Sub will thereupon
cease and NPS will continue as the surviving corporation and a wholly owned
subsidiary of Holdco (the "NPS Merger"), (ii) Enzon will be merged with and into
Enzon Merger Sub, the separate corporate existence of Enzon will thereupon cease
and Enzon Merger Sub will continue as the surviving corporation and a wholly
owned subsidiary of Holdco (the "Enzon Merger") and (iii) upon consummation of
the Mergers, Holdco's name shall be changed to a new name to be agreed upon by
NPS and Enzon.
C. The NPS Board has (i) determined that the NPS Merger is consistent
with and in furtherance of the long-term business interests of NPS and fair to,
and in the best interests of NPS and its stockholders, (ii) declared this
Agreement to be advisable, (iii) approved this Agreement, the NPS Merger and the
other transactions contemplated by this Agreement, and (iv) determined to
recommend that the stockholders of NPS adopt this Agreement.
D. The Enzon Board has (i) determined that the Enzon Merger is
consistent with and in furtherance of the long-term business interests of Enzon
and fair to, and in the best interests of, Enzon and its stockholders, (ii)
declared this Agreement to be advisable, (iii) approved this Agreement, the
Enzon Merger and the other transactions contemplated by this Agreement, and (iv)
determined to recommend that the stockholders of Enzon adopt this Agreement.
E. Concurrently with the execution of this Agreement, and as a
condition and inducement to the willingness of NPS and Enzon to enter into this
Agreement, directors and officers who are affiliates of NPS are entering into a
Voting Agreement with Enzon, each in the form attached hereto as Exhibit A-1
(the "NPS Voting Agreements"), and directors and officers who are affiliates of
Enzon shall enter into a Voting Agreement with NPS, each in the form attached
hereto as Exhibit A-2 (the "Enzon Voting Agreements").
F. Concurrently with the execution of this Agreement, and as a
condition and inducement to the willingness of NPS and Enzon to enter into this
Agreement, the person designated to be the executive Chairman of the Board of
Holdco upon the consummation of the transactions contemplated hereby has agreed
to a term sheet regarding an Employment Agreement with Holdco in the form
attached hereto as Exhibit B-1 and the person designated to be the Chief
Executive Officer of Holdco upon the consummation of the transactions
contemplated hereby has agreed to enter into an Employment Agreement with Enzon
in the form attached hereto as Exhibit B-2, which will be assigned to and
assumed by Holdco upon consummation of the Mergers.
G. The parties hereto intend that, for United States federal income tax
purposes, each of the Mergers will qualify as a reorganization within the
meaning of Section 368(a) of the Code.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, and intending to be legally bound hereby and thereby, the parties
hereto agree as follows:
ARTICLE I
THE PLAN OF REORGANIZATION
1.1 Organization of Holdco, NPS Merger Sub and Enzon Merger Sub.
(a) Organization.
(i) NPS and Enzon have organized Holdco under the laws of the
State of Delaware for the purpose of effecting the transactions
contemplated hereby. The authorized capital stock of Holdco consists of
one thousand (1,000) shares of Common Stock, of which one (1) share
shall be issued to NPS and one (1) share shall be issued to Enzon. NPS
and Enzon shall take, and shall cause Holdco to take, all requisite
action to cause the certificate of incorporation of Holdco to be in the
form attached hereto as Exhibit C-1 (the "Holdco Certificate of
Incorporation") and the bylaws of Holdco (the "Holdco Bylaws") to be in
the form of Exhibit C-2, in each case as of immediately prior to the
Effective Time. Promptly following the execution of this Agreement, NPS
and Enzon will agree on a new name for Holdco and amend the Holdco
Certificate of Incorporation accordingly; provided, however, that such
name will not be either "NPS" or "Enzon."
(ii) NPS and Enzon have caused Holdco to organize NPS Merger
Sub and Enzon Merger Sub under the laws of the State of Delaware for
the purposes of the effecting the transactions contemplated hereby. The
authorized capital stock of each of NPS Merger Sub and Enzon Merger Sub
consists of one thousand (1,000) shares of Common Stock, all of which
has been issued to Holdco, as the sole stockholder of each of NPS
Merger Sub and Enzon Merger Sub, for a purchase price of One Dollar
($1.00) per share.
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(b) Board of Directors. Prior to the Effective Time, the Board of
Directors of each of Holdco (the "Holdco Board"), NPS Merger Sub and Enzon
Merger Sub shall consist of the Chief Executive Officer of each of NPS and
Enzon. NPS and Enzon shall take all requisite action to cause the directors of
Holdco as of the Effective Time to be as provided in Section 5.12(a) hereof.
(c) Officers. Prior to the Effective Time, the sole officers of Holdco,
NPS Merger Sub and Enzon Merger Sub shall consist of the Chief Executive Officer
of each of NPS and Enzon. NPS and Enzon shall take all requisite action to cause
the executive officers of Holdco as of the Effective Time to be as provided in
Section 5.12(c) hereof.
(d) Approval of Agreement; Compliance. NPS and Enzon, acting in their
respective capacities as the sole holders of all outstanding shares of Holdco
Common Stock, shall adopt this Agreement, and shall cause Holdco to take all
requisite action to approve and adopt this Agreement and approve the
transactions contemplated hereby. Each of NPS and Enzon shall cause each of
Holdco, NPS Merger Sub and Enzon Merger Sub to perform their respective
obligations under this Agreement in accordance with the terms and conditions
hereof.
1.2 The NPS Merger. Upon the terms and subject to the conditions set
forth in this Agreement and in accordance with the DGCL, and simultaneously with
the Enzon Merger, NPS, Holdco and NPS Merger Sub shall cause a certificate of
merger to be filed with the Secretary of State of the State of Delaware in
accordance with the relevant provisions of the DGCL (the "NPS Certificate of
Merger") providing for the NPS Merger, with NPS being the surviving corporation
thereof upon the effectiveness of the NPS Merger, pursuant to this Agreement and
the NPS Certificate of Merger and in accordance with applicable provisions of
the DGCL.
1.3 The Enzon Merger. Upon the terms and subject to the conditions set
forth in this Agreement and in accordance with the DGCL, and simultaneously with
the NPS Merger, Enzon, Holdco and Enzon Merger Sub shall cause a certificate of
merger to be filed with the Secretary of State of the State of Delaware in
accordance with the relevant provisions of the DGCL (the "Enzon Certificate of
Merger") providing for the Enzon Merger, with Enzon Merger Sub being the
surviving corporation thereof upon the effectiveness of the Enzon Merger,
pursuant to this Agreement and the Enzon Certificate of Merger and in accordance
with applicable provisions of the DGCL.
1.4 The Closing. Upon the terms and subject to the conditions set forth
in Article VI hereof, the closing of the transactions contemplated hereby (the
"Closing") shall take place on the first (1st) business day after the
satisfaction or waiver of the conditions set forth in Article VI hereof which
are capable of being satisfied prior to the Closing, or such other date upon
which the parties hereto shall mutually agree (the "Closing Date"), at the
offices of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, located
at 00 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx, or such other location
upon which the parties hereto shall mutually agree.
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1.5 Effective Time. As soon as practicable following the Closing the
parties hereto shall cause the Mergers to be consummated by filing the
Certificates of Merger with the Secretary of State of the State of Delaware in
such form as is required by, and executed and acknowledged in accordance with,
the relevant provisions of the DGCL and make all other filings or recordings
required under the DGCL. The Mergers shall become effective at the date and time
at which the Certificates of Merger are duly filed with the Secretary of State
of the State of Delaware in accordance with the relevant provisions of the DGCL
or such subsequent date and time as the parties hereto shall mutually agree and
as shall be specified in the Certificates of Merger; provided, however, that
notwithstanding the foregoing, the parties hereto agree that the Certificates of
Merger shall provide that the Mergers shall become effective at the same time.
1.6 Effects of the Mergers. From and after the Effective Time, the
Mergers shall have all of the effects provided by applicable Legal Requirements
(including, without limitation, the DGCL), including, without limiting the
generality of the foregoing, and subject thereto, at the Effective Time all the
property, rights, privileges, powers and franchises of NPS and Enzon,
respectively, shall vest in the respective Surviving Corporations of the
respective Mergers, and all debts, liabilities and duties of NPS and Enzon,
respectively, shall become the debts, liabilities and duties of the respective
Surviving Corporations of the respective Mergers.
1.7 Certificate of Incorporation and Bylaws of the Surviving
Corporations.
(a) Certificates of Incorporation.
(i) As of the Effective Time, by virtue of the NPS Merger and
without any action on the part of NPS or NPS Merger Sub, the
Certificate of Incorporation of the Surviving Corporation of the NPS
Merger shall be amended and restated in its entirety to read the same
as the Certificate of Incorporation of NPS Merger Sub as in effect
immediately prior to the Effective Time, until thereafter amended in
accordance with the DGCL and such Certificate of Incorporation;
provided, however, that as of the Effective Time, the Certificate of
Incorporation of the Surviving Corporation of the NPS Merger shall
provide that the name of the Surviving Corporation of the NPS Merger is
"NPS."
(ii) As of the Effective Time, by virtue of the Enzon Merger
and without any action on the part of Enzon or Enzon Merger Sub, the
Certificate of Incorporation of the Surviving Corporation of the Enzon
Merger shall be amended and restated in its entirety to read the same
as the Certificate of Incorporation of Enzon Merger Sub as in effect
immediately prior to the Effective Time, until thereafter amended in
accordance with the DGCL and such Certificate of Incorporation;
provided, however, that as of the Effective Time, the Certificate of
Incorporation of the Surviving Corporation of the Enzon Merger shall
provide that the name of the Surviving Corporation of the Enzon Merger
is "Enzon."
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(b) Bylaws.
(i) As of the Effective Time, by virtue of the NPS Merger and
without any action on the part of NPS or NPS Merger Sub, the Bylaws of
NPS Merger Sub, as in effect immediately prior to the Effective Time,
shall be the Bylaws of the Surviving Corporation of the NPS Merger,
until thereafter amended in accordance with the DGCL and as provided in
such Bylaws.
(ii) As of the Effective Time, by virtue of the Enzon Merger
and without any action on the part of Enzon or Enzon Merger Sub, the
Bylaws of Enzon Merger Sub, as in effect immediately prior to the
Effective Time, shall be the Bylaws of the Surviving Corporation of the
Enzon Merger, until thereafter amended in accordance with the DGCL and
as provided in such Bylaws.
1.8 Directors and Officers.
(a) Directors.
(i) As of the Effective Time, by virtue of the NPS Merger and
without any action on the part of NPS or NPS Merger Sub, the initial
directors of the Surviving Corporation of the NPS Merger shall be the
directors of NPS Merger Sub, until their respective successors are duly
elected or appointed and qualified. Any successors elected or appointed
to the board of the Surviving Corporation of the NPS Merger shall be so
elected or appointed in a manner proportionate and consistent with the
composition of the Holdco Board.
(ii) As of the Effective Time, by virtue of the Enzon Merger
and without any action on the part of Enzon or Enzon Merger Sub, the
initial directors of the Surviving Corporation of the Enzon Merger
shall be the directors of Enzon Merger Sub, until their respective
successors are duly elected or appointed and qualified. Any successors
elected or appointed to the board of the Surviving Corporation of the
Enzon Merger shall be so elected or appointed in a manner proportionate
and consistent with the composition of the Holdco Board.
(b) Officers.
(i) As of the Effective Time, by virtue of the NPS Merger and
without any action on the part of NPS or NPS Merger Sub, the officers
of the Surviving Corporation of the NPS Merger shall be the officers of
NPS Merger Sub, until their respective successors are duly appointed.
(ii) As of the Effective Time, by virtue of the Enzon Merger
and without any action on the part of Enzon or Enzon Merger Sub, the
officers of the Surviving Corporation of the Enzon Merger shall be the
officers of Enzon Merger Sub, until their respective successors are
duly appointed.
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1.9 Effect of NPS Merger on Capital Stock. Upon the terms and subject
to the conditions set forth in this Agreement, at the Effective Time, by virtue
of the NPS Merger, and without any action on the part of NPS, NPS Merger Sub,
Holdco or the holders of any of the following securities, the following shall
occur:
(a) NPS Merger Sub Common Stock. Each share of Common Stock of NPS
Merger Sub shall be canceled and converted into one fully paid and nonassessable
share of Common Stock of the Surviving Corporation of the NPS Merger.
(b) NPS Common Stock. Except as provided in Section 1.9(c) and Section
1.11(d) hereof, each share of NPS Common Stock issued and outstanding
immediately prior to the Effective Time shall be cancelled and extinguished and
automatically converted into the right to receive one (1) share (the "NPS
Exchange Ratio") of validly issued, fully paid and nonassessable Holdco Common
Stock upon surrender of the certificate representing such share of NPS Common
Stock in the manner provided for in Section 1.11 hereof (or in the case of a
lost, stolen or destroyed certificate, upon delivery of an affidavit (and bond,
if required) in the manner provided in Section 1.14 hereof).
(c) Certain Owned Shares. Each share of NPS Common Stock which is,
immediately prior to the Effective Time, held in the treasury of NPS, or
outstanding and held by Enzon, Holdco, or any direct or indirect wholly owned
subsidiary of NPS, Enzon or Holdco, shall be canceled and extinguished without
any conversion thereof.
(d) NPS Options. Each NPS Option outstanding immediately prior to the
Effective Time shall be treated in accordance with the terms of Section
5.9(a)(i) hereof.
(e) NPS Purchase Rights. All Rights outstanding under the NPS ESPP
shall be treated as set forth in Section 5.9(a)(ii) hereof.
(f) Adjustments to the NPS Exchange Ratio. The NPS Exchange Ratio shall
be adjusted to reflect fully the appropriate effect of any stock split, reverse
stock split, stock dividend (including any dividend or distribution of
securities convertible into NPS Common Stock), reorganization, recapitalization,
reclassification or other like change with respect to NPS Common Stock having a
record date on or after the date hereof and prior to the Effective Time.
1.10 Effect of the Enzon Merger on Capital Stock. Upon the terms and
subject to the conditions set forth in this Agreement, at the Effective Time, by
virtue of the Enzon Merger, and without any action on the part of Enzon, Enzon
Merger Sub, Holdco or the holders of any of the following securities, the
following shall occur:
(a) Enzon Merger Sub Common Stock. The Enzon Merger shall have no
effect on the common stock of Enzon Merger Sub.
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(b) Enzon Common Stock. Except as provided in Section 1.10(c) and
Section 1.11(d) hereof, each share of Enzon Common Stock issued and outstanding
immediately prior to the Effective Time shall be cancelled and extinguished and
automatically converted into the right to receive 0.7264 of a share (the "Enzon
Exchange Ratio") of validly issued, fully paid and nonassessable Holdco Common
Stock upon surrender of the certificate representing such share of Enzon Common
Stock in the manner provided for in Section 1.11 hereof (or in the case of a
lost, stolen or destroyed certificate, upon delivery of an affidavit (and bond,
if required) in the manner provided in Section 1.14 hereof).
(c) Certain Owned Shares. Each share of Enzon Common Stock which is, as
of immediately prior to the Effective Time, held in the treasury of Enzon, or
outstanding and held by NPS, Holdco, or any direct or indirect wholly owned
subsidiary of Enzon, NPS or Holdco, shall be canceled and extinguished without
any conversion thereof.
(d) Enzon Options. Each Enzon Option outstanding immediately prior to
the Effective Time shall be treated in accordance with the terms of Section
5.9(b) hereof.
(e) Adjustments to the Enzon Exchange Ratio. The Enzon Exchange Ratio
shall be adjusted to reflect fully the appropriate effect of any stock split,
reverse stock split, stock dividend (including any dividend or distribution of
securities convertible into Enzon Common Stock), reorganization,
recapitalization, reclassification or other like change with respect to Enzon
Common Stock having a record date on or after the date hereof and prior to the
Effective Time.
1.11 Exchange Procedures.
(a) Exchange Agent. NPS and Enzon shall appoint a commercial bank,
trust company or other institution to act as the exchange agent for the Mergers
(the "Exchange Agent").
(b) Holdco to Provide Common Stock. Promptly after the Effective Time,
Holdco shall deposit with the Exchange Agent, for the benefit of the holders of
shares of NPS Common Stock and Enzon Common Stock, for exchange in accordance
with the terms of this Article I, certificates representing the shares of Holdco
Common Stock issuable pursuant to this Agreement and the Certificates of Merger.
In addition, Holdco shall make available, as necessary from time to time after
the Effective Time as needed, cash in an amount sufficient for payment in lieu
of fractional shares pursuant to Section 1.11(d) hereof and any dividends or
distributions which holders of shares of NPS Common Stock and Enzon Common Stock
may be entitled to pursuant to Section 1.11(e) hereof.
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(c) Exchange Procedures. Promptly after the Effective Time, Holdco
shall cause the Exchange Agent to mail to each holder of record (as of the
Effective Time) of, or entitled to, a certificate or certificates (the
"Certificates") which immediately prior to the Effective Time represented
outstanding shares of NPS Common Stock, including, for greater certainty, the
holders (other than NPS or any of its Subsidiaries) of certificates including
Exchangeable Shares purchased by an affiliate of NPS prior to the Effective
Time, and Enzon Common Stock, in each case, whose shares were converted into the
right to receive shares of Holdco Common Stock pursuant to Section 1.9 and
Section 1.10 hereof, cash in lieu of any fractional shares pursuant to Section
1.11(d) hereof and any dividends or other distributions pursuant to Section
1.11(e) hereof: (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Exchange Agent and shall be in
such form and have such other provisions as NPS and Enzon may reasonably
specify) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for certificates representing whole shares of Holdco
Common Stock, cash in lieu of any fractional shares pursuant to Section 1.11(d)
hereof and any dividends or other distributions pursuant to Section 1.11(e)
hereof. Upon surrender of Certificates for cancellation to the Exchange Agent,
together with such letter of transmittal, duly completed and validly executed in
accordance with the instructions thereto and such other documents as may
reasonably be required by the Exchange Agent, the holder of such Certificates
shall be entitled to receive in exchange therefor the number of whole shares of
Holdco Common Stock (after taking into account all Certificates surrendered by
such holder) to which such holder is entitled pursuant to Section 1.9 and
Section 1.10 hereof (which shall be in uncertificated book entry form unless a
physical certificate is requested or is otherwise required by applicable Legal
Requirements), payment in lieu of fractional shares which such holder has the
right to receive pursuant to Section 1.11(d) hereof and any dividends or
distributions payable pursuant to Section 1.11(e), and the Certificates so
surrendered shall forthwith be canceled. Until so surrendered, outstanding
Certificates will be deemed from and after the Effective Time, for all corporate
purposes, to evidence the ownership of the number of full shares of Holdco
Common Stock into which such shares of NPS Common Stock or Enzon Common Stock
shall have been so converted and the right to receive an amount in cash in lieu
of the issuance of any fractional shares in accordance with Section 1.11(d)
hereof and any dividends or distributions payable pursuant to Section 1.11(e)
hereof.
(d) Fractional Shares. No fraction of a share of Holdco Common Stock
will be issued by virtue of the Mergers, but in lieu thereof each holder of NPS
Common Stock or Enzon Common Stock who would otherwise be entitled to receive a
fraction of a share of Holdco Common Stock (after aggregating all fractional
shares of Holdco Common Stock that otherwise would be received by such holder)
shall, upon surrender of such holder's Certificate(s), receive from the Exchange
Agent, at such time as such holder shall receive a Certificate or Certificates
representing shares of Holdco Common Stock as contemplated by Section 1.11(c)
hereof, an amount of cash (rounded up to the nearest whole cent), without
interest, equal to the product obtained by multiplying (i) such fraction, and
(ii) the closing price per share of Holdco Common Stock on the NASDAQ on the
trading day immediately succeeding the date upon which the Effective Time occurs
(as reported in the Wall Street Journal, National Edition).
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(e) Distributions With Respect to Unexchanged Shares. No dividends or
other distributions declared or made after the date hereof with respect to
Holdco Common Stock, NPS Common Stock or Enzon Common Stock with a record date
after the Effective Time and no payment in lieu of fractional shares pursuant to
Section 1.11(d) hereof will be paid to the holders of any unsurrendered
Certificates with respect to the shares of Holdco Common Stock represented
thereby until the holders of record of such Certificates shall surrender such
Certificates. Subject to applicable Legal Requirements, following surrender of
any such Certificates, the Exchange Agent shall deliver to the record holders
thereof, without interest (i) promptly after such surrender, the number of whole
shares of Holdco Common Stock issued in exchange therefor along with payment in
lieu of fractional shares pursuant to Section 1.11(d) hereof and the amount of
any such dividends or other distributions with a record date after the Effective
Time and theretofore paid with respect to such whole shares of Holdco Common
Stock and (ii) at the appropriate payment date, the amount of dividends or other
distributions with a record date after the Effective Time and a payment date
subsequent to such surrender payable with respect to such whole shares of Holdco
Common Stock.
(f) Transfers of Ownership. If shares of Holdco Common Stock are to be
issued in a name other than that in which the Certificates surrendered in
exchange therefor are registered, it will be a condition of the issuance thereof
that the Certificates so surrendered will be properly endorsed and otherwise in
proper form for transfer and that the Persons requesting such exchange will have
paid to Holdco or any agent designated by it any transfer or other Taxes
required by reason of the issuance of shares of Holdco Common Stock in any name
other than that of the registered holder of the Certificates surrendered, or
established to the satisfaction of Holdco or any agent designated by it that
such Tax has been paid or is not payable.
(g) Required Withholding. Each of the Exchange Agent, Holdco and the
Surviving Corporations shall be entitled to deduct and withhold from any
consideration payable or otherwise deliverable pursuant to this Agreement to any
holder or former holder of NPS Common Stock or Enzon Common Stock such amounts
as may be required to be deducted or withheld therefrom under the Code or under
any provision of state, local or foreign Tax laws or under any other applicable
Legal Requirements. To the extent such amounts are so deducted or withheld, the
amount of such consideration shall be treated for all purposes under this
Agreement as having been paid to the Person to whom such consideration would
otherwise have been paid.
(h) No Liability. Notwithstanding anything to the contrary in this
Section 1.11, none of the Exchange Agent, Holdco, the Surviving Corporations or
any other party hereto shall be liable to a holder or former holder of shares of
NPS Common Stock, Enzon Common Stock or Holdco Common Stock, as the case may be,
for any amount properly paid to a public official pursuant to any applicable
abandoned property, escheat or similar Legal Requirement.
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(i) Termination of Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to the holders of Certificates six (6) months after
the Effective Time shall, at the request of Holdco, be delivered to Holdco or
otherwise on the instruction of Holdco, and any holders of the Certificates who
have not surrendered such Certificates in compliance with this Section 1.11
shall after such delivery to Holdco look only to Holdco for the shares of Holdco
Common Stock pursuant to Section 1.9 and 1.10 hereof, cash in lieu of any
fractional shares pursuant to Section 1.11(d) hereof and any dividends or other
distributions pursuant to Section 1.11(e) with respect to the shares of NPS
Common Stock or Enzon Common Stock formerly represented thereby. Any such
portion of the Exchange Fund remaining unclaimed by holders of shares of NPS
Common Stock or Enzon Common Stock immediately prior to such time as such
amounts would otherwise escheat to or become property of any Governmental
Authority shall, to the extent permitted by applicable Legal Requirements,
become the property of Holdco, free and clear of any claims or interest of any
Person previously entitled thereto.
1.12 Unvested Common Stock. If any shares of NPS Common Stock or Enzon
Common Stock outstanding immediately prior to the Effective Time are unvested or
are subject to a repurchase option, risk of forfeiture or other condition under
any applicable restricted stock purchase agreement or other agreement with NPS
or Enzon, respectively, then the shares of Holdco Common Stock issued in
exchange for such shares of NPS Common Stock or Enzon Common Stock, as
applicable, shall also be unvested and subject to the same repurchase option,
risk of forfeiture or other condition, and the certificates representing such
shares may accordingly be marked with appropriate legends. NPS and Enzon each
shall take all action that may be necessary to ensure that, from and after the
Effective Time, Holdco will be entitled to exercise any such repurchase option
or other right set forth in any such restricted stock purchase agreement or
other agreement.
1.13 No Further Ownership Rights in Capital Stock of NPS and Enzon. All
shares of Holdco Common Stock issued upon the surrender for exchange of shares
of NPS Common Stock and Enzon Common Stock in accordance with the terms hereof
(including any cash paid in respect thereof pursuant to Section 1.11(d) hereof
and Section 1.11(e) hereof) shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of NPS Common Stock or
Enzon Common Stock, as the case may be, and there shall be no further
registration of transfers on the records of Holdco or the Surviving Corporations
of shares of NPS Common Stock or Enzon Common Stock that were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to Holdco for any reason, they shall be canceled and
exchanged in accordance with the terms of this Article I.
1.14 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 Holdco
Common Stock, cash for fractional shares, if any, as may be required pursuant to
Section 1.11(d) hereof and any dividends or distributions payable pursuant to
Section 1.11(e) hereof; provided, however, that Holdco may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost, stolen or destroyed Certificates to deliver a bond in such sum as it may
reasonably direct as indemnity against any claim that may be made against the
Exchange Agent, Holdco or either of the Surviving Corporations with respect to
the Certificates alleged to have been lost, stolen or destroyed.
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1.15 Tax Consequences. The parties hereto intend that each of the
Mergers will qualify as a reorganization within the meaning of Section 368(a) of
the Code. The parties hereto adopt this Agreement as a plan of reorganization
within the meaning of Treasury Regulations Sections 1.368-2(g).
1.16 Further Action. At and after the Effective Time, the officers and
directors of the Surviving Corporations will be authorized to execute and
deliver, in the name and on behalf of NPS and Enzon, as the case may be, any
deeds, bills of sale, assignments or assurances and to take and do, in the name
and on behalf of NPS and Enzon, any other actions and things to vest, perfect or
confirm of record or otherwise in the Surviving Corporations any and all right,
title and interest in, to and under any of the rights, properties or assets
acquired or to be acquired by the Surviving Corporations as a result of, or in
connection with, the Mergers.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF ENZON
Enzon represents and warrants to NPS as follows, subject to the
exceptions specifically disclosed in writing in a disclosure letter (the "Enzon
Disclosure Letter") delivered by Enzon to NPS, dated as of the date hereof and
certified by each of the Chief Executive Officer and the Chief Financial Officer
of Enzon, which certifications shall provide that each such person has reviewed
the Enzon Disclosure Letter and that the Enzon Disclosure Letter is true and
correct in all respects:
2.1 Organization; Standing and Power; Charter Documents; Subsidiaries.
(a) Organization; Standing and Power. Enzon and each of its
Subsidiaries is a corporation or other organization duly organized, validly
existing and, to the extent applicable, in good standing under the laws of the
jurisdiction of its incorporation or organization, has the requisite power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted, except where the failure to be so organized, existing
and in good standing would not reasonably be expected to have a Material Adverse
Effect on Enzon, and is duly qualified and in good standing to do business in
each jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such qualification necessary other than in such
jurisdictions where the failure to so qualify or to be good standing,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on Enzon.
(b) Charter Documents. Enzon has delivered or made available to NPS:
(i) a true and correct copy of the Certificate of Incorporation (including any
Certificate of Designations) and Bylaws of Enzon, each as amended to date
(collectively, the "Enzon Charter Documents") and (ii) the certificate of
incorporation and bylaws, or like organizational documents (collectively,
"Subsidiary Charter Documents"), of each of its Subsidiaries, and each such
instrument is in full force and effect. Enzon is not in material violation of
any of the provisions of the Enzon Charter Documents and each Subsidiary is not
in material violation of its respective Subsidiary Charter Documents.
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(c) Subsidiaries. Section 2.1(c) of the Enzon Disclosure Letter
contains a complete and accurate list of all of Enzon's Subsidiaries as of the
date hereof, together with a complete and accurate list of each partnership,
joint venture or other business entity in which Enzon holds an interest, whether
voting, equity or otherwise, indicating the name, jurisdiction of organization
and Enzon's interest in each such entity. Neither Enzon nor any of its
Subsidiaries owns any equity or other interest in any corporation, partnership,
joint venture or other business entity which is not set forth in Section 2.1(c)
of the Enzon Disclosure Letter. All the outstanding shares of capital stock of,
or other equity interests in, each such Subsidiary have been validly issued and
are fully paid and nonassessable and are owned directly or indirectly by Enzon,
free and clear of all Liens, including any restriction on the right to vote,
sell or otherwise dispose of such capital stock or other ownership interests,
except for restrictions imposed by applicable securities laws.
2.2 Capital Structure.
(a) Capital Stock. The authorized capital stock of Enzon consists of:
(i) ninety million (90,000,000) shares of Enzon Common Stock, par value $0.01
per share and (ii) three million (3,000,000) shares of preferred stock, par
value $0.01 per share (the "Enzon Preferred Stock"), of which (A) one million
one hundred thousand (1,100,000) shares have been designated as Series A
Cumulative Convertible Preferred Stock ("Enzon Series A Preferred Stock"), and
(B) six hundred thousand (600,000) shares have been designated as Series B
Preferred Stock ("Enzon Series B Stock"), all of which are reserved for issuance
upon exercise of preferred stock purchase rights (the "Enzon Rights") issued
pursuant to the Enzon Rights Agreement dated as of May 17, 2002, between Enzon
and Continental Stock Transfer & Trust Company, as rights agent (the "Enzon
Rights Agreement"). At the close of business on February 13, 2003: (i) forty
three million three hundred ninety two thousand four hundred forty eight
(43,392,448) shares of Enzon Common Stock were issued and outstanding (none of
which were held by Enzon in its treasury), (ii) seven thousand (7,000) shares of
Enzon Series A Preferred Stock were issued and outstanding, and (iii) no (0)
shares of Enzon Series B Stock were issued and outstanding. All of the
outstanding shares of capital stock of Enzon are duly authorized and validly
issued, fully paid and nonassessable and not subject to any preemptive rights.
Upon consummation of the Mergers, (A) the shares of Holdco Common Stock issued
in exchange for any shares of Enzon Common Stock that are subject to a Contract
pursuant to which Enzon has the right to repurchase, redeem or otherwise
reacquire any shares of Enzon Common Stock will, without any further action of
Enzon, NPS, Holdco or any other Person, become subject to the restrictions,
conditions and other provisions contained in such Contract and (B) Holdco will
automatically succeed to and become entitled to exercise Enzon's rights and
remedies under any such Contract.
