EXHIBIT 10.1
AGREEMENT AND PLAN OF MERGER
AMONG
ALLIANCE PHARMACEUTICAL CORP.,
A NEW YORK CORPORATION,
ALLIANCE MERGER SUBSIDIARY, INC.,
A DELAWARE CORPORATION,
AND
MOLECULAR BIOSYSTEMS, INC.,
A DELAWARE CORPORATION,
DATED AS OF OCTOBER 11, 2000
TABLE OF CONTENTS
PAGE
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ARTICLE I. The Merger; Closing; Effective Time...................................................1
1.1 The Merger.........................................................................1
1.2 Closing............................................................................1
1.3 Effective Time.....................................................................2
1.4 Effects of the Merger..............................................................2
ARTICLE II. Certificate of Incorporation and By-Laws of the Surviving Corporation................2
2.1 The Certificate of Incorporation...................................................2
2.2 The By-Laws........................................................................2
ARTICLE III. Officers and Directors of the Surviving Corporation.................................2
3.1 Officers and Directors.............................................................2
ARTICLE IV. Conversion or Cancellation of Shares in the Merger...................................2
4.1 Conversion or Cancellation of Shares...............................................2
4.2 Allocation of Merger Consideration; Exchange Procedures............................4
4.3 No Fractional Shares...............................................................5
4.4 Dissenters'Rights..................................................................5
4.5 Stock Option Plan..................................................................6
4.6 Warrants...........................................................................6
4.7 No Further Ownership Rights in Company Common Stock................................6
4.8 Withholding Rights.................................................................6
4.9 Lost, Stolen or Destroyed Certificates.............................................7
4.10 Stock Transfer Books...............................................................7
4.11 Further Assurances.................................................................7
ARTICLE V. Representations and Warranties........................................................7
5.1 Representations and Warranties of the Company......................................7
5.2 Representations and Warranties of Purchaser.......................................22
ARTICLE VI. Covenants...........................................................................24
6.1 Interim Operations of the Company.................................................24
6.2 Acquisition Proposals.............................................................26
6.3 Meetings of Company's Stockholders................................................27
6.4 Filings; Other Action.............................................................27
6.5 Access............................................................................28
6.6 Notification of Certain Matters...................................................28
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6.7 Publicity.........................................................................28
6.8 Takeover Statutes.................................................................28
6.9 Affiliates Agreements.............................................................28
6.10 Letter of the Company's Accountants...............................................29
6.11 Registration Statement............................................................29
6.12 Indemnification of Directors and Officers.........................................29
6.13 No Changes in Purchaser Shares....................................................30
6.14 Voting Agreement..................................................................30
ARTICLE VII. Conditions.........................................................................30
7.1 Conditions to Obligations of Purchaser............................................30
7.2 Conditions to Obligations of the Company..........................................31
ARTICLE VIII. Termination, Amendment and Waiver.................................................32
8.1 Termination.......................................................................32
8.2 Effect of Termination.............................................................33
8.3 Amendment.........................................................................34
8.4 Waiver............................................................................34
ARTICLE IX. Miscellaneous and General...........................................................34
9.1 Payment of Expenses...............................................................34
9.2 Survival..........................................................................34
9.3 Counterparts......................................................................35
9.4 Governing Law.....................................................................35
9.5 Notices...........................................................................35
9.6 Entire Agreement, etc.............................................................35
9.7 Definition of "Subsidiary"........................................................35
9.8 Captions..........................................................................36
EXHIBITS
Exhibit A Affiliates Agreement
Exhibit B Opinion of Company's Counsel
Exhibit C Opinion of Purchaser's Counsel
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SCHEDULES
5.1(c)(ii) Government Filings; No Violations
5.1(e) Company Reports; Financial Statements
5.1(f) Absence of Certain Changes or Events
5.1(g) Litigation, Investigations and Liabilities
5.1(h) No Defaults; Contracts
5.1(i) Employee Benefits
5.1(l) Subsidiaries
5.1(n) Intellectual Property
5.1(o) Title to Property and Assets
5.1(p) Tax Returns and Payments
5.1(q) Insurance
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "AGREEMENT"), dated as of October
11, 2000, by and among Alliance Pharmaceutical Corp., a New York corporation
(the "PURCHASER"), Alliance Merger Subsidiary, Inc., a Delaware corporation and
wholly owned subsidiary of Purchaser (the "MERGER SUB"), and Molecular
Biosystems, Inc., a Delaware corporation (the "COMPANY").
RECITALS
WHEREAS, the Boards of Directors of the Purchaser and the Company each
have determined that it is in the best interests of each corporation and their
respective stockholders for the Purchaser and the Company to engage in a
business combination through a merger as outlined below (the "MERGER") in order
to advance the long-term strategic business interests of the Purchaser and the
Company;
WHEREAS, the respective Boards of Directors of the Company and the
Purchaser have approved the Merger, upon the terms and subject to the conditions
set forth in this Agreement, pursuant to which each share of common stock, par
value $.01 per share, of the Company ("COMPANY COMMON STOCK") issued and
outstanding immediately prior to the Effective Time (as defined below), will be
converted into the right to receive shares (the "PURCHASER SHARES") of Common
Stock, par value $.01 per share, of the Purchaser (the "PURCHASER COMMON
STOCK"), as set forth herein; and
WHEREAS, the Company, the Purchaser and the Merger Sub desire to make
certain representations, warranties, covenants and agreements in connection with
this Agreement.
NOW, THEREFORE, in consideration of the premises and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE I.
THE MERGER; CLOSING; EFFECTIVE TIME
1.1 THE MERGER. Subject to the terms and conditions of this
Agreement, and in accordance with the Delaware General Corporation Law (the
"DGCL"), at the Effective Time the Merger Sub shall be merged with and into the
Company and the separate corporate existence of the Merger Sub shall thereupon
cease. The Company shall be the surviving corporation in the Merger (sometimes
hereinafter referred to as the "SURVIVING CORPORATION") and shall continue to be
governed by the laws of the State of Delaware, and the separate corporate
existence of the Company with all its rights, privileges, immunities, powers and
franchises shall continue unaffected by the Merger. The Merger shall have the
effects specified in the DGCL.
1.2 CLOSING. The closing of the Merger (the "CLOSING") shall take
place (i) at the offices of Pillsbury Madison & Sutro LLP, 00000 Xx Xxxxxx Xxxx,
Xxxxx 000, Xxx Xxxxx, XX at 9:00 A.M. on the first business day on which the
last to be fulfilled or waived of the conditions
set forth in Article VII hereof shall be fulfilled or waived in accordance with
this Agreement or (ii) at such other place and time and/or on such other date as
the Company and the Purchaser may agree (the "CLOSING DATE"), unless this
Agreement has been terminated pursuant to its terms.
1.3 EFFECTIVE TIME. As soon as practicable following the Closing,
and provided that this Agreement shall not have been terminated or abandoned
pursuant to Article VIII hereof, the Company and the Purchaser will cause a
Certificate of Merger (the "DELAWARE CERTIFICATE OF MERGER") to be executed and
filed with the Secretary of State of Delaware as provided in Section 251 of the
DGCL. The Merger shall become effective at the time and on the date on which the
Delaware Certificate of Merger has been duly filed with the Secretary of State
of Delaware, and such time is hereinafter referred to as the "EFFECTIVE TIME."
1.4 EFFECTS OF THE MERGER. At and after the Effective Time, the
Merger will have the effects set forth in the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, all
property, rights, privileges, powers and franchises of the Company and the
Merger Sub shall be vested in the Surviving Corporation, and all debts,
liabilities and duties of the Company and the Merger Sub shall become the debts,
liabilities and duties of the Surviving Corporation.
ARTICLE II.
CERTIFICATE OF INCORPORATION AND BY-LAWS OF THE SURVIVING CORPORATION
2.1 THE CERTIFICATE OF INCORPORATION. The Certificate of
Incorporation of the Surviving Corporation shall be amended and restated
immediately after the Effective Time to conform to the Certificate of
Incorporation of the Merger Sub as in effect immediately prior to the Effective
Time.
2.2 THE BY-LAWS. The By-laws of the Surviving Corporation shall be
amended and restated immediately after the Effective Time to conform to the
By-laws of the Merger Sub as in effect immediately prior to the Effective Time.
ARTICLE III.
OFFICERS AND DIRECTORS OF THE SURVIVING CORPORATION
3.1 OFFICERS AND DIRECTORS. The directors and officers of the
Surviving Corporation immediately after the Effective Time shall be the
respective individuals who are directors and officers of the Merger Sub
immediately prior to the Effective Time.
ARTICLE IV.
CONVERSION OR CANCELLATION OF SHARES IN THE MERGER
4.1 CONVERSION OR CANCELLATION OF SHARES. The manner of converting
or canceling shares of the Company, the Merger Sub and the Purchaser in the
Merger shall be as follows:
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(a) CONVERSION OF SHARES. Subject to Sections 4.2 and 4.3, each
share of the Company Common Stock (the "Shares") issued and outstanding
immediately prior to the Effective Time (other than Shares owned by the
Purchaser, the Merger Sub or any other direct or indirect subsidiary of the
Purchaser (collectively, the "PURCHASER COMPANIES") or Shares ("DISSENTING
SHARES") that are held by stockholders exercising appraisal rights pursuant to
Section 262 of the DGCL) shall be converted without any action on the part of
the holder thereof into the right to receive that number of fully paid and
nonassessable Purchaser Shares determined by the Exchange Ratio (as defined
below):
The Parties agree that the Exchange Ratio will be determined by using the
following formulae:
Exchange Ratio = 770,000 MINUS ADJUSTMENT SHARES (AS DEFINED BELOW)
--------------------------------------------------
Company Securities
Company Securities = The aggregate number of issued and outstanding
shares of Company Common Stock, plus 49,000
shares of Company Common Stock subject to
outstanding "in the money" Company Options
(as defined below). As of the date hereof
the number of Company Securities is 18,907,786.
example: as of date hereof: 770,000 = .0407239
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18,907,786
Based on the above example, the Exchange Ratio is .0407239 Purchaser
Shares for each Company Share. It is further understood that the maximum number
of shares of Purchaser Common Stock which will either be issued in the Merger or
become subject to outstanding "in the money" options assumed by Purchaser in the
Merger is 770,000, subject to reduction as follows:
The 770,000 Purchaser Shares shall be reduced by the number of
"ADJUSTMENT SHARES." Adjustment Shares shall be determined by dividing: (A) the
amount by which the Company's total assets less accumulated depreciation or
amortization as of the Effective Time less total liabilities as of the Effective
Time, in each case determined in accordance with generally accepted accounting
principles and in a manner consistent with the Company's June 30, 2000 balance
sheet but including any unrecorded or unpaid severance, accounting, legal,
investment banking and other expenses as of the Effective Time (including those
liabilities triggered by the Merger), is less than $5,000,000; by (B) 32.50.
For purposes hereof, the Purchaser Shares (together with any cash in
lieu of fractional shares of Purchaser Common Stock to be paid pursuant to
Section 4.3) shall be the "MERGER CONSIDERATION." All Shares shall no longer be
outstanding and shall be canceled and retired and shall cease to exist, and each
certificate (each a "CERTIFICATE") representing any of such Shares shall
thereafter represent only the right to receive the Merger Consideration (and the
right, if any, to receive cash in lieu of fractional shares) into which such
Shares have been converted pursuant
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to this Article IV, or the right, if any, to receive payment from the Surviving
Corporation of the "FAIR VALUE" of such Shares as determined in accordance with
Section 262 of the DGCL.
(b) CANCELLATION OF SHARES. Each Share issued and outstanding at
the Effective Time and owned by any of the Purchaser Companies, and each Share
issued and held in the Company's treasury at the Effective Time, shall, by
virtue of the Merger and without any action on the part of the holder thereof,
cease to be outstanding, shall be canceled and retired without payment of any
consideration therefor and shall cease to exist.
(c) MERGER SUB. At the Effective Time, each share of Common Stock,
par value $.01 per share, of the Merger Sub issued and outstanding immediately
prior to the Effective Time shall be converted into one validly issued, fully
paid and non-assessable share of common stock, par value $.01 per share, of the
Surviving Corporation.
4.2 ALLOCATION OF MERGER CONSIDERATION; EXCHANGE PROCEDURES.
(a) EXCHANGE FUND. Prior to the Effective Time, the Purchaser
shall appoint a commercial bank or trust company to act as exchange agent
hereunder for the purpose of exchanging Certificates for the Merger
Consideration (the "EXCHANGE AGENT"). At or prior to the Effective Time, the
Purchaser shall deposit with the Exchange Agent, in trust for the benefit of
holders of Shares, certificates representing the Purchaser Shares issuable
pursuant to Section 4.1, in exchange for outstanding Shares. The Purchaser
agrees to make available to the Exchange Agent from time to time as needed cash
sufficient to pay cash in lieu of fractional shares pursuant to Section 4.3. Any
cash and Purchaser Shares to be deposited with the Exchange Agent shall
hereinafter be referred to as the "EXCHANGE FUND."
