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EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
AMONG
CREATIVE BIOMOLECULES, INC.
ONTOGENY, INC.
REPROGENESIS, INC.
AND
CURIS, INC.
Dated as of February 14, 2000
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TABLE OF CONTENTS
ARTICLE I THE MERGER................................................ A-2
1.1 The Merger................................................. A-2
1.2 Effective Time............................................. A-2
1.3 Effect of the Merger....................................... A-2
Certificate of Incorporation and By-laws of Surviving
1.4 Company.................................................... A-2
1.5 Directors and Officers..................................... A-2
ARTICLE II EFFECTS ON CAPITAL STOCK; EXCHANGE OF CERTIFICATES........ A-2
2.1 Effect of Merger On Capital Stock.......................... A-2
2.2 Cancellation of Treasury Shares............................ A-4
2.3 Stock Options and Warrants................................. A-4
2.4 Adjustments to Exchange Ratios............................. A-4
2.5 Fractional Shares.......................................... A-5
2.6 Surrender of Certificates.................................. A-5
2.7 No Further Ownership Rights in Company Stock............... A-6
2.8 Closing.................................................... A-6
2.9 Lost, Stolen or Destroyed Certificates..................... A-6
2.10 Tax Consequences........................................... A-7
2.11 Dissenters' Rights......................................... A-7
2.12 Closing of Company Transfer Books.......................... A-7
2.13 Affiliates................................................. A-7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF COMPANIES............... A-8
3.1 Organization of the Company................................ A-8
3.2 The Company's Capital Structure............................ A-8
3.3 Authority; No Conflict; Required Filings and Consents...... A-9
3.4 Financial Statements....................................... A-10
3.5 No Undisclosed Liabilities................................. A-11
3.6 Absence of Certain Changes or Events....................... A-11
3.7 Taxes...................................................... A-11
3.8 Properties................................................. A-12
3.9 Intellectual Property...................................... A-12
3.10 Preclinical Testing and Clinical Trials.................... A-13
3.11 Agreements, Contracts and Commitments...................... A-14
3.12 Litigation................................................. A-14
3.13 Environmental Matters...................................... A-14
3.14 Employee Benefit Plans..................................... A-15
3.15 Compliance With Laws....................................... A-16
3.16 Certain Regulatory Matters................................. A-16
3.17 Tax Matters................................................ A-16
3.18 Registration Statement; Proxy Statement/Prospectus......... A-17
3.19 Labor Matters.............................................. A-17
3.20 Insurance.................................................. A-17
3.21 No Existing Discussions.................................... A-17
3.22 Opinion of Financial Advisor............................... A-17
3.23 Section 203 of the DGCL Not Applicable..................... A-17
3.24 No Brokers................................................. A-18
3.25 Stockholder Rights......................................... A-18
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OR CURIS................... A-18
4.1 Organization of Curis..................................... A-18
4.2 Curis' Capital Structure.................................. A-19
4.3 Authority; No Conflict; Required Filings and Consents..... A-19
Continuity of Business Enterprise; Reorganization
4.4 Classification............................................ A-20
ARTICLE V CONDUCT OF BUSINESS PENDING THE MERGER.................... A-20
5.1 Conduct of Business by Company Pending the Merger......... A-20
5.2 Cooperation............................................... A-22
5.3 Confidentiality........................................... A-22
5.4 Curis Certificate of Incorporation........................ A-22
ARTICLE VI SOLICITATION OF OTHER PROPOSALS........................... A-22
6.1 Solicitation of Other Proposals........................... A-22
ARTICLE VII ADDITIONAL AGREEMENTS..................................... A-25
7.1 Proxy Statement/Prospectus; Registration Statement........ A-25
7.2 Meetings of Stockholders.................................. A-26
7.3 Access to Information..................................... A-26
7.4 All Reasonable Efforts; Further Assurances................ A-26
7.5 Stock Options and Warrants................................ A-27
7.6 Notification of Certain Matters........................... A-28
7.7 Listing on the Nasdaq..................................... A-29
7.8 Public Announcements...................................... A-29
7.9 Accountant's Letters...................................... A-29
7.10 Indemnification of Directors and Officers................. A-29
7.11 Covenants for Tax-free Status............................. A-30
7.12 Stockholder Agreements.................................... A-30
7.13 Affiliate Agreements...................................... A-31
7.14 SEC Filings............................................... A-31
7.15 Maintenance, Prosecution and Filing Obligations........... A-31
7.16 Certain Agreements........................................ A-31
7.17 Lock-Up Agreements........................................ A-32
7.18 Curis Board Authorization................................. A-32
7.19 Best Efforts Obligations.................................. A-32
ARTICLE VIII CONDITIONS OF MERGER...................................... A-32
Conditions to Obligation of All Parties to Effect the
8.1 Merger.................................................... A-32
Additional Conditions to Obligation of Each Party to
8.2 Effect the Merger......................................... A-33
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER......................... A-34
9.1 Termination............................................... A-34
9.2 Effect of Termination..................................... A-35
9.3 Fees and Expenses......................................... A-35
9.4 Amendment................................................. A-37
9.5 Waiver.................................................... A-37
ARTICLE X GENERAL PROVISIONS........................................ A-38
10.1 Survival of Representations and Warranties................ A-38
10.2 Notices................................................... A-38
10.3 Certain Definitions....................................... A-39
10.4 Interpretation............................................ A-40
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10.5 Severability.............................................. A-40
10.6 Entire Agreement.......................................... A-41
10.7 Assignment................................................ A-41
10.8 Parties in Interest....................................... A-41
10.9 Failure or Indulgence Not Waiver; Remedies Cumulative..... A-41
10.10 Governing Law............................................. A-41
10.11 Counterparts.............................................. A-41
EXHIBIT A-- Form of Stockholder Agreement............................. A-46
EXHIBIT B-- Form of Certificate of Merger............................ A-50
EXHIBIT C-- Form of Articles of Merger............................... A-52
EXHIBIT D-- Curis Certificate of Incorporation....................... A-55
EXHIBIT E-- Form of Affiliate Agreement.............................. A-58
EXHIBIT F-- Form of Lock-Up Agreement................................ A-60
Form of Certificate of Amendment to Certificate of
EXHIBIT G-- Incorporation............................................ A-62
Form of Articles of Amendment to Articles of
EXHIBIT H-- Incorporation............................................ A-64
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SCHEDULES
Schedule 1.5Directors and Officers of the Surviving Company
Creative Disclosure Schedules
See attached
Ontogeny Disclosure Schedules
See attached
Reprogenesis Disclosure Schedules
See attached
Curis Disclosure Schedules
None
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, is made as of February 14, 2000 (the
"Agreement") by and among CREATIVE BIOMOLECULES, INC., a Delaware corporation
("Creative"), ONTOGENY, INC., a Delaware corporation ("Ontogeny"),
REPROGENESIS, INC., a Texas corporation ("Reprogenesis") and CURIS, INC. a
Delaware corporation ("Curis"). Each of Creative, Ontogeny, Reprogenesis and
Curis are sometimes referred to herein individually as a "Party" and
collectively as the "Parties". Each of Creative, Ontogeny and Reprogenesis are
also sometimes referred to herein individually as a "Company" and collectively
as the "Companies".