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(b) Stock Options. As of the close of business on February 13, 2003:
(i) four million three hundred eighty two thousand six hundred four (4,382,604)
shares of Enzon Common Stock are subject to issuance pursuant to outstanding
Enzon Options, and (ii) no shares of Enzon Common Stock are subject to issuance
pursuant to outstanding options, rights or warrants to purchase Enzon Common
Stock issued other than pursuant to the Enzon Option Plans. All shares of Enzon
Common Stock subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
would be duly authorized, validly issued, fully paid and nonassessable. There
are no commitments or agreements of any character to which Enzon is bound
obligating Enzon to accelerate the vesting of any Enzon Option as a result of
the Mergers (whether alone or upon the occurrence of any additional or
subsequent events). There are no outstanding or authorized stock appreciation,
phantom stock, profit participation or other similar rights with respect to
Enzon. Section 2.2(b) of the Enzon Disclosure Letter contains a complete and
accurate list of the following information with respect to each Enzon Option
outstanding as of February 13, 2003: (i) the name of the optionee in respect of
each such Enzon Option; (ii) the particular Enzon Option Plan pursuant to which
each such Enzon Option was granted; (iii) the number of shares of Enzon Common
Stock subject to each such Enzon Option; (iv) the exercise price of each such
Enzon Option; (v) the date on which each such Enzon Option was granted; (vi) the
extent to which each such Enzon Option is vested and unvested as of a recent
practicable date; (vii) the date on which each such Enzon Option expires and
(viii) whether the exercisability of each such Enzon Option will be accelerated
in any way by the transactions contemplated by this Agreement, and indicates the
extent of any such acceleration. Section 2.2(b) of the Enzon Disclosure Letter
also contains a complete and accurate description of the vesting schedule
generally applicable to Enzon Options, and shall specifically identify each
Enzon Option with a vesting schedule that is different than such generally
applicable vesting schedule (including a description of each such different
vesting schedule). Except as specifically set forth on Section 2.2(b) of the
Enzon Disclosure Letter, all Enzon Options that are not exercised prior to the
Effective Time shall automatically terminate as of the Effective Time in
accordance with the terms of the applicable Enzon Option Plan or grant
agreement.
(c) Voting Debt. No Voting Debt of Enzon is issued or outstanding as of
the date hereof.
(d) Other Securities. Except as otherwise set forth in this Section
2.2, there are no securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which Enzon or any of
its Subsidiaries is a party or by which any of them is bound obligating Enzon or
any of its Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock, Voting Debt or other
voting securities of Enzon or any of its Subsidiaries, or obligating Enzon or
any of its Subsidiaries to issue, grant, extend or enter into any such security,
option, warrant, call, right, commitment, agreement, arrangement or undertaking.
There are no outstanding contractual commitments of Enzon or any of its
Subsidiaries which obligate Enzon or its Subsidiaries to make any investment
(including in the form of a loan, capital contribution or otherwise) in any
other Person. As of the date hereof, there are no outstanding obligations of
Enzon or any of its Subsidiaries to repurchase, redeem or otherwise acquire any
shares of capital stock of Enzon or any of its Subsidiaries, except as provided
in this Agreement. All outstanding shares of Enzon Common Stock, all outstanding
Enzon Options, and all outstanding shares of capital stock of each Subsidiary of
Enzon have been issued and granted in compliance in all material respects with
(i) all applicable securities laws and all other applicable Legal Requirements
and (ii) all requirements set forth in applicable Enzon Material Contracts.
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(e) No Changes. Since January 1, 2003 through the date hereof, other
than pursuant to the exercise of Enzon Options outstanding as of such date
issued pursuant to the Enzon Option Plans, or pursuant to repurchases from
Employees following their termination pursuant to the terms of their
pre-existing stock option or purchase agreements or in connection with those
rights to receive Enzon Common Stock granted to directors under the Enzon 2001
Stock Incentive Plan, there has been no change in (i) the outstanding capital
stock of Enzon, (ii) the number of Enzon Options outstanding, or (iii) the
number of other options, warrants or other rights to purchase Enzon capital
stock.
2.3 Authority; Non-Contravention; Necessary Consents.
(a) Authority. Enzon has all requisite corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by Enzon has been duly authorized by all
necessary corporate action (including approval by the board of directors, which
was unanimous as of the date hereof) on the part of Enzon, and no other
corporate proceedings on the part of Enzon are necessary to authorize the
execution and delivery of this Agreement or to consummate the Enzon Merger and
the other transactions contemplated hereby by Enzon, subject only to the
adoption of this Agreement by Enzon's stockholders and the filing of the Enzon
Certificate of Merger pursuant to the DGCL. The affirmative vote of the holders
of a majority of the outstanding shares of Enzon Common Stock to adopt this
Agreement (the "Requisite Enzon Stockholder Approval") is the only vote of the
holders of any class or series of Enzon capital stock necessary to adopt this
Agreement and consummate the Enzon Merger and the other transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Enzon and, assuming due execution and delivery by NPS, constitutes the valid and
binding obligation of Enzon, enforceable against Enzon in accordance with its
terms.
(b) Non-Contravention. The execution and delivery of this Agreement by
Enzon does not, and performance of this Agreement by Enzon will not: (i)
conflict with or violate the Enzon Charter Documents or any Subsidiary Charter
Documents of any Subsidiary of Enzon, (ii) subject to the adoption of this
Agreement by Enzon's stockholders as contemplated in Section 5.2 hereof and
compliance with the requirements set forth in Section 2.3(c) hereof, conflict
with or violate any material Legal Requirement applicable to Enzon or any of its
Subsidiaries or by which Enzon or any of its Subsidiaries or any of their
respective properties is bound or affected, or (iii) result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or impair Enzon'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 on any of the properties or assets of Enzon or any of its
Subsidiaries pursuant to, any material note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, authorization, consent, approval,
franchise or other instrument or obligation to which Enzon or any Subsidiary of
Enzon is a party or by which Enzon or any Subsidiary of Enzon or any of their
respective properties are bound or affected. Section 2.3(b) of the Enzon
Disclosure Letter contains a complete and accurate list of all consents, waivers
and approvals required to be obtained in connection with the consummation of the
Enzon Merger and the other transactions contemplated hereby.
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(c) Necessary Consents. No consent, approval, order or authorization
of, or registration, declaration or filing with any Governmental Authority is
required to be obtained or made by Enzon in connection with the execution and
delivery of this Agreement or the consummation of the Enzon Merger and other
transactions contemplated hereby, except for: (i) the filing of the Enzon
Certificate of Merger with the Secretary of State of the State of Delaware and
appropriate documents with the relevant authorities of other states in which
Enzon and/or NPS are qualified to do business, (ii) the filing of the Proxy
Statement/Prospectus with the SEC in accordance with the Exchange Act and the
effectiveness of the Registration Statement, (iii) such consents, approvals,
orders, authorizations, registrations, declarations and filings as may be
required under applicable federal, foreign and state securities (or related)
laws and the HSR Act and any other comparable foreign merger Legal Requirements,
(iv) the consents listed on Section 2.3(b) of the Enzon Disclosure Letter; and
(v) such other consents, authorizations, filings, approvals and registrations
which if not obtained or made would not be material to Enzon or NPS or
materially adversely affect the ability of the parties hereto to consummate the
Mergers within the time frame in which the Mergers would otherwise be
consummated in the absence of the need for such consent, approval, order,
authorization, registration, declaration or filings. The consents, approvals,
orders, authorizations, registrations, declarations and filings set forth in (i)
through (v) are referred to herein as the "Necessary Consents" (provided that
for the purposes of the definition of "Necessary Consents" with respect to NPS,
clause (iv) shall be deemed to refer to the consents set forth in Section 3.3(b)
of the NPS Disclosure Letter).
2.4 SEC Filings; Financial Statements.
(a) SEC Filings. Enzon has filed all required registration statements,
prospectuses, reports, schedules, forms, statements and other documents
(including exhibits and all other information incorporated by reference)
required to be filed by it with the SEC since January 1, 2000. Enzon has made
available to NPS all such registration statements, prospectuses, reports,
schedules, forms, statements and other documents in the form filed with the SEC.
All such required registration statements, prospectuses, reports, schedules,
forms, statements and other documents (including those that Enzon may file
subsequent to the date hereof), as amended, are referred to herein as the "Enzon
SEC Reports." As of their respective dates, the Enzon SEC Reports (i) were
prepared in accordance and complied in all material respects with the
requirements of the Securities Act, or the Exchange Act, as the case may be, and
the Xxxxxxxx-Xxxxx Act of 2002, as amended (the "Xxxxxxxx-Xxxxx Act"), and the
rules and regulations promulgated thereunder by the SEC applicable to such Enzon
SEC Reports and (ii) did not at the time they were filed contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, except to
the extent corrected prior to the date hereof by a subsequently filed Enzon SEC
Report. None of Enzon's Subsidiaries is required to file any forms, reports or
other documents with the SEC.
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(b) Financial Statements. Each of the consolidated financial statements
(including, in each case, any related notes thereto) contained in the Enzon SEC
Reports (the "Enzon Financials"), including each Enzon SEC Report filed after
the date hereof until the Closing: (i) complied as to form in all material
respects with the published rules and regulations of the SEC, including but not
limited to the Xxxxxxxx-Xxxxx Act, with respect thereto, (ii) was prepared in
accordance with United States generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved (except as may be
indicated in the notes thereto or, in the case of unaudited interim financial
statements, as may be permitted by the SEC on Form 10-Q, Form 8-K or any
successor form under the Exchange Act), and (iii) fairly presented in all
material respects the consolidated financial position of Enzon and its
consolidated Subsidiaries as at the respective dates thereof and the
consolidated results of Enzon's operations and cash flows for the periods
indicated. The balance sheet of Enzon contained in the Enzon SEC Reports as of
December 31, 2002 is hereinafter referred to as the "Enzon Balance Sheet" and
the date of the Enzon Balance Sheet is hereinafter referred to as the "Enzon
Balance Sheet Date." Except as disclosed in the Enzon Financials, since the date
of the Enzon Balance Sheet and through the date hereof, neither Enzon nor any of
its Subsidiaries has any material liabilities required under GAAP to be set
forth on a consolidated balance sheet (absolute, accrued, contingent or
otherwise), except for liabilities incurred since the date of the Enzon Balance
Sheet in the ordinary course of business and consistent with past practices
which, individually or in the aggregate, are not material to Enzon, and
liabilities incurred pursuant to this Agreement.
2.5 Absence of Certain Changes or Events.
(a) Since the Enzon Balance Sheet Date, there has not been any Effect
that, individually or in the aggregate, constitutes a Material Adverse Effect on
Enzon.
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(b) Since the Enzon Balance Sheet Date and through the date hereof,
each of Enzon and its Subsidiaries has conducted its respective business in all
material respects only in the ordinary course of business and consistent with
past practices, and there has not been: (i) except as otherwise specifically
contemplated herein, any declaration, setting aside or payment of any dividend
on, or other distribution (whether in cash, stock or property) in respect of,
any of Enzon's capital stock, or any purchase, redemption or other acquisition
by Enzon of any of Enzon's capital stock or any other securities of Enzon or any
options, warrants, calls or rights to acquire any such shares or other
securities except for repurchases from employees or other service providers
following their termination pursuant to the terms of their pre-existing stock
option, restricted stock or purchase agreements, (ii) any split, combination or
reclassification of any of Enzon's capital stock, (iii) any granting by Enzon or
any of its Subsidiaries of any increase in compensation or material fringe
benefits to any of their officers, directors or managers or employees who earn
base salary of more than One Hundred Thousand Dollars ($100,000) per year, or
any payment by Enzon or any of its Subsidiaries of any bonus to any of their
officers, directors or managers or employees who earn base salary of more than
One Hundred Thousand Dollars ($100,000) per year, or any granting, by Enzon or
any of its Subsidiaries, of any increase in severance or termination pay, or any
entry by Enzon or any of its Subsidiaries into, or modification or amendment of,
any currently effective employment, severance, termination or indemnification
agreement or any agreement the benefits of which are contingent, or the terms of
which are materially altered, upon the occurrence of a transaction involving
Enzon of the nature contemplated hereby, in each case other than in connection
with periodic compensation or performance reviews and consistent with past
practices or for ordinary course severance and release agreements made in
connection with the termination of employment, (iv) any change by Enzon or any
of its Subsidiaries in its accounting methods, principles or practices, except
as required by concurrent changes in GAAP, (v) any communication from Nasdaq
with respect to the delisting of Enzon Common Stock, (vi) any revaluation by
Enzon or any of its Subsidiaries of any of its assets, including, without
limitation, writing-off of notes or accounts receivable other than in the
ordinary course of business and consistent with past practices, (vii) any
material damage, destruction or loss, whether or not covered by insurance, to
any material properties or assets of Enzon or any of its Subsidiaries, (viii)
any amendment of any term of any outstanding security of Enzon or any of its
Subsidiaries, (ix) any making of any loan, advance or capital contribution to or
investment by Enzon in any Person, including without limitation any director,
officer or other affiliate of Enzon, other than (A) loans, advances or capital
contributions to or investments in wholly-owned Subsidiaries or entities that
became wholly owned Subsidiaries made in the ordinary course of business and
consistent with past practices, (B) investments made in accordance with Enzon's
investment guidelines, a copy of which has been made available to NPS, and in
the ordinary course of business and consistent with past practices, and (C)
travel and entertainment expense advances made in the ordinary course of
business and consistent with past practices, or (x) any agreement, whether in
writing or otherwise, to take any action described in this Section by Enzon or
any of its Subsidiaries.
2.6 Tax Matters.
(a) Enzon and each of its Subsidiaries have timely filed Tax Returns
relating to Taxes required to be filed by Enzon and each of its Subsidiaries
with any Tax authority, except such Tax Returns that are not material to Enzon
and such Tax Returns are true, correct and complete in all material respects.
Enzon and each of its subsidiaries have paid all Taxes shown to be due on such
Tax Returns.
(b) Enzon and each of its Subsidiaries as of the Effective Time will
have withheld with respect to its employees all federal and state income taxes,
Taxes pursuant to the Federal Insurance Contribution Act, Taxes pursuant to the
Federal Unemployment Tax Act and other Taxes required to be withheld, except
such Taxes which are not material to Enzon.
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(c) Neither Enzon nor any of its Subsidiaries has been delinquent in
the payment of any material Tax nor is there any material Tax deficiency
outstanding, proposed or assessed against Enzon or any of its Subsidiaries, nor
has Enzon or any of its Subsidiaries executed any unexpired waiver of any
statute of limitations on or extending the period for the assessment or
collection of any Tax.
(d) Enzon and its Subsidiaries have not taken any position on any Tax
Return or filing which is or would be subject to penalties under Section 6662 of
the Code.
(e) No audit or other examination of any Tax Return of Enzon or any of
its Subsidiaries by any Tax authority is presently in progress, nor has Enzon or
any of its Subsidiaries been notified of any request for such an audit or other
examination.
(f) No adjustment or deficiency relating to any Tax Returns filed by
Enzon or any of its Subsidiaries has been proposed in writing formally or
informally by any Tax authority to Enzon or any of its Subsidiaries or any
representative thereof.
(g) Neither Enzon nor any of its Subsidiaries has any liability for any
material unpaid Taxes which has not been accrued for, or reserved on, the Enzon
Balance Sheet in accordance with GAAP, which is material to Enzon, other than
any liability for unpaid Taxes that may have accrued since the date of the Enzon
Balance Sheet in connection with the operation of the business of Enzon and its
subsidiaries in the ordinary course.
(h) No claim has ever been made in writing by an authority in a
jurisdiction where Enzon and any of its Subsidiaries do not file Tax Returns
that Enzon and its Subsidiaries is or may be subject to taxation by that
jurisdiction.
(i) There are no Liens for Taxes upon the assets of Enzon and its
Subsidiaries except for Taxes that are not yet payable.
(j) There is no contract, agreement, plan or arrangement to which Enzon
or any of its Subsidiaries is a party as of the date of this Agreement,
including but not limited to the provisions of this Agreement, covering any
employee or former employee of Enzon or any of its Subsidiaries that,
individually or collectively, would reasonably be expected to give rise to the
payment of any amount as a result of the Merger that would not be deductible
pursuant to Sections 404 or 162(m) of the Code.
(k) Neither Enzon nor any of its Subsidiaries has filed any consent
agreement under Section 341(f) of the Code or agreed to have Section 341(f)(2)
of the Code apply to any disposition of a subsection (f) asset (as defined in
Section 341(f)(4) of the Code) owned by Enzon or any of its Subsidiaries.
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(l) Neither Enzon nor any of its Subsidiaries is party to or has any
obligation under any tax-sharing, tax indemnity or tax allocation agreement or
arrangement and neither Enzon nor any of its Subsidiaries has been a member of
any affiliated group of corporations within the meaning of Section 1504 of the
Code other than the group of which Enzon is currently the common parent. Enzon
and its Subsidiaries have not participated in, or cooperated with, an
international boycott within the meaning of Section 999 of the Code.
(m) None of Enzon's or its Subsidiaries' assets are tax exempt use
property within the meaning of Section 168(h) of the Code.
(n) Neither Enzon nor any of its Subsidiaries was a "distributing
corporation" or a "controlling corporation" in a distribution of stock intended
to qualify under Section 355 of the Code and that occurred within two (2) years
before the date of this Agreement or as part of a plan or series of transactions
that includes the Merger.
2.7 Intellectual Property Matters.
(a) Section 2.7(a) of the Enzon Disclosure Letter contains a complete
and accurate list, as of the date hereof, of all material Enzon Registered
Intellectual Property. Enzon or one of its Subsidiaries is listed in the records
of the appropriate United States, state or foreign agency as the owner for each
item of Enzon Registered Intellectual Property, free and clear of all Liens.
(b) Each material Enzon License Agreement is in full force and effect.
None of the material Enzon License Agreements grants any third party exclusive
rights to or under any Enzon Intellectual Property Rights or the right to
sublicense any Enzon Intellectual Property Rights. To its knowledge, Enzon and
its Subsidiaries are in material compliance with, and have not materially
breached any term of any of such Enzon License Agreements and, to the knowledge
of Enzon, all other parties to such Enzon License Agreements are in compliance
in all material respects with, and have not materially breached any term of,
such Enzon License Agreements.
(c) To the knowledge of Enzon, (i) the operation of the business of
Enzon or any of its Subsidiaries as such businesses are currently conducted as
of the date hereof, including the design, development, marketing and sale of the
products or services of Enzon or its Subsidiaries, does not infringe or
misappropriate in any material respect the Intellectual Property Rights of any
third party or constitute unfair competition or unfair trade practices under the
laws of any jurisdiction, and (ii) Enzon and its Subsidiaries own or possess
sufficient rights to all Intellectual Property Rights used in or necessary for
the operation of their business as currently conducted on the date hereof and as
will be conducted immediately after the Enzon Merger.
(d) Neither Enzon nor any of its Subsidiaries has received any written
notice from any third party as of the date hereof, and, to the knowledge of
Enzon, there is no other assertion or pending overt threat from any third party,
that the operation of the business of Enzon or any of its Subsidiaries or any
act, product or service of Enzon or any of its Subsidiaries, infringes or
misappropriates the Intellectual Property Rights of any third party or
constitutes unfair competition or unfair trade practices under the laws of any
jurisdiction.
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(e) To the knowledge of Enzon, as of the date hereof, no person is
infringing or misappropriating any material Enzon Intellectual Property Rights
or Enzon Licensed Intellectual Property Rights in any material respect. Neither
Enzon nor any of its Subsidiaries has brought any such claims, suits,
arbitrations or other adversarial proceedings against any third party that
remain unresolved.
(f) All necessary registration, maintenance and renewal fees currently
due in connection with any material Enzon Registered Intellectual Property has
been made and all necessary documents, recordations and certificates in
connection with such material Enzon Registered Intellectual Property have been
filed with the relevant patent, copyright, trademark or other authorities in the
United States or foreign jurisdictions, as the case may be, for the purposes of
maintaining such material Enzon Registered Intellectual Property, except where
the failure to do so would not be reasonably likely to have a material impact on
Enzon or where Enzon has made a reasonable business judgment not to include such
material Intellectual Property Rights in the Enzon Registered Intellectual
Property. To the knowledge of Enzon, all material Enzon Registered Intellectual
Property, or Enzon Licensed Intellectual Property Rights exclusively licensed by
Enzon or its Subsidiaries, are valid and enforceable, and no challenges with
respect thereto have been raised by any third party or Government Authority.
(g) To the extent that any material computer programs, databases,
compilations, and data collections (in each case, whether in human-readable,
machine readable, source code or object code form) and documentation related to
the foregoing (collectively, "Software") has been developed or created by a
third party (including any current or former employee of Enzon or any of its
Subsidiaries) for Enzon or any of its Subsidiaries, Enzon or one of its
Subsidiaries, as the case may be, has a written agreement with such third party
with respect thereto, and Enzon or one of its Subsidiaries thereby either (i)
has obtained ownership of and is the exclusive owner of with respect to such
third party's Intellectual Property Rights in such work, material or invention,
or (ii) has obtained a license sufficient for the conduct of its business as
currently conducted with respect to such third party's Intellectual Property
Rights in such work, material or invention by operation of law or by valid
assignment.
(h) Enzon and its Subsidiaries have taken reasonable steps to protect
their respective material Trade Secrets and any Trade Secrets of third parties
provided to Enzon or any of its Subsidiaries. Without limiting the foregoing,
Enzon and each of its Subsidiaries maintain a policy requiring all employees,
contractors and other parties having access to such Trade Secrets to execute a
proprietary information/confidentiality agreement, in substantially the form
made available to NPS, with Enzon or one of its Subsidiaries, as the case may
be. Except under confidentiality obligations, there has been no disclosure by
Enzon or any of its Subsidiaries of any such Trade Secrets, and no party to any
such agreement is in breach thereof.
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(i) The consummation of the Mergers will neither violate nor result in
the breach, modification, cancellation, termination, or suspension of any Enzon
License Agreement in accordance with its terms.
(j) With respect to all personal information gathered or accessed in
the course of the operations of Enzon or any of its Subsidiaries, Enzon and its
Subsidiaries have taken reasonable steps (including, without limitation,
implementing and monitoring compliance with adequate measures with respect to
technical and physical security) to ensure that the information is protected
against loss and against unauthorized access, use, modification, disclosure or
other misuse in accordance with Enzon's published privacy policies as then in
effect. To the knowledge of Enzon, there has been no unauthorized access to or
other misuse of that information. No claims have been asserted or threatened
against Enzon or any of its Subsidiaries by any person alleging a violation of
such person's privacy, personal or confidentiality rights.
(k) The Enzon Merger will not result in: (i) Holdco or the Surviving
Corporation of the NPS Merger becoming bound by any non-compete or other
restriction on the operation of any business of Holdco or the Surviving
Corporation of the NPS Merger, (ii) the Surviving Corporation of the NPS Merger
granting any rights or licenses to any of its Intellectual Property Rights to
any third party (including a covenant not to xxx with respect to any of its
Intellectual Property Rights), (iii) the termination or breach of any Contract
to which Enzon is a party, or (iv) the obligations under any Contract to pay any
royalties or other amounts to any third party in excess of those amounts
otherwise owed by Enzon or its Subsidiaries immediately prior to the Enzon
Merger.
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2.8 Legal Compliance; Permits.
(a) Neither Enzon nor any of its Subsidiaries is, in any material
respect, in conflict with, or in default or in violation of (i) any Legal
Requirement applicable to Enzon or any of its Subsidiaries or by which Enzon or
any of its Subsidiaries or any of their respective businesses or properties is,
or Enzon believes is reasonably likely to be, bound or affected, (ii) any note,
bond, mortgage, indenture, Contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Enzon or any of its
Subsidiaries is a party or by which Enzon or any of its Subsidiaries or its or
any of their respective properties is bound or affected. As of the date hereof,
no investigation or review by any Governmental Authority is pending or has been
threatened in a writing delivered to Enzon or any of its Subsidiaries, against
Enzon or any of its Subsidiaries. There is no judgment, injunction, order or
decree binding upon Enzon or any of its Subsidiaries which has or would
reasonably be expected to have the effect of prohibiting or materially impairing
any business practice of Enzon or any of its Subsidiaries, any acquisition of
property by Enzon or any of its Subsidiaries or the conduct of business by Enzon
and its Subsidiaries as currently conducted.
(b) Enzon and its Subsidiaries hold, to the extent legally required,
all material Permits that are required for the operation of the business of
Enzon and its Subsidiaries as currently conducted (collectively, the "Enzon
Permits"), except where the failure to hold any such Permits would not
materially adversely affect the ability of any party hereto to consummate the
transactions contemplated by this Agreement. As of the date hereof, no
suspension or cancellation of any Enzon Permits is pending or, to the knowledge
of Enzon, threatened. Enzon and its Subsidiaries are in compliance in all
material respects with the terms of the Enzon Permits.
2.9 Regulatory Compliance.
(a) Enzon and its Subsidiaries, and to Enzon's knowledge, Enzon's
agents are in material compliance with all Legal Requirements applicable to the
evaluation, testing, manufacturing, distribution and marketing of each of the
products of Enzon or any of its Subsidiaries, in whatever stage of development
or commercialization, to the extent that the same are applicable to the business
of Enzon or any of its Subsidiaries as it is currently conducted and proposed to
be conducted, including but not limited to those relating to investigational
use, premarket approval, current "Good Manufacturing Practices," current "Good
Laboratory Practices," current "Good Clinical Practices," labeling, advertising,
record keeping, reporting of adverse events, filing of reports and security.
(b) Section 2.9(b) of Enzon Disclosure Letter contains a complete and
accurate list of the products that are being developed, tested, manufactured,
marketed, distributed, sold or licensed in or out by Enzon or any of its
Subsidiaries.
(c) Section 2.9(c) of Enzon Disclosure Letter contains a complete and
accurate list of each of Enzon's and its Subsidiaries' pending and approved New
Drug Applications ("NDAs"), Biological License Applications ("BLAs"),
Investigational New Drug Applications ("INDs") and similar state and foreign
regulatory filings as of the date of this Agreement. True and complete copies of
such NDAs, BLAs, INDs and similar regulatory filings, including all supplements,
amendments, and annual reports, have heretofore been made available to NPS. True
and complete copies of all material correspondence from the FDA and other
similar Governmental Authorities, and Enzon's and its Subsidiaries' responses
have heretofore been made available to NPS.
-22-
(d) Section 2.9(d) of Enzon Disclosure Letter contains a complete and
accurate list of (i) Form 483s with issues currently outstanding and (ii)
Notices of Adverse Findings and Warning Letters or other correspondence from the
FDA and other Governmental Authorities since February 1, 2000 in which the FDA
or any such other Governmental Authority asserted that the operations or
facilities of Enzon or any of its Subsidiaries may not be in compliance with
applicable Legal Requirements, in each case received by Enzon or any of its
Subsidiaries from the FDA or any such other Governmental Authority and the
response of Enzon and/or its Subsidiaries to the FDA and/or any such other
Governmental Authority to such notices from the FDA and/or any such other
Governmental Authority. True and complete copies of such Form 483s (together
with a written summary thereof including a list of currently outstanding issues
and corrective action commitments), Notices of Adverse Findings, Warning Letters
and other correspondence and Enzon's and/or its Subsidiary's responses have
heretofore been made available to NPS. Except as described in such Form 483's,
all operations of Enzon and its Subsidiaries have been and are being conducted
in substantial compliance with all requirements as set forth in Section 2.9(a)
hereof.
(e) Enzon has provided NPS access to all Adverse Reaction Reports filed
by Enzon or any of its Subsidiaries in all Annual Reports with all Governmental
Authorities for its marketed products and with respect to its Phase II and Phase
III studies.
(f) Neither Enzon nor any of its Subsidiaries, and to Enzon's knowledge
any officer, employee or agent of Enzon or any of its Subsidiaries has made an
untrue statement of a material fact or fraudulent statement to the FDA or any
other Governmental Authority, failed to disclose a material fact required to be
disclosed to the FDA or any other Governmental Authority, or committed an act,
made a statement, or failed to make a statement that, at the time such
disclosure was made, could reasonably be expected to provide a basis for the FDA
or any other Governmental Authority to invoke its policy respecting Fraud,
Untrue Statements of Material Facts, Bribery, and Illegal Gratuities, set forth
in 56 Fed. Reg. 46191 (September 10, 1991) or any similar policy. Neither Enzon
nor any of its Subsidiaries, and to Enzon's knowledge any officer, employee or
agent of Enzon or any of its Subsidiaries, has been convicted of any crime or
engaged in any conduct for which debarment is mandated by 21 U.S.C. ss. 335a(a)
or any similar Legal Requirement for which debarment is authorized by 21 U.S.C.
ss. 335a(b) or any similar Legal Requirement.
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(g) Neither Enzon nor any of its Subsidiaries has, since February 1,
2000, received any written notice that the FDA or any other Governmental
Authority has commenced, or threatened in writing to initiate, any action to
withdraw its approval or request the recall of any product of Enzon or any of
its Subsidiaries, or commenced, or overtly threatened to initiate, any action to
enjoin production at any facility of Enzon or any of its Subsidiaries. Neither
Enzon nor any of its Subsidiaries has received any written notice from the FDA,
any other Governmental Authority, or any professional or consumer organization
asserting that any product developed, tested, manufactured, marketed,
distributed, sold, or licensed to, Enzon or any of its Subsidiaries, or any
active ingredient used by Enzon or any of its Subsidiaries in any product
developed, tested, manufactured, marketed, distributed, sold or licensed to
Enzon or any of its Subsidiaries, is or may be defective or dangerous or fails
to meet any applicable regulation promulgated by any Governmental Authority.
(h) Neither Enzon nor any of its Subsidiaries has received any written
notice from the FDA or any other Governmental Authority indicating that: (A) a
clinical hold will be placed on clinical studies currently being performed for
any product being tested or developed by Enzon or any of its Subsidiaries; (B)
any clinical or pre-clinical data gathered by Enzon or any of its Subsidiaries
in support of an NDA or BLA, as the case may be, to the FDA will not be accepted
by the FDA to support the relevant NDA or BLA, as the case may be; (C) the FDA
will reject or fail to accept an NDA or BLA, as the case may be, for a product
currently being developed or tested by Enzon or any of its Subsidiaries; or (D)
the clinical studies designed to support an NDA or BLA, as the case may be, to
the FDA for any product currently being developed or tested by Enzon or any of
its Subsidiaries are inadequate or poorly-designed to support the NDA or BLA, as
the case may be. Neither Enzon nor any of its Subsidiaries are aware of any
circumstances that would cause the FDA or any other Governmental Authority to
provide any such written notice.
(i) Enzon and its Subsidiaries are, and have at all times been, in
substantial compliance with the Medicare Anti-Kickback Statute, 42 U.S.C. ss.
1320a-7b(b), and implementing regulations codified at 42 C.F.R. ss. 1001 and
with all similar Legal Requirements.
(j) To Enzon's knowledge, there are no facts or circumstances
concerning suppliers of active ingredients, bulk product, or finished product to
Enzon or any of its Subsidiaries that would reasonably be expected to have a
Material Adverse Effect on Enzon.
2.10 Studies. The clinical, pre-clinical, safety and other studies and
tests conducted by or on behalf of or sponsored by Enzon or any of its
Subsidiaries were and, if still pending, are being conducted in material
compliance with standard medical and scientific research procedures. Neither
Enzon nor any of its Subsidiaries has received any notices or other
correspondence from the FDA or any other Governmental Authority requiring the
termination, suspension or modification of any clinical, pre-clinical, safety or
other studies or tests.
-24-
2.11 Litigation. As of the date hereof, there are no claims, suits,
actions, arbitrations, proceedings or investigations pending or, to the
knowledge of Enzon, overtly threatened against Enzon or any of its Subsidiaries,
before any court, governmental department, commission, agency, instrumentality
or authority, or any arbitrator that seeks to restrain or enjoin the
consummation of the transactions contemplated hereby or which would reasonably
be expected, either singularly or in the aggregate with all such claims, actions
or proceedings, to be material to the Enzon.