(b) EXCHANGE PROCEDURES. Promptly after the Effective Time, the
Purchaser shall cause the Exchange Agent to mail to each holder of a Certificate
(i) a letter of transmittal which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only upon proper
delivery of the Certificates to the Exchange Agent, and which letter shall be in
customary form and have such other provisions as the Purchaser may reasonably
specify and (ii) instructions for effecting the surrender of such Certificates
in exchange for the applicable Merger Consideration. Upon surrender of a
Certificate to the Exchange Agent together with such letter of transmittal, duly
executed and completed in accordance with the instructions thereto, and such
other documents as may reasonably be required by the Exchange Agent, the holder
of such Certificate shall be entitled to receive in exchange therefor: (A) one
or more Purchaser Shares representing, in the aggregate, the whole number of
Purchaser Shares that such holder has the right to receive pursuant to Section
4.1 (after taking into account all shares of Company Common Stock then held by
such holder) and (B) a check in the amount equal to the cash that such holder
has the right to receive in lieu of any fractional Purchaser Shares pursuant to
Section 4.3. No interest will be paid or will accrue on any cash payable
pursuant to Section 4.3. In the event of a transfer of ownership of Shares which
is not registered in the transfer records of the Company, one or more Purchaser
Shares evidencing, in the aggregate, the proper number of Purchaser Shares and a
check in the proper amount of cash in lieu of fractional Purchaser Shares
pursuant to Section 4.3 may be issued with respect to such Shares to such a
transferee if the Certificate representing such Shares is presented to the
Exchange Agent,
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accompanied by all documents required to evidence and effect such transfer and
to evidence that any applicable stock transfer taxes have been paid.
(c) TRANSFERS. After the Effective Time, there shall be no
transfers on the stock transfer books of the Company of the Shares that were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation, they shall be
canceled and exchanged for the Purchaser Shares and any cash to be paid upon the
due surrender of and in respect of such Certificates in lieu of fractional
Purchaser Shares pursuant to this Agreement in accordance with the procedures
set forth in this Article IV. Certificates surrendered for exchange by any
person constituting an "AFFILIATE" of the Company for purposes of Rule 145(c)
under the Securities Act of 1933, as amended (the "SECURITIES ACT") shall not be
exchanged until the Purchaser has received a written agreement from such person
as provided in Section 6.9 hereof.
(d) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund
(including the proceeds of any investments thereof and any Purchaser Shares)
that remains unclaimed by the stockholders of the Company one year after the
Effective Time shall be paid to the Purchaser. Any stockholders of the Company
who have not theretofore complied with this Article IV shall thereafter look
only to the Purchaser for payment of their Purchaser Shares and cash in lieu of
fractional Purchaser Shares payable upon due surrender of their Certificates,
and in each case, without any interest thereon. Notwithstanding the foregoing,
none of the Purchaser, the Surviving Corporation, the Exchange Agent or any
other person shall be liable to any former holder of Shares for any amount
properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.
4.3 NO FRACTIONAL SHARES. No certificates or scrip representing
less than one Purchaser Share shall be issued upon the surrender for exchange of
Certificates representing Shares pursuant to Article IV. In lieu of any such
fractional shares, each holder of Shares shall be paid, upon surrender of a
Certificate or Certificates representing such Shares, an amount in cash, rounded
to the nearest cent, determined by multiplying (i) the Exchange Ratio by (ii)
the fractional interest to which such holder would otherwise be entitled (after
taking into account all Shares held of record by such holder at the Effective
Time).
4.4 DISSENTERS' RIGHTS. Any stockholder who shall have delivered a
written demand for appraisal of such stockholders' Shares, as provided in
Section 262 of the DGCL (each a "DISSENTING STOCKHOLDER"), shall not be entitled
to Purchaser Shares or cash in lieu of fractional Purchaser Shares pursuant to
this Article IV, unless and until the holder thereof shall have failed to
perfect or shall have effectively withdrawn or lost such holder's right to
dissent from the Merger under the DGCL, and shall be entitled to receive only
the payment provided by Section 262 of the DGCL with respect to such Shares. The
Company shall give the Purchaser (i) prompt notice of any written demands for
appraisal of any Dissenting Shares, attempted withdrawals of such demands, and
any other instruments served pursuant to applicable law received by the Company
relating to stockholders' rights of appraisal and (ii) the opportunity to direct
all negotiations and proceedings with respect to demand for appraisal under the
DGCL. The Company shall not, except with the prior written consent of the
Purchaser, voluntarily make any payment with respect to any demands for
appraisals of Dissenting Shares, offer to settle or settle any such demands or
approve any withdrawal of any such demands.
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4.5 STOCK OPTION PLAN. Immediately prior to the Effective Time
each unexpired and unexercised option to purchase Shares (each a "COMPANY
OPTION") outstanding pursuant to the Company's Pre-1984 Stock Option Plan, 1984
Incentive Stock Option Plan, 1984 Nonstatutory Stock Option Plan, 1993 Stock
Option Plan, 1993 Outside Directors Stock Option Plan, 1997 Outside Directors
Stock Option Plan or 1998 Stock Option Plan or pursuant to any separate option
agreements (collectively, the "COMPANY STOCK OPTION PLAN") may be exercised in
full in accordance with its terms. Each Company Option subject to the Pre-1984
Stock Option Plan, 1984 Incentive Stock Option Plan, 1984 Nonstatutory Stock
Option Plan and 1998 Stock Option Plan not so exercised shall be deemed to be
automatically terminated as of the Effective Time. Each Company Option subject
to the 1993 Stock Option Plan, the 1993 Outside Directors Option Plan and 1997
Outside Directors Option Plan not so exercised shall be deemed to be
automatically converted into an option (a "PURCHASER OPTION") to purchase a
number of Purchaser Shares equal to the number of Shares that could have been
purchased under the Company Option multiplied by the Exchange Ratio, with the
resulting number of shares rounded down to the nearest whole share, at a price
per Purchaser Share equal to the option exercise price determined pursuant to
the Company Option divided by the Exchange Ratio, with the resulting exercise
price rounded up to the nearest whole cent. Such Purchaser Option shall
otherwise be subject to the same terms and conditions as the Company Option. The
Purchaser shall reserve for issuance a sufficient number of Purchaser Shares for
issuance upon exercise of such Purchaser Options.
4.6 WARRANTS. Immediately prior to the Effective Time each
unexpired and unexercised Company Warrant (as defined below) outstanding may be
exercised in full in accordance with its terms. Each Company Warrant not so
exercised shall be deemed to be automatically converted into a warrant (a
"PURCHASER WARRANT") to purchase a number of Purchaser Shares equal to the
number of Shares that could have been purchased under the Company Warrant
multiplied by the Exchange Ratio, with the resulting number of shares rounded
down to the nearest whole share, at a price per Purchaser Share equal to the
warrant exercise price determined pursuant to the Company Warrant divided by the
Exchange Ratio, with the resulting exercise price rounded up to the nearest
whole cent. Such Purchaser Warrant shall otherwise be subject to the same terms
and conditions as the Company Warrant. The Purchaser shall reserve for issuance
a sufficient number of Purchaser Shares for issuance upon exercise of such
Purchaser Warrants.
4.7 NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. All
Shares issued and outstanding immediately prior to the Effective Time shall no
longer be outstanding and shall automatically be canceled and retired and shall
cease to exist, and each holder of a Certificate or instrument representing any
such Shares shall, to the extent such Certificate or instrument represents such
Shares, cease to have any rights with respect thereto, except the right to
receive the Merger Consideration upon surrender of such Certificate or
instrument in accordance with Section 4.2.
4.8 WITHHOLDING RIGHTS. Each of the Purchaser and the Surviving
Corporation shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of Shares such
amounts as the Purchaser or the Surviving Corporation is required to deduct or
withhold with respect to the making of such payment under the Code, or any
provision of state, local or foreign tax law. To the extent that amounts are so
withheld, such
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withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of the Shares in respect of which such deduction and
withholding was made by the Purchaser or the Surviving Corporation, as the case
may be.
4.9 LOST, STOLEN OR DESTROYED CERTIFICATES. If any Certificate
shall have been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the person claiming such Certificate to be lost, stolen or
destroyed and, if required by the Surviving Corporation, the posting by such
person of a bond in such reasonable amount as the Surviving Corporation may
direct as indemnity against any claim that may be made against it with respect
to such Certificate, the Exchange Agent will deliver in exchange for such lost,
stolen or destroyed Certificate the applicable Merger Consideration with respect
to the Shares formerly represented thereby and any cash in lieu of fractional
Purchaser Shares deliverable in respect thereof, pursuant to this Agreement.
4.10 STOCK TRANSFER BOOKS. At the Effective Time, the stock
transfer books of the Company shall be closed and there shall be no further
registration of Shares thereafter on the records of the Company. On or after the
Effective Time, any Certificates presented to the Exchange Agent for any reason
shall be converted into the Merger Consideration with respect to the Shares
formerly represented thereby (including any cash in lieu of fractional Purchaser
Shares to which the holders thereof are entitled pursuant to Section 4.3).
4.11 FURTHER ASSURANCES. If, at any time after the Effective Time,
any further action is necessary or desirable to carry out the purposes of this
Agreement and to vest the Surviving Corporation with full right, title and
possession to all assets, property, rights, privileges, powers and franchises of
the Company and the Merger Sub, the officers and directors of the Surviving
Corporation are fully authorized in the name of the Company and the Merger Sub
to take, and will take, all such lawful and necessary action, so long as such
action is consistent with this Agreement.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
5.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to the Purchaser that:
(a) CORPORATE ORGANIZATION AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and is in good standing as a foreign corporation in
each jurisdiction where the properties owned, leased or operated, or the
business conducted, by it require such qualification, except for such failure to
so qualify or be in such good standing, which, when taken together with all
other such failures, could not reasonably be expected to have a material adverse
effect on the Company or its subsidiaries or their respective businesses,
condition (financial or otherwise), properties, prospects or results of
operations or Liabilities (as defined below) of the Company or its subsidiaries
(a "COMPANY MATERIAL ADVERSE EFFECT"). The Company has the requisite corporate
power and authority to carry on its business as it is now being conducted. The
Company has made available to the Purchaser a complete and correct copy of the
Company's
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Certificate of Incorporation and By-laws and the charter documents of each of
its subsidiaries, each as amended to date. Except as set forth in Schedule
5.1(l), the Company's Certificate of Incorporation and By-laws and the charter
documents of each of its subsidiaries so delivered are in full force and effect.
(b) CORPORATE AUTHORITY. Subject only to approval of this
Agreement by the holders of a majority of the outstanding Shares, the Company
has the requisite corporate power and authority and has taken all corporate
action necessary in order to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. This Agreement is a valid and
binding agreement of the Company enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally.
As of the date of this Agreement, the Board of Directors of the Company (i) has,
without a negative vote, approved the Merger and this Agreement and the
transactions contemplated herein and (ii) has received the opinion of its
financial advisor, Prudential Vector Healthcare Group, a unit of Prudential
Securities ("PRUDENTIAL VECTOR"), to the effect that the consideration to be
received by the holders of the Shares in the Merger is fair to such holders
(other than the Purchaser and its affiliates) from a financial point of view,
and such opinion (the "FAIRNESS OPINION"), a copy of which has been delivered to
the Purchaser, has not been withdrawn, revoked or modified.
(c) GOVERNMENTAL FILINGS; NO VIOLATIONS.
(i) Other than the filings provided for in Section 1.3,
the Securities Act, the Securities Exchange Act of 0000 (xxx "XXXXXXXX XXX," and
all such filings being herein referred to as the "REGULATORY FILINGS"), no
notices, reports or other filings are required to be made by the Company with,
nor are any consents, registrations, approvals, permits or authorizations
required to be obtained by the Company from, any governmental or regulatory
authority, agency, commission or other entity, domestic or foreign
("GOVERNMENTAL ENTITY"), in connection with the execution and delivery of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby, the failure to make or obtain any or all of which is
reasonably likely to have a Company Material Adverse Effect, or could prevent,
materially delay or materially burden the transactions contemplated by this
Agreement.