RECITALS
WHEREAS, each of the Parties desires to effectuate a corporate
reorganization to form a combined company to conduct the businesses of the
Companies;
WHEREAS, Curis has been formed by the Companies for the purpose of
effectuating such corporate reorganization;
WHEREAS, each Company is the owner of 100 shares of common stock, par value
$.01 per share, of Curis (the "Curis Common Stock");
WHEREAS, the Board of Directors of each Party has deemed it advisable and in
the best interests of such Party and the stockholders of such Party for such
Party to effectuate the corporate reorganization upon the terms and subject to
the conditions set forth herein;
WHEREAS, in furtherance of such corporate reorganization, the Board of
Directors of each Company has approved the merger of such Company and each
other company with and into Curis (the "Merger"), with Curis being the
surviving corporation of the Merger (the "Surviving Company") in accordance
with the General Corporation Law of the State of Delaware (the "DGCL") and the
Texas Business Corporation Act (the "TBCA") and subject to the conditions set
forth herein;
WHEREAS, the Merger will result in, among other things, the exchange and
conversion of all of the issued and outstanding shares of capital stock of the
Companies into shares of common stock, par value $0.01 per share, of the
Surviving Company ("Surviving Company Common Stock");
WHEREAS, as a condition to the willingness of, and as an inducement to, the
Parties to enter into this Agreement, contemporaneously with the execution and
delivery of this Agreement, certain holders of shares of capital stock of the
Companies are entering into agreements in the form of Exhibit A hereto (a
"Stockholder Agreement"), which Stockholder Agreements provide for certain
actions relating to the transactions contemplated by this Agreement, including
the agreement by such holders to vote such shares in favor of the Merger;
WHEREAS, for federal income tax purposes, it is intended that the Merger
shall qualify as a tax-free reorganization within the meaning of Section 368(a)
of the United States Internal Revenue Code of 1986, as amended (the "Code") and
the United States Treasury Regulations promulgated thereunder; and
WHEREAS, the Parties desire to make certain representations and warranties
and other agreements in connection with the Merger; and
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, the Parties hereby agree as follows:
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ARTICLE I
The Merger
1.1 The Merger. At the Effective Time (as defined in Section 1.2) and
subject to and upon the terms and conditions of this Agreement and the
provisions of the DGCL and the TBCA, each Company shall be merged with and into
Curis, the separate corporate existence of each Company shall cease and Curis
shall, as the surviving corporation in the Merger, continue its existence under
the provisions of the DGCL as the Surviving Company.
1.2 Effective Time. As promptly as practicable after the satisfaction or, to
the extent permitted hereunder, waiver of the conditions set forth in Article
VIII of this Agreement, the Parties shall cause the Merger to be consummated by
filing (a) the Certificate of Merger substantially in the form of Exhibit B
attached hereto (the "Certificate of Merger"), along with a certified copy of
this Agreement, if required, with the Secretary of State of the State of
Delaware, executed in accordance with the relevant provisions of the DGCL and
(b) the Articles of Merger substantially in the form of Exhibit C attached
hereto (the "Articles of Merger") with the Secretary of State of the State of
Texas, executed in accordance with the relevant provisions of the TBCA (the
date and time of the later of the issuance of the certificate of merger by the
Secretary of State of the State of Texas and the filing of the Certificate of
Merger, or such later date and time as may be specified in the Certificate of
Merger and the Articles of Merger by mutual agreement of the Parties, being the
"Effective Time").
1.3 Effect of the Merger. At the Effective Time, the effect of the Merger
shall be as provided in the applicable provisions of the DGCL and the TBCA.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers and franchises of
the Companies shall vest in the Surviving Company, and all debts, liabilities
and duties of the Companies shall become the debts, liabilities and duties of
the Surviving Company.
1.4 Certificate of Incorporation and By-laws of Surviving Company. The
Certificate of Incorporation of Curis shall be the Certificate of Incorporation
of the Surviving Company until thereafter amended as provided by the DGCL. The
By-laws of Curis shall be the By-laws of the Surviving Company until thereafter
amended as provided by the DGCL.
1.5 Directors and Officers. At the Effective Time, the directors and
officers of the Surviving Company shall be those persons set forth on Schedule
1.5 hereto, in each case until their respective successors are duly elected or
appointed and qualified or until their earlier death, resignation or removal in
accordance with the Surviving Company's Certificate of Incorporation and By-
laws.
ARTICLE II
Effects on Capital Stock; Exchange of Certificates
2.1 Effect of Merger on Capital Stock. At the Effective Time, by virtue of
the Merger and without any action on the part of the Parties hereto or the
holders of the following securities:
(a) Subject to the other provisions of this Article II, each share of common
stock, par value $.01 per share, of Creative (the "Creative Common Stock")
issued and outstanding immediately prior to the Effective Time (other than any
Creative Common Stock to be canceled pursuant to Section 2.2) shall be
converted automatically into the right to receive 0.30 of a fully paid and
nonassessable share of Surviving Company Common Stock (the "Creative Exchange
Ratio"), together with cash, if any, in lieu of any fraction of a share of
Surviving Company Common Stock, pursuant to Section 2.5 (the "Creative Merger
Consideration").
(b) Subject to the other provisions of this Article II, each share of (i)
common stock, par value $.01 per share, of Ontogeny (the "Ontogeny Common
Stock") issued and outstanding immediately prior to the Effective
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Time and (ii) each share of Series A Convertible Preferred Stock, Series B
Convertible Preferred Stock, Series C Convertible Preferred Stock, Series C-1
Convertible Preferred Stock, Series D Convertible Preferred Stock, Series E
Convertible Preferred Stock, Series F Convertible Preferred Stock and Series G
Convertible Preferred Stock of Ontogeny, each series with a par value $.01 per
share (collectively, the "Ontogeny Preferred Stock") issued and outstanding
immediately prior to the Effective Time (other than, in each case, any Ontogeny
Common Stock or Ontogeny Preferred Stock to be canceled pursuant to Section 2.2
and any Appraisal Shares (as defined in Section 2.11(a))) shall be converted
automatically into the right to receive 0.2564 of a fully paid and
nonassessable share of Surviving Company Common Stock (the "Ontogeny Exchange
Ratio"), together with cash, if any, in lieu of any fraction of a share of
Surviving Company Common Stock, pursuant to Section 2.5 (the "Ontogeny Merger
Consideration").
(c) (i) In addition to such number of shares of Surviving Company Common
Stock that each share of Series A preferred stock, par value $.01 per share, of
Reprogenesis (the "Reprogenesis Series A Stock") shall be entitled to pursuant
to Section 2.1 (c)(ii), each share of Reprogenesis Series A Stock issued and
outstanding immediately prior to the Effective Time (other than any
Reprogenesis Series A Stock to be canceled pursuant to Section 2.2 and any
Dissenting Shares (as defined in Section 2.11(b)) shall be converted
automatically into the right to receive the number of fully paid and
nonassessable shares of Surviving Company Common Stock equal to the
Reprogenesis Series A Consideration divided by 2,702,702, together with cash,
if any, in lieu of any fraction of a share of Surviving Company Common Stock,
pursuant to Section 2.5. "Reprogenesis Series A Consideration" shall mean the
lesser of (A) the number of fully paid and nonassessable shares of Surviving
Company Common Stock whose aggregate Trailing Average Market Price equals
$6,000,000 and (B) the Reprogenesis Fully Diluted Merger Consideration.
(ii) Subject to Section 2.1(c)(i), each share of common stock, par value
$.01 per share, of Reprogenesis (the "Reprogenesis Common Stock"), each share
of Reprogenesis Series A Stock and each share of Series B preferred stock, par
value $.01 per share, of Reprogenesis (the "Reprogenesis Series B Stock")
issued and outstanding immediately prior to the Effective Time (other than any
Reprogenesis Common Stock, Reprogenesis Series A Stock and Reprogenesis Series
B Stock to be canceled pursuant to Section 2.2 and any Dissenting Shares (as
defined in Section 2.11(b)) shall be converted automatically into the right to
receive 0.1956 (the "Reprogenesis Exchange Ratio") multiplied by a fraction,
the numerator of which is the Reprogenesis Fully Diluted Merger Consideration
less the Reprogenesis Series A Consideration and the denominator of which is
the Reprogenesis Fully Diluted Merger Consideration, of a fully paid and
nonassessable share of Surviving Company Common Stock, together with cash, if
any, in lieu of any fraction of a share of Surviving Company Common Stock,
pursuant to Section 2.5. The Creative Exchange Ratio, Ontogeny Exchange Ratio
and Reprogenesis Exchange Ratio are sometimes referred to individually herein
as an "Exchange Ratio".