2.12 Brokers' and Finders' Fees. Except for fees payable to XX Xxxxx
Securities Corporation ("XX Xxxxx") pursuant to an engagement letter dated
December 12, 2002, a copy of which has been provided to NPS, Enzon has not
incurred, nor will it incur, directly or indirectly, any liability for brokerage
or finders' fees or agents' commissions or any similar charges in connection
with this Agreement or any transaction contemplated hereby. No such engagement
letter obligates Enzon (or will obligate Holdco or either of the Surviving
Corporations) to continue to use the services of XX Xxxxx following the Mergers
or pay the fees or expenses of XX Xxxxx in connection with any transactions
other than the Mergers following the consummation of the Mergers.
2.13 Transactions with Affiliates. Since the date of the Enzon's last
proxy statement filed with the SEC, no event has occurred as of the date hereof
that would be required to be reported by Enzon pursuant to Item 404 of
Regulation S-K promulgated by the SEC (except for amounts due as normal salaries
and bonuses and in reimbursements of ordinary expenses). Section 2.13 of the
Enzon Disclosure Letter identifies each Person who is an "affiliate" (as that
term is used in Rule 145 promulgated under the Securities Act) of Enzon as of
the date hereof.
2.14 Employee Matters.
(a) Section 2.14(a) of the Enzon Disclosure Letter contains an complete
and accurate list of each Enzon Benefit Plan and each Enzon Employee Agreement.
Neither Enzon nor any of its ERISA Affiliates has any plan or commitment to
establish any new Enzon Benefit Plan or Enzon Employee Agreement, to modify any
Enzon Benefit Plan or Enzon Employee Agreement (except to the extent required by
applicable Legal Requirements or to conform any such Enzon Benefit Plan or Enzon
Employee Agreement to the requirements of any applicable Legal Requirements or
as otherwise specifically contemplated herein, in each case as previously
disclosed to NPS in writing, or as required by this Agreement), or to adopt or
enter into any Enzon Benefit Plan or Enzon Employee Agreement.
(b) Enzon has provided or made available to NPS complete and accurate
copies of the following: (i) all documents, contracts and agreements embodying
each Enzon Benefit Plan and each Enzon Employee Agreement including, without
limitation, all amendments thereto and all related trust documents,
administrative service agreements, group annuity contracts, group insurance
contracts, and policies pertaining to fiduciary liability insurance covering the
fiduciaries for each plan; (ii) the three (3) most recent financial statements,
accounting statements, accounting reports, annual reports (including Form Series
5500 and all schedules and financial statements attached thereto), annual
returns, investment reports, actuarial reports, periodic accounting and cost
certificates, if then existing, in connection with each Enzon Benefit Plan;
(iii) the most recent summary plan description together with the summary(ies) of
material modifications thereto, if any, required under ERISA or comparable Legal
Requirements with respect to each Enzon Benefit Plan; (iv) all IRS or other
Governmental Authority determination, opinion, notification and advisory
letters, and all applications and correspondence to or from the IRS or the DOL
with respect to any such application or letter; (v) all communications material
to any Enzon Employee or Enzon Employees relating to any Enzon Benefit Plan and
any proposed Enzon Benefit Plans, in each case, relating to any amendments,
terminations, establishments, increases or decreases in benefits, acceleration
of payments or vesting schedules or other events which would result in any
material liability to Enzon or any of its Subsidiaries; (vi) all material
correspondence to or from any Governmental Authority relating to any Enzon
Benefit Plan; (vii) all COBRA forms and related notices (or such forms and
notices as required under comparable Legal Requirements); (viii) the three (3)
most recent plan years discrimination tests for each Enzon Benefit Plan; and
(ix) all prospectuses prepared in connection with each Enzon Benefit Plan.
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(c) Enzon and its ERISA Affiliates have performed in all material
respects all obligations required to be performed by them under, are not in
default or violation of, and have no knowledge of any default or violation by
any other party to each Enzon Benefit Plan, and each Enzon Benefit Plan has been
established, maintained and administered in all material respects in accordance
with its terms and in compliance with all applicable Legal Requirements,
including, without limitation, ERISA or the Code. Any Enzon Benefit Plan
intended to be qualified under Section 401(a) of the Code and each trust
intended to qualify under Section 501(a) of the Code (i) has either applied for,
prior to the expiration of the requisite period under applicable Treasury
Regulations or IRS pronouncements, or obtained a favorable determination,
notification, advisory and/or opinion letter, as applicable, as to its qualified
status from the IRS or still has a remaining period of time under applicable
Treasury Regulations or IRS pronouncements in which to apply for such letter and
to make any amendments necessary to obtain a favorable determination, and (ii)
incorporates or has been amended to incorporate all provisions required to
comply with the Tax Reform Act of 1986 and subsequent legislation. For each
Enzon Benefit Plan that is intended to be qualified under Section 401(a) of the
Code there has been no event, condition or circumstance that has adversely
affected or is likely to adversely affect such qualified status. No "prohibited
transaction," within the meaning of Section 4975 of the Code or Sections 406 and
407 of ERISA, and not otherwise exempt under Section 408 of ERISA, has occurred
with respect to any Enzon Benefit Plan. There are no actions, suits or claims
pending, or, to the knowledge of Enzon, threatened or reasonably anticipated
(other than routine claims for benefits) in respect of any Enzon Benefit Plan or
the assets of any Enzon Benefit Plan. Each Enzon Benefit Plan (other than stock
option and stock incentive plans) can be amended, terminated or otherwise
discontinued after the Effective Time in accordance with its terms, without
liability to Enzon, NPS, Holdco or any of their respective ERISA Affiliates
(other than ordinary administration expenses). There are no audits, inquiries or
proceedings pending or, to the knowledge of Enzon or any of its ERISA
Affiliates, threatened by the IRS, the DOL, or any other applicable Governmental
Authority with respect to any Enzon Benefit Plan. Neither Enzon nor any of its
ERISA Affiliates is subject to any material penalty, tax, interest or fees with
respect to any Enzon Benefit Plan under Section 502(i) of ERISA or Sections 4975
through 4980 of the Code or applicable Legal Requirement. Enzon and each of its
ERISA Affiliates have timely made all contributions and other payments,
including premiums, required by and due under the terms of each Enzon Benefit
Plan.
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(d) Neither Enzon nor any of its ERISA Affiliates has ever maintained,
established, sponsored, participated in, or contributed to, any (i) Pension Plan
that is subject to Title IV of ERISA or Section 412 of the Code, (ii)
Multiemployer Plan, (iii) "multiple employer plan" as defined in ERISA or the
Code, or multiemployer plan under comparable Legal Requirements, or (iv) a
"funded welfare plan" within the meaning of Section 419 of the Code. No Enzon
Benefit Plan provides health benefits that are not fully insured through an
insurance contract.
(e) No Enzon Benefit Plan provides, or reflects or represents any
liability to provide post-termination or retiree welfare benefits to any person
for any reason, except as may be required by COBRA or other applicable Legal
Requirements, and neither Enzon nor any of its ERISA Affiliates has ever
represented, promised or contracted (whether in oral or written form) to any
Enzon Employee (either individually or to Enzon Employees as a group) or any
other person that such Enzon Employee(s) or other person would be provided with
post-termination or retiree welfare benefits, except to the extent required by
any Legal Requirements.
(f) Neither Enzon nor any of its ERISA Affiliates has violated in any
material respect any of the health care continuation requirements of COBRA, the
requirements of FMLA, the requirements of the Health Insurance Portability and
Accountability Act of 1996, the requirements of the Women's Health and Cancer
Rights Act of 1998, the requirements of the Newborns' and Mothers' Health
Protection Act of 1996, or any amendment to each such act, or any similar
provisions of state law applicable to its Enzon Employees.
(g) Neither Enzon nor any of its ERISA Affiliates is obligated to
provide any Enzon Employee with any compensation or benefits pursuant to an
agreement (e.g., an acquisition agreement) with a former employer of such Enzon
Employee.
(h) Neither Enzon nor any of its ERISA Affiliates has violated Section
306 or 402 of the Xxxxxxxx-Xxxxx Act of 2002 and the execution of this Agreement
and the consummation of the transactions contemplated hereby will not, to the
knowledge of Enzon, cause such a violation.
(i) The execution of this Agreement and the consummation of the
transactions contemplated hereby will not (either alone or upon the occurrence
of any additional or subsequent events) constitute an event under any Enzon
Benefit Plan, Enzon Employee Agreement, trust or loan that will or may result in
any payment (whether of severance pay or otherwise), acceleration, forgiveness
of indebtedness, vesting, distribution, increase in benefits or obligation to
fund benefits with respect to any Enzon Employee. No payment or benefit which
will or may be made by Enzon or its ERISA Affiliates with respect to any Enzon
Employee or any other "disqualified individual" (as defined in Code Section 280G
and the regulations thereunder) is, individually or collectively, reasonably
likely to be characterized as a "parachute payment," within the meaning of
Section 280G(b)(2) of the Code. There is no contract, agreement, plan or
arrangement to which Enzon or any of its ERISA Affiliates is a party or by which
it is bound to compensate any Enzon Employee for excise taxes paid pursuant to
Section 4999 of the Code.
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(j) Enzon (i) is in compliance in all material respects with all
applicable Legal Requirements relating to employment, employment practices,
terms and conditions of employment and wages and hours, in each case, with
respect to Enzon Employees, (ii) has withheld and reported, in all material
respects, all amounts required by applicable Legal Requirements or by Contract
to be withheld and reported with respect to wages, salaries and other payments
to Enzon Employees, (iii) is not liable, in any material respect, for any
arrears of wages or any Taxes or any penalty for failure to comply with any of
the foregoing with respect to Enzon Employees, and (iv) is not liable for any
material payment to any Governmental Authority or trust or other fund governed
by or maintained by or on behalf of any Governmental Authority, with respect to
unemployment compensation benefits, social security, employment insurance
benefits, health premiums or other benefits or obligations for Enzon Employees
(other than routine payments to be made in the normal course of business and
consistent with past practice). There are no pending, threatened or reasonably
anticipated claims or actions against Enzon or any of its ERISA Affiliates under
any worker's compensation policy, workplace safety and insurance legislation or
long-term disability policy. Neither Enzon nor any of its ERISA Affiliates has
direct or indirect liability with respect to any misclassification of any person
as an independent contractor rather than as an employee, or with respect to any
employee leased from another employer, except as would not result in material
harm to Enzon. Each current Enzon Employee who performs services in the United
States is an "at-will" employee whose employment can be terminated by Enzon or
one of its ERISA Affiliates at any time, with or without cause.
(k) No work stoppage, lock-out, labor strike or other labor disturbance
against Enzon or any of its ERISA Affiliates is pending, threatened or
reasonably anticipated. Enzon has no knowledge of any activities or proceedings
of any labor union to organize any Enzon Employees. There are no actions, suits,
claims, labor disputes or grievances pending, or, to the knowledge of Enzon,
threatened or reasonably anticipated relating to any labor, employment, health
and safety, workplace safety and insurance, human rights, pay equity, employment
equity or discrimination matters involving any Enzon Employee which, if
adversely determined, would, individually or in the aggregate, result in any
material liability to Enzon, NPS, Holdco or either of the Surviving
Corporations. Neither Enzon nor any of its Subsidiaries has engaged in any
unfair labor practices within the meaning of the National Labor Relations Act or
under comparable Legal Requirements, except as would not result in material harm
to Enzon. Neither Enzon nor any of its ERISA Affiliates is presently, or has
been in the past, a party to, or bound by, any collective bargaining agreement,
works council agreement or union contract with respect to Enzon Employees and no
collective bargaining agreement is being negotiated with respect to Enzon
Employees. Neither Enzon nor any of its Subsidiaries have incurred any material
liability or material obligation under the WARN Act or any similar Legal
Requirement that remains unsatisfied.
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(l) Neither Enzon nor any of its ERISA Affiliates has, or has ever had,
the obligation to maintain, establish, sponsor, participate in, or contribute to
any International Benefit Plan.
2.15 Environmental Matters.
(a) As of the Closing Date, except in compliance with Environmental
Laws and in a manner that could not reasonably be expected to subject Enzon or
any of its Subsidiaries to liability, to the knowledge of Enzon and its
Subsidiaries after reasonable inquiry, no Hazardous Materials are present on any
Enzon Business Facility currently owned, operated, occupied, controlled or
leased by Enzon or any of its Subsidiaries or were present on any other Enzon
Business Facility at the time it ceased to be owned, operated, occupied,
controlled or leased by Enzon or any of its Subsidiaries. To the knowledge of
Enzon, there are no underground storage tanks, asbestos which is friable or
likely to become friable or PCBs present on any Enzon Business Facility
currently owned, operated, occupied, controlled or leased by Enzon or any of its
Subsidiaries.
(b) Enzon and its Subsidiaries have conducted all Hazardous Material
Activities relating to their business in compliance in all material respects
with all applicable Environmental Laws. The Hazardous Materials Activities of
Enzon and its Subsidiaries prior to the Closing Date have not resulted in the
exposure of any person to a Hazardous Material in a manner which has caused or
could reasonably be expected to cause an adverse health effect to any such
person.
(c) Enzon and its Subsidiaries currently hold all Environmental Permits
necessary for the continued conduct of any of their Hazardous Material
Activities as such activities are currently being conducted. All such
Environmental Permits are valid and in full force and effect. Enzon and its
Subsidiaries have complied in all material respects with all covenants and
conditions of any Environmental Permit which is or has been in force with
respect to their Hazardous Materials Activities. No circumstances exist which
could cause any Environmental Permit to be revoked, modified, or rendered
non-renewable upon payment of the permit fee.
(d) No action, proceeding, revocation proceeding, amendment procedure,
writ, injunction or claim is pending, or to the best of Enzon's knowledge,
threatened, concerning or relating to any Environmental Permit, any Hazardous
Material, or any Hazardous Material Activity of Enzon or any of its
Subsidiaries.
(e) Neither Enzon nor any of its Subsidiaries has knowledge of any fact
or circumstance, which could result in any environmental liability which could
reasonably be expected to have a Material Adverse Effect on Enzon.
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(f) Enzon and its Subsidiaries have delivered or made available to NPS
and its agents, representatives and employees, all records in Enzon's and its
Subsidiaries' possession, custody or control concerning their respective
Hazardous Material Activities and all environmental audits and environmental
assessments of any Enzon Business Facility. Enzon has complied with all
environmental disclosure obligations imposed by applicable Legal Requirements
with respect to the transactions contemplated hereby.
2.16 Real Estate Matters; Title to Property.
(a) Section 2.16(a)(i) of the Enzon Disclosure Letter contains a
complete and accurate list of all real property currently leased, subleased or
licensed by or from Enzon or any of its Subsidiaries or otherwise used or
occupied by Enzon or any of its Subsidiaries for the operation of their
businesses (collectively, the "Enzon Leased Real Property"). Section 2.16(a)(ii)
of the Enzon Disclosure Letter contains a complete and accurate list of all real
property owned by Enzon or any of its Subsidiaries (collectively, the "Enzon
Owned Real Property").
(b) Enzon has provided NPS a complete and accurate copy of all leases,
lease guaranties, subleases, agreements for the leasing, use or occupancy of, or
otherwise granting a right in or relating to the Enzon Leased Real Property,
including all amendments, terminations and modifications thereof (collectively,
the "Enzon Lease Agreements"), and there are no other Enzon Lease Agreements for
real property affecting the Enzon Leased Real Property or to which Enzon or any
of its Subsidiaries is bound, other than those set forth in Section 2.16(a)(i)
of the Enzon Disclosure Letter. All of the Enzon Lease Agreements are valid and
effective in accordance with their respective terms, and there is not, under any
of such Enzon Lease Agreements, any existing default, no rentals are past due,
or event of default (or event which with notice or lapse of time, or both, would
constitute a default).
(c) (i) There are no structural, electrical, mechanical, plumbing,
roof, paving or other defects in any improvements located on the Enzon Owned
Real Property or the Enzon Leased Real Property as could, either individually or
in the aggregate, have a material adverse effect on the use, development,
occupancy or operation thereof; (ii) to the knowledge of Enzon, there are no
natural or artificial conditions upon any Enzon Owned Real Property or any other
facts or conditions which could, in the aggregate, have a material adverse
effect on the transferability, "financability," ownership, leasing, use,
development, occupancy or operation of any such Enzon Owned Real Property; (iii)
Neither Enzon nor any of its Subsidiaries has received any notice from any
insurance company of any defects or inadequacies in any Enzon Owned Real
Property or Enzon Leased Real Property or any part thereof which could
materially and adversely affect the insurability of such Enzon Owned Real
Property or Enzon Leased Real Property or the premiums for the insurance
thereof, nor has any notice been given by any insurer of any such real property
requesting the performance of any repairs, alterations or other work with which
compliance has not been made; (iv) there currently exists water, sewer, gas,
electrical, telephone and telecommunication lines and surface drainage systems
serving the Enzon Owned Real Property which have been licensed, permitted,
completed, installed and paid for and which are sufficient as licensed and
permitted to service the operations of each such parcel of Enzon Owned Real
Property when fully occupied and operational, and all such lines and systems
serving each such parcel of Enzon Owned Real Property are located in the
right-of-way of public roadways to the boundary of the land on which each such
property is situated; (v) there are no pending, or, to the knowledge of Enzon,
threatened assessments, improvements or activities of any public or quasi-public
body either planned, in the process of construction or completed which may give
rise to any assessment against any Enzon Owned Real Property; and (vii) neither
the Enzon Leased Real Property nor Enzon Owned Real Property (including any
improvements thereon) violate in any material respect any applicable Legal
Requirements relating to such Enzon Leased Real Property and Enzon Owned Real
Property, and any such non-violation is not dependent on so-called
non-conforming use exceptions.
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(d) Enzon and each of its Subsidiaries has good and valid title to, or,
in the case of leased properties and assets, valid leasehold interests in, all
of its tangible properties and assets, real, personal and mixed, used or held
for use in its business, free and clear of any Liens, except (i) as reflected in
the Enzon Financials, (ii) Liens for Taxes not yet due and payable, and (iii)
such imperfections of title and encumbrances, if any, which do not materially
detract from the value or interfere with the present use or operation of the
property subject thereto or affected thereby.
(e) The equipment owned or leased by the Enzon or any of its
Subsidiaries is (i) adequate for the conduct of the business of Enzon and its
Subsidiaries as currently conducted and as currently contemplated to be
conducted, and (ii) in good operating condition, regularly and properly
maintained, subject to normal wear and tear.
2.17 Contracts.
(a) For all purposes of and under this Agreement, "Enzon Material
Contract" shall mean:
(i) any "material contracts" (as such term is defined in Item
601(b)(10) of Regulation S-K of the SEC) with respect to Enzon and its
Subsidiaries;
(ii) any Contract to which Enzon or any of its Subsidiaries is
a party (A) containing any covenant: (1) limiting the right of Enzon or
its Subsidiaries to engage in any material line of business, make use
of any material Intellectual Property Rights or compete with any Person
in any material line of business, (2) granting or receiving any
licensing, research and/or development, manufacture, marketing,
distribution or supply rights (whether with respect to Enzon
Intellectual Property Rights, Enzon Licensed Intellectual Property
Rights, or otherwise), or (3) otherwise having a material effect on the
right of Enzon and its Subsidiaries to license, research and/or
develop, manufacture, market, sell or distribute any material
Intellectual Property Rights, products or services to any class of
customers, in any geographic area, during any period of time or in any
segment of the market, or to purchase or otherwise obtain any supplies
of material raw materials or products, or (B) to the extent not
otherwise covered in (A), constituting a material Enzon License
Agreement;
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(iii) any joint marketing or development Contract to which
Enzon or any of its Subsidiaries is a party which may not be canceled
without penalty upon notice of ninety (90) days or less;
(iv) any employment or consulting Contract with (A) any
executive officer or other employee of Enzon earning an annual salary
in excess of One Hundred Thousand Dollars ($100,000), other than those
that are terminable by Enzon or any of its Subsidiaries on no more than
thirty (30) days notice without liability or financial obligation on
the part of Enzon, or (B) any member of the Enzon Board;
(v) any Contract to which Enzon or any of its Subsidiaries is
a party or any plan of Enzon or any of its Subsidiaries, including,
without limitation, any stock option plan, stock appreciation right
plan or stock purchase plan, any of the benefits of which will be
increased, or the vesting of benefits of which will be accelerated, by
the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement;
(vi) any indemnification or any guaranty Contract to which
Enzon or any of its Subsidiaries is a party which is outside the
ordinary course of Enzon's business;
(vii) any Contract relating to the disposition or acquisition
by Enzon or any of its Subsidiaries after the date of this Agreement of
a material amount of assets not in the ordinary course of business or
pursuant to which Enzon or any of its Subsidiaries has any material
ownership interest in any other Person or other business enterprise
other than Enzon's Subsidiaries;
(viii) any Contract to provide source code to any third party
for any product or technology that is material to Enzon and its
Subsidiaries taken as a whole;
(ix) any mortgages, indentures, guarantees, loans or credit
agreements, security agreements or other Contracts to which Enzon or
any of its Subsidiaries is a party relating to the borrowing of money
or extension of credit, other than accounts receivables and payables in
the ordinary course of Enzon's business;
(x) any material settlement Contract entered into by Enzon or
any of its Subsidiaries within three (3) years prior to the date of
this Agreement; and
(xi) any Contract, or group of Contracts with a Person (or
group of affiliated Persons), the termination or breach of which would
be reasonably expected to have a material adverse effect on any
material division or business unit or other material operating group of
product or service offerings of Enzon or otherwise have a Material
Adverse Effect on Enzon.
(b) Section 2.17(b) of the Enzon Disclosure Letter contains a complete
and accurate list of all Enzon Material Contracts to which it is a party or is
bound by as of the date hereof which are described in Section 2.17(a)(i) through
Section 2.17(a)(xi) hereof, inclusive.
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(c) All Enzon Material Contracts are valid and in full force and effect
except to the extent they have previously expired in accordance with their terms
or if the failure to be in full force and effect, individually or in the
aggregate, would not reasonably be expected to be material to Enzon. Neither
Enzon nor any of its Subsidiaries has violated any provision of, or committed or
failed to perform any act which, with or without notice, lapse of time or both
would constitute a default under the provisions of, any Enzon Material Contract,
except in each case for those violations and defaults which, individually or in
the aggregate, would not reasonably be expected to be material to Enzon.
2.18 Disclosure. None of the information supplied or to be supplied by
or on behalf of Enzon for inclusion or incorporation by reference in the
Registration Statement will, at the time the Registration Statement becomes
effective under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading. None of the information
supplied or to be supplied by or on behalf of Enzon for inclusion or
incorporation by reference in the Proxy Statement/Prospectus, will, at the time
the Proxy Statement/Prospectus is mailed to the stockholders of Enzon or NPS, at
the time of the NPS Stockholders' Meeting or Enzon Stockholders' Meeting or as
of the Effective Time, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under which
they are made, not misleading. The Proxy Statement/Prospectus will comply as to
form in all material respects with the provisions of the Exchange Act and the
rules and regulations promulgated by the SEC thereunder. Notwithstanding the
foregoing, no representation or warranty is made by Enzon with respect to
statements made or incorporated by reference therein about NPS supplied by NPS
for inclusion or incorporation by reference in the Registration Statement or the
Proxy Statement/Prospectus.
2.19 Board Approval. The Enzon Board, by resolutions duly adopted by
unanimous vote at a meeting of all Directors duly called and held and not
subsequently rescinded or modified in any way (the "Enzon Board Approval"), has
(i) determined that the Enzon Merger is consistent with and in furtherance of
the long-term business interests of Enzon and fair to, and in the best interests
of, Enzon and its stockholders, (ii) declared this Agreement to be advisable,
(iii) approved this Agreement, the Enzon Merger and the other transactions
contemplated by this Agreement, (iv) approved the Enzon Voting Agreements and
the transactions contemplated thereby, and (v) determined to recommend to the
stockholders of Enzon that such stockholders adopt this Agreement at the Enzon
Stockholders' Meeting.
2.20 Fairness Opinion. The Enzon Board has received a written opinion
from XX Xxxxx, dated as of February 19, 2003, to the effect that, as of such
date, the Enzon Exchange Ratio is fair, from a financial point of view, to Enzon
stockholders and has delivered to NPS a copy of such opinion.
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2.21 Rights Plan. Enzon has taken all action so that (i) neither NPS
nor Holdco shall be an "Acquiring Person" within the meaning of the Enzon Rights
Agreement and (ii) the entering into of this Agreement and the transactions
contemplated hereby, including the Enzon Merger, the NPS Merger and the Enzon
Voting Agreements, will not result in the grant of any rights to any Person
under the Enzon Rights Agreement or enable or require the Enzon Rights to be
exercised, distributed or triggered.
2.22 Takeover Statutes. The approval of this Agreement, the Enzon
Voting Agreements and the transactions contemplated hereby and thereby,
including the Mergers, by the Enzon Board of Directors referred to in Section
2.19 constitutes approval of this Agreement and the Enzon Voting Agreements and
the transactions contemplated hereby and thereby, including the Mergers, for the
purposes of Section 203 of the DGCL and any other similar Legal Requirement and
represents the only action necessary to ensure that Section 203 of the DGCL does
not and will not apply to the execution, delivery or performance of this
Agreement or the Enzon Voting Agreements or the consummation of the Mergers and
the other transactions contemplated hereby and thereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF NPS
NPS represents and warrants to Enzon as follows, subject to the
exceptions specifically disclosed in writing in a disclosure letter (the "NPS
Disclosure Letter") delivered by NPS to Enzon, dated as of the date hereof and
certified by each of the Chief Executive Officer and the Corporate Controller
and Director of Financial Reporting of NPS, which certifications shall provide
that each such person has reviewed the NPS Disclosure Letter and that the NPS
Disclosure Letter is true and correct in all respects:
3.1 Organization; Standing and Power; Charter Documents; Subsidiaries.
(a) Organization; Standing and Power. NPS and each of its Subsidiaries
is a corporation or other organization duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation or
organization, has the requisite power and authority to own, lease and operate
its properties and to carry on its business as now being conducted, except where
the failure to be so organized, existing and in good standing would not
reasonably be expected to have a Material Adverse Effect on NPS, and is duly
qualified and in good standing to do business in each jurisdiction in which the
nature of its business or the ownership or leasing of its properties makes such
qualification necessary other than in such jurisdictions where the failure to so
qualify or to be good standing, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on NPS.
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(b) Charter Documents. NPS has delivered or made available to Enzon (i)
a true and correct copy of the Certificate of Incorporation (including any
Certificate of Designations) and Bylaws of NPS, each as amended to date
(collectively, the "NPS Charter Documents") and (ii) the Subsidiary Charter
Documents of each of its Subsidiaries, and each such instrument is in full force
and effect. NPS is not in violation of any of the provisions of the NPS Charter
Documents and each Subsidiary is not in violation of its respective Subsidiary
Charter Documents, except in the case of a Subsidiary, as would not reasonably
be expected to have a Material Adverse Effect on NPS.
(c) Subsidiaries. Section 3.1(c) of the NPS Disclosure Letter contains
a complete and accurate list of all of NPS's Subsidiaries as of the date hereof,
together with a complete and accurate list of each partnership, joint venture or
other business entity in which NPS holds an interest, whether voting, equity or
otherwise, indicating the name, jurisdiction of organization and NPS's interest
in each such entity. Neither NPS nor any of its Subsidiaries owns any equity or
other interest in any corporation, partnership, joint venture or other business
entity which is not set forth in Section 3.1(c) of the NPS Disclosure Letter.
All the outstanding shares of capital stock of, or other equity interests in,
each such Subsidiary have been validly issued and are fully paid and
nonassessable and, except for three hundred twenty three thousand two hundred
twenty (323,220) Exchangeable Shares, are owned directly or indirectly by NPS,
free and clear of all Liens, including any restriction on the right to vote,
sell or otherwise dispose of such capital stock or other ownership interests,
except for restrictions imposed by applicable securities laws.
3.2 Capital Structure.
(a) Capital Stock. The authorized capital stock of NPS consists of: (i)
forty five million (45,000,000) shares of NPS Common Stock, par value $0.001 per
share and (ii) five million (5,000,000) shares of preferred stock, par value
$0.001 per share the "NPS Preferred Stock"), (i) of which one (1) share has been
designated as Special Voting Share and is outstanding, and (ii) of which three
hundred fifty thousand (350,000) shares have been designated as Series A Junior
Participating Preferred Stock, all of which will be reserved for issuance upon
exercise of preferred stock purchase rights (the "NPS Rights") issuable pursuant
to the Rights Agreement dated as of December 4, 1996, between NPS and
Computershare (formerly American Securities Transfer and Trust, Inc.), as rights
agent, as amended (the "NPS Rights Agreement"). At the close of business of
February 13, 2003: (i) thirty eight million eight hundred thirteen thousand one
hundred eighty one (38,813,181) shares of NPS Common Stock were issued and
outstanding, which includes three hundred twenty three thousand two hundred
twenty (323,220) Exchangeable Shares which are exchangeable into shares of NPS
Common Stock on a one-for-one basis, (ii) one (1) Special Voting Share was
issued and outstanding. All of the outstanding shares of capital stock of NPS
are, and all shares of capital stock of NPS which may be issued as contemplated
or permitted by this Agreement will be, when issued, duly authorized and validly
issued, fully paid and nonassessable and not subject to any preemptive rights.
Upon consummation of the Mergers, (A) the shares of Holdco Common Stock issued
in exchange for any shares of NPS Common Stock that are subject to a Contract
pursuant to which NPS has the right to repurchase, redeem or otherwise reacquire
any shares of NPS Common Stock will, without any further act of NPS, Enzon,
Holdco, or any other Person, become subject to the restrictions, conditions and
other provisions contained in such Contract and (B) Holdco will automatically
succeed to and become entitled to exercise NPS's rights and remedies under any
such Contract.
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(b) Stock Options. As of the close of business on February 13, 2003:
(i) three million ninety one thousand three hundred sixty nine (3,091,369)
shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS
Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to
outstanding options, rights or warrants to purchase NPS Common Stock issued
other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand
seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for
future issuance under the NPS ESPP. All shares of NPS Common Stock subject to
issuance as aforesaid, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, would be duly authorized,
validly issued, fully paid and nonassessable. There are no commitments or
agreements of any character to which NPS is bound obligating NPS to accelerate
the vesting of any NPS Option as a result of the Mergers (whether alone or upon
the occurrence of any additional or subsequent events). There are no outstanding
or authorized stock appreciation, phantom stock, profit participation or other
similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter
contains a complete and accurate list of the following information with respect
to each NPS Option outstanding as of February 13, 2003: (i) the name of the
optionee in respect of each such NPS Option; (ii) the particular plan pursuant
to which each such NPS Option was granted; (iii) the number of shares of NPS
Common Stock subject to each such NPS Option; (iv) the exercise price of each
such NPS Option; (v) the date on which each such NPS Option was granted; (vi)
the extent to which each such NPS Option is vested and unvested as of a recent
practicable date; (vii) the date on which each such NPS Option expires and
(viii) whether the exercisability of each such NPS Option will be accelerated in
any way by the transactions contemplated by this Agreement, and indicates the
extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter
also contains a complete and accurate description of the vesting schedule
generally applicable to NPS Options, and shall specifically identify each NPS
Option with a vesting schedule that is different than such generally applicable
vesting schedule (including a description of each such different vesting
schedule).