(ii) The execution and delivery of this Agreement by the
Company do not, and the consummation by the Company of the transactions
contemplated by this Agreement will not, constitute or result in (i) a breach or
violation of, or a default under, the Certificate of Incorporation or Bylaws of
the Company, (ii) except as set forth on Schedule 5.1(c)(ii) hereto, a breach or
violation of, a default under or the triggering of any payment or other material
obligations pursuant to, any of the Company's existing Compensation and Benefit
Plans (as defined in Section 5.1(h)) or any grant or award made under any of the
foregoing, (iii) except as set forth on Schedule 5.1(c)(ii), a breach or
violation of, or a default under, the acceleration of or the creation of a lien,
pledge, security interest or other encumbrance on assets (with or without the
giving of notice or the lapse of time) pursuant to, any provision of any
agreement, instrument, lease, contract, note, mortgage, indenture, arrangement
or other obligation (a "CONTRACT") to which the Company is a party or by or to
which the Company or any of its properties or assets is bound or subject or any
law, rule, ordinance or regulation or judgment, decree, order, award or
governmental or non-governmental permit or license to which the
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Company is subject or (iv) any change in the rights or obligations of any party
under any of the Contracts, except, in the case of clause (iii) or (iv) above,
for such breaches, violations, defaults, accelerations or changes that, alone or
in the aggregate, could not result in the creation of any lien, pledge, security
interest, charge or encumbrance of any kind ("LIEN") upon any assets of the
Company or that could not prevent, materially delay or materially burden the
transactions contemplated by this Agreement.
(iii) The Company has all licenses, franchises, permits,
clearances, consents, certificates and other evidences of authority necessary to
the conduct of the Company's business and operations as currently conducted
("PERMITS") which Permits are in full force and effect and neither the Company
nor any of its subsidiaries is in violation of any Permit in any material
respect. The business of the Company and each of its subsidiaries has been
conducted in compliance with all applicable laws, regulations, orders and other
requirements of Governmental Entities, including, without limiting the
generality of the foregoing, all laws, regulations and orders relating to
employment practices and procedures, the health and safety of employees and
export controls, except where any non compliance has not had, or would not have,
a Company Material Adverse Effect.
(iv) To the knowledge of the Company, no statute has been
enacted nor has any rule or regulation been adopted by any state where laws
apply to the business of the Company or any federal agency or authority which
may reasonably be expected to have a Company Material Adverse Effect which has
not yet been reflected in the operating results of the Company.
(d) CAPITAL STRUCTURE. The authorized capital stock of the Company
consists of 40,000,000 Shares of which 18,858,786 Shares were outstanding at the
close of business on September 30, 2000. All of the outstanding Shares have been
duly authorized and are validly issued, fully paid and nonassessable and not
subject to preemptive rights. As of August 31, 2000, the Company had 42,298
Shares held in its treasury, 50,000 Shares reserved for issuance upon the
exercise of an outstanding warrant (the "COMPANY WARRANTS") and 4,316,270 Shares
reserved for issuance pursuant to options granted under the Company Stock Option
Plan. As of the date of this Agreement, except for this Agreement, and as
disclosed in this Section 5.1(d), the Company has no Shares reserved for
issuance and there are no options, warrants, calls, rights, commitments or
agreements of any character to which the Company is a party or by which it is
bound obligating the Company to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock of the Company or
obligating the Company to grant, extend or enter into any such option, warrant,
call, right, commitment or agreement. After the Effective Time the Surviving
Corporation will have no obligation to issue, transfer or sell any securities of
the Surviving Corporation pursuant to any Compensation and Benefit Plan (as
defined in Section 5.1(h)). Assuming conversion and exercise of all options,
warrants and other rights to acquire Company Common Stock, the Company would
have 23,255,056 shares of Company Common Stock issued and outstanding.
(e) COMPANY REPORTS; FINANCIAL STATEMENTS.
(i) The Company has filed with the Securities and
Exchange Commission (the "SEC") and delivered to the Purchaser the Company's
Annual Report on Form 10-K for the
-9-
year ended March 31, 2000 (the "FORM 10-K") and any other registration
statements, schedules, reports, proxy statements or information statements
(collectively, "COMPANY REPORTS") filed or required to be filed since March 31,
2000. As of their respective dates, the Company Reports complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, and the rules and regulations promulgated thereunder applicable to
the Company Reports, and the Company Reports did not, and any Company Reports
filed with the SEC subsequent to the date hereof will not, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances in which they were made, not misleading. The financial statements
of the Company included in the Company Reports comply as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with generally accepted accounting principles ("GAAP") (except, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly and accurately present the financial position of the
Company as of the dates thereof and its results of operations, stockholders
equity and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments) and are in all
material respects in accordance with the books of account and records of the
Company. The Company has delivered to the Purchaser a copy of the financial
statements included in the Form 10-K (including an auditor's opinion). The
Company has delivered to the Purchaser unaudited consolidated balance sheets and
consolidated income statements as of the end of the calendar months ending July
31, 2000 and August 31, 2000, together with statements of retained earnings and
cash flows for each such period. Such financial statements have been prepared in
accordance with GAAP (subject to normal year-end adjustments and the addition of
footnotes or other explanatory material associated with its financial statements
prepared in accordance with GAAP) applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and fairly
and accurately present the financial position and results of operations of the
Company for such periods, and have been prepared in accordance with the books
and records of the Company on a consistent basis.
(ii) None of the information supplied or to be supplied by
the Company for inclusion in (A) the Company's proxy or information statement
with respect to its meeting of stockholders (the "PROXY STATEMENT/PROSPECTUS")
to approve the transactions contemplated hereby and (B) the registration
statement on Form S-4 or other appropriate registration form to be filed with
the SEC by the Purchaser in connection with the offer and issuance of the
Purchaser Shares and Purchaser Warrants in or as a result of the Merger (the
"REGISTRATION STATEMENT") including the Proxy Statement/Prospectus included
therein will, in the case of the Proxy Statement/Prospectus, at the time of
mailing of the Proxy Statement/Prospectus to stockholders of the Company and at
the time of the meeting of such stockholders to be held in connection with the
Merger (the "MEETING"), contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements made, in light of the circumstances under which they are made,
not misleading or, in the case of the Registration Statement, 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 to make the statements therein not misleading.
The Proxy Statement/Prospectus will comply as to form in all material respects
with the provisions of the
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Exchange Act and the rules and regulations thereunder, except that no
representation is made by the Company with respect to information supplied by
the Purchaser for inclusion in the Proxy Statement/Prospectus.
(f) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as specifically
disclosed in the Company Reports (but not the exhibits or other agreements
referenced therein) or as set forth in Schedule 5.1(f), since March 31, 2000,
the Company and its subsidiaries have conducted its business only in the
ordinary and usual course of such business and there has not been:
(i) any material adverse change in the Company, its
subsidiaries or their respective businesses, conditions (financial or
otherwise), properties, prospects, Contracts or results of operations or
Liabilities ("MATERIAL ADVERSE CHANGE");
(ii) any damage, destruction or loss, whether or not
covered by insurance;
(iii) any waiver by the Company of a valuable right or of a
debt owed to it;
(iv) any satisfaction, settlement or discharge of any Lien
or payment of any obligation by the Company, except in the ordinary course of
business and which is not material to the assets, properties, financial
condition, operating results or business of the Company or any subsidiary (as
such business is presently conducted);
(v) any change or amendment to a material Contract by
which the Company, its subsidiaries or any of their assets or properties are
bound or subject;
(vi) any declaration, authorization, setting aside or
payment of any dividend or other distribution (whether in cash, stock or
property) with respect to any of the Company's or its subsidiaries' capital
stock;
(vii) any split, combination or reclassification of any of
its capital stock or any issuance or the authorization of any issuance of any
other securities in respect of, in lieu of or in substitution for shares of
their capital stock;
(viii) any issuance, or authorization for issuance, or any
commitment to issue, any equity security, bond, note or other security of the
Company or any of its subsidiaries, except for Company Common Stock issuable
upon the exercise of the Company Warrants or options granted under the Company
Stock Option Plan;
(ix) any incurrence of debt for borrowed money;
(x) any loan to any person (including advances to
employees, officers or directors of the Company) or guarantee of any
indebtedness of another person;
(xi) any purchase, redemption or other acquisition or
commitment to acquire, directly or indirectly, any share or shares of Company
Common Stock or a subsidiary's capital stock;
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(xii) except as contemplated by this Agreement, any
disposition of, or agreement to dispose of, by sale, lease, license or
otherwise, any asset or property, tangible or intangible, except, in the case of
such assets and property, in the ordinary and usual course of business.
(xiii) except for short-term investment securities, any
purchase or agreement to purchase or otherwise acquire any securities of any
corporation, partnership, joint venture, firm or other entity
(xiv) any expenditure or commitment for the purchase,
license, acquisition, construction or improvement of a capital asset;
(xv) any sale, assignment, transfer or conveyance or
commitment to sell, assign, transfer or convey, any Intellectual Property (as
defined below);
(xvi) any change in any compensation arrangement or
agreement with any employee, director or consultant, or any adoption or
amendment of any bonus, incentive, profit-sharing, stock option, stock purchase,
pension, retirement, deferred-compensation, severance, life insurance, medical
or other benefit plan, agreement, trust, fund, policy or arrangement for the
benefit of employees of any kind whatsoever; or
(xvii) any amendment or modification in its Certificate of
Incorporation or By-laws, or commitment to amend or modify its Certificate of
Incorporation or By-laws, except as contemplated in this Agreement.
Except as set forth on Schedule 5.1(f), since March 31, 2000, there has not been
(x) any granting by the Company or its subsidiaries to any of their officers of
any increase in compensation, (y) any granting by the Company or any of its
subsidiaries to any such officer of any increase in severance or termination pay
or (z) any entry by the Company or any of its subsidiaries into any employment,
severance or termination agreement with any such officer.
(g) LITIGATION, INVESTIGATIONS AND LIABILITIES.
(i) Except as disclosed in the Company Reports filed with
the SEC prior to the date hereof, the Company's Annual Report on Form 10-K for
the fiscal year ended March 31, 1999, and as set forth on Schedule 5.1(g), as of
the date of this Agreement, there is no action, suit or proceeding pending or
currently threatened (or any reasonable basis therefor known to the Company)
against the Company or any of its subsidiaries. The foregoing includes, without
limitation, actions pending or threatened (or any reasonable basis therefor
known to the Company) involving the prior employment of any of the Company's or
its subsidiaries employees, their use in connection with the Company's business
of any information or techniques allegedly proprietary to any of their former
employers, or their obligations under any agreements with prior employers.
Neither the Company nor any of its subsidiaries is a party or subject to the
provisions of any order, writ, injunction, judgment or decree of any court or
Governmental Entity.
(ii) Except as disclosed on Schedule 5.1(g), there have
been no judicial or administrative proceedings or other investigations and, to
the Company's knowledge there are no
-12-
judicial or administrative proceedings or other investigations pending or
threatened alleging violation by the Company or any of its subsidiaries of any
local, state or federal laws, regulations and orders respecting the business of
the Company or any of its subsidiaries including, without limitation, laws,
regulations and orders promulgated under the Food and Drug Administration Act or
other Governmental Entity regulating the Company's or its subsidiaries'
businesses or products which could reasonably be expected to have a Company
Material Adverse Effect (either individually or in the aggregate); and the
Company has not received any notice of any investigation, claim or proceeding
against the Company by any such Governmental Entity; and the Company is not
aware of any fact or circumstance which could involve the Company in any such
proceeding, investigation or claim or impose any such liability upon the Company
and which could reasonably be expected to have a Company Material Adverse Effect
(either individually or in the aggregate). Except as disclosed on Schedule
5.1(g), neither the Company nor any of its subsidiaries has received in the past
twelve months any inquiries from a Governmental Entity relating to its business
practices or products, which have not been publicly disclosed whether or not
such inquiry resulted in an investigation by such Governmental Entity.
(iii) The Company is not aware of any judicial or
administrative proceedings or other investigations by any Governmental Entity,
pending or threatened, alleging violation of any laws, regulations and orders by
any licensee of the Company or its subsidiaries relating to any product rights
licensed by the Company or a subsidiary; and the Company is not aware of any
fact or circumstance which could involve any of the Company's or its
subsidiaries' licensees in any such proceeding and investigation and which could
reasonably be expected to have a Company Material Adverse Effect (either
individually or in the aggregate). Except as disclosed on Schedule 5.1(g),
neither the Company nor the Company's subsidiaries have received, and to the
Company's knowledge no licensee of the Company or a subsidiary has received, any
inquiries from any Governmental Entity within the past twelve (12) months
relating to the manufacture or sale of the contrast imaging agent know as
Optison.