(iii) For the purposes of this Section 2.1(c), (A) "Trailing Average Market
Price" shall mean the average of the daily Market Price for each Business Day
on the twenty (20) consecutive Business Days the last day of which shall be the
fifth Business Day prior to the Effective Time, divided by the Creative
Exchange Ratio, (B) "Reprogenesis Fully Diluted Merger Consideration" shall
mean the product of the Reprogenesis Exchange Ratio and the aggregate number of
shares of Reprogenesis Common Stock, Reprogenesis Series A Stock and
Reprogenesis Series B Stock either issued and outstanding or subject to
outstanding options or warrants to purchase immediately prior to the Effective
Time (other than any Reprogenesis Common Stock, Reprogenesis Series A Stock and
Reprogenesis Series B Stock to be canceled pursuant to Section 2.2), (C)
"Market Price" at any date shall be deemed to be the last reported sale price
of Creative Common Stock, or, in case no such reported sale takes place on such
day, the average of the bid and asked prices, in either case as officially
reported by the Nasdaq National Market, or, if the Nasdaq National Market is no
longer reporting such information, as reasonably determined in good faith by
resolution of the Board of Directors of Reprogenesis, and (D) "Reprogenesis
Merger Consideration" shall mean the product of the Reprogenesis Exchange Ratio
and the number of shares of Reprogenesis Common Stock, Reprogenesis Series A
Stock and Reprogenesis Series B Stock issued and outstanding immediately prior
to the Effective Time (other than any Reprogenesis Common
A-3
Stock, Reprogenesis Series A Stock and Reprogenesis Series B Stock to be
canceled pursuant to Section 2.2 and other than any Dissenting Shares). The
Reprogenesis Merger Consideration, collectively with the Creative Merger
Consideration and the Ontogeny Merger Consideration, are referred to herein as
the "Merger Consideration".
(d) As of the Effective Time, all Company Common Stock and Company Preferred
Stock (together, "Company Stock") issued and outstanding immediately prior to
the Effective Time shall automatically be canceled and retired and shall cease
to exist, and each holder of a certificate representing any Company Stock shall
cease to have any rights with respect thereto, except the right to receive the
applicable Merger Consideration and any cash in lieu of fractional shares of
Surviving Company Common Stock to be issued or paid in consideration therefor
upon surrender of such certificate in accordance with Section 2.5 hereof,
without interest.
(e) As of the Effective Time, all shares of Curis Common Stock issued and
outstanding immediately prior to the Effective Time shall no longer be
outstanding and shall automatically be cancelled and retired and shall cease to
exist, and each holder of a certificate representing any Curis Common Stock
shall cease to have any rights with respect thereto.
2.2 Cancellation of Treasury Shares. Each share of Creative Common Stock
held in the treasury of Creative and each share of Creative Common Stock, if
any, owned by any wholly-owned subsidiary of Creative or by Curis immediately
prior to the Effective Time shall be canceled and extinguished without any
conversion thereof. Each share of Ontogeny Common Stock and Ontogeny Preferred
Stock held in the treasury of Ontogeny and each share of Ontogeny Common Stock
and Ontogeny Preferred Stock, if any, owned by any wholly-owned subsidiary of
Ontogeny or by Curis immediately prior to the Effective Time shall be canceled
and extinguished without any conversion thereof. Each share of Reprogenesis
Common Stock and Reprogenesis Preferred Stock held in the treasury of
Reprogenesis and each share of Reprogenesis Common Stock and Reprogenesis
Preferred Stock, if any, owned by any wholly-owned subsidiary of Reprogenesis
or by Curis immediately prior to the Effective Time shall be canceled and
extinguished without any conversion thereof.
2.3 Stock Options and Warrants.
(a) At the Effective Time, each outstanding Company Stock Option under the
Company Stock Plans, whether vested or unvested, shall, in accordance with the
terms of such Company Stock Option and such Company Stock Plan, by virtue of
the Merger and without any action on the part of the holder thereof, become and
represent an option to acquire, on the same terms and conditions as were
applicable under such Company Stock Option, the same number of shares of
Surviving Company Common Stock as the holder of such Company Stock Option would
have been entitled to receive pursuant to the Merger had such holder exercised
such option in full immediately prior to the Effective Time, as further set
forth in Section 7.5.
(b) At the Effective Time, each outstanding Company Warrant (other than any
Company Warrant that by its terms otherwise expires by virtue of the Merger)
shall, in accordance with the terms of such Company Warrant, by virtue of the
Merger and without any action on the part of the holder thereof, become and
represent a warrant to acquire, on the same terms and conditions as were
applicable under such Company Warrant, the same number of shares of Surviving
Company Common Stock as the holder of such Company Warrant would have been
entitled to receive pursuant to the Merger (including with respect to the
treatment of fractional shares) had such holder exercised such Company Warrant
in full immediately prior to the Effective Time, as further set forth in
Section 7.5
2.4 Adjustments to Exchange Ratios. Without limiting any other provision of
this Agreement, the applicable Exchange Ratio or Exchange Ratios shall be
correspondingly adjusted to reflect fully the effect of any stock split,
reverse split, stock dividend (including any dividend or distribution of
securities convertible into Company Stock), reorganization, recapitalization,
reclassification, conversion, consolidation, contribution or exchange of shares
or other like change with respect to Curis Common Stock or Company Stock
occurring after the date hereof and prior to the Effective Time.
A-4
2.5 Fractional Shares. No fraction of a share of Surviving Company Common
Stock will be issued hereunder, but in lieu thereof each holder of Company
Stock who would otherwise be entitled to a fraction of a share of Surviving
Company Common Stock (after aggregating all fractional shares of Surviving
Company Common Stock to be received by such holder) shall receive from the
Surviving Company an amount of cash (rounded down to the nearest whole cent),
without interest, equal to the product of such fraction multiplied by the
Market Value (as defined below) of the Surviving Company Common Stock. The
"Market Value" of the Surviving Company Common Stock means the closing price
per share of Surviving Company Common Stock (rounded to the nearest cent) on
the NASDAQ National Market (as reported in the Wall Street Journal, or, if not
reported therein, any other authoritative source selected by the Surviving
Company) on the first day of trading of shares of Surviving Company Common
Stock.
2.6 Surrender of Certificates.
(a) Exchange Agent. Prior to the Effective Time, Curis shall designate one
or more Persons to act as Exchange Agent hereunder.
(b) Surviving Company to Provide Common Stock. Promptly after the Effective
Time, the Surviving Company shall make available to the Exchange Agent for
exchange in accordance with this Article II, through such reasonable procedures
as the Surviving Company may adopt, the shares of Surviving Company Common
Stock issuable pursuant to Section 2.1 in exchange for outstanding Company
Stock, together with an estimated amount of cash to be paid pursuant to Section
2.5 in lieu of fractional shares.
(c) Exchange Procedures. Promptly after the Effective Time, the Surviving
Company shall cause the Exchange Agent to mail to each holder of record of a
certificate or certificates (the "Certificates") which immediately prior to the
Effective Time represented outstanding Company Stock whose shares were
converted into the right to receive shares of Surviving Company Common Stock
pursuant to Section 2.1, a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon delivery of the Certificates to the Exchange Agent and
shall be in such form and have such other provisions as the Surviving Company
may reasonably specify) and instructions for use in effecting the surrender of
the Certificates in exchange for certificates representing shares of Surviving
Company Common Stock and cash in lieu of the fraction of a share of Surviving
Company Common Stock, if any, pursuant to Section 2.5 hereof. Upon surrender of
a Certificate for cancellation to the Exchange Agent, together with such letter
of transmittal, duly completed and validly executed in accordance with the
instructions thereto, the holder of such Certificate shall be entitled to
receive in exchange therefor, a certificate representing the number of whole
shares of Surviving Company Common Stock and payment in lieu of fractional
shares which such holder has the right to receive pursuant to Section 2.5, and
the Certificate so surrendered shall forthwith be canceled. Until so
surrendered, each outstanding Certificate that, prior to the Effective Time,
represented Company Stock will be deemed from and after the Effective Time, for
all corporate purposes, other than the payment of dividends, to evidence the
right to receive the number of full shares of Surviving Company Common Stock
into which such Company Stock shall have been so converted and the right to
receive an amount in cash in lieu of the issuance of any fractional shares in
accordance with Section 2.5. Any portion of the shares of Surviving Company
Common Stock deposited with the Exchange Agent pursuant to this Section 2.6(c)
which remains undistributed to the holders of the Certificates representing
Company Common Shares for six (6) months after the Effective Time shall be
delivered to Surviving Company, upon demand, and any holders of Company Stock
who have not theretofore complied with this Article II shall thereafter look
only to the Surviving Company for Surviving Company Common Stock, any cash in
lieu of fractional shares of Surviving Company Common Stock and any dividends
or distributions with respect to Surviving Company Common Stock to which such
holders may be entitled.