(c) Voting Debt. No Voting Debt of NPS is issued or outstanding as of
the date hereof.
(d) Other Securities. Except as otherwise set forth in this Section 3.2
or Section 5.19, there are no securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to which NPS
or any of its Subsidiaries is a party or by which any of them is bound
obligating NPS or any of its Subsidiaries to issue, deliver or sell, or cause to
be issued, delivered or sold, additional shares of capital stock, Voting Debt or
other voting securities of NPS or any of its Subsidiaries, or obligating NPS or
any of its Subsidiaries to issue, grant, extend or enter into any such security,
option, warrant, call, right, commitment, agreement, arrangement or undertaking.
There are no outstanding contractual commitments of NPS or any of its
Subsidiaries, which obligate NPS, or its Subsidiaries to make any investment
(including in the form of a loan, capital contribution or otherwise) in any
other Person. As of the date hereof, there are no outstanding obligations of NPS
or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares
of capital stock of NPS or any of its Subsidiaries, except as provided in this
Agreement. All outstanding shares of NPS Common Stock, all outstanding NPS
Options, and all outstanding shares of capital stock of each Subsidiary of NPS
have been issued and granted in compliance in all material respects with (i) all
applicable securities laws and all other applicable Legal Requirements and (ii)
all requirements set forth in applicable NPS Material Contracts.
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(e) No Changes. Since January 1, 2003 through the date hereof, other
than pursuant to the exercise of NPS Options outstanding as of such date issued
pursuant to the NPS Option Plans, or pursuant to repurchases from Employees
following their termination pursuant to the terms of their pre-existing stock
option or purchase agreements, there has been no change in (i) the outstanding
capital stock of NPS, (ii) the number of NPS Options outstanding, or (iii) the
number of other options, warrants or other rights to purchase NPS capital stock.
3.3 Authority; Non-Contravention; Necessary Consents.
(a) Authority. NPS has all requisite corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by NPS have been duly authorized by all
necessary corporate action (including approval by the boards of directors, which
was unanimous as of the date hereof) on the part of NPS, and no other corporate
proceedings on the part of NPS are necessary to authorize the execution and
delivery of this Agreement or to consummate the transactions contemplated hereby
by NPS, subject only to the adoption of this Agreement by NPS's stockholders,
and the filing of the Certificates of Merger pursuant to the DGCL. The
affirmative vote of the holders of a majority of the outstanding shares of NPS
Common Stock to adopt this Agreement (the "Requisite NPS Stockholder Approval")
is the only vote of the holders of any class or series of NPS capital stock
necessary to adopt this Agreement and consummate the NPS Merger and the other
transactions contemplated hereby. This Agreement has been duly executed and
delivered by NPS and, assuming due execution and delivery by Enzon, constitutes
the valid and binding obligation of NPS, enforceable against NPS in accordance
with its terms.
(b) Non-Contravention. The execution and delivery of this Agreement by
NPS does not, and performance of this Agreement by NPS will not: (i) conflict
with or violate the NPS Charter Documents, the certificate of incorporation or
bylaws of Holdco or any other Subsidiary Charter Documents of any Subsidiary of
NPS, (ii) subject to adoption of this Agreement by NPS's stockholders as
contemplated in Section 5.2 hereof and compliance with the requirements set
forth in Section 3.3(c) hereof, conflict with or violate any material Legal
Requirement applicable to NPS or any of its Subsidiaries or by which NPS or any
of its Subsidiaries or any of their respective properties is bound or affected,
or (iii) result in any breach of or constitute a default (or an event that with
notice or lapse of time or both would become a material default) under, or
impair NPS'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 on any of the properties or
assets of NPS or any of its Subsidiaries pursuant to, any material note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, authorization,
consent, approval, franchise or other instrument or obligation to which NPS or
any Subsidiary of NPS is a party or by which NPS or any Subsidiary of NPS or any
of their respective properties are bound or affected. Section 3.3(b) of the NPS
Disclosure Letter contains a complete and accurate list of all consents, waivers
and approvals required to be obtained in connection with the consummation of the
transactions contemplated hereby.
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(c) Necessary Consents. No consent, approval, order or authorization
of, or registration, declaration or filing with any Governmental Authority is
required to be obtained or made by NPS in connection with the execution and
delivery of this Agreement or the consummation of the NPS Merger and other
transactions contemplated hereby, except for (i) the Necessary Consents and (ii)
such other consents, authorizations, filings, approvals and registrations which
if not obtained or made would not be material to NPS, Enzon or Holdco or
materially adversely affect the ability of the parties hereto to consummate the
Mergers within the time frame in which the Mergers would otherwise be
consummated in the absence of the need for such consent, approval, order,
authorization, registration, declaration or filings.
3.4 SEC Filings; Financial Statements.
(a) SEC Filings. NPS has filed all required registration statements,
prospectuses, reports, schedules, forms, statements and other documents
(including exhibits and all other information incorporated by reference)
required to be filed by it with the SEC and Canadian Securities regulatory
authorities since January 1, 2000. NPS has made available to Enzon all such
registration statements, prospectuses, reports, schedules, forms, statements and
other documents in the form filed with the SEC. All such required registration
statements, prospectuses, reports, schedules, forms, statements and other
documents (including those that NPS may file subsequent to the date hereof), as
amended, are referred to herein as the "NPS SEC Reports." As of their respective
dates, the NPS SEC Reports (i) were prepared in accordance and complied in all
material respects with the requirements of the Securities Act, or the Exchange
Act, as the case may be, and the Xxxxxxxx-Xxxxx Act and the rules and
regulations of promulgated thereunder by the SEC applicable to such NPS SEC
Reports and (ii) did not at the time they were filed contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, except to
the extent corrected prior to the date hereof by a subsequently filed NPS SEC
Report. None of NPS's Subsidiaries is required to file any forms, reports or
other documents with the SEC.
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(b) Financial Statements. Each of the consolidated financial statements
(including, in each case, any related notes thereto) contained in the NPS SEC
Reports (the "NPS Financials"), including each NPS SEC Report filed after the
date hereof until the Closing: (i) complied as to form in all material respects
with the published rules and regulations of the SEC, including the
Xxxxxxxx-Xxxxx Act, with respect thereto, (ii) was prepared in accordance with
GAAP applied on a consistent basis throughout the periods involved (except as
may be indicated in the notes thereto or, in the case of unaudited interim
financial statements, as may be permitted by the SEC on Form 10-Q, Form 8-K or
any successor form under the Exchange Act), and (iii) fairly presented in all
material respects the consolidated financial position of NPS and its
consolidated Subsidiaries as at the respective dates thereof and the
consolidated results of NPS's operations and cash flows for the periods
indicated. The balance sheet of NPS contained in the NPS SEC Reports as of
September 30, 2002 is hereinafter referred to as the "NPS Balance Sheet" and the
date of the NPS Balance Sheet is hereinafter referred to as the "NPS Balance
Sheet Date." Except as disclosed in the NPS Financials, since the NPS Balance
Sheet Date and through the date hereof, neither NPS nor any of its Subsidiaries
has any material liabilities required under GAAP to be set forth on a
consolidated balance sheet (absolute, accrued, contingent or otherwise), except
for liabilities incurred since the NPS Balance Sheet Date in the ordinary course
of business and consistent with past practices which, individually or in the
aggregate, are not material to NPS, and liabilities incurred pursuant to this
Agreement.
3.5 Absence of Certain Changes or Events.
(a) Since the NPS Balance Sheet Date, there has not been any Effect
that, individually or in the aggregate, constitutes a Material Adverse Effect on
NPS.
(b) Since the NPS Balance Sheet Date and through the date hereof, each
of NPS and its Subsidiaries has conducted its respective business in all
material respects only in the ordinary course of business and consistent with
past practices, and there has not been: (i) except as otherwise specifically
contemplated herein, any declaration, setting aside or payment of any dividend
on, or other distribution (whether in cash, stock or property) in respect of,
any of NPS's capital stock, or any purchase, redemption or other acquisition by
NPS of any of NPS's capital stock or any other securities of NPS or any options,
warrants, calls or rights to acquire any such shares or other securities except
for repurchases from employees or other service providers following their
termination pursuant to the terms of their pre-existing stock option, restricted
stock or purchase agreements, (ii) any split, combination or reclassification of
any of NPS's capital stock, (iii) any granting by NPS or any of its Subsidiaries
of any increase in compensation or material fringe benefits to any of their
officers, directors or managers or employees who earn base salary of more than
One Hundred Thousand Dollars ($100,000) per year, or any payment by NPS or any
of its Subsidiaries of any bonus to any of their officers, directors or managers
or employees who earn base salary of more than One Hundred Thousand Dollars
($100,000) per year, or any granting, by NPS or any of its Subsidiaries, of any
increase in severance or termination pay, or any entry by NPS or any of its
Subsidiaries into, or modification or amendment of, any currently effective
employment, severance, termination or indemnification agreement or any agreement
the benefits of which are contingent, or the terms of which are materially
altered, upon the occurrence of a transaction involving NPS of the nature
contemplated hereby, in each case other than in connection with periodic
compensation or performance reviews and consistent with past practices or for
ordinary course severance and release agreements made in connection with the
termination of employment, (iv) any change by NPS or any of its Subsidiaries in
its accounting methods, principles or practices, except as required by
concurrent changes in GAAP, (v) any communication from Nasdaq with respect to
the delisting of NPS Common Stock, (vi) any revaluation by NPS or any of its
Subsidiaries of any of its assets, including, without limitation, writing-off of
notes or accounts receivable other than in the ordinary course of business and
consistent with past practices, (vii) any material damage, destruction or loss,
whether or not covered by insurance, to any material properties or assets of NPS
or any of its Subsidiaries, (viii) any amendment of any material term of any
outstanding security of NPS or any of its Subsidiaries, (ix) any making of any
loan, advance or capital contribution to or investment by NPS in any Person,
including without limitation any director, officer or other affiliate of NPS,
other than (A) loans, advances or capital contributions to or investments in
wholly-owned Subsidiaries or entities that became wholly owned Subsidiaries made
in the ordinary course of business and consistent with past practices, (B)
investments made in accordance with NPS's investment guidelines, a copy of which
has been made available to Enzon, and in the ordinary course of business and
consistent with past practices, and (C) travel and entertainment expense
advances made in the ordinary course of business and consistent with past
practices, or (x) any agreement, whether in writing or otherwise, to take any
action described in this Section by NPS or any of its Subsidiaries.
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3.6 Tax Matters.
(a) NPS and each of its Subsidiaries have timely filed all Tax Returns
relating to Taxes required to be filed by NPS and each of its Subsidiaries with
any Tax authority, except such Tax Returns that are not material to NPS and such
Tax Returns are true, correct and complete in all material respects. NPS and
each of its Subsidiaries have paid all Taxes shown to be due on such Tax
Returns.
(b) NPS and each of its Subsidiaries as of the Effective Time will have
withheld with respect to its employees all federal, state and provincial income
taxes, Taxes pursuant to the Federal Insurance Contribution Act, the Federal
Unemployment Tax Act, the Canada Pension Plans, the Employment Insurance Act
(Canada) and other Taxes required to be withheld, except such Taxes which are
not material to NPS.
(c) Neither NPS nor any of its Subsidiaries has been delinquent in the
payment of any material Tax nor is there any material Tax deficiency
outstanding, proposed or assessed against NPS or any of its Subsidiaries, nor
has NPS or any of its Subsidiaries executed any unexpired waiver of any statute
of limitations on or extending the period for the assessment or collection of
any Tax.
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(d) NPS and its Subsidiaries have not taken any position on any Tax
Return or filing which is or would be subject to penalties under Section 6662 of
the Code.
(e) No audit or other examination of any Tax Return of NPS or any of
its Subsidiaries by any Tax authority is presently in progress, nor has NPS or
any of its Subsidiaries been notified of any request for such an audit or other
examination.
(f) No adjustment or deficiency relating to any Tax Returns filed by
NPS or any of its Subsidiaries has been proposed in writing formally or
informally by any Tax authority to NPS or any of its Subsidiaries or any
representative thereof.
(g) Neither NPS nor any of its Subsidiaries has any liability for any
material unpaid Taxes which has not been accrued for, or reserved on, the NPS
Balance Sheet in accordance with GAAP, which is material to NPS, other than any
liability for unpaid Taxes that may have accrued since the date of the NPS
Balance Sheet in connection with the operation of the business of NPS and its
subsidiaries in the ordinary course.
(h) No claim has ever been made in writing by an authority in a
jurisdiction where NPS and any of its Subsidiaries do not file Tax Returns that
NPS and its Subsidiaries is or may be subject to taxation by that jurisdiction.
(i) There are no Liens for Taxes upon the assets of NPS and its
Subsidiaries except for Taxes that are not yet payable.
(j) There is no contract, agreement, plan or arrangement to which NPS
or any of its Subsidiaries is a party as of the date of this Agreement,
including but not limited to the provisions of this Agreement, covering any
employee or former employee of NPS or any of its Subsidiaries that, individually
or collectively, would reasonably be expected to give rise to the payment of any
amount as a result of the Merger that would not be deductible pursuant to
Sections 404 or 162(m) of the Code.
(k) Neither NPS nor any of its Subsidiaries has filed any consent
agreement under Section 341(f) of the Code or agreed to have Section 341(f)(2)
of the Code apply to any disposition of a subsection (f) asset (as defined in
Section 341(f)(4) of the Code) owned by NPS or any of its Subsidiaries.
(l) Neither NPS nor any of its Subsidiaries is party to or has any
obligation under any tax-sharing, tax indemnity or tax allocation agreement or
arrangement and neither NPS nor any of its Subsidiaries has been a member of any
affiliated group of corporations within the meaning of Section 1504 of the Code
other than the group of which NPS is currently the common parent. NPS and its
Subsidiaries have not participated in, or cooperated with, and international
boycott within the meaning of Section 999 of the Code.
(m) None of NPS's or its subsidiaries' assets are tax exempt use
property within the meaning of Section 168(h) of the Code.
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(n) Neither NPS nor any of its Subsidiaries was a "distributing
corporation" or a "controlling corporation" in a distribution of stock intended
to qualify under Section 355 of the Code and that occurred within two (2) years
before the date of this Agreement or as part of a plan or series of transactions
that includes the Merger.
(o) All transactions between each NPS Canadian Subsidiary and NPS or
any other Subsidiary of NPS not resident in Canada (for purposes of the Canadian
Tax Act) have complied with the arm's length standards set out in Sections 69
and 247 of the Canadian Tax Act and Canada Customs and Revenue Agency
Information Circular 87-2R and are not liable to a transfer pricing adjustment
under Sections 69 and 247 of the Canadian Tax Act. Each NPS Canadian Subsidiary
has withheld and duly and timely remitted to the appropriate Governmental
Authority all Taxes required by the Canadian Tax Act to be withheld from amounts
paid or credited by it to any non-resident of Canada (for purposes of the
Canadian Tax Act).
(p) The NPS Canadian Subsidiaries will not at any time be deemed to
have capital gain pursuant to subsection 80.03(2) of the Canadian Tax Act as a
result of any transaction or event taking place in any taxation year ending on
or before the Effective Time. The NPS Canadian Subsidiaries have not entered
into an agreement contemplated by Section 80.04 of the Canada Tax Act.
(q) Each NPS Canadian Subsidiary is a registrant for purposes of the
Excise Tax Act (Canada). All input tax credits claimed by each NPS Canadian
Subsidiary pursuant to the Excise Tax Act (Canada) have been proper, correctly
calculated and documented. Each NPS Canadian Subsidiary has collected, paid and
remitted when due all federal, provincial and foreign, sales and use Taxes,
including goods and services tax, collectible, payable or remittable prior to
the Effective Time.
3.7 Intellectual Property Matters.
(a) Section 3.7(a) of the NPS Disclosure Letter contains a complete and
accurate list, as of the date hereof, of all material NPS Registered
Intellectual Property. NPS or one of its Subsidiaries is listed in the records
of the appropriate United States, state or foreign agency as the owner for each
item of NPS Registered Intellectual Property, free and clear of all Liens.
(b) Each material NPS License Agreement is in full force and effect.
None of the material NPS License Agreements grants any third party exclusive
rights to or under any NPS Intellectual Property Rights or the right to
sublicense any NPS Intellectual Property Rights. To its knowledge, NPS and its
Subsidiaries are in material compliance with, and have not materially breached
any term of any of such NPS License Agreements and, to the knowledge of NPS, all
other parties to such NPS License Agreements are in compliance in all material
respects with, and have not materially breached any term of, such NPS License
Agreements.
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(c) To the knowledge of NPS, (i) the operation of the business of NPS
or any of its Subsidiaries as such businesses are currently conducted as of the
date hereof, including the design, development, marketing and sale of the
products or services of NPS or its Subsidiaries, does not infringe or
misappropriate in any material respect the Intellectual Property Rights of any
third party or constitute unfair competition or unfair trade practices under the
laws of any jurisdiction, and (ii) NPS and its Subsidiaries own or possess
sufficient rights to all Intellectual Property Rights used in or necessary for
the operation of their business as currently conducted on the date hereof and as
will be conducted immediately after the NPS Merger.
(d) Neither NPS nor any of its Subsidiaries has received any written
notice from any third party as of the date hereof, and, to the knowledge of NPS,
there is no other assertion or pending overt threat from any third party, that
the operation of the business of NPS or any of its Subsidiaries or any act,
product or service of NPS or any of its Subsidiaries, infringes or
misappropriates the Intellectual Property Rights of any third party or
constitutes unfair competition or unfair trade practices under the laws of any
jurisdiction.
(e) To the knowledge of NPS, as of the date hereof, no person is
infringing or misappropriating any material NPS Intellectual Property Rights or
NPS Licensed Intellectual Property Rights in any material respect. Neither NPS
nor any of its Subsidiaries has brought any such claims, suits, arbitrations or
other adversarial proceedings against any third party that remain unresolved.
(f) All necessary registration, maintenance and renewal fees currently
due in connection with any material NPS Registered Intellectual Property have
been made and all necessary documents, recordations and certificates in
connection with such material NPS Registered Intellectual Property have been
filed with the relevant patent, copyright, trademark or other authorities in the
United States or foreign jurisdictions, as the case may be, for the purposes of
maintaining such material NPS Registered Intellectual Property, except where the
failure to do so would not be reasonably likely to have a material impact on NPS
or where NPS has made a reasonable business judgment not to include such
material Intellectual Property Rights in the NPS Registered Intellectual
Property. To the knowledge of NPS, all NPS Registered Intellectual Property, or
NPS Licensed Intellectual Property Rights exclusively licensed by NPS or its
Subsidiaries, are valid and enforceable, and no challenges with respect thereto
have been raised by any third party or Government Authority.
(g) To the extent that any material Software has been developed or
created by a third party (including any current or former employee of NPS or any
of its Subsidiaries) for NPS or any of its Subsidiaries, NPS or one of its
Subsidiaries, as the case may be, has a written agreement with such third party
with respect thereto, and NPS or one of its Subsidiaries thereby either (i) has
obtained ownership of and is the exclusive owner of with respect to such third
party's Intellectual Property Rights in such work, material or invention, or
(ii) has obtained a license sufficient for the conduct of its business as
currently conducted with respect to such third party's Intellectual Property
Rights in such work, material or invention by operation of law or by valid
assignment.
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(h) NPS and its Subsidiaries have taken reasonable steps to protect
their respective material Trade Secrets and any Trade Secrets of third parties
provided to NPS or any of its Subsidiaries. Without limiting the foregoing, NPS
and each of its Subsidiaries maintain a policy requiring all employees,
contractors and other parties having access to such Trade Secrets to execute a
proprietary information/confidentiality agreement, in substantially the form
made available to Enzon, with NPS or one of its Subsidiaries, as the case may
be. Except under confidentiality obligations, there has been no disclosure by
NPS or any of its Subsidiaries of any such Trade Secrets, and no party to any
such agreement is in breach thereof.
(i) The consummation of the Mergers will neither violate nor result in
the breach, modification, cancellation, termination, or suspension of any NPS
License Agreement in accordance with its terms.
(j) With respect to all personal information gathered or accessed in
the course of the operations of NPS or any of its Subsidiaries, NPS and its
Subsidiaries have taken reasonable steps (including, without limitation,
implementing and monitoring compliance with adequate measures with respect to
technical and physical security) to ensure that the information is protected
against loss and against unauthorized access, use, modification, disclosure or
other misuse in accordance with NPS's published privacy policies as then in
effect. To the knowledge of NPS, there has been no unauthorized access to or
other misuse of that information. No claims have been asserted or threatened
against NPS or any of its Subsidiaries by any person alleging a violation of
such person's privacy, personal or confidentiality rights.
(k) The NPS Merger will not result in: (i) Holdco or the Surviving
Corporation of the Enzon Merger becoming bound by any non-compete or other
restriction on the operation of any business of Holdco or the Surviving
Corporation of the Enzon Merger, (ii) the Surviving Corporation of the Enzon
Merger granting any rights or licenses to any of its Intellectual Property
Rights to any third party (including a covenant not to xxx with respect to any
of its Intellectual Property Rights), (iii) the termination or breach of any
Contract to which NPS is a party, or (iv) the obligation under any Contract to
pay any royalties or other amounts to any third party in excess of those amounts
otherwise owed by Enzon or its Subsidiaries immediately prior to the NPS Merger.
3.8 Legal Compliance; Permits.
(a) Neither NPS nor any of its Subsidiaries is, in any material
respect, in conflict with, or in default or in violation (i) any Legal
Requirement applicable to NPS or any of its Subsidiaries or by which NPS or any
of its Subsidiaries or any of their respective businesses or properties is, or
NPS believes is reasonably likely to be, bound or affected, (ii) any note, bond,
mortgage, indenture, Contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which NPS or any of its Subsidiaries is a
party or by which NPS or any of its Subsidiaries or its or any of their
respective properties is bound or affected. As of the date hereof, no
investigation or review by any Governmental Authority is pending or has been
threatened in a writing delivered to NPS or any of its Subsidiaries, against NPS
or any of its Subsidiaries. There is no judgment, injunction, order or decree
binding upon NPS or any of its Subsidiaries which has or would reasonably be
expected to have the effect of prohibiting or materially impairing any business
practice of NPS or any of its Subsidiaries, any acquisition of property by NPS
or any of its Subsidiaries or the conduct of business by NPS and its
Subsidiaries as currently conducted.
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(b) NPS and its Subsidiaries hold, to the extent legally required, all
material Permits that are required for the operation of the business of NPS and
its Subsidiaries as currently conducted (collectively, the "NPS Permits"),
except where the failure to hold any such Permits would not materially adversely
affect the ability of any party hereto to consummate the transactions
contemplated by this Agreement. As of the date hereof, no suspension or
cancellation of any of the NPS Permits is pending or, to the knowledge of NPS,
threatened. NPS and its Subsidiaries are in compliance in all material respects
with the terms of the NPS Permits.
3.9 Regulatory Compliance.
(a) NPS and its Subsidiaries, and to NPS's knowledge, NPS's agents are
in material compliance with all Legal Requirements applicable to the evaluation,
testing, manufacturing, distribution and marketing of each of the products of
NPS or any of its Subsidiaries, in whatever stage of development or
commercialization, to the extent that the same are applicable to the business of
NPS or any of its Subsidiaries as it is currently conducted and proposed to be
conducted, including but not limited to those relating to investigational use,
premarket approval, current "Good Manufacturing Practices," current "Good
Laboratory Practices," current "Good Clinical Practices," labeling, advertising,
record keeping, reporting of adverse events, filing of reports and security.
(b) Section 3.9(b) of NPS Disclosure Letter contains a complete and
accurate list of the products that are being developed, tested, manufactured,
marketed, distributed, sold or licensed in or out by NPS or any of its
Subsidiaries.
(c) Section 3.9(c) of NPS Disclosure Letter contains a complete and
accurate list of each of NPS's and its Subsidiaries' pending and approved NDAs,
BLAs, INDs and similar state and foreign regulatory filings as of the date of
this Agreement. True and complete copies of such NDAs, BLAs, INDs and similar
regulatory filings, including all supplements, amendments, and annual reports,
have heretofore been made available to Enzon. True and complete copies of all
material correspondence from the FDA and other similar Governmental Authorities,
and NPS's and its Subsidiaries' responses have heretofore been made available to
Enzon.
(d) Section 3.9(d) of NPS Disclosure Letter contains a complete and
accurate list of (i) Form 483s with issues currently outstanding, (ii) Notices
of Adverse Findings and Warning Letters or other correspondence from the FDA and
other Governmental Authorities since February 1, 2000 in which the FDA or any
such other Governmental Authority asserted that the operations or facilities of
NPS or any of its Subsidiaries may not be in compliance with applicable Legal
Requirements, in each case received by NPS or any of its Subsidiaries from the
FDA or any such other Governmental Authority and the response of NPS and/or its
Subsidiaries to the FDA and/or any such other Governmental Authority to such
notices from the FDA and/or any such other Governmental Authority. True and
complete copies of such Form 483s (together with written summaries thereof
including a list of currently outstanding issues and corrective action
commitments), Notices of Adverse Findings, Warning Letters and other
correspondence and NPS's and/or its Subsidiaries' responses have heretofore been
made available to Enzon. Except as described in such Form 483's, all operations
of NPS and its Subsidiaries have been and are being conducted in substantial
compliance with all requirements as set forth in Section 3.9(a) hereof.
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(e) NPS has provided Enzon access to all Adverse Reaction Reports filed
by NPS or any of its Subsidiaries in all Annual Reports with all Governmental
Authorities with respect to its Phase II and Phase III studies.
(f) Neither NPS nor any of its Subsidiaries, and to NPS's knowledge any
officer, employee or agent of NPS or any of its Subsidiaries has made an untrue
statement of a material fact or fraudulent statement to the FDA or any other
Governmental Authority, failed to disclose a material fact required to be
disclosed to the FDA or any other Governmental Authority, or committed an act,
made a statement, or failed to make a statement that, at the time such
disclosure was made, could reasonably be expected to provide a basis for the FDA
or any other Governmental Authority to invoke its policy respecting Fraud,
Untrue Statements of Material Facts, Bribery, and Illegal Gratuities, set forth
in 56 Fed. Reg. 46191 (September 10, 1991) or any similar policy. Neither NPS
nor any of its Subsidiaries, and to NPS's knowledge any officer, employee or
agent of NPS or any of its Subsidiaries, has been convicted of any crime or
engaged in any conduct for which debarment is mandated by 21 U.S.C. ss. 335a(a)
or any similar Legal Requirement for which debarment is authorized by 21 U.S.C.
ss. 335a(b) or any similar Legal Requirement.
(g) Neither NPS nor any of its Subsidiaries has, since February 1,
2000, received any written notice that the FDA or any other Governmental
Authority has commenced, or threatened in writing to initiate, any action to
withdraw its approval or request the recall of any product of NPS or any of its
Subsidiaries, or commenced, or overtly threatened to initiate, any action to
enjoin production at any facility of NPS or any of its Subsidiaries. Neither NPS
nor any of its Subsidiaries has received any written notice from the FDA, any
other Governmental Authority, or any professional or consumer organization
asserting that any product developed, tested, manufactured, marketed,
distributed, sold, or licensed to NPS or any of its Subsidiaries, or any active
ingredient used by NPS or any of its Subsidiaries in any product developed,
tested, manufactured, marketed, distributed, sold or licensed to NPS or any of
its Subsidiaries, is or may be defective or dangerous or fails to meet any
applicable regulation promulgated by any Governmental Authority.
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(h) Neither NPS nor any of its Subsidiaries has received any written
notice from the FDA or any other Governmental Authority indicating that: (A) a
clinical hold will be placed on clinical studies currently being performed for
any product being tested or developed by NPS or any of its Subsidiaries; (B) any
clinical or pre-clinical data gathered by NPS or any of its Subsidiaries in
support of an NDA or BLA, as the case may be, to the FDA will not be accepted by
the FDA to support the relevant NDA or BLA, as the case may be; (C) the FDA will
reject or fail to accept an NDA or BLA, as the case may be, for a product
currently being developed or tested by NPS or any of its Subsidiaries; or (D)
the clinical studies designed to support an NDA or BLA, as the case may be, to
the FDA for any product currently being developed or tested by NPS or any of its
Subsidiaries are inadequate or poorly-designed to support the NDA or BLA, as the
case may be. Neither NPS nor any of its Subsidiaries are aware of any
circumstances that would cause the FDA or any other Governmental Authority to
provide any such written notice.
(i) NPS and its Subsidiaries are, and have at all times been, in
substantial compliance with the Medicare Anti-Kickback Statute, 42 U.S.C. ss.
1320a-7b(b), and implementing regulations codified at 42 C.F.R. ss. 1001 and
with all similar Legal Requirements.
(j) To NPS's knowledge, there are no facts or circumstances concerning
suppliers of active ingredients, bulk product, or finished product to NPS or any
of its Subsidiaries that would reasonably be expected to have a Material Adverse
Effect on NPS.
3.10 Studies. The clinical, pre-clinical, safety and other studies and
tests conducted by or on behalf of or sponsored by NPS or any of its
Subsidiaries were and, if still pending, are being conducted in material
compliance with standard medical and scientific research procedures. Neither NPS
nor any of its Subsidiaries has received any notices or other correspondence
from the FDA or any other Governmental Authority requiring the termination,
suspension or modification of any clinical, pre-clinical, safety or other
studies or tests.
3.11 Litigation. As of the date hereof, there are no claims, suits,
actions, arbitrations, proceedings or investigations pending or, to the
knowledge of NPS, overtly threatened against NPS or any of its Subsidiaries,
before any court, governmental department, commission, agency, instrumentality
or authority, or any arbitrator that seeks to restrain or enjoin the
consummation of the transactions contemplated hereby or which would reasonably
be expected, either singularly or in the aggregate with all such claims, actions
or proceedings, to be material to NPS.
3.12 Brokers' and Finders' Fees. Except for fees payable to Xxxxxx
Xxxxxxx & Co. Incorporated ("Xxxxxx Xxxxxxx") pursuant to an engagement letter
dated February 12, 2003, a copy of which has been provided to Enzon, NPS has not
incurred, nor will it incur, directly or indirectly, any liability for brokerage
or finders' fees or agents' commissions or any similar charges in connection
with this Agreement or any transaction contemplated hereby. No such engagement
letter obligates NPS (or will obligate Holdco or either of the Surviving
Corporations) to continue to use the services of Xxxxxx Xxxxxxx following the
Mergers or pay the fees or expenses of Xxxxxx Xxxxxxx in connection with any
transactions other than the Mergers following the consummation of the Mergers.
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3.13 Transactions with Affiliates. Since the date of the NPS's last
proxy statement filed with the SEC, no event has occurred as of the date hereof
that would be required to be reported by NPS pursuant to Item 404 of Regulation
S-K promulgated by the SEC (except for amounts due as normal salaries and
bonuses and in reimbursements of ordinary expenses). Section 3.13 of the NPS
Disclosure Letter identifies each Person who is an "affiliate" (as that term is
used in Rule 145 promulgated under the Securities Act) of NPS as of the date
hereof.
3.14 Employee Matters.
(a) Section 3.14(a) of the NPS Disclosure Letter contains an complete
and accurate list of each NPS Benefit Plan and each NPS Employee Agreement.