(iv) Except as set forth in the financial statements for
the month ending August 31, 2000, the Company and its subsidiaries have no
liabilities or obligations of any nature (whether accrued, absolute, contingent
or otherwise) ("LIABILITIES") and there exists no existing fact, condition or
circumstance which could reasonably be expected to result in a Liability, except
as set forth in item 2 of Schedule 5.1(f) or items 2, 7 and 8 of Schedule 5.1(g)
and except Liabilities incurred in the ordinary course of business which could
not reasonably be expected to have a Company Material Adverse Effect (either
individually or in the aggregate).
(h) NO DEFAULTS; CONTRACTS. Neither the Company nor any of its
subsidiaries is in violation of or default under any provisions of its
respective Certificate of Incorporation or Bylaws or charter document or any
provision of any federal or state judgment, order, writ, decree, statute, rule
or regulation applicable to the Company or any of its subsidiaries. Except as
set forth in Schedule 5.1(h) all Contracts to which the Company or any of its
subsidiaries is a party or by which it is bound are valid, binding and in full
force and effect subject to the effect of applicable bankruptcy, insolvency and
other similar laws affecting the enforceability of creditors' rights generally,
general equitable principles and the discretion of courts in granting equitable
remedies. Except as disclosed on Schedule 5.1(h), each party thereto has
performed in all material respects their obligation under the Contracts, and
neither the Company nor any of its subsidiaries, nor to the Company's knowledge
any other party thereto, is in default under any of
-13-
the Contracts, nor has there occurred any event or circumstance which with
notice or lapse of time or both would constitute a default or event of default
on the part of the Company or any of its subsidiaries, nor to the Company's
knowledge any other party thereto, or give to any other party thereto the right
to terminate or modify any Company Contracts. Except as disclosed on Schedule
5.1(h), the Company has not received notice (written or oral) that any party to
any Contracts intends to cancel, terminate or refuse to renew (if renewable)
such Contracts or to exercise or decline to exercise any option or right
thereunder. All Liabilities of the Company under any Contracts with respect to
the license, development, manufacturing, use or sale of the product known as
Optison in the Mallinckrodt Territory (as defined below) have been irrevocably
assumed by Mallinckrodt, Inc. For purposes of this section "Mallinckrodt
Territory" shall mean all countries of the world excluding Japan, South Korea
and Taiwan. Schedule 5.1(h) sets forth a list of all material Contracts of the
Company which are valid and existing on the date hereof.
(i) EMPLOYEE BENEFITS.
(i) To the extent required to be disclosed therein, the
Company Reports accurately describe all bonus, deferred compensation, pension,
retirement, profit-sharing, thrift, savings, employee stock ownership, stock
bonus, stock purchase, restricted stock and stock option plans, all employment
or severance Contracts or policies, other material employee benefit plans and
any applicable "change of control" or similar provisions in any plan, Contract
or arrangement which cover employees or former employees of the Company or any
of its subsidiaries (the "COMPENSATION AND BENEFIT PLANS"). The Compensation and
Benefit Plans and all other benefit plans, Contracts or arrangements (regardless
of whether they are funded or unfunded) covering employees or former employees
of the Company (the "EMPLOYEES"), including, but not limited to, "employee
benefit plans" within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") are listed in Schedule 5.1(i).
True and complete copies of all Compensation and Benefit Plans and such other
benefit plans, Contracts or arrangements, including, but not limited to, any
trust instruments and/or insurance Contracts, if any, forming a part of any such
plans and agreements, and all amendments thereto have been furnished to the
Purchaser.
(ii) Except as set forth on Schedule 5.1(i), the Company
and any of its subsidiaries do not have and have not had at any time any
employee benefit plan as described in Section 3(2)(A) or Section 3(2)(B) of
ERISA. Except as disclosed on Schedule 5.1(i), all other employee benefit plans
subject to the provisions of ERISA are in material compliance with the
provisions of ERISA.
(iii) The Company and its subsidiaries do not have any
obligations for retiree health and life benefits under any Compensation and
Benefit Plan, except as set forth on Schedule 5.1(i). Except as disclosed on
Schedule 5.1(i), there are no restrictions on the rights of the Company or any
of its subsidiaries to amend or terminate any such Compensation and Benefit Plan
without incurring any liability thereunder.
(iv) Except as set forth on Schedule 5.1(i) hereto,
neither the Company nor any of its subsidiaries is a party to any oral or
written (A) agreements with any officer or other employee of the Company or any
of its subsidiaries, the benefits of which are contingent, or the
-14-
terms of which are materially altered, upon the occurrence of a transaction
involving the Company of the nature contemplated by this Agreement, (B)
agreements with respect to any officer of the Company or a subsidiary providing
any term of employment or compensation guarantee extending for a period longer
than three months and for the payment of in excess of $100,000 or (C) agreements
or plans, including any stock option plan, stock appreciation rights plan,
restricted stock plan or stock purchase plan, any of the benefits of which will
be increased, or the vesting of the 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.
(j) BROKERS AND FINDERS. Neither the Company nor any of its
subsidiaries, nor any of their officers, directors or employees has employed any
broker or finder or incurred any liability for any brokerage fees, commissions
or finders, fees in connection with the transactions contemplated herein, except
that the Company has employed Prudential Vector as its financial advisors, the
arrangements with which have been disclosed in writing to the Purchaser prior to
the date hereof.
(k) TAKEOVER STATUTES. No "fair price", "moratorium", "control
share acquisition" or other similar antitakeover statute or regulation (each a
"TAKEOVER STATUTE") is applicable to the Merger, except for any such statutes or
regulations as to which all necessary action has been taken by the Company and
its Board of Directors to permit the consummation of the Merger in accordance
with the terms hereof.
(l) SUBSIDIARIES. Except as disclosed on Schedule 5.1(l), the
Company does not presently own or control, directly or indirectly, any interest
in any other corporation, association, partnership or other business entity.
None of the subsidiaries listed on Schedule 5.1(l) are deemed "Significant
Subsidiaries" as defined in Rule 1-02 of Regulation 5-x of the Securities and
Exchange Commission.
(m) INVENTION AND SECRECY. All current and former key employees
and officers of the Company and its subsidiaries have executed an Employee's
Invention and Proprietary Information Agreement in the form previously furnished
to the Purchaser. The Company, is not aware that any of such key employees or
officers is in violation thereof, and the Company will use commercially
reasonable efforts to prevent any such violation.
(n) INTELLECTUAL PROPERTY.
(i) Schedule 5.1(n) lists all Patents (as defined below),
registered and applied for Trademarks (as defined below), and material
unregistered Trademarks, service marks and trade names owned by (or registered
in the name of) the Company that are considered by the Company to be material to
its business or the business of a subsidiary as currently conducted. Schedule
5.1(n) includes as to each Patent or Trademark or Patent and Trademark
applications listed thereon: a Patent number or Patent application number, a
Trademark registration number or Trademark application number, as applicable for
each listed Trademark and non-U.S. Patent, and a docket or Patent number or
Patent application number for each listed U.S. Patent; the country or countries
in which each Patent or Trademark is issued, registered or applied for, as
applicable; the application date or registration date for each listed Trademark
and the docket
-15-
number or issue date for each listed Patent, as applicable; and the owner of
such Patent or Trademark. Except as disclosed therein, all Patents and
Trademarks listed on Schedule 5.1(n) exist and have been maintained in good
standing, including without limitation, the timely payment of any maintenance
fees and annuities thereon. Except as disclosed in Schedule 5.1(n), the Company
and its subsidiaries have taken all actions which it considers commercially
reasonable and made all applications and filings which it considers commercially
reasonable pursuant to applicable laws to secure, perfect and protect its rights
in the Intellectual Property (as defined below); and, neither the Company, nor
to the Company's knowledge, any of its agents have practiced inequitable conduct
under the Patent laws or other applicable laws with respect to any of the
foregoing. The Company and its subsidiaries have taken all steps which they
consider commercially reasonable (including without limitation entering into
appropriate confidentiality, non-disclosure and non-competition agreements with
all officers, directors and employees of the Company and its subsidiaries with
access to or knowledge of the Intellectual Property (as defined below) of the
Company and its subsidiaries (and the products and technology of the Company and
its subsidiaries)) to safeguard and maintain the secrecy and confidentiality of,
and to assign to the Company or its subsidiaries, all of such employee's rights
in all such Intellectual Property invented or developed by such employee within
the scope of such employee's employment and relating to the Company's or its
subsidiaries' businesses.
(ii) Except as set forth in the Schedule 5.1(n), the
Company or its subsidiaries owns, is duly licensed or otherwise has the right to
use, license or sublicense all of the Intellectual Property used by the Company
or its licensees (pursuant to a license or sublicense from the Company) in
connection with their respective businesses as presently conducted and as
proposed to be conducted through the Effective Date; and except as set forth in
Schedule 5.1(n) the Company has no reason to believe that such Intellectual
Property is not valid and enforceable against third parties. Except as set forth
in Schedule 5.1(n), the Company owns, on an exclusive basis, free and clear of
any Liens, and has the unrestricted right to use, license, sell or dispose of,
and the right to bring infringement actions with respect to all the Intellectual
Property owned by the Company. Except as set forth in Schedule 5.1(n), the
Company and its subsidiaries do not pay, and have no obligation (whether
absolute or contingent) to pay, royalties, honoraria, fees or other payments to
any person by reason of the ownership, use, license, sale or disposition of any
issued Patents by the Company or its subsidiaries. Except as set forth in
Schedule 5.1(n), neither the Company nor its subsidiaries has received notice
(written or oral) of any claim of any person asserting rights in, or a conflict
with, the Intellectual Property used or required for use in connection with the
business of the Company, its subsidiaries or their respective licensees as
presently conducted and as proposed to be conducted (including without
limitation the Patents and Trademarks listed in Schedule 5.1(n)) and neither the
Company nor any of its subsidiaries has been informed of any reasonable basis
for such a claim. Without limiting the foregoing, to the Company's knowledge, no
other person has claimed the right to use in connection with substantially
similar or closely related goods and in the same geographic area any Trademark
which is identical or confusingly similar to any Trademark used by the Company
or any of its subsidiaries, except pursuant to written agreements with the
Company or any of its subsidiaries which are listed in Schedule 5.1(n). Except
as set forth on Schedule 5.1(n), neither the Company nor any of its subsidiaries
has provided notice (written or oral) to any person of infringement of any
Intellectual Property right held by the Company or any of its subsidiaries; and
neither the Company nor or any of its subsidiaries has been informed of any
reasonable basis for such a claim. Except as set forth on Schedule 5.1(n), there
is no Contract or understanding (written or
-16-
oral) between the Company or any of its subsidiaries and another person which
would prevent or restrict the Company, any of its subsidiaries or the Purchaser
after the Merger from using, selling, licensing or disposing of any material
Intellectual Property of the Company or any of its subsidiaries on substantially
the same terms and conditions applicable to the Company or any of its
subsidiaries immediately prior to the Merger.
(iii) The entry by the Company into this Agreement will not
require the consent of any third party (other than consents that have been
obtained by the Company or any of its subsidiaries and provided to the
Purchaser) who is a party to an agreement, arrangement or understanding
described in Schedule 5.1(n) nor otherwise adversely affect the validity of any
such agreement, arrangement or understanding, nor adversely affect the benefit
that inures to the Company or any of its subsidiaries from such agreement,
arrangement or understanding. Schedule 5.1(h) lists all material Contracts or
understandings (whether written or oral, and if oral, Schedule 5.1(h) contains a
brief description of the principal terms thereof) pursuant to which the Company
and any of its subsidiaries has either purchased, sold, licensed, secured or
disposed of rights in Intellectual Property from or to another person or agreed
to do any of the foregoing (other than licenses to commercially available
off-the-shelf computer software acquired or entered into by the Company or any
of its subsidiaries in the ordinary course of business) ("INTELLECTUAL PROPERTY
AGREEMENTS"). Except as disclosed in Schedule 5.1(h) each of the parties thereto
have performed, in all material respects, all obligations under each
Intellectual Property Agreement which are required to be performed by such
party, and there is no default (or event which with notice or lapse of time
would constitute a default) by the Company or any of its subsidiaries
thereunder, and to the Company's knowledge, there is no default (or event which
with notice or lapse of time would constitute a default) by any other party
thereunder. Except as set forth in Schedule 5.1(n), neither the Company nor any
of its subsidiaries has received notice (written or oral) that any party to any
Intellectual Property Agreement intends to cancel, terminate or refuse to renew
(if renewable) such Intellectual Property Agreement or intends to decline to
exercise any option or right thereunder.