(d) Distributions With Respect to Unexchanged Shares. No dividends or other
distributions declared or made after the Effective Time with respect to
Surviving Company Common Stock with a record date after the Effective Time will
be paid to the holder of any unsurrendered Certificate with respect to the
shares of Surviving Company Common Stock represented thereby until the holder
of record of such Certificate shall
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surrender such Certificate. Subject to applicable escheat law, following
surrender of any such Certificate, there shall be paid to the record holder of
the certificates representing whole shares of Surviving Company Common Stock
issued in exchange therefor, without interest, at the time of such surrender,
the amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such whole shares of Surviving
Company Common Stock.
(e) Transfers of Ownership. If any certificate for shares of Surviving
Company Common Stock is to be issued in a name other than that in which the
Certificate surrendered in exchange therefor is registered, it will be a
condition of the issuance thereof that the Certificate so surrendered will be
properly endorsed and otherwise in proper form for transfer and that the Person
requesting such exchange will have paid to Surviving Company, or any agent
designated by it, any transfer or other taxes required by reason of the
issuance of a certificate for shares of Surviving Company Common Stock in any
name other than that of the registered holder of the certificate surrendered,
or established to the satisfaction of Surviving Company or any agent designated
by it that such tax has been paid or is not payable.
(f) No Liability. Notwithstanding anything to the contrary in this
Agreement, none of the Exchange Agent or Surviving Company shall be liable to a
holder of Company Stock for any Surviving Company Common Stock or any amount
properly paid to a public official pursuant to any applicable abandoned
property, escheat or similar law.
(g) Withholding of Tax. The Surviving Company and the Exchange Agent will be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of Company Stock such amounts as the
Surviving Company (or any Affiliate thereof) or the Exchange Agent are required
to deduct and withhold with respect to the making of such payment under the
Code, or any provision of federal, state, local or foreign Tax law (as defined
below). To the extent that amounts are so withheld by the Surviving Company or
the Exchange Agent, such withheld amounts will be treated for all purposes of
this Agreement as having been paid to the holder of Company Stock in respect of
whom such deduction and withholding were made by Surviving Company.
2.7 No Further Ownership Rights in Company Stock. All shares of Surviving
Company Common Stock issued upon the surrender for exchange of Company Stock in
accordance with the terms of this Article II (including any cash paid in
respect thereof) shall be deemed to have been issued in full satisfaction of
all rights pertaining to such Company Stock under this Article II, and there
shall be no further registration of transfers on the records of the Surviving
Company of shares of Company Stock which were outstanding immediately prior to
the Effective Time. If, after the Effective Time, Certificates are presented to
the Surviving Company for any reason, they shall be canceled and exchanged as
provided in this Article II.
2.8 Closing. Unless this Agreement shall have been terminated and the
transactions contemplated by this Agreement abandoned pursuant to the
provisions of Article IX, and subject to the provisions of Article VIII, the
closing of the Merger (the "Closing") will take place at 10:00 a.m. (Eastern
time) on a date (the "Closing Date") to be mutually agreed upon by the parties,
which date shall be not later than the third Business Day after all the
conditions set forth in Article VIII shall have been satisfied (or waived in
accordance with Section 9.5, to the extent the same may be waived), unless
another time and/or date is agreed to in writing by the parties. The Closing
shall take place at the offices of Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C., Boston, Massachusetts, unless another place is agreed to in
writing by the parties.
2.9 Lost, Stolen or Destroyed Certificates. In the event any Certificates
shall have been lost, stolen or destroyed, the Exchange Agent shall issue in
exchange for such lost, stolen or destroyed certificates, upon the making of an
affidavit of that fact by the holder thereof, such shares of Surviving Company
Common Stock and cash for fractional shares, if any, as may be required
pursuant to Section 2.5; provided that the Surviving Company may, as a
condition precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed certificates to deliver a bond in such sum as it may
reasonably direct as indemnity against any claim that may be made against the
Surviving Company or the Exchange Agent with respect to the Certificates
alleged to have been lost, stolen or destroyed.
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2.10 Tax Consequences. For federal income tax purposes, the Parties intend
that the Merger be treated as a reorganization within the meaning of Section
368(a) of the Code, and that this Agreement shall be, and is hereby, adopted as
a plan of reorganization for purposes of Section 368 of the Code. The parties
shall not take a position on any Tax Return (as defined below) inconsistent
with this Section 2.10.
2.11 Dissenters' Rights.
(a) Notwithstanding anything in this Agreement to the contrary, shares
("Appraisal Shares") of capital stock of Ontogeny that are outstanding
immediately prior to the Effective Time and that are held by any Person who is
entitled to demand and properly demands appraisal of such Appraisal Shares
pursuant to, and who complies in all respects with, Section 262 of the DGCL
("Section 262") shall not be converted into Merger Consideration as provided in
Section 2.1, but rather the holders of Appraisal Shares shall be entitled to
payment of the fair market value of such Appraisal Shares in accordance with
Section 262; provided, however, that if any such holder shall fail to perfect
or otherwise shall waive, withdraw or lose the right to appraisal under Section
262, then the right of such holder to be paid the fair value of such holder's
Appraisal Shares shall cease and such Appraisal Shares shall be deemed to have
been converted as of the Effective Time into, and to have become exchangeable
solely for the right to receive, the applicable Merger Consideration as
provided in Section 2.1. Ontogeny shall give prompt notice to Curis of any
demands received by Ontogeny for appraisal of any shares of capital stock of
Ontogeny, and Curis shall have the right to participate in and direct all
negotiations and proceedings with respect to such demands. Prior to the
Effective Time, Ontogeny shall not, without the prior written consent of Curis,
make any payment with respect to, or settle or offer to settle, any such
demands, or agree to do any of the foregoing.
(b) Notwithstanding anything in this Agreement to the contrary, shares
("Dissenting Shares") of capital stock of Reprogenesis that are outstanding
immediately prior to the Effective Time and that are held by any Person who is
entitled to make and properly makes demand for payment of the fair value of
such Dissenting Shares pursuant to, and who complies in all respects with,
Article 5.12 of the TBCA ("Article 5.12") shall not be converted into Merger
Consideration as provided in Section 2.1, but rather the holders of Dissenting
Shares shall be entitled to payment of the fair value of such Dissenting Shares
in accordance with Article 5.12; provided, however, that if any such holder
shall fail to perfect or otherwise shall waive, withdraw or lose his right to
payment of the fair value under Article 5.12, then the right of such holder to
be paid the fair value of such holder's Dissenting Shares shall cease and such
Dissenting Shares shall be deemed to have been converted as of the Effective
Time into, and to have become exchangeable solely for the right to receive, the
applicable Merger Consideration as provided in Section 2.1. Reprogenesis shall
give prompt notice to Curis of any demands received by Reprogenesis for the
payment of the fair value of any shares of capital stock of Reprogenesis, and
Curis shall have the right to participate in and direct all negotiations and
proceedings with respect to such demands. Prior to the Effective Time,
Reprogenesis shall not, without the prior written consent of Curis, make any
payment with respect to, or settle or offer to settle, any such demands, or
agree to do any of the foregoing.