Neither NPS nor any of its ERISA Affiliates has any plan or commitment to
establish any new NPS Benefit Plan or NPS Employee Agreement, to modify any NPS
Benefit Plan or NPS Employee Agreement (except to the extent required by
applicable Legal Requirements or to conform any such NPS Benefit Plan or NPS
Employee Agreement to the requirements of any applicable Legal Requirements or
as otherwise specifically contemplated herein, in each case as previously
disclosed to Enzon in writing, or as required by this Agreement), or to adopt or
enter into any NPS Benefit Plan or NPS Employee Agreement.
(b) NPS has provided or made available to Enzon complete and accurate
copies of the following: (i) all documents, contracts and agreements embodying
each NPS Benefit Plan and each NPS Employee Agreement, including, without
limitation, all amendments thereto and all related trust documents,
administrative service agreements, group annuity contracts, group insurance
contracts, and policies pertaining to fiduciary liability insurance covering the
fiduciaries for each plan; (ii) the three (3) most recent financial statements,
accounting statements, accounting reports, annual reports (including Form Series
5500 and all schedules and financial statements attached thereto), annual
returns, investment reports, actuarial reports, periodic accounting and cost
certificates, if then existing, in connection with each NPS Benefit Plan; (iii)
the most recent summary plan description together with the summary(ies) of
material modifications thereto, if any, required under ERISA or any comparable
Legal Requirements with respect to each NPS Benefit Plan; (iv) all IRS or other
Governmental Authority determination, opinion, notification and advisory
letters, and all applications and correspondence to or from the IRS, the DOL or
other Governmental Authority with respect to any such application or letter;
(iv) all communications material to any NPS Employee or NPS Employees relating
to any NPS Benefit Plan and any proposed NPS Benefit Plans, in each case,
relating to any amendments, terminations, establishments, increases or decreases
in benefits, acceleration of payments or vesting schedules or other events which
would result in any material liability to NPS or any of its Subsidiaries; (v)
all material correspondence to or from any Governmental Authority relating to
any NPS Benefit Plan; (vi) all COBRA forms and related notices (or such forms
and notices as required under comparable Legal Requirements); (vii) all
correspondence to or from any governmental agency relating to any NPS Benefit
Plan; or (viii) the three (3) most recent plan years discrimination tests for
each NPS Benefit Plan; and (ix) all prospectuses prepared in connection with
each NPS Benefit Plan.
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(c) NPS and its ERISA Affiliates have performed in all material
respects all obligations required to be performed by them under, are not in
default or violation of, and have no knowledge of any default or violation by
any other party to each NPS Benefit Plan, and each NPS Benefit Plan has been
established, maintained and administered in all material respects in accordance
with its terms and in compliance with all applicable Legal Requirements,
including, without limitation, ERISA, the Code and applicable Canadian
Legislation. Any NPS Benefit Plan intended to be qualified under Section 401(a)
of the Code and each trust intended to qualify under Section 501(a) of the Code
(i) has either applied for, prior to the expiration of the requisite period
under applicable Treasury Regulations or IRS pronouncements, or obtained a
favorable determination, notification, advisory and/or opinion letter, as
applicable, as to its qualified status from the IRS or still has a remaining
period of time under applicable Treasury Regulations or IRS pronouncements in
which to apply for such letter and to make any amendments necessary to obtain a
favorable determination, and (ii) incorporates or has been amended to
incorporate all provisions required to comply with the Tax Reform Act of 1986
and subsequent legislation. For each NPS Benefit Plan that is intended to be
qualified under Section 401(a) of the Code there has been no event, condition or
circumstance that has adversely affected or is likely to adversely affect such
qualified status. No "prohibited transaction," within the meaning of Section
4975 of the Code or Sections 406 and 407 of ERISA, and not otherwise exempt
under Section 408 of ERISA, has occurred with respect to any NPS Benefit Plan.
There are no actions, suits or claims pending, or, to the knowledge of NPS,
threatened or reasonably anticipated (other than routine claims for benefits) in
respect of any NPS Benefit Plan or the assets of any NPS Benefit Plan. Each NPS
Benefit Plan (other than stock option plans) can be amended, terminated or
otherwise discontinued after the Effective Time in accordance with its terms,
without liability to NPS, Enzon, Holdco or any of their respective ERISA
Affiliates (other than ordinary administration expenses). There are no audits,
inquiries or proceedings pending or, to the knowledge of NPS or any of its ERISA
Affiliates, threatened by the IRS, the DOL, or any other Governmental Authority
with respect to any NPS Benefit Plan. Neither NPS nor any of its ERISA
Affiliates is subject to any material penalty, tax, interest or fees with
respect to any NPS Benefit Plan under Section 502(i) of ERISA or Sections 4975
through 4980 of the Code or other applicable Legal Requirement. NPS and each of
its ERISA Affiliates have timely made all contributions and other payments,
including premiums, required by and due under the terms of each NPS Benefit
Plan.
(d) Neither NPS nor any of its ERISA Affiliates has ever maintained,
established, sponsored, participated in, or contributed to, any (i) Pension Plan
that is subject to Title IV of ERISA or Section 412 of the Code, (ii)
Multiemployer Plan, (iii) "multiple employer plan" as defined in ERISA or the
Code, or a multiemployer plan under comparable Legal Requirements, (iv) a
"funded welfare plan" within the meaning of Section 419 of the Code, or (v) any
pension plan that is subject to Canadian pension legislation other than the
Canada Pension Plans No NPS Benefit Plan provides health benefits that are not
fully insured through an insurance contract.
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(e) No NPS Benefit Plan provides, or reflects or represents any
liability to provide post-termination or retiree welfare benefits to any person
for any reason, except as may be required by COBRA or other applicable Legal
Requirements, and neither NPS nor any of its ERISA Affiliates has ever
represented, promised or contracted (whether in oral or written form) to any NPS
Employee (either individually or to NPS Employees as a group) or any other
person that such NPS Employee(s) or other person would be provided with
post-termination or retiree welfare benefits, except to the extent required by
any Legal Requirements.
(f) Neither NPS nor any of its ERISA Affiliates has violated in any
material respect any of the health care continuation requirements of COBRA, the
requirements of FMLA, the requirements of the Health Insurance Portability and
Accountability Act of 1996, the requirements of the Women's Health and Cancer
Rights Act of 1998, the requirements of the Newborns' and Mothers' Health
Protection Act of 1996, or any amendment to each such act, or any similar
provisions of state law applicable to its NPS Employees.
(g) Neither NPS nor any of its ERISA Affiliates is obligated to provide
any NPS Employee with any compensation or benefits pursuant to an agreement
(e.g., an acquisition agreement) with a former employer of such NPS Employee.
(h) Neither NPS nor any of its ERISA Affiliates has violated Section
306 or 402 of the Xxxxxxxx-Xxxxx Act of 2002 and the execution of this Agreement
and the consummation of the transactions contemplated hereby will not, to the
knowledge of NPS, cause such a violation.
(i) The execution of this Agreement and the consummation of the
transactions contemplated hereby will not (either alone or upon the occurrence
of any additional or subsequent events) constitute an event under any NPS
Benefit Plan, NPS Employee Agreement, trust or loan that will or may result in
any payment (whether of severance pay or otherwise), acceleration, forgiveness
of indebtedness, vesting, distribution, increase in benefits or obligation to
fund benefits with respect to any NPS Employee. No payment or benefit which will
or may be made by NPS or its ERISA Affiliates with respect to any NPS Employee
or any other "disqualified individual" (as defined in Code Section 280G and the
regulations thereunder) is, individually or collectively, reasonably likely to
be characterized as a "parachute payment," within the meaning of Section
280G(b)(2) of the Code. There is no contract, agreement, plan or arrangement to
which NPS or any of its ERISA Affiliates is a party or by which it is bound to
compensate any NPS Employee for excise taxes paid pursuant to Section 4999 of
the Code.
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(j) NPS (i) is in compliance in all material respects with all
applicable Legal Requirements relating to employment, employment practices,
terms and conditions of employment and wages and hours, in each case, with
respect to NPS Employees, (ii) has withheld and reported, in all material
respects, all amounts required by applicable Legal Requirements or by Contract
to be withheld and reported with respect to wages, salaries and other payments
to NPS Employees, (iii) is not liable, in any material respect, for any arrears
of wages or any Taxes or any penalty for failure to comply with any of the
foregoing, with respect to NPS Employees, and (iv) is not liable for any
material payment to any Governmental Authority or any trust or other fund
governed by or maintained by or on behalf of any Governmental Authority, with
respect to unemployment compensation benefits, social security, employment
insurance benefits, health premiums, the Canada Pension Plans or other benefits
or obligations for NPS Employees (other than routine payments to be made in the
normal course of business and consistent with past practice). There are no
pending, threatened or reasonably anticipated claims or actions against NPS or
any of its ERISA Affiliates under any worker's compensation policy, workplace
safety and insurance legislation or long-term disability policy. Neither NPS nor
any of its ERISA Affiliates has direct or indirect liability with respect to any
misclassification of any person as an independent contractor rather than as an
employee, or with respect to any employee leased from another employer, except
as would not result in material harm to Enzon. Each current NPS Employee who
performs services in the United States is an "at-will" employee whose employment
can be terminated by NPS or one of its ERISA Affiliates at any time, with or
without cause.
(k) No work stoppage, lock-out, labor strike or other labor disturbance
against NPS or any of its ERISA Affiliates is pending, threatened or reasonably
anticipated. NPS has no knowledge of any activities or proceedings of any labor
union to organize any NPS Employees. There are no actions, suits, claims, labor
disputes or grievances pending, or, to the knowledge of NPS, threatened or
reasonably anticipated relating to any employment, labor, health and safety,
workplace safety and insurance, human rights, pay equity, employment equity or
discrimination matters involving any NPS Employee which, if adversely
determined, would, individually or in the aggregate, result in any material
liability to NPS or any of its Subsidiaries, Enzon, Holdco or either of the
Surviving Corporations. Neither NPS nor any of its Subsidiaries has engaged in
any unfair labor practices within the meaning of the National Labor Relations
Act or under comparable Legal Requirements, except as would not result in
material harm to NPS. Neither NPS nor any of its ERISA Affiliates is presently,
or has been in the past, a party to, or bound by, any collective bargaining
agreement, works council agreement or union contract with respect to NPS
Employees and no collective bargaining agreement is being negotiated with
respect to NPS Employees. Neither NPS nor any of its Subsidiaries have incurred
any material liability or material obligation under the WARN Act or any similar
Legal Requirements that remains unsatisfied.
(l) In respect of NPS's International Benefit Plans:
(i) there are no unfunded liabilities that, as of the
Effective Time, will not be offset by insurance or fully accrued;
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(ii) except as required by applicable Legal Requirements, no
condition exists that would prevent NPS or Holdco from terminating or
amending any such plan at any time for any reason without liability to
NPS, Enzon, Holdco or any of their respective ERISA Affiliates (other
than ordinary administration expenses or routine claims for benefits);
(iii) each plan which has or purports to have Tax-favored
treatment satisfies in all material respects the conditions for
Tax-favored treatment under applicable Legal Requirements and each plan
which purports to qualify as a particular type of plan for Tax purposes
meets in all material respects the requirements for such qualification;
(iv) there has not been in any material respect any withdrawal
of, application for, or payment of any surplus or other funds out of
any such plan except in accordance with the terms of such plan and
applicable Legal Requirements; and
(v) to the knowledge of NPS, no event has occurred within the
past two (2) years respecting any such plan which is registered under
applicable Legal Requirements which would result in the revocation of
that registration.
3.15 Environmental Matters.
(a) As of the Closing Date, except in compliance with Environmental
Laws and in a manner that could not reasonably be expected to subject NPS or any
of its Subsidiaries to liability, to the knowledge of NPS and its Subsidiaries
after reasonable inquiry, no Hazardous Materials are present on any NPS Business
Facility currently owned, operated, occupied, controlled or leased by NPS or any
of its Subsidiaries or were present on any other NPS Business Facility at the
time it ceased to be owned, operated, occupied, controlled or leased by NPS or
any of its Subsidiaries. To the knowledge of NPS, there are no underground
storage tanks, asbestos which is friable or likely to become friable or PCBs
present on any NPS Business Facility currently owned, operated, occupied,
controlled or leased by NPS or any of its Subsidiaries.
(b) NPS and its Subsidiaries have conducted all Hazardous Material
Activities relating to their business in compliance in all material respects
with all applicable Environmental Laws. The Hazardous Materials Activities of
NPS and its Subsidiaries prior to the Closing Date have not resulted in the
exposure of any person to a Hazardous Material in a manner which has caused or
could reasonably be expected to cause an adverse health effect to any such
person.
(c) NPS and its Subsidiaries currently hold all Environmental Permits
necessary for the continued conduct of any of their Hazardous Material
Activities as such activities are currently being conducted. All such
Environmental Permits are valid and in full force and effect. NPS and its
Subsidiaries have complied in all material respects with all covenants and
conditions of any Environmental Permit which is or has been in force with
respect to their Hazardous Materials Activities. No circumstances exist which
could cause any Environmental Permit to be revoked, modified, or rendered
non-renewable upon payment of the permit fee.
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(d) No action, proceeding, revocation proceeding, amendment procedure,
writ, injunction or claim is pending, or to the best of NPS's knowledge,
threatened, concerning or relating to any Environmental Permit, any Hazardous
Material, or any Hazardous Material Activity of NPS or any of its Subsidiaries.
(e) Neither NPS nor any of its Subsidiaries has knowledge of any fact
or circumstance, which could result in any environmental liability which could
reasonably be expected to have a Material Adverse Effect on NPS.
(f) NPS and its Subsidiaries have delivered or made available to Enzon
and its agents, representatives and employees, all records in NPS's and its
Subsidiaries' possession, custody or control concerning their respective
Hazardous Material Activities and all environmental audits and environmental
assessments of any NPS Business Facility. NPS has complied with all
environmental disclosure obligations imposed by applicable Legal Requirements
with respect to the transactions contemplated hereby.
3.16 Real Estate Matters; Title to Property
(a) Section 3.16(a)(i) of the NPS Disclosure Letter contains a complete
and accurate list of all real property currently leased, subleased or licensed
by or from NPS or any of its Subsidiaries or otherwise used or occupied by NPS
or any of its Subsidiaries for the operation of their businesses (collectively,
the "NPS Leased Real Property"). Section 3.16(a)(ii) of the NPS Disclosure
Letter contains a complete and accurate list of all real property owned by NPS
or any of its Subsidiaries (collectively, the "NPS Owned Real Property").
(b) NPS has provided Enzon a complete and accurate copy of all leases,
lease guaranties, subleases, agreements for the leasing, use or occupancy of, or
otherwise granting a right in or relating to the NPS Leased Real Property,
including all amendments, terminations and modifications thereof (collectively,
the "NPS Lease Agreements"), and there are no other NPS Lease Agreements for
real property affecting the NPS Leased Real Property or to which NPS or any of
its Subsidiaries is bound, other than those set forth in Section 3.16(a)(i) of
the NPS Disclosure Letter. All of the NPS Lease Agreements are valid and
effective in accordance with their respective terms, and there is not, under any
of such NPS Lease Agreements, any existing default, no rentals are past due, or
event of default (or event which with notice or lapse of time, or both, would
constitute a default).
(c) (i) There are no structural, electrical, mechanical, plumbing,
roof, paving or other defects in any improvements located on the NPS Owned Real
Property or the NPS Leased Real Property as could, either individually or in the
aggregate, have a material adverse effect on the use, development, occupancy or
operation thereof; (ii) to the knowledge of NPS, there are no natural or
artificial conditions upon any NPS Owned Real Property or any other facts or
conditions which could, in the aggregate, have a material adverse effect on the
transferability, financability, ownership, leasing, use, development, occupancy
or operation of any such NPS Owned Real Property; (iii) Neither NPS nor any of
its Subsidiaries has received any notice from any insurance company of any
defects or inadequacies in any NPS Owned Real Property or NPS Leased Real
Property or any part thereof which could materially and adversely affect the
insurability of such NPS Owned Real Property or NPS Leased Real Property or the
premiums for the insurance thereof, nor has any notice been given by any insurer
of any such real property requesting the performance of any repairs, alterations
or other work with which compliance has not been made; (iv) there currently
exists water, sewer, gas, electrical, telephone and telecommunication lines and
surface drainage systems serving the NPS Owned Real Property which have been
licensed, permitted, completed, installed and paid for and which are sufficient
as licensed and permitted to service the operations of each such parcel of NPS
Owned Real Property when fully occupied and operational, and all such lines and
systems serving each such parcel of NPS Owned Real Property are located in the
right-of-way of public roadways to the boundary of the land on which each such
property is situated; (v) there are no pending, or, to the knowledge of NPS,
threatened assessments, improvements or activities of any public or quasi-public
body either planned, in the process of construction or completed which may give
rise to any assessment against any NPS Owned Real Property; and (vii) neither
the NPS Leased Real Property nor NPS Owned Real Property (including any
improvements thereon) violate in any material respect any applicable Legal
Requirements relating to such NPS Leased Real Property and NPS Owned Real
Property, and any such non-violation is not dependent on so-called
non-conforming use exceptions.
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(d) NPS and each of its Subsidiaries has good and valid title to, or,
in the case of leased properties and assets, valid leasehold interests in, all
of its tangible properties and assets, real, personal and mixed, used or held
for use in its business, free and clear of any Liens, except (i) as reflected in
the NPS Financials, (ii) Liens for Taxes not yet due and payable, and (iii) such
imperfections of title and encumbrances, if any, which do not materially detract
from the value or interfere with the present use or operation of the property
subject thereto or affected thereby.
(e) The equipment owned or leased by the NPS or any of its Subsidiaries
is (i) adequate for the conduct of the business of NPS and its Subsidiaries as
currently conducted and as currently contemplated to be conducted, and (ii) in
good operating condition, regularly and properly maintained, subject to normal
wear and tear.
3.17 Contracts.
(a) For all purposes of and under this Agreement, "NPS Material
Contract" shall mean:
(i) any "material contracts" (as such term is defined in Item
601(b)(10) of Regulation S-K of the SEC) with respect to NPS and its
Subsidiaries;
(ii) any Contract to which NPS or any of its Subsidiaries is a
party (A) containing any covenant: (1) limiting the right of NPS or its
Subsidiaries to engage in any material line of business, make use of
any material Intellectual Property Rights or compete with any Person in
any material line of business, (2) granting or receiving any material
licensing, research and/or development, manufacture, marketing,
distribution or supply rights (whether with respect to NPS Intellectual
Property Rights, NPS Licensed Intellectual Property Rights, or
otherwise), or (3) otherwise having a material effect on the right of
NPS and its Subsidiaries to license, research and/or develop,
manufacture, market, sell or distribute any material Intellectual
Property Rights, products or services to any class of customers, in any
geographic area, during any period of time or in any segment of the
market, or to purchase or otherwise obtain any supplies of material raw
materials or products, or (B) to the extent not otherwise covered in
(1), constituting a material NPS License;
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(iii) any joint marketing or development Contract to which NPS
or any of its Subsidiaries is a party which may not be canceled without
penalty upon notice of ninety (90) days or less;
(iv) any employment or consulting Contract with (A) any
executive officer or other employee of NPS earning an annual salary in
excess of One Hundred Thousand Dollars ($100,000), other than those
that are terminable by NPS or any of its Subsidiaries on no more than
thirty (30) days notice without liability or financial obligation on
the part of NPS, or (B) any member of the NPS Board;
(v) any Contract to which NPS or any of its Subsidiaries is a
party or any plan of NPS or any of its Subsidiaries, including, without
limitation, any stock option plan, stock appreciation right plan or
stock purchase plan, any of the benefits of which will be increased, or
the vesting of benefits of which will be accelerated, by the occurrence
of any of the transactions contemplated by this Agreement or the value
of any of the benefits of which will be calculated on the basis of any
of the transactions contemplated by this Agreement;
(vi) any indemnification or any guaranty Contract to which NPS
or any of its Subsidiaries is a party which is outside the ordinary
course of NPS's business;
(vii) any Contract relating to the disposition or acquisition
by NPS or any of its Subsidiaries after the date of this Agreement of a
material amount of assets not in the ordinary course of business or
pursuant to which NPS or any of its Subsidiaries has any material
ownership interest in any other Person or other business enterprise
other than NPS's Subsidiaries;
(viii) any Contract to provide source code to any third party
for any product or technology that is material to NPS and its
Subsidiaries taken as a whole;
(ix) any mortgages, indentures, guarantees, loans or credit
agreements, security agreements or other Contracts to which NPS or any
of its Subsidiaries is a party relating to the borrowing of money or
extension of credit, other than accounts receivables and payables in
the ordinary course of NPS's business;
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(x) any material settlement Contract entered into by NPS or
any of its Subsidiaries within three (3) years prior to the date of
this Agreement; and
(xi) any Contract, or group of Contracts with a Person (or
group of affiliated Persons), the termination or breach of which would
be reasonably expected to have a material adverse effect on any
material division or business unit or other material operating group of
product or service offerings of NPS or otherwise have a Material
Adverse Effect on NPS.
(b) Section 3.17(b) of the NPS Disclosure Letter contains a complete
and accurate list of all NPS Material Contracts to which it is a party or is
bound by as of the date hereof which are described in Section 3.17(a)(i) through
Section 3.17(a)(xi) hereof, inclusive.
(c) All NPS Material Contracts are valid and in full force and effect
except to the extent they have previously expired in accordance with their terms
or if the failure to be in full force and effect, individually or in the
aggregate, would not reasonably be expected to be material to NPS. Neither NPS
nor any of its Subsidiaries has violated any provision of, or committed or
failed to perform any act which, with or without notice, lapse of time or both
would constitute a default under the provisions of, any NPS Material Contract,
except in each case for those violations and defaults which, individually or in
the aggregate, would not reasonably be expected to be material to NPS.
3.18 Disclosure. None of the information supplied or to be supplied by
or on behalf of NPS for inclusion or incorporation by reference in the
Registration Statement will, at the time the Registration Statement becomes
effective under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading. None of the information
supplied or to be supplied by or on behalf of NPS for inclusion or incorporation
by reference in the Proxy Statement/Prospectus, will, at the time the Proxy
Statement/Prospectus is mailed to the stockholders of NPS or Enzon, at the time
of the NPS Stockholders' Meeting or Enzon Stockholders' Meeting or as of the
Effective Time, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they are
made, not misleading. The Proxy Statement/Prospectus will comply as to form in
all material respects with the provisions of the Exchange Act and the rules and
regulations promulgated by the SEC thereunder. Notwithstanding the foregoing, no
representation or warranty is made by NPS with respect to statements made or
incorporated by reference therein about Enzon supplied by Enzon for inclusion or
incorporation by reference in the Registration Statement or the Proxy
Statement/Prospectus.
3.19 Board Approval. The NPS Board, by resolutions duly adopted by
unanimous vote at a meeting of all Directors duly called and held and not
subsequently rescinded or modified in any way (the "NPS Board Approval"), has
(i) determined that the NPS Merger is consistent with and in furtherance of the
long-term business interests of NPS and fair to, and in the best interests of,
NPS and its stockholders, (ii) declared this Agreement to be advisable, (iii)
approved this Agreement, the NPS Merger and the other transactions contemplated
by this Agreement, (iv) approved the NPS Voting Agreements, and (v) determined
to recommend to the stockholders of NPS that such stockholders adopt this
Agreement at the NPS Stockholders' Meeting.
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3.20 Fairness Opinion. The NPS Board has received a written opinion
from Xxxxxx Xxxxxxx, dated as of February 19, 2003 to the effect that, as of
such date, the NPS Exchange Ratio is fair, from a financial point of view, to
NPS stockholders and has delivered to Enzon a copy of such opinion.
3.21 Rights Plan. NPS has taken all action so that (i) neither Enzon
nor Holdco shall be an "Acquiring Person" within the meaning of the NPS Rights
Agreement and (ii) the entering into of this Agreement and the transactions
contemplated hereby, including the NPS Merger, the Enzon Merger and the NPS
Voting Agreements, will not result in the grant of any rights to any Person
under the NPS Rights Agreement or enable or require the NPS Rights to be
exercised, distributed or triggered.
3.22 Takeover Statutes. The approval of this Agreement, the NPS Voting
Agreements and the transactions contemplated hereby and thereby, including the
Mergers, by the NPS Board of Directors referred to in Section 3.19 constitutes
approval of this Agreement and the NPS Voting Agreements and the transactions
contemplated hereby and thereby, including the Mergers, for the purposes of
Section 203 of the DGCL and any other similar Legal Requirement and represents
the only action necessary to ensure that Section 203 of the DGCL does not and
will not apply to the execution, delivery or performance of this Agreement or
the NPS Voting Agreements or the consummation of the Mergers and the other
transactions contemplated hereby and thereby.
ARTICLE IV
INTERIM CONDUCT OF BUSINESS
4.1 Conduct of Business.
(a) Affirmative Obligations. During the period from the date hereof and
continuing until the earlier of the termination of this Agreement pursuant to
its terms or the Effective Time, each of NPS and Enzon, and each of its
respective Subsidiaries shall, except as otherwise expressly contemplated by
this Agreement or to the extent that the other party hereto shall otherwise
consent in writing, carry on its business in the usual, regular and ordinary
course, in substantially the same manner as heretofore conducted, and use
commercially reasonable efforts consistent with past practices and policies to
(i) preserve intact its present business organization, (ii) keep available the
services of its present executive officers and Key Employees, and (iii) preserve
its relationships with customers, suppliers, licensors, licensees, development
partners and others with which it has business dealings. In addition, without
limiting the generality of the foregoing, each of NPS and Enzon shall (i)
continue its course of action and strategies with respect to any state and
federal regulatory approval for any pharmaceutical product or compound,
including the continuation of any clinical and pre-clinical studies, meeting
with FDA officials or officials of any other Governmental Authority, taking
steps as necessary to obtain and maintain all necessary approvals from the FDA
or any other Governmental Authority, and the filing of all necessary and
appropriate submissions to FDA or any other Governmental Authority and (ii) file
(or cause to be filed) at its own expense, on or prior to the due date thereof,
all Tax Returns required to be filed for all Tax periods ending on or before the
Effective Time; provided, however, that neither NPS on the one hand, and Enzon,
on the other, shall file or amend any Tax Returns, or other returns, elections,
claims for refund or information statements with respect to any liabilities for
Taxes (other than federal, state, provincial or local sales, use, goods and
services, property, withholding or employment tax returns or statements) for any
Tax period without prior approval of the other, which approval shall not be
unreasonably withheld or delayed. Enzon or NPS, as the case may be, shall
provide the other with a copy of appropriate workpapers, schedules, drafts and
final copies of each federal, state and provincial income Tax Return or election
of Enzon or NPS (including returns of all employee benefit Plans), as the case
may be, at least ten (10) days before filing such return or election or making
such amendment and shall reasonably cooperate with any request by Enzon or NPS,
as the case may be, in connection therewith.
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(b) Actions Requiring Consent. In addition, without limiting the
generality of Section 4.1(a), except as permitted by the terms of this
Agreement, and except as provided in Article IV of the Enzon Disclosure Letter
or Article IV of the NPS Disclosure Letter (as the case may be), without the
prior written consent of a duly authorized officer of the other party hereto,
during the period from the date hereof and continuing until the earlier of the
termination of this Agreement pursuant to its terms or the Effective Time, each
of NPS and Enzon shall not do any of the following, and shall not permit their
respective Subsidiaries to do any of the following:
(i) enter into any new line of business material to it and its
Subsidiaries taken as a whole;
(ii) declare, set aside or pay any dividends on or make any
other distributions (whether in cash, stock, equity securities or
property) in respect of any capital stock or split, combine or
reclassify any capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for any
capital stock;
(iii) purchase, redeem or otherwise acquire, directly or
indirectly, any shares of its capital stock or the capital stock of its
Subsidiaries, except (A) repurchases of unvested shares at cost in
connection with the termination of the employment relationship with any
employee pursuant to stock option or purchase agreements in effect on
the date hereof or entered into the ordinary course of business and
consistent with past practices and the terms of this Agreement after
the date hereof, (B) the redemption of Enzon Series A Preferred Stock
in accordance with the terms of Section 5.20 hereof, and (C) the
redemption or purchase by a NPS Subsidiary of the Exchangeable Shares
in accordance with Section 5.19 hereof;
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(iv) issue, deliver, sell, authorize, pledge or otherwise
encumber any shares of capital stock, Voting Debt or any securities
convertible into shares of capital stock or Voting Debt, or
subscriptions, rights, warrants or options to acquire any shares of
capital stock or Voting Debt or any securities convertible into shares
of capital stock or Voting Debt, or enter into other agreements or
commitments of any character obligating it to issue any such securities
or rights, other than: (A) issuances of NPS Common Stock or Enzon
Common Stock upon the exercise of NPS Options or Enzon Options,
respectively, existing on the date hereof in accordance with their
present terms (including cashless exercises) or granted pursuant to
clause (C) below, (B) issuance of shares of NPS Common Stock to
participants in the NPS ESPP pursuant to the terms thereof, (C) grants
of stock options or other stock based awards of or to acquire, in the
case of Enzon, Enzon Common Stock granted under the Enzon Option Plans
outstanding on the date hereof, and in the case of NPS, NPS Common
Stock granted under the NPS Option Plans outstanding on the date
hereof, in each case in the ordinary course of business and consistent
with past practices in connection with annual compensation reviews or
ordinary course promotions or to new hires and which options or stock
based awards have a vesting schedule no more favorable than ratable
monthly installments that vest over not less than three (3) years and
do not accelerate, or become subject to acceleration, directly or
indirectly, as a result of the approval or consummation of the Mergers
and/or termination of employment following the Mergers or (D) the
issuance and delivery of NPS Common Stock in exchange for the
Exchangeable Shares;
(v) cause, permit or propose any amendments to its Charter
Documents or any of the Subsidiary Charter Documents of its
Subsidiaries;
(vi) acquire or agree to acquire by merging or consolidating
with, or by purchasing any equity interest in or a portion of the
assets of, or by any other manner, any business or any Person or
division thereof, or otherwise acquire or agree to acquire any assets
which are material, individually or in the aggregate, to its business,
provided, however, that the foregoing shall not prohibit (A) internal
reorganizations or consolidations involving existing Subsidiaries of
either Enzon or NPS or (B) the creation of new Subsidiaries organized
to conduct or continue activities otherwise permitted by this
Agreement;
(vii) enter into any partnership arrangements, joint
development agreements, joint ventures or other strategic partnerships,
alliances or collaborations;
(viii) sell, lease, license, mortgage or otherwise encumber or
dispose of any properties or assets which are material, individually or
in the aggregate, to its business, except sales or other dispositions
in the ordinary course of business and consistent with past practices;
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(ix) make any loans, advances or capital contributions to, or
investments in, any other Person, other than loans or investments by it
or a Subsidiary of it to or in it or any Subsidiary of it;
(x) except as required by GAAP or the SEC as concurred in by
its independent auditors, make any change in its methods or principles
of accounting (including Tax accounting) since the date of, in the case
of Enzon, the Enzon Balance Sheet, and, in the case of NPS, the NPS
Balance Sheet;
(xi) settle any claim (including any Tax claim), action or
proceeding involving the payment by it of money damages, except to the
extent subject to reserves reflected, in the case of NPS, on the latest
NPS Balance Sheet, and in the case of Enzon, on the latest Enzon
Balance Sheet, in each case in accordance with GAAP;
(xii) change its fiscal year;
(xiii) make or change any express or deemed material Tax
election, or consent to the extension or waiver of the statutory period
of limitations applicable to any claim for Taxes;
(xiv) change any of its methods of reporting income or
deductions for federal income Tax purposes from those employed in
preparation of the federal income Tax Returns for the taxable year
ending 2002;
(xv) Except as required by Legal Requirements or Contracts
binding on either party and disclosed on Section 3.14(a) of the NPS
Disclosure Letter in the case of NPS and Section 2.14(a) of the Enzon
Disclosure Letter in the case of Enzon and only with respect to
arrangements in effect on the date of this Agreement, (A) increase in
any manner the amount of compensation (including equity compensation,
whether payable in cash or otherwise) or material fringe benefits of,
pay any bonus to or xxxxx xxxxxxxxx or termination pay to any executive
officer or director or key employee of Enzon or NPS, respectively, or
any material Subsidiary, division or business unit of either Enzon or
NPS (collectively, "Key Employees"), (B) make any increase in or
commitment to increase, in the case of Enzon, any Enzon Benefit Plan
(including any severance plan), and in the case of NPS, any NPS Benefit
Plan (including any severance plan), adopt or amend or make any
commitment to adopt or amend any such plan or make any contribution,
other than regularly scheduled contributions, to any such plan, (C)
waive any stock repurchase rights, accelerate, amend or change the
period of exercisability of, in the case of Enzon, Enzon Options, and
in the case of NPS, NPS Options, or restricted stock, or reprice any
such options or authorize cash payments in exchange for any such
options, (D) enter into any employment, severance, termination or
indemnification agreement with any of its Employees, (E) make any oral
or written representation or commitment with respect to any material
aspect of, in the case of Enzon, any Enzon Benefit Plan, and in the
case of NPS, any NPS Employee Benefit Plan, that is not in accordance
with the existing written terms and provision of such plan, (F) grant
any SAR to any Person (including any of its Employees), or (G) enter
into any agreement with any of its Employees the benefits of which are
(in whole or in part) contingent or the terms of which are materially
altered upon the occurrence of a transaction involving Enzon or NPS (as
the case may be) of the nature contemplated hereby;
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(xvi) subject NPS or Enzon (as the case may be) or any of
their respective Subsidiaries, or Holdco or either of the Surviving
Corporations, to any non-compete or other restriction on any of their
respective businesses following the Closing;
(xvii) enter into any agreement or commitment the effect of
which would be to grant to a third party following the Mergers any
actual or potential right of license to any Intellectual Property
Rights owned by either NPS or Enzon or any of its respective
Subsidiaries;
(xviii) grant any exclusive rights with respect to any
Intellectual Property Rights of such party;
(xix) enter into, modify or amend in a manner adverse in any
material respect to such party, or terminate any Enzon Material
Contract, in the case of Enzon, or NPS Material Contract, in the case
of NPS, or waive, release or assign any material rights or claims
thereunder, including with respect to the agreement between NPS and
Technology Partnerships Canada dated November 9, 1999;
(xx) incur any indebtedness for borrowed money or guarantee
any such indebtedness of another Person, issue or sell any debt
securities or options, warrants, calls or other rights to acquire any
debt securities of it, guarantee any debt securities of another Person,
enter into any "keep well" or other agreement to maintain any financial
statement condition of any other Person (other than any wholly owned
Subsidiary of it) or enter into any arrangement having the economic
effect of any of the foregoing (collectively, "Indebtedness"), except
for intercompany indebtedness between Enzon and any of its wholly owned
Subsidiaries and NPS and any of its wholly owned Subsidiaries, as the
case may be; or
(xxi) agree in writing or otherwise to take any of the actions
described in Section 4.1(b)(i) through Section 4.1(b)(xx) hereof,
inclusive.