(iv) Except as disclosed in Schedule 5.1(n), to the
Company's knowledge, the operation of the business of the Company and its
subsidiaries as presently conducted and, as proposed to be conducted through the
Effective Date (including without limitation, the manufacture, sale, use, trade
dress, packaging, license, or other exploitation of products and technology
currently marketed or in development) does not and will not infringe, trespass
or otherwise violate the valid Intellectual Property rights of any person.
Without limiting the foregoing, and except as disclosed in the Company Reports
or as disclosed in Schedule 5.1(n), neither the Company nor any of its
subsidiaries has received any notice (written or oral) of any infringement of
any Intellectual Property right held by another person; and, there is no
reasonable basis for such a claim. Except as set forth in the Intellectual
Property Agreements, neither the Company nor any of its subsidiaries is
obligated to indemnify any person for any material liability, cost or expense
arising from such person's use, sale, licensing or disposition of any
Intellectual Property or such person's manufacture, use, sale, license or other
exploitation of any product or technology. Mallinckrodt Inc. has assumed all of
the Company's and its subsidiaries' obligations and liabilities relating to or
arising out of Intellectual Property disputes involving Optison in the
Mallinckrodt Territory.
-17-
(v) As used herein, the following capitalized terms shall
have the meanings ascribed to them as set forth below: "INTELLECTUAL PROPERTY"
shall mean any and all Patents, Trademarks, Copyrights, and Trade Secrets.
"PATENTS" shall mean patents, including U.S. and foreign patents, pending patent
applications and counterparts (whether original, reissue, reexamine, division,
continuation, continuation-in-part, or extension thereof), patent disclosures
and invention disclosures. "TRADEMARKS" shall mean trademarks, trade names,
trade dress, domain names, service marks, or copyrights (in each case, whether
registered or not) as well as any application therefor or registration thereof
and all goodwill associated therewith.
(o) TITLE TO PROPERTY AND ASSETS. Except as disclosed on Schedule
5.1(o), the Company 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 properties and assets, free and clear of all Liens, except (i) as
reflected in the financial statements included in the Form 10-K, (ii) Liens for
taxes not yet due and payable and (iii) for Liens and imperfections of title
which are not material in character, amount or extent, and which do not
materially impair the Company's ownership or use of such property or assets.
(p) TAX RETURNS AND PAYMENTS.
(i) The Company and each of its subsidiaries has timely
filed, in accordance with applicable law, all Tax Returns (as defined below)
that it was required to file, (ii) all such Tax Returns were correct and
complete in all material respects, (iii) all material Taxes due and payable by
the Company and each of its subsidiaries (whether or not shown on any Tax
Return) have been paid, (iv) neither the Company nor any of its subsidiaries
currently is the beneficiary of any extension of time within which to file any
Tax Return, (v) since December 31, 1997, no written claim has been made with
respect to the Company or any of its subsidiaries by an authority in a
jurisdiction where the Company or any of its subsidiaries does not file Tax
Returns that the Company or any of its subsidiaries is or may be subject to
taxation by that jurisdiction, and (vi) there are no security interests or other
encumbrances on any of the assets of the Company or any of its subsidiaries that
arose in connection with any failure (or alleged failure) to pay any Tax (as
defined below).
(ii) The Company and each of its subsidiaries has withheld
and paid all material Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent contractor,
creditor, stockholder, or other third party.
(iii) There is no dispute or claim concerning any Tax
liability of the Company or any of its subsidiaries either (i) claimed or raised
by any authority in writing or (ii) with respect to any potentially material Tax
liability, as to which any of the officers (and employees responsible for Tax
matters) of the Company or any of its subsidiaries has knowledge based upon
personal contact with any agent of such authority. Schedule 5.1(p) lists all
federal, all state, all material local, and all material foreign income and
franchise Tax Returns filed with respect to the Company and each of its
subsidiaries for taxable periods ended on or after December 31, 1997, indicates
those Tax Returns that have been audited, and indicates those Tax Returns that
currently are the subject of audit. The Company has delivered to the Purchaser
correct and complete copies of all federal income Tax Returns, examination
reports, and statements of
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deficiencies assessed against or agreed to by the Company and each of its
subsidiaries since December 31, 1997.
(iv) Neither the Company nor any of its subsidiaries has
waived any statute of limitations in respect of Taxes or agreed to any extension
of time with respect to a Tax assessment or deficiency.
(v) Neither the Company nor any of its subsidiaries has
filed a consent under Code ss. 341(f) concerning collapsible corporations.
Neither the Company nor any of its subsidiaries has been a United States real
property holding corporation within the meaning of Code ss. 897(c)(2) during the
applicable period specified in Code ss. 897(c)(1)(A)(ii). Neither the Company
nor any of its subsidiaries (i) has been a member of an affiliated group filing
a consolidated federal income Tax Return, or any similar state, local or foreign
consolidated, combined or unitary Tax Return (other than a group of which the
Company was the common parent corporation) and (ii) has any liability for the
Taxes of any person or entity (other than the Company) under Reg. ss.1.1502-6
(or any similar provision of state, local, or foreign law), as a transferee or
successor, or otherwise.
(vi) The provision for taxes of the Company and each of
its subsidiaries as set forth in the most recent balance sheet included in the
consolidated financial statements forming a part of the Form 10-K is adequate
for all Taxes due or accrued as of the date thereof, whether or not shown as
being due on any Tax Returns or reports.
(vii) Except as set forth on Schedule 5.1(p)
hereto, neither the Company nor any of its subsidiaries has made, is obligated
to make, or is a party to any agreement that could reasonably be expected to
obligate it to make, any payments that are "excess parachute payments" within
the meaning of Section 280G of the Code (determined without regard to whether
any portion of such payment is reasonable compensation for personal services
actually rendered).
(viii) "TAX" or "TAXES" means any federal, state, local, or
foreign income, gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental (including taxes
under Code ss.59A), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty, or addition thereto, whether disputed or not.
(ix) "TAX RETURN" means any return, declaration, report,
claim for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any amendment
thereof.
(q) INSURANCE. Schedule 5.1(q) sets forth a complete and accurate
list of all insurance policies maintained by the Company and each of its
subsidiaries or for the benefit of the Company and each of its subsidiaries,
respectively. Such policies are in full force and effect, and all premiums due
thereon have been paid. The Company and each of its subsidiaries has complied in
all material respects with the terms and provisions of such policies.
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(r) LABOR AGREEMENTS AND ACTIONS. Neither the Company nor any of
its subsidiaries is bound by or subject to (and none of their respective assets
or properties is bound by or subject to) any written or oral, express or
implied, Contract or arrangement with any labor union, and no labor union has
requested or has sought to represent any of the employees of the Company or any
of its subsidiaries. There is no strike or other labor dispute involving the
Company or any of its subsidiaries pending or threatened, nor is the Company or
any of its subsidiaries aware of any labor organization activity involving their
respective employees.
(s) VOTING ARRANGEMENTS. To the Company's knowledge there are no
outstanding stockholder agreements, voting trusts, proxies or other arrangements
or understandings among the stockholders of the Company or any of its
subsidiaries relating to the voting of their respective shares.
(t) ENVIRONMENTAL. (i) The businesses as presently or formerly
engaged in by the Company and each of its subsidiaries are and have been
conducted in compliance in all material respects with all applicable
Environmental Laws (as defined below), including, without limitation, having all
required permits, licenses and other approvals and authorizations, during the
time the Company and each of its subsidiaries engaged in such businesses, (ii)
the properties presently or formerly owned or operated by the Company and each
of its subsidiaries (including, without limitation, soil, groundwater or surface
water on, under or adjacent to the properties, and buildings thereon) (the
"PROPERTIES") do not contain any Hazardous Substance (as defined below) other
than as permitted under applicable Environmental Law (provided, however, that
with respect to Properties formerly owned or operated by the Company or any of
its subsidiaries, such representation is limited to the period the Company or
any of its subsidiaries owned or operated such Properties), (iii) except as
disclosed on Schedule 5.1(t), neither the Company nor any of its subsidiaries
has received any notices, demand letters or request for information from any
Governmental Entity or any third party indicating that the Company or any of its
subsidiaries may be in violation of, or liable under, any Environmental Law in
connection with the ownership or operation of the Company's or any of its
subsidiaries' businesses, (iv) there are no civil, criminal or administrative
actions, suits, demands, claims, hearings, investigations or proceedings pending
or threatened against the Company or any of its subsidiaries with respect to the
Company or any of its subsidiaries or the Properties relating to any violation,
or alleged violation, of any Environmental Law, (v) no reports have been filed,
or are required to be filed, by the Company or any of its subsidiaries
concerning the release of any Hazardous Substance or the threatened or actual
violation of any Environmental Law on or at the Properties, (vi) no Hazardous
Substance has been disposed of, transferred, released or transported from any of
the Properties during the time such Property was owned or operated by the
Company or any of its subsidiaries, other than as permitted under applicable
Environmental Law, (vii) there have been no environmental investigations,
studies, audits, tests, reviews or other analyses conducted by or which are in
the possession of the Company or any of its subsidiaries relating to the
Company, any of its subsidiaries or the Properties which have not been delivered
to the Purchaser prior to the date hereof, (viii) there are no underground
storage tanks on, in or under any of the Properties and no underground storage
tanks have been closed or removed from any Properties which are or have been in
the ownership of the Company or any of its subsidiaries (provided, however, that
with respect to Properties formerly owned or operated by the Company or any of
its subsidiaries, the representations in this subsection (viii) are limited to
the period the Company and any of its subsidiaries owned or operated such
Properties), (ix) there is no asbestos present in any Property
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presently owned or operated by the Company or any of its subsidiaries, and no
asbestos has been removed from any Property while such Property was owned or
operated by the Company or any of its subsidiaries, (x) none of the Properties
has been used at any time by the Company or any of its subsidiaries as a
sanitary landfill or hazardous waste disposal site and (xi) neither the Company
nor any of its subsidiaries has incurred, and none of the Properties (provided,
however, that with respect to Properties formerly owned or operated by the
Company or any of its subsidiaries, such representation is limited to the period
the Company or any of its subsidiaries owned or operated such Properties) are
presently subject to, any material Liabilities (fixed or contingent) relating to
any suit, settlement, court order, administrative order, judgment or claim
asserted or arising under any Environmental Law.
"ENVIRONMENTAL LAW" means (i) any federal, state and local law,
statute, ordinance, rule, regulation, code, license, permit, authorization,
approval, legal doctrine, order, judgment, decree, consent, injunction,
requirement or agreement between the Company, any of its subsidiaries and any
Governmental Entity, (x) relating to the protection, preservation or restoration
of the environment, (including, without limitation, air, water vapor, surface
water, groundwater, drinking water supply, surface land, subsurface land, plant
and animal life or any other natural resource), or to human health or safety, or
(y) the exposure to, or the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or disposal
of Hazardous Substances, in each case as amended and as now or hereafter in
effect, and (ii) any common law rule that may impose liability or obligations
for injuries or damages due to, or threatened as a result of, the presence of or
exposure to any Hazardous Substance. The term Environmental Law includes,
without limitation, the federal Comprehensive Environmental Response
Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act, the Federal Water Pollution Control Act of 1972, the
federal Clean Air Act, the federal Clean Water Act, the federal Resource
Conservation and Recovery Act of 1976 (including the Hazardous and Solid Waste
Amendments thereto), the federal Solid Waste Disposal Act and the federal Toxic
Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide Act,
the Federal Occupational Safety and Health Act of 1970, each as amended and as
now or hereafter in effect.
"HAZARDOUS SUBSTANCE" means any substance presently or hereafter
listed, defined, designated or classified as hazardous, toxic, radioactive or
dangerous, or otherwise regulated, under any Environmental Law, whether by type
or by quantity, including any substance containing any such substance as a
component. Hazardous Substance includes, without limitation, any toxic waste,
pollutant, contaminant, hazardous substance, toxic substance, hazardous waste,
special waste, industrial substance or petroleum or any derivative or by-product
thereof, radon, radioactive material, asbestos, asbestos containing material,
urea formaldehyde foam insulation, lead and polychlorinated biphenyl.
(u) MINUTE BOOKS. The Company and each of its subsidiaries have
made available to Purchaser all minutes of meetings of directors, committees and
stockholders which reflect all transactions referred to in such minutes
accurately in all material respects.
(v) REAL PROPERTY HOLDING COMPANY. Neither the Company nor any of
its subsidiaries is a "United States real property holding corporation" (as that
term is defined in Section 897(c)(2) of the Code).