2.12 Closing of Company Transfer Books. At the Effective Time, the stock
transfer books of each Company shall be closed and no transfer of shares of
Company Stock shall thereafter be made. If, after the Effective Time,
certificates representing shares of Company Stock are presented to the
Surviving Company, they shall be canceled and presented to the Exchange Agent
in accordance with Section 2.6.
2.13 Affiliates. Notwithstanding anything herein to the contrary,
Certificates surrendered for exchange by any Person who is a director or
executive officer of a Company or a holder of shares of 10% or more of such
Company's Voting Stock, shall not be exchanged until the Surviving Company has
received an Affiliate Agreement from such Person.
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ARTICLE III
Representations and Warranties of Companies
Each Company hereby represents and warrants to each other Company that the
statements contained in this Article III are true and correct with respect to
it, except as set forth herein or in the disclosure schedule attached by such
Company to this Agreement (for each respective Company, the "Company Disclosure
Schedule"). The Company Disclosure Schedule shall be arranged in sections
corresponding to the numbered and lettered sections contained in this Article
III, and the disclosure in any section shall qualify other sections in this
Article III only the extent that it is reasonably apparent from a reading of
such disclosure that it also qualifies or applies to such other sections. For
the purposes of this Article III, all references to a Company shall include
such Company and its Subsidiaries, and all representations and warranties about
a Company shall be construed as representations and warranties about each of
its Subsidiaries as well, unless the context requires otherwise (including, by
way of example, Section 3.7(c) hereof).
3.1 Organization of the Company. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the state of
its organization. The Company has all requisite corporate power to own, lease
and operate its properties and assets and to carry on the business as now being
conducted and as proposed to be conducted, and is duly qualified to do business
and is in good standing as a foreign corporation in each jurisdiction in which
the failure to be so qualified, individually or in the aggregate, would be
reasonably likely to have a material adverse effect on the business,
properties, financial condition, results of operations or prospects of the
Company, or to have a material adverse effect on the ability of the Company to
consummate the transactions contemplated by this Agreement (a "Company Material
Adverse Effect"); provided, however, that for purposes of this Agreement, any
adverse change in the stock price of a Company whose stock is publicly traded
(each, a "Public Company") in and of itself, as quoted on the Nasdaq National
Market, shall not be taken into account in determining whether there has been
or would be a "Company Material Adverse Effect" on or with respect to the
Company.
3.2 The Company's Capital Structure.
(a) The authorized capital stock of the Company is as set forth in the
Company Disclosure Schedule. As of February 10, 2000, the number of shares of
common stock of the Company ("Company Common Stock") and preferred stock of the
Company ("Company Preferred Stock") issued and outstanding or held in the
treasury of the Company are as set forth on the Company Disclosure Schedule,
and all of such shares are validly issued, fully-paid and non-assessable. The
Company Disclosure Schedule shows the number of shares of Company Common Stock
reserved for future issuance pursuant to stock options granted and outstanding
as of the date of this Agreement, and the plans under which such options were
granted (collectively, the "Company Stock Plans") and sets forth a complete and
accurate list of all holders of options outstanding as of the date of this
Agreement to purchase shares of Company Common Stock (such outstanding options,
the "Company Stock Options") under the Company Stock Plans, indicating the
number of shares of Company Common Stock subject to each Company Stock Option,
and the exercise price, the date of grant and the expiration date thereof. The
Company Disclosure Schedule shows the number of shares of Company Common Stock
reserved for future issuance pursuant to warrants or other outstanding rights
to purchase shares of Company Common Stock outstanding as of the date of this
Agreement (such outstanding warrants or other rights, the "Company Warrants")
and the agreement or other document under which such Company Warrants were
granted and sets forth a complete and accurate list of all holders of Company
Warrants indicating the number and type of shares of Company Common Stock
subject to each Company Warrant, and the exercise price, the date of grant and
the expiration date thereof. All outstanding shares of Company Common Stock
are, and all shares of Company Common Stock subject to issuance as specified
above are, duly authorized and, upon issuance on the terms and conditions
specified in the instruments pursuant to which they are issuable, shall be,
validly issued, fully paid and nonassessable and not subject to or issued in
violation of any purchase option, call option, right of first refusal,
preemptive right, subscription right or any similar right under any provision
of the DGCL or the TBCA, the Company's Certificate or Articles of Incorporation
or By-laws or any
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agreement to which the Company is a party or is otherwise bound. There are no
obligations, contingent or otherwise, of the Company to repurchase, redeem or
otherwise acquire any shares of Company Common Stock or any other capital stock
of the Company or to provide funds to or make any investment (in the form of a
loan, capital contribution or otherwise) in any other entity.
(b) Except for the Company Stock Plans, the Company Warrants and shares of
capital stock and other securities of the Company issuable pursuant to the
foregoing, (i) there are no equity securities of any class of the Company, or
any security exchangeable into or exercisable for such equity securities,
issued, reserved for issuance or outstanding, and (ii) there are no options,
warrants, equity securities, 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 or other equity interests in the
Company or obligating the Company to grant, extend, accelerate the vesting of,
otherwise modify or amend or enter into any such option, warrant, equity
security, call, right, commitment or agreement. To the best Knowledge of the
Company, other than the Stockholder Agreements, there are no voting trusts,
proxies or other voting agreements or understandings with respect to the shares
of capital stock of or other equity interests in the Company.
(c) There are no bonds, debentures, notes or other indebtedness of the
Company with voting rights (or convertible into, or exchangeable for,
securities with voting rights) on any matters on which stockholders of the
Company may vote.
(d) The Company Disclosure Schedule sets forth all Subsidiaries of the
Company and the authorized capital stock or other equity interests of such
Subsidiaries. The Company owns all of the outstanding capital stock or other
equity interests of such Subsidiaries. As of the date of this Agreement, the
number of shares of common stock and preferred stock, or amount of other equity
interests, of any such Subsidiary issued and outstanding or held in such
Subsidiary's treasury are as set forth on the Company Disclosure Schedule, and
all of such shares or other equity interests are duly authorized, validly
issued, fully-paid and non-assessable and not subject to or issued in violation
of any purchase option, call option, right of first refusal, preemptive right,
subscription right or any similar right under any provision of the DGCL or the
TBCA (or other law governing such Subsidiary's organization), the Certificate
or Articles of Incorporation or By-laws (or other organizational documents) of
such Subsidiary or any agreement to which such Subsidiary is a party or is
otherwise bound. There are no obligations, contingent or otherwise, of such
Subsidiary to repurchase, redeem or otherwise acquire any shares of its capital
stock or other equity interests or to provide funds to or make any investment
(in the form of a loan, capital contribution or otherwise) in any other entity.
There are no options, warrants, equity securities, calls, rights, commitments
or agreements of any character to which any such Subsidiary is a party or by
which it is bound obligating it to issue, deliver or sell, or cause to be
issued, delivered or sold, shares of capital stock of or other equity interests
in such Subsidiary.
(e) Each Subsidiary of the Company is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization. Each
such Subsidiary has all requisite power (corporate and otherwise) to own, lease
and operate its properties and assets and to carry on the business as now being
conducted and as proposed to be conducted, and is duly qualified to do business
and is in good standing as a foreign corporation or other entity in each
jurisdiction in which the failure to be so qualified, individually or in the
aggregate, would be reasonably likely to have a Company Material Adverse
Effect. Each Subsidiary of the Company is inactive, has not conducted any
business in the last five years, and has not owned, leased or operated any
properties or assets in the last five years.
3.3 Authority; No Conflict; Required Filings and Consents.
(a) The Company has all requisite power and authority to enter into this
Agreement and to consummate the transactions contemplated by this Agreement.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement by the Company have been duly
authorized by all the necessary corporate action on the part of the Company,
subject only to the approval of the Merger by
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the Company's stockholders under the DGCL or the TBCA. This Agreement has been
duly executed and delivered by the Company and constitutes the valid and
binding obligations of the Company, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles (the "Bankruptcy and Equity
Exception").