4.2 Control of Other Party's Business. Nothing contained in this
Agreement shall give NPS, directly or indirectly, the right to control or direct
Enzon's operations and nothing contained in this Agreement shall give Enzon,
directly or indirectly, the right to control or direct NPS's operations prior to
the Effective Time. Prior to the Effective Time, each of NPS and Enzon shall
exercise, consistent with the terms and conditions of this Agreement, complete
control and supervision over its operations.
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ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Proxy Statement/Prospectus; Registration Statement. As promptly as
practicable after the execution of this Agreement, NPS and Enzon shall prepare
and file with the SEC a joint proxy statement/prospectus for use in connection
with the solicitation of the Requisite NPS Stockholder Approval and the
Requisite Enzon Stockholder Approval (the "Proxy Statement/Prospectus"), and
Holdco shall prepare and file with the SEC a registration statement on Form S-4,
in which the Proxy Statement/Prospectus is to be included as a prospectus, for
use in connection with the registration under the Securities Act of the shares
of Holdco Common Stock issuable in connection with the Mergers (the
"Registration Statement"). NPS, Enzon and Holdco shall provide one another with
any information which may be required in order to effectuate the preparation and
filing of the Proxy Statement/Prospectus and the Registration Statement pursuant
to this Section 5.1. Each of NPS, Enzon and Holdco shall respond to any comments
from the SEC, shall use commercially reasonable efforts to cause the
Registration Statement to be declared effective under the Securities Act as
promptly as practicable after such filing and to keep the Registration Statement
effective as long as is necessary to consummate the Mergers and the transactions
contemplated hereby. Each of NPS, Enzon and Holdco will notify the others
promptly upon the receipt of any comments from the SEC or its staff in
connection with the filing of, or amendments or supplements to, the Registration
Statement and/or the Proxy Statement/Prospectus. Whenever any event occurs which
is required to be set forth in an amendment or supplement to the Proxy
Statement/Prospectus or the Registration Statement, NPS, Enzon or Holdco, as the
case may be, shall promptly inform the others of such occurrence and cooperate
in filing with the SEC or its staff, and/or mailing to stockholders of NPS
and/or Enzon, if applicable, such amendment or supplement. Each of NPS, Enzon
and Holdco shall cooperate and provide the others (and their counsel) with a
reasonable opportunity to review and comment on any amendment or supplement to
the Proxy Statement/Prospectus and the Registration Statement prior to filing
such with the SEC, and will provide each other with a copy of all such filings
made with the SEC. Each of NPS and Enzon shall cause the Proxy
Statement/Prospectus to be mailed to its respective stockholders at the earliest
practicable time after the Registration Statement is declared effective by the
SEC. Holdco shall also use commercially reasonable efforts to take any action
required to be taken by it under any applicable state and provincial securities
laws in connection with the issuance of Holdco Common Stock in the Mergers and
the conversion of NPS Options and Enzon Options into options to acquire Holdco
Common Stock, and NPS shall furnish any information concerning NPS and the
holders of NPS Common Stock and NPS Options as may be reasonably requested in
connection with any such action.
5.2 Meetings of Stockholders; Board Recommendation.
(a) Meeting of Stockholders. Promptly after the Registration Statement
is declared effective under the Securities Act, each of NPS and Enzon will take
all action necessary in accordance with the DGCL and its respective Certificate
of Incorporation and Bylaws to call, hold and convene a meeting of its
respective stockholders to consider the adoption of this Agreement (each, a
"Stockholders' Meeting") to be held as promptly as practicable after the
declaration of effectiveness of the Registration Statement. Each of NPS and
Enzon will hold their respective Stockholders' Meetings on the same date and at
the same time. Subject to the terms of Section 5.3(d) hereof, each of NPS and
Enzon will use commercially reasonable efforts to solicit from its respective
stockholders proxies in favor of the adoption of this Agreement, and will take
all other action necessary or advisable to secure the vote or consent of their
respective stockholders required by the rules of the NASD or the NASDAQ or the
DGCL to obtain such approvals. Notwithstanding anything to the contrary
contained in this Agreement, NPS or Enzon, as the case may be, may adjourn or
postpone its Stockholders' Meeting to the extent necessary to ensure that any
necessary supplement or amendment to the Proxy Statement/Prospectus is provided
to its respective stockholders in advance of a vote on the Mergers and this
Agreement or, if as of the time for which the Stockholders' Meeting is
originally scheduled (as set forth in the Proxy Statement/Prospectus) there are
insufficient shares of NPS Common Stock or Enzon Common Stock (as the case may
be) represented (either in person or by proxy) to constitute a quorum necessary
to conduct the business of such Stockholders' Meeting. Each of NPS and Enzon
shall ensure that its respective Stockholders' Meeting is called, noticed,
convened, held and conducted, and that all proxies solicited by it in connection
with its Stockholders' Meeting are solicited in compliance with the DGCL, its
Certificate of Incorporation and Bylaws, the rules of the NASD and NASDAQ and
all other applicable Legal Requirements.
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(b) Board Recommendation. Except to the extent expressly permitted by
the terms of Section 5.3(d) hereof: (i) the NPS Board shall recommend that the
stockholders of NPS vote in favor of adoption of this Agreement at its
Stockholders' Meeting, (ii) the Enzon Board shall recommend that the
stockholders of Enzon vote in favor of adoption of this Agreement at its
Stockholders' Meeting, (iii) the Proxy Statement/Prospectus shall include a
statement to the effect that the NPS Board has recommended that the stockholders
of NPS vote in favor of adoption of this A greement at its Stockholders'
Meeting, (iv) the Proxy Statement/Prospectus shall include a statement to the
effect that the Enzon Board has recommended that the stockholders of Enzon vote
in favor of adoption of this Agreement at its Stockholders' Meeting, and (v)
neither the NPS Board nor the Enzon Board (nor any committee thereof) shall
withhold, withdraw, amend or modify, or propose or resolve to withhold,
withdraw, amend or modify, in a manner adverse to the other party, such
respective recommendations.
5.3 Acquisition Proposals.
(a) No Solicitation. Except as provided in Section 5.3(c), each of NPS
and Enzon agrees that neither it nor any of its Subsidiaries nor any of the
officers and directors of it or its Subsidiaries shall, and that it shall use
commercially reasonable efforts to cause its and its Subsidiaries' Employees,
agents and representatives (including any investment banker, attorney or
accountant retained by it or any of its Subsidiaries) not to (and shall not
authorize any of them to) directly or indirectly: (i) solicit, initiate,
encourage, knowingly facilitate or induce any inquiry with respect to, or the
making, submission or announcement of, any Acquisition Proposal with respect to
itself, (ii) furnish to any Person any nonpublic information or take any other
action to facilitate any inquiries or the making of any proposal that
constitutes or could reasonably be expected to lead to, any Acquisition Proposal
with respect to itself, (iii) participate or engage in discussions or
negotiations with any Person with respect to any Acquisition Proposal with
respect to itself, or the making of any proposal that constitutes or could
reasonably be expected to lead to any Acquisition Proposal with respect to
itself, (iv) approve, endorse or recommend any Acquisition Proposal with respect
to itself (except to the extent specifically permitted pursuant to the terms of
Section 5.3(d) hereof), or (v) enter into any letter of intent, agreement in
principal or similar agreement or any Contract contemplating or otherwise
relating to any Acquisition Proposal or transaction contemplated thereby with
respect to itself (other than a confidentiality agreement referred to in Section
5.3(c)(i)). NPS and Enzon, as the case may be, and their respective Subsidiaries
will each immediately cease any and all existing activities, discussions or
negotiations with any third parties conducted heretofore with respect to any
Acquisition Proposal with respect to itself or any transaction that could
reasonably be expected to lead to an Acquisition Proposal with respect to
itself.
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(b) Notification of Unsolicited Acquisition Proposals.
(i) As promptly as practicable after receipt of any
Acquisition Proposal or any request for nonpublic information or
inquiry which it reasonably believes could lead to an Acquisition
Proposal, and in any event within one (1) business day after the
recipient has knowledge that it has received such Acquisition Proposal,
request for information or inquiry, NPS or Enzon, as the case may be,
shall provide the other party hereto with oral and written notice of
the terms and conditions of such Acquisition Proposal, request or
inquiry, and the identity of the Person or group making any such
Acquisition Proposal, request or inquiry and a copy of all written
materials provided in connection with such Acquisition Proposal,
request or inquiry. The recipient of the Acquisition Proposal, request
or inquiry shall keep the other party informed of the status of any
such Acquisition Proposal, request or inquiry (including any material
modifications or amendments thereto, or any proposed modifications or
amendments thereto), and shall promptly provide to the other party a
copy of all written materials subsequently provided in connection with
such Acquisition Proposal, request or inquiry.
(ii) NPS or Enzon, as the case may be, shall provide the other
party hereto with forty-eight (48) hours prior notice (or such lesser
prior notice as is provided to the members of its board of directors)
of any meeting of the its board of directors at which its board of
directors is reasonably expected to consider any Acquisition Proposal.
(c) Superior Offers. Notwithstanding anything to the contrary contained
in Section 5.3(a) hereof, in the event that NPS or Enzon, as the case may be,
receives an unsolicited, bona fide written Acquisition Proposal with respect to
itself from a third party that its board of directors has in good faith
concluded (after consultation with its outside legal counsel and its financial
advisor), is, or is reasonably likely to result in, a Superior Offer, it may
then take the following actions (but only if and to the extent that its board of
directors concludes in good faith, after consultation with its outside legal
counsel, that the failure to do so is reasonably likely to result in a breach of
its fiduciary obligations under applicable Legal Requirements):
(i) furnish nonpublic information to the third party making
such Acquisition Proposal, provided that (A) (1) concurrently with
furnishing any such nonpublic information to such third party, it gives
the other party hereto written notice of its intention to furnish
nonpublic information and (2) it receives from the third party an
executed confidentiality agreement, the terms of which are at least as
restrictive as the terms contained in the Confidentiality Agreement and
(B) contemporaneously with furnishing any such nonpublic information to
such third party, it furnishes such nonpublic information to the other
party hereto (to the extent such nonpublic information has not been
previously so furnished); and
(ii) engage in discussions or negotiations with the third
party with respect to the Acquisition Proposal, provided that
concurrently with holding or entering into discussions or negotiations
with such third party, it gives the other party hereto written notice
of its intention to hold or enter into discussions or negotiations with
such third party.
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(d) Changes of Recommendation. Except as set forth in this Section
5.3(d), neither the NPS Board nor the Enzon Board (as the case may be) shall
withhold, withdraw, amend or modify its recommendation in favor of the
transactions contemplated hereby or approve or recommend an Acquisition
Proposal. Notwithstanding the foregoing, (i) if the NPS Board or the Enzon Board
(as the case may be) has concluded in good faith, after consultation with its
outside legal counsel, that the failure of the board of directors to effect a
Change of Recommendation (as hereinafter defined) is reasonably likely to result
in a breach of its fiduciary obligations to its stockholders under applicable
Legal Requirements, then the NPS Board or the Enzon Board (as the case may be)
may withhold, withdraw, amend or modify its recommendation in favor of the
transaction contemplated hereby, and (ii) with respect to a Superior Offer, may
approve or recommend such Superior Offer if all of the following conditions in
clauses (1) through (5) are met:
(1) a Superior Offer with respect to it has been made and has
not been withdrawn;
(2) its Stockholders' Meeting has not occurred;
(3) it shall have (A) provided to the other party hereto
written notice which shall state expressly (1) that it has received a
Superior Offer, (2) the terms and conditions of the Superior Offer and
the identity of the Person or group making the Superior Offer, and (3)
that it intends to effect a Change of Recommendation and the manner in
which it intends to do so, (B) provided to the other party hereto a
copy of all written materials delivered to the Person or group making
the Superior Offer in connection with such Superior Offer, and (C) made
available to the other party hereto all materials and information made
available to the Person or group making the Superior Offer in
connection with such Superior Offer;
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(4) its board of directors has concluded in good faith, after
consultation with its outside legal counsel, that, in light of such
Superior Offer, the failure of the board of directors to take such
action is reasonably likely to result in a breach of its fiduciary
obligations to its stockholders under applicable Legal Requirements,
and
(5) it shall not have breached any of the provisions set forth
in this Section 5.3 in connection with such Superior Offer.
Any of the actions set forth in Section 5.3(d)(i) and Section 5.3(d)(ii),
whether by a board of directors, or a committee thereof, is referred to herein
as a "Change of Recommendation."
(e) Continuing Obligation to Call, Hold and Convene Stockholders'
Meeting; No Other Vote. Notwithstanding anything to the contrary contained in
this Agreement, the obligation of NPS or Enzon, as the case may be, to call,
give notice of, convene and hold its Stockholders' Meeting shall not be limited
or otherwise affected by the commencement, disclosure, announcement or
submission to it of any Acquisition Proposal with respect to it, or by any
Change of Recommendation. Neither NPS nor Enzon shall submit to the vote of its
respective stockholders any Acquisition Proposal, or propose to do so.
(f) Compliance with Tender Offer Rules. Nothing contained in this
Agreement shall prohibit either party or its respective board of directors from
taking and disclosing to its stockholders a position contemplated by Rules 14d-9
and 14e-2(a) promulgated under the Exchange Act; provided that the content of
any such disclosure thereunder shall be governed by the terms of this Agreement.
Without limiting the foregoing proviso, neither party shall effect a Change of
Recommendation unless specifically permitted pursuant to the terms of Section
5.3(d) hereof.
5.4 Confidentiality; Access to Information; No Modification of
Representations, Warranties or Covenants.
(a) Confidentiality. The parties acknowledge that Enzon and NPS have
previously executed a letter agreement effective December 18, 2002 (the
"Confidentiality Agreement"), which Confidentiality Agreement will continue in
full force and effect in accordance with its terms and each of NPS and Enzon
will hold, and will cause its respective directors, officers, Employees, agents
and advisors (including attorneys, accountants, consultants, bankers and
financial advisors) to hold, any Evaluation Material (as defined in the
Confidentiality Agreement) confidential in accordance with the terms of the
Confidentiality Agreement.
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(b) Access to Information. Each of NPS and Enzon will afford the other
and the other's accountants, counsel and other representatives reasonable access
during normal business hours to its properties, books, records and personnel
during the period prior to the Effective Time to obtain all information
concerning its business, including the status of product development efforts,
properties, results of operations and personnel, as such other parties may
reasonably request, and, during such period, upon request by the other parties
hereto, each of NPS and Enzon shall, and shall cause each of their respective
Subsidiaries to, furnish promptly to the other parties a copy of any report,
schedule, registration statement and other document filed by it during such
period pursuant to the requirements of federal or state securities laws;
provided, however, that any party may restrict the foregoing access to the
extent that any Legal Requirement applicable to such party requires such party
or its Subsidiaries to restrict or prohibit access to any such properties or
information. In addition to the foregoing, (i) NPS shall afford Enzon the right
to conduct (at Enzon's cost and expense) an environmental audit or assessment
(performed by an environmental consulting firm that maintains liability
insurance) of any currently owned, occupied, or leased NPS Business Facility
that may include soil, groundwater, or Hazardous Materials sampling, and (ii)
Enzon shall afford NPS the right to conduct (at NPS's cost and expense) an
environmental audit or assessment (performed by an environmental consulting firm
that maintains liability insurance) of any currently owned, occupied, or leased
Enzon Business Facility that may include soil, groundwater, or Hazardous
Materials sampling.
(c) No Modification of Representations and Warranties or Covenants. No
information or knowledge obtained in any investigation or notification pursuant
to this Section 5.4, Section 5.6 hereof or Section 5.7 hereof shall affect or be
deemed to modify any representation or warranty contained herein, the covenants
or agreements of the parties hereto or the conditions to the obligations of the
parties hereto under this Agreement.
5.5 Public Disclosure. Without limiting any other provision of this
Agreement, NPS and Enzon shall consult with each other before issuing, and
provide each other the opportunity to review, comment upon and concur with, and
use commercially reasonable efforts to agree on any press release or public
statement with respect to this Agreement and the transactions contemplated
hereby, including the Mergers, and any Acquisition Proposal and will not issue
any such press release or make any such public statement prior to such
consultation and (to the extent practicable) agreement, except as may be
required by applicable Legal Requirements or any listing agreement with the
NASDAQ or any other applicable national or regional securities exchange. The
parties have agreed to the text of the joint press release announcing the
signing of this Agreement.
5.6 Regulatory Filings; Reasonable Efforts.
(a) Regulatory Filings. Each of NPS, Enzon and Holdco shall coordinate
and cooperate with each other and shall each use commercially reasonable efforts
to comply with, and shall each refrain from taking any action that would impede
compliance with, all Legal Requirements, and as promptly as practicable after
the date hereof, each of NPS, Enzon and Holdco shall make all filings, notices,
petitions, statements, registrations, submissions of information, application or
submission of other documents required by any Governmental Authority in
connection with the Mergers and the transactions contemplated hereby, including,
without limitation: (i) Notification and Report Forms with the FTC and the DOJ
as required by the HSR Act, (ii) any other filing necessary to obtain any
Necessary Consent, (iii) any other comparable pre-merger notification forms
required by the merger notification or control laws of Canada or any other
applicable jurisdiction, as agreed by the parties hereto, and (iv) any filings
required under the Securities Act, the Exchange Act, any applicable state or
securities or "blue sky" laws and the securities laws of Canada or any province
thereof or any foreign country, or any other Legal Requirement relating to the
Merger. Each of NPS and Enzon will cause all documents that it is responsible
for filing with any Governmental Authority under this Section 5.6(a) to comply
in all material respects with all applicable Legal Requirements.
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(b) Exchange of Information. Each of NPS, Enzon and Holdco shall
promptly supply the other with any information, which may be required in order
to effectuate any filings or application pursuant to Section 5.6(a) hereof.
Except where prohibited by applicable Legal Requirements, and subject to the
Confidentiality Agreement, each of Enzon and NPS shall consult with the other
prior to taking a position with respect to any such filing, shall permit the
other to review and discuss in advance, and consider in good faith the views of
the other in connection with any analyses, appearances, presentations,
memoranda, briefs, white papers, arguments, opinions and proposals before making
or submitting any of the foregoing to any Governmental Authority by or on behalf
of any party hereto in connection with any investigations or proceedings in
connection with this Agreement or the transactions contemplated hereby
(including under any antitrust or fair trade Legal Requirement), coordinate with
the other in preparing and exchanging such information and promptly provide the
other (and its counsel) with copies of all filings, presentations or submissions
(and a summary of any oral presentations) made by such party with any
Governmental Authority in connection with this Agreement or the transactions
contemplated hereby, provided that with respect to any such filing, presentation
or submission, each of NPS and Enzon need not supply the other (or its counsel)
with copies (or in case of oral presentations, a summary) to the extent that any
Legal Requirements applicable to such party requires such party or its
Subsidiaries to restrict or prohibit access to any such properties or
information.
(c) Notification. Each of NPS, Enzon and Holdco shall notify the other
parties hereto promptly upon the receipt of: (i) any comments from any officials
of any Governmental Authority in connection with any filings made pursuant
hereto and (ii) any request by any officials of any Governmental Authority for
amendments or supplements to any filings made pursuant to, or information
provided to comply in all material respects with, any Legal Requirements.
Whenever any event occurs that is required to be set forth in an amendment or
supplement to any filing made pursuant to Section 5.6(a) hereof, NPS, Enzon and
Holdco, as the case may be, shall promptly inform the other parties hereto of
such occurrence and cooperate in filing with the applicable Governmental
Authority such amendment or supplement.
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(d) Reasonable Efforts. Subject to the terms of Section 5.2 and Section
5.3 hereof and upon the terms and subject to the conditions set forth herein,
each of the parties agrees to use commercially reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to assist
and cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Mergers and the other transactions contemplated by this
Agreement, including using commercially reasonable efforts to accomplish the
following: (i) the taking of all reasonable acts necessary to cause the
conditions precedent set forth in Article VI hereof to be satisfied, (ii) the
obtaining of all necessary actions or nonactions, waivers, consents, approvals,
orders and authorizations from Governmental Entities and the making of all
necessary registrations, declarations and filings (including registrations,
declarations and filings with Governmental Entities, if any) and the taking of
all reasonable steps as may be necessary to avoid any suit, claim, action,
investigation or proceeding by any Governmental Authority, (iii) the obtaining
of all necessary consents, approvals or waivers from third parties, including
all Necessary Consents, (iv) the defending of any suits, claims, actions,
investigations or proceedings, whether judicial or administrative, challenging
this Agreement or the consummation of the transactions contemplated hereby,
including seeking to have any stay or temporary restraining order entered by any
court or other Governmental Authority vacated or reversed, and (v) the execution
or delivery of any additional instruments necessary to consummate the
transactions contemplated by, and to fully carry out the purposes of, this
Agreement. In connection with and without limiting the foregoing, Enzon and the
Enzon Board, and NPS and the NPS Board, shall (as the case may be), if any
takeover statute or similar Legal Requirement is or becomes applicable to the
Mergers, this Agreement or any of the transactions contemplated by this
Agreement, use commercially reasonable efforts to ensure that the Mergers and
the other transactions contemplated by this Agreement may be consummated as
promptly as practicable on the terms contemplated by this Agreement and
otherwise to minimize the effect of such Legal Requirement on the Mergers, this
Agreement and the transactions contemplated hereby.
(e) Limitation on Divestiture. Notwithstanding anything in this
Agreement to the contrary, nothing in this Agreement shall require, or be deemed
to require, (i) NPS or Enzon to agree to or effect any divestiture or hold
separate any business or assets or (ii) Enzon or NPS to agree to or effect any
divestiture, hold separate any business or take any other action that is not
conditional on the consummation of the Mergers. Neither Enzon nor NPS shall take
or agree to take any action identified in clause (i) or (ii) of the immediately
preceding sentence without the prior written consent of the other party.
5.7 Notification of Certain Matters.
(a) By Enzon. Enzon shall give prompt notice to NPS of any
representation or warranty made by it contained in this Agreement becoming
untrue or inaccurate, or any failure of Enzon to comply with or satisfy in any
material respect any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement, in each case, such that the conditions set
forth in Section 6.3(a) or Section 6.3(b) hereof would not be satisfied.
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(b) By NPS. NPS shall give prompt notice to Enzon of any representation
or warranty made by it contained in this Agreement becoming untrue or
inaccurate, or any failure of NPS to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or satisfied by
it under this Agreement, in each case, such that the conditions set forth in
Section 6.2(a) or Section 6.2(b) hereof would not be satisfied.
5.8 Third-Party Consents. As soon as practicable following the date
hereof, NPS and Enzon will each use commercially reasonable efforts to obtain
any material consents, waivers and approvals under any of its or its
Subsidiaries' respective Contracts required to be obtained in connection with
the consummation of the transactions contemplated hereby.
5.9 Employee Options and Purchase Rights.
(a) NPS Options; NPS Purchase Rights.
(i) At the Effective Time, each then outstanding NPS Option,
whether or not exercisable at the Effective Time and regardless of the
respective exercise (or base) prices thereof, shall be assumed by
Holdco. Each NPS Option so assumed by Holdco under this Agreement will
continue to have, and be subject to, the same terms and conditions set
forth in the applicable NPS Option (including any applicable stock
option agreement or other document evidencing such NPS Option)
immediately prior to the Effective Time (including any repurchase
rights or vesting provisions), except that (i) each NPS Option will be
exercisable (or will become exercisable in accordance with its terms)
for that number of whole shares of Holdco Common Stock equal to the
product of the number of shares of NPS Common Stock that were issuable
upon exercise of such NPS Option immediately prior to the Effective
Time multiplied by the NPS Exchange Ratio, rounded down to the nearest
whole number of shares of Holdco Common Stock and (ii) the per share
exercise price for the shares of Holdco Common Stock issuable upon
exercise of such assumed NPS Option will be equal to the quotient
determined by dividing the exercise price per share of NPS Common Stock
at which such NPS Option was exercisable immediately prior to the
Effective Time by the NPS Exchange Ratio, rounded up to the nearest
whole cent. Each assumed NPS Option shall be vested immediately
following the Effective Time as to the same percentage of the total
number of shares subject thereto as it was vested as to immediately
prior to the Effective Time, except to the extent such NPS Option by
its terms in effect prior to the date hereof provides for acceleration
of vesting. As soon as reasonably practicable following the Effective
Time, Holdco shall issue to each Person who holds an assumed NPS Option
a document evidencing the foregoing assumption of such NPS Option by
Holdco. The conversion of NPS Options provided for in this Section
5.9(a)(i), with respect to any NPS Options which are intended to be
"incentive stock options" (as defined in Section 422 of the Code) shall
be effected in a manner consistent with Section 424(a) of the Code.
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(ii) At the Effective Time, Holdco shall assume the NPS ESPP
and each outstanding purchase right held by NPS Employees who are then
participating in the NPS ESPP (the "NPS Purchase Plan Options"). Each
NPS Purchase Plan Option so assumed by Holdco shall continue to have,
and be subject to the same terms and conditions set forth in the NPS
ESPP, except that the shares of NPS Common Stock reserved for issuance
under the NPS ESPP shall be converted into shares of Holdco Common
Stock based on the NPS Exchange Ratio and the fair market value per
share of NPS Common Stock at the beginning of each offering period in
effect as of the Effective Time shall be equal to the fair market value
per share of the NPS Common Stock at the beginning of each such
offering period divided by the NPS Exchange Ratio, rounded up to the
nearest whole cent. NPS, Enzon and Holdco shall take all action that
may be necessary (under the NPS ESPP and otherwise) to effectuate the
provisions of this Section 5.9(a)(ii) and to ensure that, from and
after the Effective Time, holders of NPS Purchase Plan Options and
Employees of NPS participating in the NPS ESPP after the Effective Time
have no rights with respect to the NPS ESPP that are inconsistent with
this Section 5.9(a)(ii). To the extent that Holdco maintains an
Employee Stock Purchase Plan following the Effective Time (including
the NPS ESPP), Enzon employees will be able to participate in such plan
to the same extent as similarly situated NPS Employees.
(b) Enzon Options. Except as provided below, each outstanding Enzon
Option shall accelerate and become fully vested in accordance with the terms of
the applicable Enzon Option Plan, and to the extent not exercised prior to the
Effective Time shall terminate and cease to represent a right to acquire shares
of Enzon Common Stock. Enzon shall provide a notice to the optionees no later
than fifteen (15) days prior to the Effective Time informing them of such
acceleration and that any such Enzon Options not exercised prior to the
Effective Time shall terminate as of the Effective Time. Notwithstanding the
foregoing, the Enzon Options held by the individuals listed on Section 5.9(b) of
the Enzon Disclosure Letter and outstanding as of the Effective Time shall cease
to represent a right to acquire shares of Enzon Common Stock and shall be
assumed by Holdco. Each Enzon Option so assumed by Holdco under this Agreement
will continue to have, and be subject to, the same terms and conditions set
forth in the applicable Enzon Option (including any applicable stock option
agreement or other document evidencing such Enzon Option) immediately prior to
the Effective Time (including any repurchase rights or vesting provisions),
except that (a) each Enzon Option will be exercisable (or will become
exercisable in accordance with its terms) for that number of whole shares of
Holdco Common Stock equal to the product of the number of shares of Enzon Common
Stock that were issuable upon exercise of such Enzon Option immediately prior to
the Effective Time multiplied by the Enzon Exchange Ratio, rounded down to the
nearest whole number of shares of Holdco Common Stock, and (b) the per share
exercise price for the shares of Holdco Common Stock issuable upon exercise of
such assumed Enzon Option will be equal to the quotient determined by dividing
the exercise price per share of Enzon Common Stock at which such Enzon Option
was exercisable immediately prior to the Effective Time by the Enzon Exchange
Ratio, rounded up to the nearest whole cent. Each assumed Enzon Option shall be
vested immediately following the Effective Time as to the same percentage of the
total number of shares subject thereto as it was vested as to immediately prior
to the Effective Time, except to the extent such Enzon Option by its terms in
effect prior to the date hereof provides for acceleration of vesting. As soon as
reasonably practicable following the Effective Time, Holdco shall issue to each
Person who holds an assumed Enzon Option a document evidencing the foregoing
conversion of such Enzon Options to options to acquire Holdco shares. The
conversion of Enzon Options provided for in this Section 5.9(b), with respect to
any Enzon Options which are intended to be "incentive stock options" (as defined
in Section 422 of the Code) shall be effected in a manner consistent with
Section 424(a) of the Code.