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(w) INFORMATION. Neither this Agreement, any schedule or exhibit
hereto, nor any other non-forward looking written statements or certificates
delivered in connection herewith contains any untrue statement of a material
fact made by the Company or any of its subsidiaries or omits to state a material
fact required to be stated herein or therein by the Company or any of its
subsidiaries or necessary to make the statements made by the Company or any of
its subsidiaries herein or therein, in light of the circumstances in which they
were made, not misleading.
5.2 REPRESENTATIONS AND WARRANTIES OF PURCHASER. The Purchaser
represents and warrants to the Company that:
(a) CORPORATE ORGANIZATION AND QUALIFICATION. Each of the
Purchaser and the Merger Sub is a corporation duly organized, validly existing
and in good standing under the laws of the State of New York and Delaware,
respectively, and is in good standing as a foreign corporation in each
jurisdiction where the properties owned, leased or operated, or the business
conducted, by it require such qualification except for such failure to so
qualify or to be in such good standing, which, when taken together with all
other such failures, could not reasonably be expected to have a material adverse
effect on the Purchaser or its business, condition (financial or otherwise),
properties, prospects or results of operations or Liabilities of the Purchaser
and its subsidiaries, taken as a whole (a "PURCHASER MATERIAL ADVERSE EFFECT").
Each of the Purchaser and the Merger Sub has the requisite corporate power and
authority to carry on its business as it is now being conducted. The Purchaser
has made available to the Company a complete and correct copy of the Certificate
of Incorporation and By-laws of the Purchaser and the Merger Sub, each as
amended to date. The Certificates of Incorporation and By-laws so delivered are
in full force and effect.
(b) CORPORATE AUTHORITY. Each of the Purchaser and the Merger Sub
has the requisite corporate power and authority and has taken all corporate
action necessary in order to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. This Agreement is a valid and
binding agreement of each of the Purchaser and the Merger Sub, enforceable
against the Purchaser and the Merger Sub in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium and similar
laws affecting creditors' rights and remedies generally.
(c) GOVERNMENTAL FILINGS; NO VIOLATIONS.
(i) Other than the Regulatory Filings, no notices,
reports or other filings are required to be made by the Purchaser or the Merger
Sub with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained by the Purchaser or the Merger Sub from,
any Governmental Entity in connection with the execution and delivery of this
Agreement by the Purchaser and the Merger Sub and the consummation by the
Purchaser and the Merger Sub of the transactions contemplated hereby, the
failure to make or obtain any or all of which could prevent, materially delay or
materially burden the transactions contemplated by this Agreement.
(ii) The execution and delivery of this Agreement by the
Purchaser and the Merger Sub do not, and the consummation of the transactions
contemplated hereby by the
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Purchaser and the Merger Sub will not, constitute or result in (i) a breach or
violation of, or a default under, the Certificate of Incorporation or By-laws of
the Purchaser or the Merger Sub or (ii) a breach or violation of, a default
under, the acceleration of or the creation of a material Lien upon the assets of
the Purchaser pursuant to, any provision of any Contract of the Purchaser or the
Merger Sub or any law, ordinance, rule or regulation or judgment, decree, order,
award or governmental or non-governmental permit or license to which the
Purchaser or the Merger Sub is subject, except, in the case of clause (ii)
above, for such breaches, violations, defaults or accelerations that, alone or
in the aggregate, could not prevent, materially delay or materially burden the
transactions contemplated by this Agreement.
(d) CAPITAL STRUCTURE; PURCHASER SHARES. The authorized capital
stock of Purchaser consists of 75,000,000 shares of Purchaser Common Stock and
5,000,000 shares of preferred stock, par value $.01 per share ("PURCHASER
PREFERRED STOCK"). At the close of business on June 30, 2000, (i) 47,233,454
shares of Purchase Common Stock were issued and outstanding, (ii) 12,392,759
shares of Purchaser Common Stock were reserved for issuance pursuant to stock
options plans or agreements to purchase shares of Purchaser Common Stock, and
(iii) 500,000 shares of Purchaser Preferred Stock designated as Series F
Preferred Stock were issued and outstanding. All Purchaser Shares to be issued
as part of the Merger Consideration will be, when so issued, duly authorized,
validly issued, fully paid and nonassessable and not subject to preemptive
rights. The Purchaser Shares will be approved for inclusion on the Nasdaq
National Market System.
(e) PURCHASER REPORTS.
(i) The Purchaser has filed with the SEC and delivered to
the Company its Form 10-K for the year ended June 30, 2000 and other reports,
schedules, forms, statements and other documents (collectively, "PURCHASER
REPORTS") filed or required to be filed since June 30, 2000. As of their
respective dates, the Purchaser Reports complied in all material respects with
the requirements of the Securities Act or the Exchange Act, as the case may be,
and the rules and regulations of the SEC promulgated thereunder applicable to
the Purchaser Reports, and the Purchaser Reports did not, and any Purchaser
Reports filed with the SEC subsequent to the date hereof will not, 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 light
of the circumstances under which they were made, not misleading. The financial
statements of the Purchaser included in Purchaser Reports comply as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with GAAP (except, in the case of unaudited statements, as permitted
by Form 10-Q of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly present
the consolidated financial position of the Purchaser and its subsidiaries as of
the dates thereof and their consolidated statements of operations, stockholders
equity and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). The Purchaser has
delivered to the Company a copy of the financial statements included in the
Purchaser's Annual Report on Form 10-K for the year ended June 30, 2000
(including an auditor's opinion). Except as set forth in the Purchaser Reports,
to the Purchaser's knowledge, the Purchaser has no Liabilities required by GAAP
to be set forth on a balance sheet of the
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Purchaser or in the notes thereto, other than Liabilities incurred in the
ordinary course of business consistent with prior practice and experience since
June 30, 2000.
(ii) None of the information supplied or to be supplied by
the Purchaser for inclusion in the Proxy Statement/Prospectus will at the time
of mailing of the Proxy Statement/Prospectus to stockholders of the Company or
at the time of the meeting of such stockholders to be held in connection with
the Merger, contain any untrue statement of a material fact or omits or will
omit to state any material fact required to be stated therein or necessary to
make the statements made therein, in 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 thereunder, except that no representation is made by the
Purchaser with respect to information supplied by the Company for inclusion
therein.
(f) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in
Purchaser Reports filed with the SEC and publicly available prior to the date
hereof, since June 30, 2000, the Purchaser has conducted its business only in
the ordinary course, and there has not been any change in the assets,
liabilities, financial condition, operating results or prospects of the
Purchaser from that reflected in the most recent financial statements filed with
the SEC as part of the Purchaser Reports and publicly available prior to the
date hereof, except for changes which have not had (either individually or in
the aggregate), and could not reasonably be expected to have (either
individually or in the aggregate), a Purchaser Material Adverse Effect.
(g) BROKERS AND FINDERS. Neither the Purchaser nor any of its
officers, directors or employees has employed any broker or finder or incurred
any liability for any brokerage fees, commissions or finders, fees in connection
with the transactions contemplated herein.
(h) INFORMATION. Neither this Agreement nor any other statements
or certificates made or delivered in connection herewith contains any untrue
statement of a material fact made by the Purchaser or omits to state a material
fact required to be stated herein or therein by the Purchaser or necessary to
make the statements made by the Purchaser herein or therein not misleading.
ARTICLE VI.
COVENANTS
6.1 INTERIM OPERATIONS OF THE COMPANY. The Company covenants and
agrees that except as described on Schedule 6.1, prior to the Effective Time
(unless the Purchaser shall otherwise agree in writing (which agreement shall
not be unreasonably withheld) and except as otherwise contemplated by this
Agreement):
(a) the Company shall, and shall cause each subsidiary thereof to,
conduct its respective businesses only in the ordinary and usual course and, to
the extent consistent therewith, the Company shall use its best efforts to
preserve its business organization intact and maintain its existing relations
with customers, suppliers, employees, corporate partners, licensees and business
associates;
-24-
(b) the Company shall not nor shall it permit any of its
subsidiaries to (i) create any subsidiaries; (ii) amend its charter documents;
(iii) split, combine or reclassify the outstanding Shares or any other shares of
capital stock of the Company or such subsidiary; or (iv) declare, set aside or
pay any dividend payable in cash, stock or property with respect to the Shares;
(c) the Company shall not, nor shall it permit any subsidiary to,
(i) issue, sell, pledge, dispose of or encumber any additional shares of, or
securities convertible or exchangeable for, or options, warrants, calls,
commitments or rights of any kind to acquire, any shares of its capital stock of
any class of the Company or such subsidiary or any other property or assets
other than (x) Shares issuable upon exercise of the Company Warrants outstanding
on the date hereof and (y) Shares issuable pursuant to options outstanding on
the date hereof under the Company Stock Option Plan; (ii) transfer, lease,
license, guarantee, sell, mortgage, pledge, dispose of or encumber any assets,
including, without limitation, all intellectual property and technology rights
which it owns or uses, or enter into any collaboration; (iii) incur or modify
any indebtedness or other liability, except in the ordinary course of business
consistent with past practice; (iv) acquire directly or indirectly by redemption
or otherwise any shares of the capital stock of the Company or such subsidiary
or (v) authorize capital expenditures or make any acquisition of, or investment
in, assets or stock of any other person or entity;
(d) except as otherwise provided herein, the Company shall not
grant any severance or termination pay to, or enter into any employment or
severance agreement with, any director, officer or other employee of the Company
or such subsidiary; and the Company shall not, nor shall it permit any
subsidiary to, establish, adopt, enter into, make any new grants or awards under
or amend, any collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement, employee
stock ownership, deferred compensation, employment, termination, severance or
other plan, agreement, trust, fund, policy or arrangement for the benefit of any
directors, officers or employees;
(e) the Company shall not, nor shall it permit any subsidiary to,
settle or compromise any material claims or litigation or modify, amend or
terminate any of its Contracts or waive, release or assign any material rights
or claims;
(f) the Company shall not, nor shall it permit any subsidiary to,
make any tax election or permit any insurance policy naming it as a beneficiary
or a loss payable payee to be canceled or terminated without notice to the
Purchaser;
(g) the Company shall not, nor shall it permit any subsidiary to,
take any of the actions described in Section 5.1(f);
(h) except as expressly permitted hereunder, the Company shall
not, nor shall it permit any subsidiary to, authorize or enter into an agreement
to do any of the foregoing; and
(i) the Company shall, within twenty (20) days after the end of
each calendar month, furnish to the Purchaser an unaudited consolidated balance
sheet and consolidated income statement as of the end of such month, together
with statements of retained earnings and cash flow for such period, all in
detail reasonably satisfactory to the Purchaser and furnished with a certificate
signed by the Chief Financial Officer or Chief Executive Officer stating that,
to his
-25-
knowledge, such financial statements have been prepared in accordance with GAAP
(subject to normal year-end adjustments and the addition of footnotes or other
explanatory material associated with its financial statements prepared in
accordance with GAAP) applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto) and fairly and accurately
present the financial position and results of operations of the Company and its
subsidiaries for such periods, and have been prepared in accordance with the
books and records of the Company on a consistent basis.
6.2 ACQUISITION PROPOSALS.
(a) The Company shall not, nor shall it permit any subsidiary to,
(and the Company shall use its best efforts to cause its officers, directors,
employees, representatives and agents, including, but not limited to, investment
bankers, attorneys and accountants, not to), directly or indirectly, encourage,
solicit, participate in or initiate discussions or negotiations with, or provide
any information to, any corporation, partnership, person or other entity or
group (other than the Purchaser or any of its affiliates or representatives)
concerning any merger, tender offer or exchange offer, involving the Company or
any subsidiary thereof or the sale of all or a significant portion of the
assets, or the sale of shares of capital stock or debt securities of the Company
or any subsidiary thereof, or any similar transaction involving the Company or
any subsidiary thereof (an "ACQUISITION PROPOSAL"). The Company will, and will
cause each subsidiary to, immediately cease any existing activities, discussions
or negotiations with any parties conducted heretofore with respect to any of the
foregoing. Notwithstanding the foregoing, the Company may (i) furnish
information concerning its business, properties or assets to any corporation,
partnership, person or other entity or group pursuant to appropriate
confidentiality agreements (which request is unsolicited after the date of this
Agreement), and (ii) negotiate and participate in discussions and negotiations
with any such entity or group concerning an Acquisition Proposal (x) if such
entity or group has submitted a bona fide written proposal to the Board of
Directors of the Company relating to any such transaction which the Board
determines represents a Superior Proposal (as defined in Section 6.2(b)) and (y)
if, in the opinion of the Board of Directors of the Company, only after receipt
of advice from outside legal counsel to the Company, the failure to engage in
such discussions or negotiations would cause the Board of Directors to violate
its fiduciary duties to the Company's stockholders under applicable law. The
Company will promptly communicate to the Purchaser the terms of any proposal,
discussion, negotiation or inquiry (and will disclose the substance of any
written materials received by the Company in connection with such proposal,
discussion, negotiation, or inquiry) and the identity of the party making such
proposal or inquiry which it may receive in respect of any such transaction.