(b) The execution and delivery of this Agreement by the Company does not,
and the consummation of the transactions contemplated by this Agreement will
not, (i) conflict with, or result in any violation or breach of, any provision
of the Certificate or Articles of Incorporation or By-laws of the Company, (ii)
result in any violation or breach of, or constitute (with or without notice or
lapse of time, or both) a default (or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of any material benefit)
under, or require a consent or waiver under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, license, contract or
other agreement, instrument or obligation to which the Company is a party or by
which it or any of its properties or assets may be bound, or (iii) conflict
with or violate any permit, concession, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to the Company
or by which it or any of its properties or assets may be bound or (iv)
constitute a change in control or comparable event under any of the terms,
conditions or provisions of any note, bond mortgage, indenture, lease, license,
contract or other agreement, instrument or obligation to which the Company is a
party or by which it or any of its properties or assets may be bound, which
change of control or comparable event will give rise to a right of termination,
cancellation or acceleration of any obligation or loss of any material benefit,
except in the case of (ii), (iii) and (iv) for any such conflicts, violations,
defaults, terminations, cancellations or accelerations which are not,
individually or in the aggregate, reasonably likely to have a Company Material
Adverse Effect.
(c) No consent, approval, license, permit, order or authorization of, or
registration, declaration or filing with, any Governmental Authority is
required by or with respect to the Company in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby, except for (i) the filing of a pre-merger notification report under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, ("HSR Act"),
(ii) the filing of the Certificate of Merger with the Delaware Secretary of
State, (iii) the filing of the Articles of Merger with the Secretary of State
of the State of Texas and the issuance of a certificate of merger by the
Secretary of State of the State of Texas, (iv) the filing of the Joint Proxy
Statement (as defined in Section 3.18 below) with the Securities and Exchange
Commission ("SEC") in accordance with the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), (v) such, consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required
under applicable state securities laws and (vi) such other consents, licenses,
permits, orders, authorizations, filings, approvals and registrations which, if
not obtained or made, would not be reasonably likely, individually or in the
aggregate, to have a Company Material Adverse Effect. The stockholder vote
required for the approval of this Agreement and the Merger by each Company is
set forth in the Company Disclosure Schedule.
3.4 Financial Statements.
(a) Each Company has provided or made available to each other Company (i)
its audited consolidated balance sheets and statements of income, changes in
stockholders' equity and cash flows as of and for each of the last three fiscal
years, and (ii) the unaudited consolidated balance sheet and statements of
income, changes in stockholders' equity and cash flows as of and for the twelve
months ended as of December 31, 1999 (the "Company Financial Statements").
(b) Each Company Financial Statement (including, in each case, any related
notes and schedules) (i) was prepared in accordance with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes to such financial
statements or, in the case of unaudited statements, as permitted by Form 10-Q
of the SEC or, with respect to Ontogeny and Reprogenesis, the absence of notes
thereto) and (iii) fairly presented or will fairly present the consolidated
financial position of the Company as of the dates and the consolidated results
of its operations and cash flows
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for the period indicated, consistent with the books and records of the Company,
except that the unaudited financial statements were or are subject to normal
and recurring year-end adjustments which were not or are not expected to be
material in amount. The unaudited balance sheet of the Company as of December
31, 1999 is referred to herein as the "Company Balance Sheet."
3.5 No Undisclosed Liabilities. Except for normal or recurring liabilities
incurred since the date of the Company Balance Sheet in the ordinary course of
business and consistent with past practices, the Company does not have any
liabilities, either accrued, contingent or otherwise (whether or not required
to be reflected in financial statements in accordance with generally accepted
accounting principles), and whether due or to become due, which individually or
in the aggregate are reasonably likely to have a Company Material Adverse
Effect.
3.6 Absence of Certain Changes or Events. Since the date of the Company
Balance Sheet, the Company has conducted its businesses only in the ordinary
course and in a manner consistent with past practice and, since such date,
there has not been (i) any event, change or development in the financial
condition, results of operations, business, properties or prospects of the
Company, that individually or in the aggregate has had, or is reasonably likely
to have, a Company Material Adverse Effect; (ii) any damage, destruction or
loss (whether or not covered by insurance) with respect to the Company having a
Company Material Adverse Effect; (iii) any material change by the Company in
its accounting methods not required pursuant to generally accepted accounting
principles or practices to which both the other Companies have not previously
consented in writing; (iv) any revaluation by the Company of any of its assets
having a Company Material Adverse Effect; or (v) any other action or event that
would have required the consent of the other Companies pursuant to Section 5.1
of this Agreement had such action or event occurred after the date of this
Agreement.
3.7 Taxes.
(a) For the purposes of this Agreement, a "Tax" or, collectively, "Taxes,"
means any and all material federal, state, local and foreign taxes, assessments
and other governmental charges, duties, impositions and liabilities, including
taxes based upon or measured by gross receipts, income, profits, sales, use and
occupation, and value added, ad valorem, transfer, gains, franchise,
withholding, payroll, recapture, employment, excise, unemployment insurance,
social security, business license, occupation, business organization, stamp,
environmental and property taxes, together with all interest, penalties and
additions imposed with respect to such amounts and any obligations under any
agreements or arrangements with any other person with respect to such amounts
and including any liability for taxes of a predecessor entity.
(b) The Company has:
(i) (y) as of the date of this Agreement, filed all federal, state,
local and foreign tax returns and reports required to be filed by it prior
to such date (taking into account extensions) and (z) as of the Closing
Date, filed all federal, state, local and foreign tax returns and reports
required to be filed by it prior to such date (taking into account
extensions), and in each case all such returns ("Tax Returns") were
complete and accurate in all respects;
(ii) (y) as of the date of this Agreement, paid or accrued all Taxes due
and payable as of such date and (z) as of the Closing Date, paid or accrued
all Taxes due and payable as of such date, in each case whether or not so
reflected on such returns or reports; and
(iii) paid or accrued all Taxes for which a notice of assessment or
collection has been received (other than amounts being contested in good
faith by appropriate proceedings);
except in the case of clause (i), (ii) or (iii) for any such filings,
inaccuracies, payments or accruals which are not reasonably likely,
individually or in the aggregate, to have a Company Material Adverse
Effect. Unpaid Taxes for periods prior to the date hereof do not materially
exceed accruals and reserves for Taxes (exclusive of any accruals and
reserves for Taxes established to reflect timing difference between book
and Tax income) as set forth on the Company Balance Sheet. Neither the
Internal Revenue Service (the
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"IRS") nor any other taxing authority has asserted any claim for Taxes, or
to the Knowledge of the chief executive officer or the principal accounting
officer of the Company, is threatening to assert any claims for Taxes,
which claims, individually or in the aggregate, are reasonably likely to
have a Company Material Adverse Effect. The Company has withheld or
collected and paid over to the appropriate Governmental Authorities (or are
properly holding for such payment) all Taxes required by law to be withheld
or collected, except for amounts which are not reasonably likely,
individually or in the aggregate, to have a Company Material Adverse
Effect. There are no Liens for Taxes upon the assets of the Company (other
than Liens for Taxes that are not yet due or that are being contested in
good faith by appropriate proceedings), except for Liens which are not
reasonably likely, individually or in the aggregate, to have a Company
Material Adverse Effect.
(c) None of the Company and its Subsidiaries has been a member of an
affiliated group of corporations filing a consolidated federal income Tax
Return (other than a group the common parent of which was the Company). None of
the Company and its Subsidiaries has any actual or potential liability for any
Taxes of any person (other than the Company) under Treasury Regulation Section
1.1502-6 (or any similar provision of federal, state, local or foreign law), or
as a transferee or successor, by contract or otherwise.
(d) The Company is not a "consenting corporation" within the meaning of
Section 341(f) of the Code, and none of the assets of the Company are subject
to an election under Section 341(f) of the Code.