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(c) Holdco Arrangements.
(i) As of the Effective Time, Holdco shall adopt and implement
a stock option plan or plans pursuant to which Holdco shall grant
options to acquire shares of Holdco Common Stock (the "Holdco
Options"). The aggregate amount of Holdco Options to be available for
grant following the Effective Time pursuant to such Holdco option plan
or plans will be determined by the Holdco Board following the Effective
Time, provided that the aggregate number of Holdco Options and the
methodology for allocation of such options shall be determined in
accordance with Section 5.9(c) of the Enzon Disclosure Letter.
(ii) Holdco shall, effective as of the Effective Time, (A)
assume the NPS Option Plans and (B) implement the stock option plan(s)
in accordance with Section 5.9(c)(i) (collectively, the "Holdco
Plans"). Holdco shall also reserve a sufficient number of shares of
Holdco Common Stock for issuance pursuant to the exercise of all NPS
Options in accordance with Section 5.9(a)(i) hereof and the exercise of
Holdco Options granted in accordance with Section 5.9(c)(i) hereof.
(iii) As soon as practicable after the Effective Time, Holdco
shall cause the shares of Holdco Common Stock issuable upon exercise of
all NPS Options assumed by Holdco pursuant to Section 5.9(a)(i) hereof
and shares issuable upon the exercise of Holdco Options pursuant to
Section 5.9(c)(i) and the shares of Holdco Common Stock reserved for
issuance pursuant to future grants or awards under the assumed NPS
Option Plans and Holdco Option Plans to be registered under the
Securities Act on Form S-8 (the "Form S-8") promulgated by the SEC (to
the extent available therefor), and shall use its commercially
reasonable efforts to maintain the effectiveness of the Form S-8 for so
long as any such assumed NPS Options or NPS Option Plans shall remain
outstanding or in effect, as the case may be.
5.10 Employee Matters. Following the Effective Time, Holdco shall use
commercially reasonable efforts to give each Continuing Employee full credit for
prior service with NPS or its Subsidiaries and Enzon or its Subsidiaries for
purposes of (i) eligibility and vesting under any Holdco Plans, and (ii)
determination of benefits levels under any vacation or severance Holdco Plans,
in each case except where such crediting would (A) result in a duplication of
benefits or (B) otherwise cause Holdco or any Holdco Plans or trust relating
thereto to accrue or pay for benefits that relate to any time period prior to
the Continuing Employee's participation in the Holdco Plans.
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5.11 Indemnification.
(a) Indemnification. From and after the Effective Time, Holdco and the
Surviving Corporations shall jointly and severally fulfill and honor in all
respects the obligations of each of NPS and Enzon pursuant to any
indemnification agreements between NPS, Enzon and their respective current and
former directors and officers (the "Indemnified Parties"), subject to applicable
Legal Requirements. The Certificate of Incorporation and Bylaws of Holdco and
each of the Surviving Corporations will contain provisions with respect to
exculpation and indemnification that are at least as favorable to the
Indemnified Parties as those contained in the Certificate of Incorporation and
Bylaws of NPS or Enzon, as applicable, as in effect on the date hereof, which
provisions will not be amended, repealed or otherwise modified for a period of
six (6) years from the Effective Time in any manner that would adversely affect
the rights thereunder of individuals who, immediately prior to the Effective
Time, were directors, officers, employees or agents of NPS or Enzon, as
applicable, unless such modification is required by applicable Legal
Requirements.
(b) Insurance. For a period of six (6) years after the Effective Time,
Holdco shall cause to be maintained directors' and officers' liability insurance
covering those persons who are currently covered by directors' and officers'
liability insurance policies of NPS and Enzon in effect as of the date hereof
(the "Insured Parties") on terms comparable to those applicable to the current
directors and officers of NPS and Enzon for a period of six (6) years.
(c) Third-Party Beneficiaries. The terms of this Section 5.11 are
intended to be for the benefit of, and shall be enforceable by the Indemnified
Parties and the Insured Parties and their heirs and personal representatives and
shall be binding on the Surviving Corporation and its successors and assigns. In
the event that Holdco or either of the Surviving Corporations (or any of the
respective successors or assigns) (i) consolidates with or merges into any other
Person and shall not be the continuing or surviving corporation or entity in
such consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any Person, then, and in each case, proper provision
shall be made so that the successor or assign of Holdco or either of the
Surviving Corporations, as the case may be, honors the obligations set forth
with respect to Holdco and the Surviving Corporations, as the case may be, in
this Section 5.11.
5.12 Governance Matters.
(a) Board of Directors.
(i) The Board of Directors of Holdco will take all actions
within its power to cause the Board of Directors of Holdco, effective
upon the Effective Time and continuing through the Transition Period
(as defined in the Holdco Bylaws), to consist of ten (10) directors,
six (6) of whom shall have served on the Board of Directors of NPS
immediately prior to the Effective Time (or, if fewer than six (6) of
the current members of the Board of Directors of NPS are available or
willing to serve as a director of Holdco after the Effective Time, such
replacement directors as may be nominated by the remaining directors of
NPS) (the "NPS Designees"), and four (4) of whom shall have served on
the Board of Directors of Enzon immediately prior to the Effective Time
(or, if fewer than four (4) of the current members of the Board of
Directors of Enzon are available or willing to serve as a director of
Holdco after the Effective Time, such replacement directors as may be
nominated by the remaining directors of Enzon) (the "Enzon Designees").
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(ii) The NPS Designees shall be the "Class A Representatives"
(as defined in the Holdco Bylaws) and the Enzon Designees shall be the
"Class B Representatives" (as defined in the Holdco Bylaws), in each
case for purposes of the Holdco Bylaws and the Holdco Certificate of
Incorporation. The Board of Directors of Holdco will take all actions
within its power to cause the NPS Designees and the Enzon Designees to
be nominated for election as the Class A Representatives and the Class
B Representatives, respectively, of the Board of Directors of Holdco at
any annual or special meeting of stockholders held during the
Transition Period (as defined in the Holdco Bylaws) at which directors
of Holdco are to be elected. The terms of this provision shall survive
the Effective Time.
(b) Board Committees and Other Governance Matters. The Board of
Directors of Holdco will take all actions within its power to cause the Board of
Directors of Holdco, effective upon the Effective Time, to create an Audit
Committee, a Compensation Committee and a Nominating/Governance Committee.
During the Transition Period (as defined in the Holdco Bylaws): (i) each
committee of the Holdco Board of Directors shall consist of three (3) persons,
two (2) of whom shall be Class A Representatives and one (1) of whom shall be a
Class B Representative, (ii) there shall be no increase in the number of
executive officers of Holdco as set forth in Section 5.12(c), and (iii) no
additional committees of the Board of Directors of Holdco may be created other
than as specified in this Section 5.12(b). Any changes or modifications to the
covenants set forth in clauses (i) through (iii) of the preceding sentence
during the Transition Period shall only be made with the prior approval of the
Holdco Board by the affirmative vote of 80% or more of the Entire Board (as
defined in the Holdco Bylaws). The current Chief Executive Officer of NPS and
the current Chief Executive Officer of Enzon shall recommend to the Holdco Board
of Directors that a Class B Representative serve as Chairman of the Compensation
Committee and that a Class A Representative serves as Chairman of each of the
Audit Committee and Nominating/Governance Committee. The terms of this provision
shall survive the Effective Time.
(c) Executive Officers. The Board of Directors of Holdco will take all
actions within its power to cause, effective upon the Effective Time, the
individuals listed on Schedule 5.12(c) hereto to be named officers of Holdco
with the titles indicated opposite their respective names as set forth on
Schedule 5.12(c) hereto. The Board of Directors of Holdco will appoint or elect
an additional four (4) officers of Holdco promptly following the date of this
Agreement, and in any case prior to the filing of the Proxy
Statement/Prospectus.
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5.13 NASDAQ Listings. Prior to the Effective Time, NPS and Enzon shall
cause Holdco to authorize for listing on NASDAQ the shares of Holdco Common
Stock issuable, and those required to be reserved for issuance, in connection
with the Mergers, subject to official notice of issuance.
5.14 Affiliate Agreements.
(a) Enzon Affiliates. Enzon shall update Schedule 2.13 as necessary to
reflect changes from the date hereof. Enzon shall use commercially reasonable
efforts to cause each Person identified on Schedule 2.13 who has not previously
delivered an Affiliate Agreement (as hereinafter defined) to Holdco to deliver
to Holdco not less than thirty (30) calendar days prior to the Effective Time, a
written agreement substantially in the form attached as Exhibit D hereto (each,
an "Affiliate Agreement").
(b) NPS Affiliates. NPS shall update Schedule 3.13 as necessary to
reflect changes from the date hereof. NPS shall use commercially reasonable
efforts to cause each Person identified on Schedule 3.13 who has not previously
delivered an Affiliate Agreement to Holdco to deliver to Holdco not less than
thirty (30) calendar days prior to the Effective Time, an Affiliate Agreement.
5.15 Treatment as Reorganization. None of NPS, Enzon or Holdco shall,
and they shall not permit any of their Subsidiaries to, take any action
(including any action otherwise permitted by Article IV) that would reasonably
be expected to cause the Mergers to fail to qualify as reorganizations under
Section 368 of the Code.
5.16 Rights Plans.
(a) Enzon Rights Plan. The Enzon Board shall take all action to the
extent necessary (including amending the Enzon Rights Agreement) in order to
render the Enzon Rights inapplicable to the Enzon Merger, the NPS Merger, the
Enzon Voting Agreements and the other transactions contemplated by this
Agreement. From the date of this Agreement until the earlier to occur of the
termination of this Agreement pursuant to Article VII hereof or the Effective
Time, the Enzon Board shall not (except in connection with the foregoing
sentence), without the prior written consent of NPS, (i) amend or modify the
Enzon Rights Agreement or (ii) take any action with respect to, or make any
determination under, the Enzon Rights Agreement, including a redemption of the
Enzon Rights, in each case in order to facilitate any Acquisition Proposal with
respect to Enzon.
(b) NPS Rights Plan. The NPS Board shall take all action to the extent necessary
(including amending the NPS Rights Agreement) in order to render the NPS Rights
inapplicable to the NPS Merger, the Enzon Merger, the NPS Voting Agreements and
the other transactions contemplated by this Agreement. From the date of this
Agreement until the earlier to occur of the termination of this Agreement
pursuant to Article VII hereof or the Effective Time, the NPS Board shall not
(except in connection with the foregoing sentence), without the prior written
consent of NPS, (i) amend or modify the NPS Rights Agreement or (ii) take any
action with respect to, or make any determination under, the NPS Rights
Agreement, including a redemption of the NPS Rights, in each case in order to
facilitate any Acquisition Proposal with respect to NPS.
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(c) Holdco Rights Plan. Subject to the fiduciary duties of the Holdco
Board under applicable law, prior to the Effective Time, the Holdco Board shall
take all such action as is necessary to declare, as of the Effective Time, a
dividend of one (1) preferred share purchase right (a "Holdco Right") for each
outstanding share of Holdco Common Stock. The description and terms of the
Holdco Rights shall be set forth in a rights agreement (the "Holdco Rights
Agreement") to be entered into between Holdco and a rights agent selected by the
Holdco Board. The terms and provisions of the Holdco Rights Agreement shall be
in the form agreed to by the Holdco Board.
(d) Executive Chairman Employment Agreement. As soon as practicable
following the date hereof, Holdco and the current Chief Executive Officer of NPS
shall enter into an employment agreement in accordance with the term sheet
attached hereto as Exhibit B-1, which employment agreement shall be on terms and
conditions reasonably acceptable to NPS and Enzon. Such employment agreement
will become effective as of the Effective Time.
5.17 Section 16 Matters. Prior to the Effective Time, Enzon, NPS and
Holdco shall take all such steps as may be required to cause any dispositions of
Enzon Common Stock, NPS Common Stock (including derivative securities) and NPS
Options or acquisitions of Holdco Common Stock (including derivative securities)
and Holdco Options resulting from the transactions contemplated by Article I
hereof by each individual who is subject to the reporting requirements of
Section 16(a) of the Exchange Act with respect to Enzon and NPS to be exempt
under Rule 16b-3 promulgated under the Exchange Act.
5.18 Enzon Indebtedness. With respect to the 4 1/2% Convertible
Subordinated Notes due 2008 (the "Notes") of Enzon issued under the indenture
dated as of June 26, 2001 between Enzon and Wilmington Trust Company, as trustee
(the "Indenture"), the Surviving Corporation of the Enzon Merger and Holdco
shall execute and deliver a Supplemental Indenture pursuant to the terms of
Article 12 of the Indenture which shall provide that the Surviving Corporation
of the Enzon Merger shall assume Enzon's obligations under the Indenture and
which shall provide that, pursuant to Section 15.6 of the Indenture, the Notes
will be convertible into shares of Holdco Common Stock in accordance with the
procedures specified in the Indenture (the "Supplemental Indenture"). Enzon and
Holdco, as the case may be, will deliver all notices to the trustee and the
holders of the Notes and will take all other actions required by the Indenture
in connection with the execution, delivery and performance of the Supplemental
Indenture and the other transactions contemplated by this Section 5.18. Holdco
will assume all Enzon's obligations under the Registration Rights Agreement
dated June 26, 2001, between Enzon and Initial Purchasers (as identified
therein).
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5.19 Exchangeable Shares; Canadian Securities Laws.
(a) Prior to the Effective Time, NPS will cause (i) NPS Holdings
Company to purchase the outstanding Exchangeable Shares in accordance with the
terms of the redemption provisions of the Exchangeable Shares and the Redemption
Call Right as provided in the Articles of Arrangement of NPS Allelix Inc. and
(ii) NPS to cancel the Special Voting Share in connection with the preceding
clause.
(b) NPS and Enzon shall cause Holdco to take all commercially
reasonable action required to be taken by it to obtain such orders from
applicable securities regulatory authorities in Canada as may be necessary to
permit Holdco Common Stock issued pursuant to the transactions contemplated
hereby to residents of Canada to be traded through an exchange or a market
outside of Canada or to a person or company outside of Canada without complying
with the prospectus requirements of applicable Canadian securities laws and
shall furnish any such information concerning the holders of NPS Common Stock,
the Exchangeable Shares or NPS Options, in the case of NPS, and the holders of
Enzon Common Stock and Enzon Options, in the case of Enzon, as may reasonably be
requested in connection with any such action.
5.20 Redemption of Enzon Series A Preferred Stock. Prior to the
Effective Time, Enzon shall redeem for cash all of the issued and outstanding
shares of Enzon Series A Preferred Stock in accordance with the terms of Enzon's
Certificate of Incorporation such that no shares of Enzon Series A Preferred
Stock will be issued or outstanding at the Effective Time.
5.21 Conveyance Taxes. NPS, Enzon and Holdco shall cooperate in the
preparation, execution and filing of all returns, questionnaires, applications
or other documents regarding any real property transfer, sales, use, transfer,
value added, stock transfer or stamp taxes, any transfer, recording,
registration or other fees or any similar taxes which become payable in
connection with the transactions contemplated by this Agreement that are
required or permitted to be filed on or before the Effective Time. All such
taxes will be paid by the party bearing the legal responsibility for such
payment; provided, however, that, as between NPS and Enzon, Enzon shall pay on
behalf of those Persons holding Enzon Common Stock immediately prior to the
Effective Time any real estate transfer or similar Taxes payable by such Person
in connection with Mergers.
ARTICLE VI
CONDITIONS TO THE MERGERS
6.1 Conditions to the Obligations of Each Party to Effect the Mergers.
The respective obligations of NPS and Enzon to effect the NPS Merger and Enzon
Merger are subject to the satisfaction or waiver on or prior to the Closing Date
of the following conditions:
(a) Stockholder Approval. Each of the Requisite Enzon Stockholder
Approval and the Requisite NPS Stockholder Approval shall have been obtained.
(b) No Order. No Governmental Authority of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, executive order, decree, injunction or other order (whether
temporary, preliminary or permanent) which (i) is in effect and (ii) has the
effect of making the Mergers illegal or otherwise prohibiting consummation of
the Mergers.
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(c) Registration Statement Effective; Proxy Statement/Prospectus. The
SEC shall have declared the Registration Statement effective and no stop order
suspending the effectiveness of the Registration Statement or any part thereof
shall have been issued by the SEC and no proceeding for that purpose, and no
similar proceeding in respect of the Proxy Statement/Prospectus, shall have been
initiated or threatened in writing by the SEC.
(d) Approvals. All waiting periods (and any extension thereof) under
the HSR Act relating to the transactions contemplated hereby will have expired
or terminated early. All other material foreign antitrust approvals required to
be obtained prior to the Mergers in connection with the transactions
contemplated hereby shall have been obtained.
(e) No Governmental Restriction. There shall not be any pending or
overtly threatened suit, action or proceeding asserted by any Governmental
Authority (i) challenging or seeking to restrain or prohibit the consummation of
the Mergers or any of the other transactions contemplated by this Agreement, the
effect of which restraint or prohibition if obtained would cause the condition
set forth in Section 6.1(b) hereof to not be satisfied or (ii) seeking to
require, (A) NPS or Enzon to agree to or effect any divestiture or hold separate
any business or assets or (B) Enzon or NPS to agree to or effect any
divestiture, hold separate any business or take any other action that is not
conditional on the consummation of the Mergers.
(f) NASDAQ Listing. The shares of Holdco Common Stock to be issued in
the Mergers and the transactions contemplated hereby shall have been authorized
for quotation on NASDAQ, subject to official notice of issuance.
6.2 Additional Conditions to the Obligations of Enzon. The obligation
of Enzon to consummate and effect the Enzon Merger shall be subject to the
satisfaction at or prior to the Closing Date of each of the following
conditions, any of which may be waived, in writing, exclusively by Enzon:
(a) Representations and Warranties. The representations and warranties
of NPS contained in this Agreement shall be true and correct on the date of this
Agreement and as of the Closing Date with the same force and effect as if made
on the Closing Date except (i) in each case, or in the aggregate, as does not
constitute a Material Adverse Effect on NPS (except in the case of the
representation set forth in Section 3.5(a), which shall be true and correct in
all respects), (ii) for changes contemplated by this Agreement, and (iii) for
those representations and warranties which address matters only as of a
particular date (which representations and warranties shall have been true and
correct (subject to the qualifications as set forth in the preceding clause (i))
as of such particular date (it being understood that, for purposes of
determining the accuracy of such representations and warranties, any update of
or modification to the NPS Disclosure Letter made or purported to have been made
after the date of this Agreement shall be disregarded). Enzon shall have
received a certificate with respect to the foregoing signed on behalf of NPS,
with respect to the representations and warranties of NPS, by an authorized
senior executive officer and senior financial officer of NPS.
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(b) Agreements and Covenants. NPS 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 it on or prior to the Closing
Date, and Enzon shall have received a certificate with respect to the foregoing
signed on behalf of NPS, with respect to the covenants of NPS, by an authorized
senior executive officer and senior financial officer of NPS.
(c) Tax Opinion. Enzon shall have received a written opinion from its
tax counsel, Xxxxxx & Xxxxxxx LLP, in form and substance reasonably satisfactory
to it to the effect that the Enzon Merger will qualify as a reorganization
within the meaning of Section 368(a) of the Code. In rendering such opinion,
Xxxxxx & Whitney LLP may require and rely upon representations and covenants
including those contained in certificates of officers of Holdco, Enzon, NPS and
others.
6.3 Additional Conditions to the Obligations of NPS. The obligations of
NPS to consummate and effect the NPS Merger shall be subject to the satisfaction
at or prior to the Closing Date of each of the following conditions, any of
which may be waived, in writing, exclusively by NPS:
(a) Representations and Warranties. The representations and warranties
of Enzon contained in this Agreement shall be true and correct on the date of
this Agreement and as of the Closing Date with the same force and effect as if
made on the Closing Date except (i) in each case, or in the aggregate, as does
not constitute a Material Adverse Effect on NPS (except in the case of the
representation set forth in Section 2.5(a) which shall be true and correct in
all respects), (ii) for changes contemplated by this Agreement, and (iii) for
those representations and warranties which address matters only as of a
particular date (which representations and warranties shall have been true and
correct (subject to the qualifications as set forth in the preceding clause (i))
as of such particular date (it being understood that, for purposes of
determining the accuracy of such representations and warranties, any update of
or modification to the NPS Disclosure Letter made or purported to have been made
after the date of this Agreement shall be disregarded). NPS shall have received
a certificate with respect to the foregoing signed on behalf of Enzon by an
authorized senior executive officer and senior financial officer of Enzon.
(b) Agreements and Covenants. Enzon 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 it at or prior to the Closing
Date, and NPS shall have received a certificate to such effect signed on behalf
of Enzon by an authorized senior executive officer and senior financial officer
of Enzon.
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(c) Tax Opinion. NPS shall have received a written opinion from its tax
counsel, Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, in form and
substance reasonably satisfactory to it to the effect that the NPS Merger will
qualify as a reorganization within the meaning of Section 368(a) of the Code. In
rendering such opinion, Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional
Corporation, may require and rely upon representations and covenants including
those contained in certificates of officers of Holdco, Enzon, NPS and others.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated at any time prior to
the Effective Time, by action taken or authorized by the board of directors of
the terminating party or parties, and except as provided below, whether before
or after the requisite approvals of the stockholders of Enzon or NPS:
(a) by mutual written consent duly authorized by the Boards of
Directors of NPS and Enzon;
(b) by either Enzon or NPS if the Mergers shall not have been
consummated by August 19, 2003 (the "End Date"); provided, however, that the
right to terminate this Agreement under this Section 7.1(b) shall not be
available to any party whose action or failure to act has been a principal cause
of or resulted in the failure of the Mergers to occur on or before such date and
such action or failure to act constitutes a material breach of this Agreement;
(c) by either Enzon or NPS if a Governmental Authority shall have
issued an order, decree or ruling or taken any other action (including the
failure to have taken an action), in any case having the effect of permanently
restraining, enjoining or otherwise prohibiting the Mergers, which order,
decree, ruling or other action is final and nonappealable;
(d) by either Enzon or NPS if the Requisite NPS Stockholder Approval
shall not have been obtained by reason of the failure to obtain the required
vote at a meeting of NPS stockholders duly convened therefor or at any
adjournment thereof; provided, however, that the right to terminate this
Agreement under this Section 7.1(d) shall not be available to NPS where the
failure to obtain the Requisite NPS Stockholder Approval shall have arisen from
the action or failure to act of NPS and such action or failure to act
constitutes a material breach by NPS of this Agreement;
(e) by either Enzon or NPS if the Requisite Enzon Stockholder Approval
shall not have been obtained by reason of the failure to obtain the required
vote at a meeting of the Enzon stockholders duly convened therefor or at any
adjournment thereof; provided, however, that the right to terminate this
Agreement under this Section 7.1(e) shall not be available to Enzon where the
failure to obtain the Requisite Enzon Stockholder Approval shall have arisen
from the action or failure to act of Enzon and such action or failure to act
constitutes a material breach by Enzon of this Agreement;
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(f) by NPS (at any time prior to the adoption of this Agreement by the
required vote of the stockholders of Enzon) if a Triggering Event with respect
to Enzon shall have occurred;
(g) by Enzon (at any time prior to the adoption of this Agreement by
the required vote of the stockholders of NPS) if a Triggering Event with respect
to NPS shall have occurred;
(h) by Enzon, upon a breach of any representation, warranty, covenant
or agreement on the part of NPS set forth in this Agreement, or if any
representation or warranty of NPS shall have become untrue, in either case such
that the conditions set forth in Section 6.2(a) or Section 6.2(b) hereof would
not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, provided that if such
inaccuracy in NPS's representations and warranties or breach by NPS is curable
by NPS prior to the End Date through the exercise of reasonable efforts, then
Enzon may not terminate this Agreement under this Section 7.1(h) prior to thirty
(30) days following the receipt of written notice from Enzon to NPS of such
breach, provided that NPS continues to exercise commercially reasonable efforts
to cure such breach through such thirty (30) day period (it being understood
that Enzon may not terminate this Agreement pursuant to this Section 7.1(h) if
it shall have materially breached this Agreement or if such breach by NPS is
cured within such thirty (30) day period); and
(i) by NPS, upon a breach of any representation, warranty, covenant or
agreement on the part of Enzon set forth in this Agreement, or if any
representation or warranty of Enzon shall have become untrue, in either case
such that the conditions set forth in Section 6.3(a) or Section 6.3(b) would not
be satisfied as of the time of such breach or as of the time such representation
or warranty shall have become untrue, provided, that if such inaccuracy in
Enzon's representations and warranties or breach by Enzon is curable by Enzon
prior to the End Date through the exercise of reasonable efforts, then NPS may
not terminate this Agreement under this Section 7.1(i) prior to the End Date
thirty (30) days following the receipt of written notice from NPS to Enzon of
such breach, provided that Enzon continues to exercise commercially reasonable
efforts to cure such breach through such thirty (30) day period (it being
understood that NPS may not terminate this Agreement pursuant to this Section
7.1(i) if it shall have materially breached this Agreement or if such breach by
Enzon is cured within such thirty (30) day period).
7.2 Notice of Termination; Effect of Termination. Any termination of
this Agreement under Section 7.1 above will be effective immediately upon the
delivery of a valid written notice of the terminating party to the other party
hereto. In the event of the termination of this Agreement as provided in Section
7.1, this Agreement shall be of no further force or effect, except (i) as set
forth in Section 5.4(a), this Section 7.2, Section 7.3 hereof and Article IX
hereof, each of which shall survive the termination of this Agreement and (ii)
nothing herein shall relieve any party from liability for fraud or any willful
or intentional breach of this Agreement. No termination of this Agreement shall
affect the obligations of the parties contained in the Confidentiality
Agreement, all of which obligations shall survive termination of this Agreement
in accordance with their terms.
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7.3 Fees and Expenses.
(a) General. Except as set forth in this Section 7.3, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses whether
or not the Mergers is consummated; provided, however, that NPS and Enzon shall
share equally (i) all fees and expenses, other than attorneys' and accountants'
fees and expenses which fees shall be paid for by the party incurring such
expense, incurred in relation to the printing and filing (with the SEC) of the
Proxy Statement/Prospectus (including any preliminary materials related thereto)
and the Registration Statement (including financial statements and exhibits) and
any amendments or supplements thereto, (ii) the filing fee for the Notification
and Report Forms filed with the FTC and DOJ under the HSR Act, and premerger
notification and reports forms under similar applicable laws of other
jurisdictions, in each case pursuant to Section 5.6(a), and (iii) reasonable
attorneys' fees and expenses incurred in connection with any foreign premerger
filings.
(b) Payments.
(i) Payment by Enzon. In the event that this Agreement is
terminated by NPS or Enzon, as applicable, pursuant to Sections 7.1(b),
Section 7.1(e), Section 7.1(f), or Section 7.1(i) hereof, Enzon shall
promptly, but in any event within two (2) business days after the date
of such termination, pay NPS a fee equal to Thirty Million Dollars
($30,000,000) (the "Enzon Termination Fee") in immediately available
funds; provided, however, that in the case of termination under Section
7.1(b), Section 7.1(e) or Section 7.1(i) hereof, (A) such payment shall
be made only if (I) following the date hereof and prior to the
termination of this Agreement, an Acquisition Proposal with respect to
a Controlling Acquisition of Enzon was (x) in the case of Section
7.1(b) hereof and Section 7.1(i) hereof, made to Enzon and not
withdrawn, and (y) in the case of Section 7.1(e) hereof, publicly
announced and not withdrawn, and (II) within twelve (12) months
following the termination of this Agreement (x) a Controlling
Acquisition of Enzon is consummated or (y) Enzon enters into an
agreement providing for a Controlling Acquisition of Enzon and such
Controlling Acquisition of Enzon is later consummated and (B) such
payment shall be at or prior to, and as a condition to, the
consummation of any such Controlling Acquisition of Enzon.
(ii) Payment by NPS. In the event that this Agreement is
terminated by NPS or Enzon, as applicable, pursuant to Section 7.1(b),
Section 7.1(d), Section 7.1(g) or Section 7.1(h) hereof, NPS shall
promptly, but in any event within two (2) business days after the date
of such termination, pay Enzon a fee equal to Thirty Million Dollars
($30,000,000) in immediately available funds (the "NPS Termination
Fee"); provided, however, that in the case of termination under Section
7.1(b), Section 7.1(d) or Section 7.1(h) hereof, (A) such payment shall
be made only if (I) following the date hereof and prior to the
termination of this Agreement, an Acquisition Proposal with respect to
a Controlling Acquisition of NPS was (x) in the case of Section 7.1(b)
hereof and Section 7.1(h) hereof, made to NPS and not withdrawn, and
(y) in the case of Section 7.1(d) hereof, publicly announced and not
withdrawn, and (II) within twelve (12) months following the termination
of this Agreement (x) a Controlling Acquisition of NPS is consummated
or (y) NPS enters into an agreement providing for a Controlling
Acquisition of NPS and such Controlling Acquisition of NPS is later
consummated; and (B) such payment shall be made at or prior to, and as
a condition to, the consummation of any such Controlling Acquisition of
NPS.
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(iii) Interest and Costs; Other Remedies. Each of NPS and Enzon
acknowledges that the agreements contained in this Section 7.3(b) are an
integral part of the transactions contemplated by this Agreement, and that,
without these agreements, the other party hereto would not enter into this
Agreement; accordingly, if NPS or Enzon, as the case may be, fails to pay in a
timely manner the amounts due pursuant to this Section 7.3(b), and, in order to
obtain such payment, the other party hereto makes a claim that results in a
judgment against the party failing to pay for the amounts set forth in this
Section 7.3(b), the party so failing to pay shall pay to the other party its
reasonable costs and expenses (including reasonable attorneys' fees and
expenses) in connection with such suit, together with interest on the amounts
set forth in this Section 7.3(b) at the prime rate of Citibank, N.A. in effect
on the date such payment was required to be made. Payment of the fees described
in this Section 7.3(b) shall not be in lieu of damages incurred in the event of
breach of this Agreement.
7.4 Amendment. Subject to applicable Legal Requirements, this Agreement
may be amended by the parties hereto, by action taken or authorized by their
respective Boards of Directors, at any time before or after adoption of this
Agreement by the stockholders of NPS and Enzon, provided, however, after any
such stockholder approval, no amendment shall be made which by applicable Legal
Requirements or in accordance with the rules of any relevant stock exchange
requires further approval by such stockholders without such further stockholder
approval. This Agreement may not be amended except by execution of an instrument
in writing signed on behalf of each of NPS, Enzon and Holdco.