(b) Subject to the following sentence, the Board of Directors of
the Company shall not (i) withdraw or modify, or propose to withdraw or modify,
in a manner adverse to the Purchaser, the approval or recommendation by such
Board of Directors of the Merger, (ii) solicit, approve or recommend, or propose
to solicit, approve or recommend, any Acquisition Proposal or (iii) approve or
authorize the Company or any of its subsidiaries entering into any agreement
with respect to any Acquisition Proposal. Notwithstanding the foregoing, in the
event the Board of Directors of the Company receives an Acquisition Proposal
that, based on the advice of outside counsel, the Board of Directors is required
to consider in the exercise of its fiduciary obligations and that it determines
to be a Superior Proposal, the Board of Directors may (subject
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to the following sentences) withdraw or adversely modify its approval or
recommendation of the Merger and approve or recommend any such Superior
Proposal, approve or authorize the Company's entering into an agreement with
respect to such Superior Proposal, approve the solicitation of additional
Acquisition Proposals or terminate this Agreement, in each case at any time
after the fifth business day following notice to the Purchaser (a "NOTICE OF
SUPERIOR PROPOSAL") advising the Purchaser that the Board of Directors has
received a Superior Proposal, specifying the material terms of the structure of
such Superior Proposal. The Company may take any of the foregoing actions
pursuant to the preceding sentence only if an Acquisition Proposal that was a
Superior Proposal at the time of delivery of a Notice of Superior Proposal
continues to be a Superior Proposal in light of any improved transaction
proposed by the Purchaser prior to the expiration of the five business day
period specified in the preceding sentence. In addition, if the Board of
Directors proposes to withdraw or adversely modify its approval or
recommendation of the Merger or to approve or recommend any Acquisition Proposal
or to authorize the Company's entering into an agreement with respect to any
Acquisition Proposal, concurrently with withdrawing or adversely modifying such
approval or recommendation, approving or recommending such Acquisition Proposal
or authorizing or approving the Company or any of its subsidiaries entering into
such agreement, the Company shall pay, or cause to be paid, to the Purchaser the
Termination Fee (as defined in Section 8.2(b)) upon the consummation of the
transaction contemplated by such agreement. For purposes of this Agreement, a
"SUPERIOR PROPOSAL" means any bona fide Acquisition Proposal to merge with the
Company or any of its subsidiaries or to acquire, directly or indirectly, a
material equity interest in or a significant amount of voting securities or
assets of the Company or any of its subsidiaries for consideration consisting of
cash and/or securities, and otherwise on terms which the Board of Directors of
the Company determines in its good faith reasonable judgment (based on the
advice of a financial advisor of nationally recognized reputation, including,
without limitation, Prudential Vector) to provide greater aggregate value to the
Company's stockholders than the Merger (or otherwise proposed by the Purchaser
as contemplated above). Nothing contained herein shall prohibit the Company from
taking and disclosing to its stockholders a position contemplated by Rule
14d-9(e) under the Exchange Act prior to the third business day following
Purchaser's receipt of a Notice of Superior Proposal provided that the Company
does not withdraw or modify its position with respect to the Merger or approve
or recommend an Acquisition Proposal.
6.3 MEETINGS OF COMPANY'S STOCKHOLDERS. The Company will take,
consistent with applicable law and its Certificate of Incorporation and By-laws,
all action necessary to convene a meeting of holders of Shares as promptly as
practicable to consider and vote upon the approval of this Agreement and the
Merger. Except as permitted pursuant to Section 6.2 and subject to its fiduciary
duties, as advised by outside counsel, the Board of Directors of the Company
shall recommend such approval and the Company shall take all lawful action to
solicit such approval. At any such meeting of the Company all of the Shares then
owned by Purchaser Companies and any affiliates thereof will be voted in favor
of this Agreement. The Company will promptly prepare and file with the SEC, will
use its reasonable best efforts to have cleared by the SEC and will thereafter
mail to its stockholders as promptly as practicable the Proxy
Statement/Prospectus.
6.4 FILINGS; OTHER ACTION. Subject to the terms and conditions
herein provided, the Company and the Purchaser shall: (a) promptly make their
respective filings and thereafter make
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any other required submissions under all Regulatory Filings with respect to the
Merger; and (b) use their best efforts to promptly take, or cause to be taken,
all other action and do, or cause to be done, all other things necessary, proper
or appropriate under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement as soon as
practicable.
6.5 ACCESS. Upon reasonable notice, the Company shall, and shall
cause its subsidiaries to, afford the Purchaser's officers, employees, counsel,
accountants and other authorized representatives ("REPRESENTATIVES") access,
during normal business hours throughout the period prior to the Effective Time,
to its properties, books, Contracts and records and, during such period, the
Company shall furnish promptly to the Purchaser all information concerning its
business, properties and personnel as the Purchaser or its representatives may
reasonably request.
6.6 NOTIFICATION OF CERTAIN MATTERS. The Company shall give prompt
notice to the Purchaser of any notice of, or other communication relating to,
any default or event that, with notice or lapse of time or both, would become a
default, received by the Company or any of its subsidiaries subsequent to the
date of this Agreement and prior to the Effective Time, under any Contract to
which the Company or such subsidiary is a party or by which the Company or any
of its properties or assets is subject or bound. The Company shall give prompt
notice to the Purchaser of (i) any change or the occurrence of any event which,
so far as reasonably can be foreseen at the time of its occurrence, is
reasonably likely to result in a Company Material Adverse Effect (ii) any notice
or other communication from any third party alleging that the consent of such
third party is or may be required in connection with the transactions
contemplated by this Agreement and (iii) any material development which may
affect the Company, its subsidiaries or their respective business, condition
(financial or otherwise), properties, prospects or results of operations or
Liabilities, whether or not such development could be likely to result in a
Material Adverse Change.
6.7 PUBLICITY. The initial press release with respect to the
transactions contemplated hereby shall be a joint press release by the Company
and the Purchaser and thereafter the Company and the Purchaser shall consult
with each other prior to issuing any press releases or otherwise making public
statements with respect to the transactions contemplated hereby and prior to
making any filings with any Governmental Entity or with any national securities
exchange with respect thereto.
6.8 TAKEOVER STATUTES. If any "fair price," "moratorium," "control
share acquisition" or other form of antitakeover statute or regulation shall
become applicable to the transactions contemplated hereby, the Company and the
members of the Board of Directors of the Company shall grant such approvals and
take such actions as are necessary so that the Merger and the transactions
contemplated hereby may be consummated as promptly as practicable on the terms
contemplated hereby and otherwise act to eliminate or minimize the effects of
such statute or regulation on the transactions contemplated hereby and thereby,
except, in each such case, as would not be consistent with the fiduciary
obligations of the Board of Directors as advised in writing by outside counsel.
6.9 AFFILIATES AGREEMENTS. Prior to Closing, the Company shall
deliver to the Purchaser a letter identifying all persons who are at the time
this Agreement is submitted to the
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stockholders of the Company for approval "affiliates" of the Company for
purposes of Rule 145 under the Securities Act. The Company shall use its best
efforts to cause each such person to deliver to Purchaser on or prior to the
Effective Time a written agreement substantially in the form of Exhibit A
hereto.
6.10 LETTER OF THE COMPANY'S ACCOUNTANTS. The Company shall cause
to be delivered to the Purchaser a letter of Xxxxxx Xxxxxxxx LLP, the Company's
independent auditors, dated a date within two business days before the date on
which the Registration Statement shall become effective and addressed to the
Purchaser, in form and substance reasonably satisfactory to the Purchaser and
customary in scope and substance for letters delivered by independent public
accountants in connection with registration statements similar to the
Registration Statement.
6.11 REGISTRATION STATEMENT. The Purchaser and the Company shall
promptly prepare and file with the SEC the Registration Statement. Each of the
Company and Purchaser shall use all reasonable efforts to have the Registration
Statement declared effective under the Securities Act as promptly as practicable
after such filing. Purchaser shall also use its reasonable effort to obtain
prior to the date the Registration Statement is declared effective all necessary
state securities law or "blue sky" permits and approvals required to consummate
the Merger and the other transactions contemplated by this Agreement.
6.12 INDEMNIFICATION OF DIRECTORS AND OFFICERS.
(a) The Surviving Corporation agrees that all rights to
indemnification existing in favor of the directors, officers or employees of the
Company (with their respective heirs and legal representatives, the "INDEMNIFIED
PARTIES") as provided in the Company's Certificate of Incorporation or By-laws,
as in effect as of the date hereof, with respect to matters occurring through
the Effective Date, shall survive the Merger and shall continue in full force
and effect for a period of six (6) years from the Effective Date. The Surviving
Corporation agrees to maintain in effect for six (6) years after the Effective
Date the current policies of directors' and officers' liability insurance
maintained by the Company with respect to matters occurring prior to the
Effective Date; provided, however, that (i) the Surviving Corporation may
substitute therefor policies with coverage limits of $5,000,000 (with carriers
comparable to the Company's existing carriers) containing terms and conditions
which are no less advantageous to the Indemnified Parties (except with respect
to the $5,000,000 coverage limit) and (ii) notwithstanding the foregoing, the
Purchaser shall not be required to pay an annual premium for such insurance in
excess of one and one-half times the last annual premium paid prior to the date
hereof, but in such case the Purchaser shall purchase as much coverage as
possible for such amount. Copies of the indemnification insurance policies,
policy numbers 000-00-00 (National Union) and YXB001537 (Genesis), which
constitute all the insurance policies currently maintained by the Company in
connection with the indemnification of its directors, officers and employees
(the "INDEMNIFICATION POLICIES"), have been provided to the Purchaser.
(b) In the event that any action, suit, proceeding or
investigation relating hereto or to the transactions contemplated by this
Agreement is commenced, whether before or after the Effective Date, the parties
hereto agree to cooperate and use their respective commercially reasonable
efforts to vigorously defend against and respond thereto.
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(c) This Section is intended to benefit the Indemnified Parties
and shall be binding on all successors and assigns of the Purchaser, the Company
and the Surviving Corporation.
6.13 NO CHANGES IN PURCHASER SHARES. If, between the date of this
Agreement and the Effective Time, the Purchaser shall effect any
reclassification, recapitalization, split-up, amendment to the terms of,
combination or readjustment of Purchaser Shares, the consideration to be
received by Company's stockholders pursuant to this Agreement shall be
appropriately adjusted.
6.14 VOTING AGREEMENT. As an inducement to the Purchaser and Merger
Sub to enter into this Agreement, the Company shall use all reasonable effort to
enter into a Voting Agreement with Mallinckrodt, Inc., Chugai Pharmaceutical
Company, Ltd., State of Wisconsin Investment Board and all members of management
pursuant to which such stockholders shall vote to approve this Agreement.
ARTICLE VII.
CONDITIONS
7.1 CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligation of the
Purchaser to consummate the Merger is subject to the fulfillment of each of the
following conditions, any or all of which may be waived in whole or in part by
the Purchaser to the extent permitted by applicable law:
(a) STOCKHOLDER APPROVAL. This Agreement shall have been duly
approved by the holders of a majority of the Shares, in accordance with
applicable law and the Certificate of Incorporation and By-laws of the Company;
(b) GOVERNMENTAL AND REGULATORY CONSENTS. Except such as would not
have a Company Material Adverse Effect or a Purchaser Material Adverse Effect,
all filings required to be made prior to the Effective Time by the Company with,
and all consents, approvals and authorizations required to be obtained prior to
the Effective Time by the Company from, any Governmental Entity in connection
with the execution and delivery of this Agreement by the Company and the
consummation of the transactions contemplated hereby by the Company and
Purchaser, shall have been made or obtained (as the case may be);
(c) OTHER CONSENTS. Any and all notices to or consents or
approvals required from third parties in order to consummate the transactions
contemplated herein relating to Contracts material to the business of the
Company shall have been given or obtained, as the case may be;
(d) LITIGATION. No court or other Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered after
the date of this Agreement any statute, rule, regulation, judgment, decree,
injunction or other order (whether temporary, preliminary or permanent) which is
in effect and prohibits consummation of the transactions contemplated by this
Agreement or imposes material restrictions on the Purchaser or the Company or on
any subsidiaries thereof in connection with the consummation of the Merger or
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with respect to their business operations, either prior to or subsequent to the
Merger (collectively, an "ORDER");
(e) REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS.