(e) The Company has not been a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
(f) The Company has not made any payments, is not obligated to make any
payments, and is not a party to any agreement that could obligate it to make
any payments that will be an "excess parachute payment" under Section 280G of
the Code.
3.8 Properties. The Company Disclosure Schedule sets forth a true and
complete list of all real property leased by the Company (collectively,
"Lease(s)") and the location of the premises. The Company is not in default
under any of such leases, except where the existence of such defaults,
individually or in the aggregate, is not reasonably likely to have a Company
Material Adverse Effect. The Company does not own and has never owned any real
property.
3.9 Intellectual Property.
(a) The Company Disclosure Schedule sets forth a true and complete list of
each of the following items: (1) all patents and applications therefor,
including any patent term extensions or supplementary protection certificates,
registrations of trademarks (including service marks) and applications
therefor, domain names and registrations of copyrights and applications
therefor that are owned by the Company or that are licensed or sublicensed to
the Company, indicating in each case the nature of ownership thereof or license
or sublicense thereto, (2) all licenses, agreements and contracts relating to
Intellectual Property Rights (as defined below) pursuant to which the Company
is entitled to use any Intellectual Property Rights owned by any third party
(the "Third Party Licenses"), other than commercially available mass marketed
shrink-wrap software and commercially available research reagents, and (3) all
agreements under which the Company has granted any third party the right to use
any Intellectual Property Rights.
(b) To the Company's Knowledge, the Company owns, or is licensed,
sublicensed or otherwise possesses legally enforceable rights to use, pursuant
to the licenses, agreements and contracts listed in Section 3.9(a)(2) of the
Company Disclosure Schedule, all Intellectual Property Rights that are used or
necessary to conduct the business of the Company as currently conducted and
that are material, individually or in the aggregate, to the Company, including
without limitation all Intellectual Property Rights used or necessary to
conduct its ongoing and presently planned clinical programs (each of which (the
"Ongoing Clinical Programs") is deemed to be material to the Company) and all
Intellectual Property Rights that are now used or planned to be used or are
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necessary to make, use or sell its planned products (as disclosed to each other
Company) after those products are approved for marketing and sale by the
appropriate health regulatory authorities (the "Company Intellectual Property
Rights"). For purposes hereof, "Intellectual Property Rights" means all
patents, including patent term extensions and supplementary protection
certificates, trademarks, trade names, domain names, service marks and
copyrights, any applications for and registrations of such patents, trademarks,
trade names, domain names, service marks and copyrights, and all processes,
formulae, methods, schematics, technology, know-how, computer software programs
or applications and tangible or intangible proprietary information or material.
(c) The execution and delivery of this Agreement and consummation of the
transactions contemplated hereby will not result in the breach of, or create on
behalf of any third party the right to terminate or modify, any license,
sublicense or other agreement relating to the Company Intellectual Property
Rights, including any Third Party License.
(d) All patents, including all patent term extensions and supplementary
protection certificates, registered trademarks, service marks and copyrights
under which the Company holds any rights and which are material to the business
of the Company are, to the Company's Knowledge, valid and subsisting, and all
applications for such patents, trademarks, service marks and copyrights are
subsisting and were filed in good faith. The Company has taken reasonable
measures to protect the proprietary nature of the Company Intellectual Property
Rights that are material to the business of the Company and to maintain in
confidence all trade secrets and confidential information owned or used by the
Company and that are material to the business of the Company. To the Knowledge
of the Company, no other person or entity is infringing, violating or
misappropriating any of the Company Intellectual Property Rights.
(e) To the Knowledge of the Company, none of the activities or business
previously or currently conducted by the Company, its licensees or assignees of
royalty-bearing Intellectual Property Rights ("IP Assignees") or planned to be
conducted (as disclosed to each other Company) by the Company, its licensees or
IP Assignees (including the manufacture, use and sale of the future products
which are the subject of Ongoing Clinical Programs for any clinical
indications) which is material to the business of the Company infringes,
violates or constitutes a misappropriation of, any Intellectual Property Rights
of any other person or entity. The Company has not received any complaint,
claim or notice alleging any such infringement, violation or misappropriation,
present or future.
(f) The Company is not a party to any agreement under which, following the
Closing, a third party would be entitled to receive a license or any other
right in or to Intellectual Property Rights currently held by either of the
other Companies or any of such other Companies' Affiliates or which, following
the Closing, would restrict or limit the business or operations currently
conducted by either of the other Companies or any of their Affiliates.
3.10 Preclinical Testing and Clinical Trials. The human clinical trials,
animal studies and other preclinical tests conducted by the Company or in which
the Company has participated, and such studies and tests conducted on behalf of
the Company, were and, if still pending, are being conducted in all material
respects in accordance with experimental protocols, informed consents,
procedures and controls generally used by qualified experts in the preclinical
or clinical study of products comparable to those being developed by the
Company. Neither the Company, nor any agent or representative of the Company
nor, to the Knowledge of the Company, any of its licensees and IP Assignees,
has received any notices or correspondence from the Food and Drug
Administration ("FDA") or any other Governmental Authority requiring the
termination, suspension or modification (other than such modifications as are
normal in the regulatory process) of any animal studies, preclinical tests or
clinical trials conducted by or on behalf of the Company or, to the Knowledge
of the Company, such licensees and IP Assignees, or in which the Company or, to
the Knowledge of the Company, such licensees and IP Assignees, have
participated. To the Company's Knowledge, no clinical investigator acting for
the Company has been or is now, or is threatened to become, the subject of any
disbarment or disqualification proceedings by any regulatory agency.
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3.11 Agreements, Contracts and Commitments.
(a) There are no contracts or agreements that are material contracts (as
defined in Item 601(b)(10) of Regulation S-K) with respect to the Company
("Company Material Contracts") other than as set forth in the Company
Disclosure Schedule. No Company Material Contract has expired by its terms or
has been terminated in accordance with its terms (nor has the Company received
notice of any such termination) and each Company Material Contract is in full
force and effect. The Company is not in violation of or in default under (nor
does there exist any condition which, upon the passage of time or the giving of
notice or both, would cause such a violation of or default under) any lease,
permit, concession, franchise, license or other contract or agreement to which
it is a party or by which it or any of its properties or assets is bound,
except for violations or defaults that, individually or in the aggregate, have
not resulted in and are not reasonably likely to result in a Company Material
Adverse Effect.
(b) The Company Disclosure Schedule sets forth a complete list of each
contract or agreement to which the Company is a party or bound (i) with any
Affiliate of the Company, other than any agreements (A) which are or have been
fully performed and under which the Company has no continuing right, liability
or obligation, (B) that are otherwise disclosed on the Company Disclosure
Schedule and marked with a footnote indicating that it is a contract or
agreement with an Affiliate of the Company or (C) Stockholder Agreements, or
(ii) that includes any non-competition or similar provision imposing any
restrictions or undertakings on the Company. To the Company's Knowledge, none
of the contracts or agreements referred to in the foregoing clause (ii) would
preclude the Company or the Surviving Company from engaging in any of its
current activities or any of the Company's or the Surviving Company's planned
activities. Copies of all the agreements, contracts and arrangements set forth
in the Company Disclosure Schedule have heretofore been made available to the
Companies and such copies are accurate and complete.
3.12 Litigation. There is no Litigation against the Company pending or as to
which the Company has received any written notice of assertion.
3.13 Environmental Matters.
(a) Except for such matters that, individually or in the aggregate, are not
reasonably likely to have a Company Material Adverse Effect: (i) the Company
has complied with all applicable Environmental Laws (as defined in Section
3.13(b)); (ii) the properties currently owned or operated by the Company
(including soils, groundwater, surface water, buildings or other structures)
are not contaminated with any Hazardous Substances (as defined in Section
3.13(c)); (iii) the properties formerly owned or operated by the Company were
not contaminated with Hazardous Substances during the period of ownership or
operation by the Company; (iv) the Company is not subject to liability for any
Hazardous Substance disposal or contamination on the property of any third
party; (v) the Company has not released any Hazardous Substance; (vi) the
Company has not received any notice, demand, letter, claim or request for
information alleging that the Company may be in violation of, liable under or
have obligations under any Environmental Law; (vii) the Company is not subject
to any orders, decrees, injunctions or other arrangements with any Governmental
Authority or any indemnity or other agreement with any third party relating to
liability under any Environmental Law or relating to Hazardous Substances; and
(viii) there are no circumstances or conditions involving the Company that
could reasonably be expected to result in any claims, liability, obligations,
investigations, costs or restrictions on the ownership, use or transfer of any
property of the Company pursuant to any Environmental Law.