7.5 Extension; Waiver. At any time prior to the Effective Time either
party hereto, by action taken or authorized by their respective Board of
Directors, may, to the extent legally allowed: (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto, and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. Delay in exercising any right under this
Agreement shall not constitute a waiver of such right.
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ARTICLE VIII
DEFINITIONS
8.1 Certain Definitions. For all purposes of and under this Agreement,
the following terms shall have the following respective meanings:
(a) "Acquisition Proposal," with reference to any party hereto, shall
mean any offer or proposal, relating to any transaction or series of related
transactions involving: (A) any purchase from such party or acquisition by any
Person or "group" (as defined under Section 13(d) of the Exchange Act and the
rules and regulations thereunder) of more than a ten percent (10%) interest in
the total outstanding voting securities of such party or any of its Significant
Subsidiaries (as defined in Rule 1-02 of Regulation S-X of the SEC) or any
tender offer or exchange offer that if consummated would result in any Person or
group beneficially owning ten percent (10%) or more of the total outstanding
voting securities of such party or any of its Significant Subsidiaries or any
merger, consolidation, business combination or similar transaction involving
such party or any of its Significant Subsidiaries, (B) any sale, lease (other
than in the ordinary course of business and consistent with past practices),
exchange, transfer, license (other than in the ordinary course of business and
consistent with past practices), acquisition or disposition of more than ten
percent (10%) of the aggregate fair market value of such party's assets
(including its Significant Subsidiaries taken as a whole), or (C) any
liquidation or dissolution of such party (provided, however, the Mergers and
transactions contemplated hereby shall not be deemed an Acquisition Proposal in
any case).
(b) "Benefit Plan" means, with reference to any party hereto and any
Subsidiary thereof, any plan, program, policy, practice, contract, agreement or
other arrangement providing for compensation, severance, termination pay,
deferred compensation, performance awards, stock or stock-related awards, fringe
benefits, pension, supplemental pension, retirement compensation, profit
sharing, medical benefits, or other employee benefits or remuneration of any
kind, whether written or unwritten or otherwise, funded or unfunded, including
without limitation, each "employee benefit plan," within the meaning of Section
3(3) of ERISA which is or has been maintained, contributed to, or required to be
contributed to, by such party or any ERISA Affiliate of such party for the
benefit of any Employee of such party, or with respect to which such party or
any ERISA Affiliate of such party has or may have any liability or obligation,
including all International Benefit Plans of such party.
(c) "Canada Pension Plans" means NPS's Registered Company Savings Plan
and Registered Retirement Savings Plan.
(d) "Canadian Tax Act" means the Income Tax Act (Canada), R.S.C. 1985,
c. 1, as amended, and the regulations promulgated thereunder.
(e) "Certificates of Merger" means, collectively, the NPS Certificate
of Merger and the Enzon Certificate of Merger.
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(f) "COBRA" means the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended and as codified in Section 4980B of the Code and Section 601
et. seq. of ERISA, and the rules and regulations promulgated thereunder, or any
successor statute, rules or regulations thereto.
(g) "Code" means the Internal Revenue Code of 1986, as amended, and the
treasury regulations promulgated thereunder, or any successor statute or
regulations thereto.
(h) "Contract" means any written, oral or other agreement, contract,
subcontract, settlement agreement, lease, binding understanding, instrument,
note, option, warranty, purchase order, license, sublicense, insurance policy,
benefit plan or legally binding commitment, arrangement, understanding or
undertaking of any kind or nature.
(i) "Controlling Acquisition" means, with reference to any party
hereto, any of the following transactions (other than the transactions
contemplated by this Agreement): (i) a merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar transaction
involving the party pursuant to which the stockholders of the party immediately
preceding such transaction hold less than sixty percent (60%) of the aggregate
equity interests in the surviving or resulting entity of such transaction or any
direct or indirect parent thereof, (ii) a sale or other disposition by the party
of assets representing in excess of forty percent (40%) of the aggregate fair
market value of the party's business immediately prior to such sale, or (iii)
the acquisition by any Person or group (including by way of a tender offer or an
exchange offer or issuance by the party or such Person or group), directly or
indirectly, of beneficial ownership or a right to acquire beneficial ownership
of shares representing in excess of forty percent (40%) of the voting power of
the then outstanding shares of capital stock of the party.
(j) "DGCL" means the General Corporation Law of the State of Delaware,
or any successor statute thereto.
(k) "DOJ" means the Antitrust Division of the United States Department
of Justice, or any successor thereto.
(l) "DOL" means the United States Department of Labor, or any successor
thereto.
(m) "Effective Time" means the actual time at which the Mergers become
effective in accordance with the relevant provisions of the DGCL.
(n) "Employee(s)" means, with reference to any party hereto and any
Subsidiary thereof, any current or former employees, consultants or directors of
such party or any of its Subsidiaries.
(o) "Employee Agreement" means, with reference to any party hereto,
each management, employment, severance, consulting, relocation, repatriation,
expatriation, visa, work permit or other agreement, contract or understanding
between such party or any ERISA Affiliate of such party and any Employee of
thereof.
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(p) "Environmental Laws" means all applicable Legal Requirements (other
than Legal Requirements promulgated by the FDA) that prohibit, regulate or
control any Hazardous Material or any Hazardous Material Activity, including,
without limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, the Resource Recovery and Conservation Act of 1976, the
Federal Water Pollution Control Act, the Clean Air Act, the Occupational Safety
and Health Act, the Hazardous Materials Transportation Act, the Clean Water Act,
comparable laws, rules, regulations, ordinances, orders, treaties, statutes, and
codes of Canada, any province thereof or other Governmental Authorities and all
amendments and modifications of any of the foregoing, all as amended.
(q) "Environmental Permit" means any approval, permit, license,
clearance or consent required to be obtained from any private person or any
Governmental Authority (other than the FDA) with respect to a Hazardous
Materials Activity which is or was conducted by Enzon or NPS or any of their
Subsidiaries.
(r) "Enzon Business Facility" means any property including the land,
the improvements thereon, the groundwater thereunder and the surface water
thereon, that is or at any time has been owned, operated, occupied, controlled
or leased by Enzon or any of its Subsidiaries in connection with the operation
of their businesses.
(s) "Enzon Common Stock" means the Common Stock, par value $0.01 per
share, of Enzon, together with the associated Rights attached thereto pursuant
to the Enzon Rights Agreement.
(t) "Enzon Intellectual Property Rights" means any Intellectual
Property Rights owned by or registered to Enzon or any of its Subsidiaries.
(u) "Enzon Licensed Intellectual Property Rights" means any
Intellectual Property Rights owned by a third party that either Enzon or one of
its Subsidiaries has a right to use, exploit or practice by virtue of a license
grant, immunity from suit or otherwise.
(v) "Enzon License Agreements" means any and all agreements (whether
with Enzon or any of its Subsidiaries or third parties, including license
agreements, collaboration agreements, research agreements, development
agreements, settlement agreements, consent-to-use agreements and covenants not
to xxx, other than licenses for personal Software that are generally available
and have an individual acquisition cost of Twenty Five Thousand Dollars
($25,000) or less) to which Enzon or any of its Subsidiaries is a party or
otherwise bound, granting any right to use, exploit or practice any material
Enzon Intellectual Property Rights or Enzon Licensed Intellectual Property
Rights, or restricting the right of Enzon or any of its Subsidiaries to use or
enforce any Enzon Intellectual Property Rights or to use Enzon Licensed
Intellectual Property Rights in a material respect.
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(w) "Enzon Options" means any and all options, warrants and other
rights to acquire Enzon Common Stock, whether issued under any of the Enzon
Option Plans or otherwise.
(x) "Enzon Option Plans" means, collectively, the Enzon 2001 Incentive
Stock Plan and the Enzon Non-Qualified Stock Option Plan.
(y) "Enzon Rights Agreement" means that certain Rights Agreement, dated
as of May 17, 2002, by and between Enzon and Continental Stock Transfer & Trust
Company.
(z) "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and the rules and regulations promulgated thereunder, or any
successor statute, rules or regulations thereto.
(aa) "ERISA Affiliate" means, with reference to any party hereto, each
Subsidiary of such party and any other person or entity under common control
with such party or any of its Subsidiaries within the meaning of Section 414(b),
(c), (m) or (o) of the Code.
(bb) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder, or any successor
statute, rules or regulations thereto.
(cc) "Exchange Fund" means all shares of Holdco Common Stock and cash
deposited with the Exchange Agent pursuant to the terms of Article I hereof.
(dd) "Exchange Ratios" means, collectively, the NPS Exchange Ratio and
the Enzon Exchange Ratio.
(ee) "Exchangeable Shares" means the non-voting exchangeable shares of
NPS Allelix Inc.
(ff) "FDA" means the United States Food and Drug Administration, or any
successor thereto.
(gg) "FMLA" means the Family Medical Leave Act of 1993, as amended, and
the rules and regulations promulgated thereunder, or any successor thereto.
(hh) "FTC" means the United States Federal Trade Commission, or any
successor thereto.
(ii) "Governmental Authority" means any supranational, national, state,
provincial, municipal, local or foreign government, any instrumentality,
subdivision, court, administrative agency or commission or other governmental
authority or instrumentality, or any quasi-governmental or private body
exercising any regulatory, taxing, importing or other governmental or
quasi-governmental authority.
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(jj) "Hazardous Material" means any substance that is prohibited or
regulated by an Environmental Law or that has been designated by any
Governmental Authority or by applicable Legal Requirements to be radioactive,
toxic, hazardous or otherwise a danger to health, reproduction or the
environment, including PCBs, asbestos, petroleum, toxic mold, ureaformaldehyde
and all substances listed as hazardous substances pursuant to the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, or
defined as a hazardous waste pursuant to the United States Resource Conservation
and Recovery Act of 1976, as amended, and the regulations promulgated pursuant
to said laws, but excluding office and janitorial supplies properly and safely
maintained.
(kk) "Hazardous Material Activity" means the transportation, transfer,
recycling, storage, use, treatment, manufacture, removal, remediation, release,
exposure of others to, sale, or distribution of any Hazardous Material or any
product containing a Hazardous Material.
(ll) "Holdco Common Stock" means the Common Stock, par value $0.001 per
share, of Holdco.
(mm) "HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, or any successor statute thereto.
(nn) "Intellectual Property Rights" means any or all rights in, arising
out of or associated with any of the following: (i) all United States, Canadian,
international and foreign patents and patent applications (including all
reissues, reexaminations, divisionals, renewals, extensions, provisionals,
continuations and continuations-in-part) (collectively, "Patents"); (ii) all
confidential inventions (whether patentable or not), biological materials,
formulae, technical information, research data, research raw data, laboratory
notebooks, procedures, designs, proprietary business information, customer
lists, know how, technology, information, Software and all documentation
relating to any of the foregoing (collectively, "Trade Secrets") (iii) all
United States, Canadian and foreign copyrights, copyright registrations and
applications therefor (collectively, "Copyrights"); (iv) all United States,
Canadian and foreign trademarks and service marks (whether or not registered),
and trade names, together with all goodwill appurtenant thereto, and
applications for registration of any of the foregoing (collectively
"Trademarks"); and (v) Internet domain name registrations and applications
therefor (collectively "Domain Names").
(oo) "International Benefit Plan" means, with reference to any party
hereto, each Benefit Plan that has been adopted or maintained by such party or
any ERISA Affiliate of such party, whether informally or formally, or with
respect to which such party or any ERISA Affiliate of such party will or may
have any liability, for the benefit of Employees of such party who perform
services outside the United States.
(pp) "IRS" means the United States Internal Revenue Service, or any
successor thereto.
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(qq) "knowledge", with respect to any party hereto, means the actual
knowledge of the executive officers of such party; provided, however, that with
respect to NPS, the Corporate Controller and Director of Financial Reporting of
NPS shall be included as an executive officer only for the purpose of this
defined term "knowledge."
(rr) "Legal Requirements" means any federal, state, provincial, local,
municipal, foreign or other law, statute, constitution, principle of common law,
resolution, ordinance, code, order, edict, decree, rule, regulation, ruling or
requirement issued, enacted, adopted, promulgated, implemented or otherwise put
into effect by or under the authority of any Governmental Authority.
(ss) "Liens" means pledges, claims, liens, charges, encumbrances,
options and security interests of any kind or nature whatsoever.
(tt) "Material Adverse Effect" means, with reference to any party
hereto, any change, event, violation, inaccuracy, circumstance or effect (any
such item, an "Effect") that is or is reasonably likely (i) to be materially
adverse to the business, assets (including intangible assets), capitalization,
financial condition or results of operations of such entity taken as a whole
with its Subsidiaries or (ii) to materially impede the ability of such party to
consummate the transactions contemplated by this Agreement; provided, however,
that, for purposes of (i) above, in no event shall any of the following, alone
or in combination, be deemed to constitute, nor shall any of the following be
taken into account in determining whether there has been or will be, a Material
Adverse Effect on any entity: (A) any Effect directly and primarily resulting
from the announcement or pendency of the Mergers; (B) any change in such
entity's stock price or trading volume, in and of itself; (C) any failure by
such entity to meet published revenue or earnings projections, in and of itself;
(D) any Effect that results from changes affecting any of the industries in
which such entity operates generally or the United States economy generally
(which changes in each case do not disproportionately affect such entity in any
material respect); (E) any Effect that results from changes affecting general
worldwide economic or capital market conditions (which changes in each case do
not disproportionately affect such entity in any material respect); or (F)
stockholder class action litigation arising from allegations of a breach of
fiduciary duty relating to this Agreement and the transaction contemplated
hereby.
(uu) "Mergers" means, collectively, the NPS Merger and the Enzon
Merger.
(vv) "Multiemployer Plan" means any Pension Plan that is a
"multiemployer plan," as defined in Section 3(37) of ERISA.
(ww) "NASD" means the National Association of Securities Dealers.
(xx) "NASDAQ" means the Nasdaq Stock Market, Inc.
(yy) "NPS Business Facility" means any property including the land, the
improvements thereon, the groundwater thereunder and the surface water thereon,
that is or at any time has been owned, operated, occupied, controlled or leased
by NPS or any of its Subsidiaries in connection with the operation of their
businesses.
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(zz) "NPS Canadian Subsidiary" means each of NPS Holdings Company, NPS
Allelix Inc. and NPS Allelix Corp. and each predecessor corporation to any of
the foregoing.
(aaa) "NPS Common Stock" means the Common Stock, par value $0.001 per
share, of NPS, together with the associated Rights attached thereto pursuant to
the NPS Rights Agreement.
(bbb) "NPS ESPP" means the NPS 1994 Employee Stock Purchase Plan.
(ccc) "NPS Intellectual Property Rights" means any Intellectual
Property Rights owned by or registered to NPS or any of its Subsidiaries.
(ddd) "NPS Licensed Intellectual Property Rights" means any
Intellectual Property Rights owned by a third party that either NPS or one of
its Subsidiaries has a right to use, exploit or practice by virtue of a license
grant, immunity from suit or otherwise.
(eee) "NPS License Agreements" means any and all agreements (whether
with NPS or any of its Subsidiaries or third parties, including license
agreements, collaborative agreements, research agreements, development
agreements, settlement agreements, consent to use agreements and covenants not
to xxx, other than licenses for Software that are generally available and have
an individual acquisition cost of Twenty Five Thousand Dollars ($25,000) or
less) to which NPS or any of its Subsidiaries is a party or otherwise bound,
granting any right to use, exploit or practice any material NPS Intellectual
Property Rights or NPS Licensed Intellectual Property Rights, or restricting the
right of NPS or any of its Subsidiaries to use or enforce any NPS Intellectual
Property Rights or to use NPS Licensed Intellectual Property Rights in a
material respect.
(fff) "NPS Options" means any and all options, warrants and other
rights to acquire NPS Common Stock, whether issued under any of the NPS Option
Plans or otherwise.
(ggg) "NPS Option Plans" means, collectively, the NPS 1987 Stock Option
Plan, the NPS 1994 Non-Employee Director Stock Option Plan, the NPS 1994 Equity
Incentive Plan and the NPS 1998 Stock Option Plan.
(hhh) "NPS Rights Agreement" means that certain Rights Agreement, dated
as of December 4, 1996, as amended as of December 31, 2001, by and between NPS
and American Stock Transfer & Trust, Inc.
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(iii) "Pension Plan" means each Benefit Plan that is an "employee
pension benefit plan," within the meaning of Section 3(2) of ERISA.
(jjj) "Permits" means all permits, licenses, certificates, variances,
exemptions, orders and approvals from Governmental Authorities.
(kkk) "Person" means any individual, corporation (including any
non-profit corporation), general partnership, limited partnership, limited
liability partnership, joint venture, estate, trust, company (including any
limited liability company or joint stock company), firm or other enterprise,
association, organization, entity or Governmental Authority.
(lll) "Redemption Call Right" means the right of NPS Holdings Company
contained in the Articles of Arrangement of NPS Allelix Inc. dated December 23,
1999 to purchase Exchangeable Shares that NPS Allelix Inc. has elected to
redeem.
(mmm) "Registered Intellectual Property" means all Patents, registered
Copyrights and registered Trademarks.
(nnn) "SAR" means any stock appreciation right, phantom stock award,
stock-related award or performance award, whether payable in cash, shares or
otherwise.
(ooo) "Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder, or any successor statute,
rules or regulations thereto.
(ppp) "SEC" means the United States Securities and Exchange Commission,
or any successor thereto.
(qqq) "Surviving Corporations" means, in the case of the NPS Merger,
NPS as the surviving corporation of the NPS Merger, and in the case of the Enzon
Merger, Enzon Merger Sub as the surviving corporation of the Enzon Merger.
(rrr) "Subsidiary," when used with reference to a party hereto, means
any corporation or other organization, whether incorporated or unincorporated,
at least a majority of the securities or other interests of which having by
their terms ordinary voting power to elect a majority of the board of directors
or others performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such party or by
any one or more of its Subsidiaries, or by such party and one or more of its
Subsidiaries.
(sss) "Superior Offer," with reference to any party hereto, means an
unsolicited, bona fide written offer made by a third party to acquire, directly
or indirectly, pursuant to a tender offer, exchange offer, merger, consolidation
or other business combination, all or substantially all of the assets of such
party or a majority of the outstanding stock or other equity interests in such
party, on terms that the board of directors of such party has in good faith
concluded (after consultation with its outside legal counsel and its financial
adviser), taking into account, among other things, all legal, financial,
regulatory and other aspects of the offer and the Person making the offer, to be
(i) more favorable, from a financial point of view, to such party's stockholders
(in their capacities as stockholders) than the terms of the Mergers and (ii)
reasonably capable of being consummated.
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(ttt) "Tax" means (i) any and all federal, state, local and foreign
taxes, assessments and other governmental charges, duties, impositions and
liabilities, including taxes based upon or measured by gross receipts, income,
profits, sales, use and occupation, and value added, ad valorem, transfer,
franchise, withholding, payroll, recapture, employment, excise and property
taxes, together with all interest, penalties and additions imposed with respect
to such amounts, (ii) any liability for the payment of any amounts of the type
described in the foregoing clause (i) of this definition as a result of being a
member of an affiliated, consolidated, combined or unitary group for any period
, and (iii) any liability for the payment of any amounts of the type described
in the foregoing clauses (i) and (ii) of this definition as a result of any
express or implied obligation to indemnify any other Person or as a result of
any obligations under any agreements or arrangements with any other Person with
respect to such amounts and including any liability for taxes of a predecessor
entity.
(uuu) "Tax Return" means federal, state, local and foreign returns,
estimates, information statements, designations, forms, schedules, reports and
documents of every nature whatever required to be filed with any Governmental
Authority relating to Taxes.
(vvv) "Triggering Event," with reference to any party hereto, shall be
deemed to have occurred if: (i) its board of directors or any committee thereof
shall for any reason have withheld or withdrawn or shall have amended or
modified in a manner adverse to the other party hereto, its recommendation in
favor of, the adoption of the Agreement, (ii) it shall have failed to include in
the Proxy Statement/Prospectus the recommendation of its board of directors in
favor of the adoption of the Agreement, (iii) its board of directors fails to
reaffirm (publicly, if so requested) its recommendation in favor of the adoption
of the Agreement within ten (10) calendar days after the other party hereto
requests in writing that such recommendation be reaffirmed in connection with a
publicly announced Acquisition Proposal, (iv) its board of directors or any
committee thereof shall have approved or recommended any Acquisition Proposal,
or (v) a tender or exchange offer relating to its securities shall have been
commenced by a Person unaffiliated with the other party hereto and it shall not
have sent to its securityholders pursuant to Rule 14e-2 promulgated under the
Securities Act, within ten (10) business days after such tender or exchange
offer is first published, sent or given, a statement disclosing that the board
of directors of such party recommends rejection of such tender or exchange
offer.
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(www) "Voting Debt" means any bonds, debentures, notes or other
indebtedness having the right to vote on any matters on which stockholders may
vote (or convertible into or exchangeable for, securities having such rights).
(xxx) "WARN Act" means the Worker Adjustment and Retraining
Notification Act, or any successor statute thereto.
8.2 Certain Definitions. The following capitalized terms and phrases
shall have the respective meanings ascribed thereto in the respective sections
of this Agreement set forth opposite each such term or phrase below:
Term / Phrase Section
------------------------------------------------- ------------------
Affiliate Agreement 5.14(a)
Agreement Introduction
Certificates 1.11(c)
Change of Recommendation 5.3(d)
Class A Representatives 5.12(a)
Class B Representatives 5.12(a)
Closing 1.4
Closing Date 1.4
Confidentiality Agreement 5.4(a)
Effect 8.1(t)(t)
End Date 7.1(b)
Enzon Introduction
Enzon Balance Sheet 2.4(b)
Enzon Balance Sheet Date 2.4(b)
Enzon Board Recitals
Enzon Board Approval 2.19
Enzon Certificate of Merger 1.3
Enzon Charter Documents 2.1(b)
Enzon Designees 5.12(a)(i)
Enzon Disclosure Letter Article II
Enzon Exchange Ratio 1.10(b)
Enzon Financials 2.4(b)
Enzon Lease Agreements 2.16(b)
Enzon Leased Real Property 2.16(a)
Enzon Material Contract 2.17
Enzon Merger Recitals
Enzon Merger Sub Recitals
Enzon Owned Real Property 2.16(a)
Enzon Permits 2.8(b)
Enzon Preferred Stock 2.2(a)
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Term / Phrase Section
------------------------------------------------- ------------------
Enzon Rights 2.2(a)
Enzon Rights Agreement 2.2(a)
Enzon SEC Reports 2.4(a)
Enzon Series A Preferred Stock 2.2(a)
Enzon Series B Stock 2.2(a)
Enzon Termination Fee 7.3(b)(i)
Enzon Voting Agreements Recitals
BLAs 2.9(c)
Exchange Agent 1.11(a)
Form S-8 5.9(c)(iii)
GAAP 2.4(b)
Holdco Introduction
Holdco Board 1.1(b)
Holdco Bylaws 1.1(a)(i)
Holdco Certificate of Incorporation 1.1(a)(i)
Holdco Options 5.9(c)(i)
Holdco Plans 5.9(c)(ii)
Holdco Right 5.16(c)
Holdco Rights Agreement 5.16(c)
INDs 2.9(c)
Indebtedness 4.1(b)(xx)
Indemnified Parties 5.11(a)
Indenture 5.18
Insured Parties 5.11(b)
Key Employees 4.1(b)(xv)
Xxxxxx Xxxxxxx 3.12
NDAs 2.9(c)
Necessary Consents 2.3(c)
Notes 5.18
NPS Introduction
NPS Balance Sheet 3.4(b)
NPS Balance Sheet Date 3.4(b)
NPS Board Recitals
NPS Board Approval 3.19
NPS Certificate of Merger 1.2
NPS Charter Documents 3.1(b)
NPS Designees 5.12(a)(i)
NPS Disclosure Letter Article III
NPS Exchange Ratio 1.9(b)
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Term / Phrase Section
------------------------------------------------- ------------------
NPS Financials 3.4(b)
NPS Lease Agreements 3.16(b)
NPS Leased Real Property 3.16(a)
NPS Material Contract 3.17(a)
NPS Merger Recitals
NPS Merger Sub Recitals
NPS Owned Real Property 3.16(a)
NPS Permits 3.8(b)
NPS Preferred Stock 3.2(a)
NPS Purchase Plan Options 5.9(a)(ii)
NPS Rights 3.2(a)
NPS Rights Agreement 3.2(a)
NPS SEC Reports 3.4(a)
NPS Termination Fee 7.3(b)(ii)
NPS Voting Agreements Recitals
Proxy Statement/Prospectus 5.1
Registration Statement 5.1
Requisite Enzon Stockholder Approval 2.3(a)
Requisite NPS Stockholder Approval 3.3(a)
Xxxxxxxx-Xxxxx Act 2.4(a)
XX Xxxxx 2.12
Software 2.7(g)
Stockholders' Meeting 5.2(a)
Subsidiary Charter Documents 2.1(b)
Supplemental Indenture 5.18
ARTICLE IX
GENERAL PROVISIONS
9.1 Non-Survival of Representations and Warranties. The representations
and warranties of Enzon and NPS contained in this Agreement, or any instrument
delivered pursuant to this Agreement, shall terminate at the Effective Time, and
only the covenants that by their terms survive the Effective Time and this
Article IX shall survive the Effective Time.
9.2 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed duly given (i) on the date of delivery if delivered
personally, (ii) on the date of confirmation of receipt (or, the first business
day following such receipt if the date is not a business day) of transmission by
telecopy or telefacsimile, or (iii) on the date of confirmation of receipt (or,
the first business day following such receipt if the date is not a business day)
if delivered by a nationally recognized courier service. All notices hereunder
shall be delivered as set forth below, or pursuant to such other instructions as
may be designated in writing by the party to receive such notice:
(a) if to NPS, to:
NPS Pharmaceuticals, Inc.
000 Xxxxxxx Xxx
Xxxx Xxxx Xxxx, Xxxx 00000-0000
Attention: Xxxxxx Xxxxxxx, Chief Executive Officer, President and
Chairman of the Board of Directors
Xxxxx Xxxxxx, Vice President, Legal Affairs,
GeneralCounsel and Secretary
Telephone No.: 000.000.0000
Telecopy No.: 801.583.4961
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with copies to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
0000 Xxxx Xxxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Xxxxxx X. X'Xxxxxx
Telephone No.: 000.000.0000
Telecopy No.: 801.993.6499
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxxx
Telephone No.: 000.000.0000
Telecopy No.: 000.000.0000
(b) if to Enzon, to:
Enzon Pharmaceuticals, Inc.
000 Xxxxx 000/000
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, President, Chief Executive Officer
and Chairman of the Board of Directors
Xxxxx Xxxxxx, Assistant General Counsel
Telephone No.: 000.000.0000
Telecopy No.: 908.575.1843
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with copies to:
Xxxxxx & Whitney LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx
Telephone No.: 000.000.0000
Telecopy No.: 212.953.7201
Xxxxxx & Whitney LLP
000 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxx
Telephone No.: 000.000.0000
Telecopy No.: 801.933.7373
9.3 Certain Interpretation.
(a) When a reference is made in this Agreement to Exhibits, such
reference shall be to an Exhibit to this Agreement unless otherwise indicated.
(b) When a reference is made in this Agreement to Articles or Sections,
such reference shall be to an Article or Section of this Agreement unless
otherwise indicated.
(c) The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(d) For all purposes of and under this Agreement, the words "include,"
"includes" and "including," when used herein, shall be deemed in each case to be
followed by the words "without limitation."
(e) For all purposes of and under this Agreement, unless otherwise
indicated, when reference is made in this Agreement to NPS, Enzon or Holdco, or
any of their respective business, as the case may be, such reference shall be
deemed to include NPS, Enzon or Holdco and their respective Subsidiaries
(including, in the case of Holdco, the Surviving Corporations), taken as a
whole, or the respective businesses of NPS, Enzon or Holdco and their respective
Subsidiaries (including, in the case of Holdco, the Surviving Corporations),
taken as a whole, as the case may be.
9.4 Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
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9.5 Entire Agreement. This Agreement and the documents and instruments
and other agreements among the parties hereto as contemplated by or referred to
herein, including the Enzon Disclosure Letter and the NPS Disclosure Letter,
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof,
it being understood that the Confidentiality Agreement shall continue in full
force and effect until the Closing and shall survive any termination of this
Agreement.
9.6 Third Party Beneficiaries. This Agreement and the documents and
instruments and other agreements among the parties hereto as contemplated by or
referred to herein, including the Enzon Disclosure Letter and the NPS Disclosure
Letter, are not intended to confer upon any other Person any rights or remedies
hereunder, except as specifically provided, following the Effective Time, in
Section 5.11 hereof. Without limiting the foregoing, it is expressly understood
and agreed that the provisions of Sections 5.10, and Section 5.12 hereof are
statements of intent and no Continuing Employee or other Person (including any
party hereto) shall have any rights or remedies, including rights of
enforcement, with respect thereto and no Continuing Employee or other Person is
or is intended to be a third-party beneficiary thereof.
9.7 Severability. In the event that any provision of this Agreement or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other Persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the greatest extent possible, the
economic, business and other purposes of such void or unenforceable provision.
9.8 Other Remedies; Specific Performance.
(a) Other Remedies. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy. The parties hereto agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
(b) Specific Performance. It is accordingly agreed that the parties
shall be entitled to seek an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
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9.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.
9.10 Submission to Jurisdiction. Each of parties irrevocably agrees
that any legal action or proceeding with respect to this Agreement or for
recognition and enforcement of any judgment in respect hereof brought by the
other party hereto or its successors or assigns may be brought and determined in
the Chancery or other Courts of the State of Delaware, and each of parties
hereby irrevocably submits with regard to any such action or proceeding for
itself and in respect to its property, generally and unconditionally, to the
nonexclusive jurisdiction of the aforesaid courts.
9.11 Rules of Construction. The parties hereto agree that they have
been represented by counsel during the negotiation and execution of this
Agreement and, therefore, waive the application of any Legal Requirement or rule
of construction providing that ambiguities in an agreement or other document
will be construed against the party drafting such agreement or document.
9.12 Assignment. No party may assign either this Agreement or any of
its rights, interests, or obligations hereunder without the prior written
approval of the other parties. Any purported assignment in violation of this
Section 9.11 shall be void. Subject to the preceding sentence, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
9.13 Waiver of Jury Trial. EACH OF HOLDCO, NPS AND ENZON HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF HOLDCO, NPS AND ENZON IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their duly authorized respective officers as of the date first
written above.
NPS PHARMACEUTICALS, INC.
By:
---------------------------------
Name:
Title:
ENZON PHARMACEUTICALS, INC.
By:
---------------------------------
Name:
Title:
MOMENTUM MERGER CORPORATION
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
XXXXXX ACQUISITION CORPORATION
By:
---------------------------------
Name:
Title:
EINSTEIN ACQUISITION CORPORATION
By:
---------------------------------
Name:
Title:
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF REORGANIZATION]
Schedule 5.12(c)
Specified Executive Officers of Holdco
Executive Chairman - Current NPS CEO
Chief Executive Officer - Current Enzon CEO
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