The representations and warranties contained in Section 5.1 that are qualified
by materiality or as to a Company Material Adverse Effect shall be true and
correct, and each of the representations and warranties in Section 5.1 that are
not so qualified shall be true and correct in all material respects, as of the
Effective Time as though made at and as of the Effective Time, except for
changes contemplated by this Agreement, and the Company shall have performed all
obligations required to be performed by it under this Agreement at or prior to
the Closing Date;
(f) REGISTRATION STATEMENT. The Registration Statement shall have
become effective under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement shall have been initiated or be
threatened by the SEC;
(g) ABSENCE OF MATERIAL ADVERSE CHANGE. There shall have been no
Material Adverse Change of the Company prior to the Closing;
(h) NONCOMPETITION AGREEMENTS. Xxxxx Xxxxxxxxxx shall have
executed and delivered to the Purchaser a noncompetition agreement in a form
reasonably satisfactory to Purchaser agreeing not to engage in any business
relating to the development, manufacture or sale of ultrasound contrast imaging
agents.
(i) DISSENTING SHARES. The number of Dissenting Shares, if any,
shall not exceed 5% of the total number of outstanding Shares;
(j) CHUGAI AGREEMENT. The terms of the Cooperative Development and
Marketing Agreement between the Company and Chugai Pharmaceutical Co., Ltd.
dated March 31, 1998, shall not have been terminated, amended, modified or
altered;
(k) OPINION OF COUNSEL. The Purchaser shall have received a
written opinion from Xxxxxxx and Colmar, dated the Closing Date, in
substantially the form attached as Exhibit B;
(l) ENVIRONMENTAL DUE DILIGENCE. The Purchaser and/or its agents
shall have completed an environmental due diligence review of the Company and
the results of such review shall be acceptable to the Purchaser in its sole
discretion; and
(m) OFFICER'S CERTIFICATE. The Company shall have furnished the
Purchaser with a certificate of its appropriate officers as to compliance with
the conditions set forth in Sections 7.1(a), (c), (e), (g), (i), (j) and (k)
dated and effective as of the Closing Date.
7.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligations of
the Company to consummate the Merger are subject to the fulfillment of each of
the following conditions, any or all of which may be waived in whole or in part
by the Company to the extent permitted by applicable law:
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(a) STOCKHOLDER APPROVAL. This Agreement shall have been duly
approved by the holders of a majority of the Shares in accordance with
applicable law and the Certificate of Incorporation and By-laws of the Company;
(b) GOVERNMENTAL AND REGULATORY CONSENTS. Except such as would not
have a Company Material Adverse Effect or a Purchaser Material Adverse Effect,
all filings required to be made prior to the Effective Time by the Purchaser
with, and all consents, approvals, permits and authorizations required to be
obtained prior to the Effective Time by the Purchaser from, any Governmental
Entity in connection with the execution and delivery of this Agreement by the
Purchaser and the consummation of the transactions contemplated hereby by the
Purchaser and the Company shall have been made or obtained (as the case may be);
(c) ORDER. There shall be in effect no Order;
(d) REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS.
The representations and warranties contained in Section 5.2 that are qualified
by materiality or as to a Purchaser Material Adverse Effect shall be true and
correct, and each of the representations and warranties in Section 5.2 that are
not so qualified shall be true and correct in all material respects, as of the
Effective Time as though made at and as of the Effective Time, except for
changes contemplated by this Agreement; and the Purchaser shall have performed
all obligations required to be performed by it under this Agreement at or prior
to the Closing Date; and
(e) OPINION OF COUNSEL. The Purchaser shall have received a
written opinion from Pillsbury Madison & Sutro LLP, dated the Closing Date, in
substantially the form attached as Exhibit C; and
(f) OFFICER'S CERTIFICATE. The Purchaser shall have furnished the
Company with a certificate of its appropriate officers as to compliance with the
conditions set forth in Section 7.2(d).
ARTICLE VIII.
TERMINATION, AMENDMENT AND WAIVER
8.1 TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after the approval by holders of
Shares:
(a) by the mutual consent of the Boards of Directors of the
Purchaser and the Company;
(b) by either the Purchaser or the Company (i) if any court or
other Governmental Entity of competent jurisdiction in the United States shall
have issued, enacted, promulgated, enforced or entered an order, statute,
decree, ruling or regulation or taken any other action permanently restraining,
enjoining or otherwise prohibiting the Merger and such order, statute, decree,
ruling, regulation or other action shall have become final and nonappealable or
(ii) if the Merger shall not have been consummated by March 31, 2001;
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(c) by the Company (i) if there should be any material breach of
the Purchaser's representations, warranties or covenants hereunder (other than,
in the case of the Purchaser's representations and warranties, breaches which
could not reasonably be expected to have a Purchaser Material Adverse Effect
(either individually or in the aggregate)), which breach shall not be cured
within ten days of written notice thereof, or (ii) to allow the Company to enter
into an agreement which the Board of Directors of the Company determines to be a
Superior Proposal (provided that, upon such termination pursuant to clause
(ii)), the Company shall pay to the Purchaser the Termination Fee described in
Section 8.2(b);
(d) by the Purchaser if the Board of Directors of the Company
shall have (i) withdrawn or modified, or proposed to withdraw or modify, in a
manner adverse to the Purchaser, its approval or recommendation of this
Agreement or the Merger, (ii) solicited, approved or recommended, or proposed to
solicit, approve or recommend, any Acquisition Proposal or (iii) approved or
authorized the Company's entering into any agreement with respect to any
Acquisition Proposal;
(e) by the Purchaser if (i) there should be any material breach of
the Company's representations, warranties or covenants hereunder (other than, in
the case of the Company's representations and warranties, breaches which could
not reasonably be expected to have a Company Material Adverse Effect (either
individually or in the aggregate)), which breach shall not be cured within ten
days of written notice thereof or (ii) the Company and Mallinckrodt, Inc. (or
its successor) fails to terminate the Investment Agreement dated December 7,
1988, between the parties; or
(f) by either the Purchaser or the Company, for any reason,
provided that upon such termination, the party terminating the Agreement shall
pay the other party as liquidated damages the Termination Fee described in
Section 8.2(b) together with such other party's legal and accounting fees costs
in connection with the Merger (the total of which amounts shall not exceed
$500,000).
8.2 EFFECT OF TERMINATION.
(a) In the event of termination of this Agreement as provided
above, this Agreement shall forthwith become void and there shall be no
liability on the part of any of the Purchaser or the Company (except as set
forth in Section 8.2(b) hereof or their respective directors and officers.
(b) If after the date hereof and during the term of this Agreement
(i) the Purchaser shall have terminated this Agreement pursuant to Sections
8.1(d) or 8.1(e) or (ii) the Company shall have terminated this Agreement
pursuant to Sections 8.1(c)(ii) or 8.1(f) or (iii) the stockholders of the
Company shall have failed to approve the Merger, as applicable then, in any such
case, the Company, if requested by the Purchaser, shall promptly, but in no
event later than two days after the date of such request, pay the Purchaser a
fee of $500,000 (the "TERMINATION FEE"), together with the Purchaser's legal and
accounting fees costs in connection with the Merger (the total of which amounts
shall not exceed $500,000), which amounts shall be payable in same day funds. If
after the date hereof and during the term of this Agreement (i) the Company
shall have terminated this Agreement pursuant to Section 8.1(c)(i) or (ii) the
Purchaser
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shall have terminated this Agreement pursuant to Section 8.1(f), then the
Purchaser, if requested by the Company, shall promptly, but in no event later
than two days after the date of such request, pay the Company a fee of $500,000
(also a "TERMINATION FEE"), together with the Company's legal and accounting
fees in connection with the Merger (the total of which amounts shall not exceed
$500,000). The parties acknowledge that the agreements contained in this Section
8.2(b) are an integral part of the transactions contemplated in this Agreement,
and that, without these agreements, the parties would not enter into this
Agreement; accordingly, if a party fails to promptly pay the amount that it is
required to pay pursuant to this Section 8.2(b), and, in order to obtain such
payment, the other party commences a suit which results in a judgment against
the defaulting party for the fee and expenses set forth in this paragraph (b),
the defaulting party shall pay to the other party its costs and expenses
(including attorneys' fees) in connection with such suit, together with interest
on the amount of the fee at the prime rate of Bank of America NT&SA on the date
such payment was required to be made.
8.3 AMENDMENT. This Agreement may be amended by the parties hereto
by action taken on behalf of their respective Boards of Directors at any time
before or after approval hereof by the stockholders of the Company, but, after
any such approval, no amendment shall be made which reduces the amount or
changes the form of consideration to be paid in the Merger or in any way
adversely affects the rights of holders of the Shares without the further
approval of such holders. This Agreement may not be amended except by an
instrument in writing signed by or on behalf of each of the parties hereto.
8.4 WAIVER. At any time prior to the Effective Date, the parties
hereto, by action taken by their respective Boards of Directors may (a) extend
the time for performance of any of the obligations or other acts of the other
parties hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any other document delivered pursuant hereto and (c)
waive compliance with any of the agreements or conditions 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.
ARTICLE IX.
MISCELLANEOUS AND GENERAL
9.1 PAYMENT OF EXPENSES. Whether or not the Merger shall be
consummated, each party hereto shall pay its own expenses incident to preparing
for, entering into and carrying out this Agreement and the consummation of the
Merger (except as provided in Section 8.2(b)).
9.2 SURVIVAL. The agreements of the Company and the Purchaser
contained in Sections 4.2 (but only to the extent that such Section expressly
relates to actions to be taken after the Effective Time) and 6.12 shall survive
the consummation of the Merger. The agreements of the Company and the Purchaser
contained in Sections 6.7, 8.2 and 9.1 shall survive the termination of this
Agreement. All other representations, warranties, agreements and covenants in
this Agreement shall not survive the consummation of the Merger or the
termination of this Agreement.
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9.3 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which, taken
together, shall constitute one and the same agreement.
9.4 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
9.5 NOTICES. Any notice, request, instruction or other document to
be given hereunder by any party to the others shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid, IF TO THE
PURCHASER, addressed to the Purchaser at 0000 Xxxxxxx Xxxxxx, Xxx Xxxxx,
Xxxxxxxxxx 00000 Attn: General Counsel (with a copy to Xxxx X. Xxxx, Esq.,
Pillsbury Madison & Sutro LLP, 00000 Xx Xxxxxx Xxxx, Xxxxx 000, Xxx Xxxxx,
Xxxxxxxxxx 00000; and IF TO THE COMPANY, addressed to the Company at 00000
Xxxxxx Xxxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000, Attention: President (with a copy to
Xxxxx X. Xxxxxx, Esq. Xxxxxxx and Colmar, 000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx 00000, or to such other persons or addresses as may be
designated in writing by the party to receive such notice.
9.6 ENTIRE AGREEMENT, ETC. This Agreement (including any exhibits,
schedules or Annexes hereto) (a) constitutes the entire agreement, and
supersedes all other prior agreements, understandings, representations and
warranties both written and oral, between the parties with respect to the
subject matter hereof, and (b) shall not be assignable by operation of law or
otherwise and, except for the Indemnified Parties as provided in Section 6.12 is
not intended to create any obligations to, or rights in respect of, any persons
other than the parties hereto.
9.7 DEFINITION OF "SUBSIDIARY". When a reference is made in this
Agreement to a subsidiary of a party, the word "SUBSIDIARY" means any
corporation or other organization whether incorporated or unincorporated of
which at least a majority of the securities or interests having by the terms
thereof ordinary voting power to elect at least 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.
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9.8 CAPTIONS. The Article, Section and paragraph captions herein
are for convenience of reference only, do not constitute part of this Agreement
and shall not be deemed to limit or otherwise affect any of the provisions
hereof.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties hereto as of the day and year
first above written.
ALLIANCE PHARMACEUTICAL CORP.
By: /s/ XXXXX X. XXXX
-----------------------------------------
Name: XXXXX X. XXXX
Title: CHAIRMAN AND CHIEF EXECUTIVE OFFICER
ALLIANCE MERGER SUBSIDIARY, INC.
By: /s/ XXXXX X. XXXX
-----------------------------------------
Name: XXXXX X. XXXX
Title: CHAIRMAN AND CHIEF EXECUTIVE OFFICER
MOLECULAR BIOSYSTEMS, INC.
By: /s/ XXXXX XXXXXXXXXX
-----------------------------------------
Name: XXXXX XXXXXXXXXX
Title: PRESIDENT AND CHIEF EXECUTIVE OFFICER
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