(b) As used herein, the term "Environmental Law" means any federal, state,
local or foreign law, regulation, order, decree, permit, authorization,
opinion, common law or agency requirement relating to: (i) the protection,
investigation or restoration of the environment, health and safety, or natural
resources, (ii) the handling, use, presence, disposal, release or threatened
release of any Hazardous Substance or (iii) noise, odor, wetlands, pollution,
contamination or any injury or threat of injury to persons or property.
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(c) As used herein, the term "Hazardous Substance" means any substance that
is: (i) listed, classified, regulated or which falls within the definition of a
"hazardous substance" or "hazardous material" pursuant to any Environmental
Law; (ii) any petroleum product or by-product, asbestos-containing material,
lead-containing paint or plumbing, polychlorinated biphenyls, radioactive
materials or radon; or (iii) any other substance which is the subject of
regulatory action by any Governmental Authority pursuant to any Environmental
Law.
3.14 Employee Benefit Plans.
(a) The Company has listed in Section 3.14 of the Company Disclosure
Schedule all employee benefit plans (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) and all bonus,
stock option, stock purchase, incentive, deferred compensation, supplemental
retirement, severance and other similar employee benefit plans, and all
unexpired severance agreements, written or otherwise, for the benefit of, or
relating to, any current or former employee of the Company or any trade or
business (whether or not incorporated) which is or was ever a member of a
controlled group of corporations or which is or was ever under common control
with the Company (an "ERISA Affiliate") within the meaning of Section 414 of
the Code (together, the "Company Employee Plans").
(b) With respect to each Company Employee Plan, the Company has furnished to
each of the other Companies a true and correct copy of (i) the most recent
annual report (Form 5500) filed with the IRS, (ii) such Company Employee Plan,
(iii) each trust agreement and group annuity contract, if any, relating to such
Company Employee Plan and (iv) the most recent reports regarding the
satisfaction of the nondiscrimination requirements of Sections 410(b), 401(k)
and 401(m) of the Code.
(c) With respect to the Company Employee Plans, no event has occurred, and
to the Knowledge of the Company, there exists no condition or set of
circumstances in connection with which the Company or any ERISA Affiliate could
be subject to any liability that is reasonably likely, individually or in the
aggregate, to have a Company Material Adverse Effect under ERISA, the Code or
any other applicable law. The transactions contemplated herein shall not
constitute a prohibited transaction (as defined in Section 4975 of the Code) or
in any way reasonably be expected to subject the Company to any liability that
in the aggregate would have a Company Material Adverse Effect.
(d) With respect to the Company Employee Plans, there are no funded benefit
obligations for which contributions have not been made or properly accrued and
there are no unfunded benefit obligations which have not been accounted for by
reserves, or otherwise properly footnoted in accordance with generally accepted
accounting principles, on the financial statements of the Company, which
obligations are reasonably likely, individually or in the aggregate, to have a
Company Material Adverse Effect.
(e) Neither the Company nor any ERISA Affiliate has (i) ever maintained a
Company Employee Benefit Plan which was ever subject to Title IV of ERISA or
Section 412 of the Code or (ii) ever been obligated to contribute to a
multiemployer plan (as defined in Section 4001(a)(3) of ERISA).
(f) Except as provided for in this Agreement, the Company is not a party to
any oral or written (i) agreement with any officer or other key employee of the
Company, the benefits of which are contingent, or the terms of which are
materially altered, upon the occurrence of a transaction involving the Company
of the nature contemplated by this Agreement, (ii) agreement with any employee
of the Company providing any term of employment or compensation guarantee
extending for a period longer than one year from the date hereof and for the
payment of compensation in excess of $50,000 per annum, or (iii) agreement or
plan, including any stock option plan, stock appreciation right 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.
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(g) Each Company Employee Plan intended to be qualified under Section 401(a)
of the Code has either obtained from the IRS a favorable determination letter
as to its qualified status under the Code, including all amendments to the Code
effected by the Tax Reform Act of 1986 and subsequent legislation, or has
applied (or has time remaining in which to apply) to the IRS for such a
determination letter prior to the expiration of the requisite period under
applicable Treasury Regulations or IRS pronouncements in which to apply for
such determination letter and to make any amendments necessary to obtain a
favorable determination or has been established under a standardized prototype
plan for which an IRS opinion letter has been obtained by the plan sponsor and
is valid as to the adopting employer. The Company has furnished or made
available to each other Company a copy of the most recent IRS determination or
opinion with respect to each such Company Employee Plan and nothing has
occurred since the inception of each such Company Employee Plan which could
reasonably be expected to cause the loss of the tax-qualified status of any
Company Employee Plan subject to Section 401(a) of the Code.
(h) None of the Company Employee Plans promises or provides retiree medical
or other retiree welfare benefits to any person, except as required by
applicable law.
3.15 Compliance With Laws. The Company has complied with, is not in
violation of, and has not received any notice alleging any violation with
respect to, any foreign, federal, state or local statute, law or regulation
with respect to the conduct of its business, or the ownership or operation of
its properties or assets, except for failures to comply or violations which,
individually or in the aggregate, have not had and are not reasonably likely to
have a Company Material Adverse Effect.
3.16 Certain Regulatory Matters.
(a) Section 3.16 of the Company Disclosure Schedule sets forth a complete
and accurate list of any written communications between the Company, on the one
hand, and the FDA or any other Governmental Authority on the other hand that
describe matters that could have a material adverse effect on the Company's
currently projected sales or revenues attributable to any contemplated
compound, product or product line of the Company. The Company has made
available to both of the other Companies copies of all such documents, as well
as copies of all complaints and other information required to be maintained by
the Company pursuant to the United States Federal Food, Drug and Cosmetic Act
and Comprehensive Drug Abuse Prevention and Control Act of 1970 and the
corresponding laws of jurisdictions other than the United States.
(b) The Company has filed with the FDA and all applicable state and local
regulatory bodies for and received approval of all registrations, applications,
licenses, requests for exemptions, permits and other regulatory authorizations
necessary to conduct the business of the Company as currently conducted, the
absence of which would, individually or in the aggregate, be reasonably likely
to have a Company Material Adverse Effect. The Company is, and at all relevant
times has been, in compliance in all material respects with all such
registrations, applications, licenses, requests for exemptions, permits and
other regulatory authorizations. To the Company's Knowledge, any third party
which is a manufacturer for the Company is, and at all relevant times has been,
in compliance in all material respects with all such registrations,
applications, licenses, requests for exemptions, permits and other regulatory
authorizations insofar as the same pertain to the manufacture of products for
the Company. The Company is, and at all relevant times has been, in compliance
in all material respect with all material FDA, state and local rules,
regulations, guidelines and policies, including, but not limited to, material
FDA, state and local rules, regulations and policies relating to good
manufacturing practice ("GMP") and good laboratory practice ("GLP"); and the
Company has no reason to believe that any party granting any such registration,
application, license, request for exemption, permit or other authorization is
considering limiting, suspending or revoking the same and knows of no basis for
any such limitation, suspension or revocation.
3.17 Tax Matters. To its Knowledge, after consulting with its independent
auditors, neither the Company nor any of its Affiliates has taken or agreed to
take any action which would prevent the Merger from constituting a transaction
qualifying as a reorganization under 368(a) of the Code.
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3.18 Registration Statement; Proxy Statement/Prospectus. The information to
be supplied by the Company for inclusion in the registration statement on Form
S-4 pursuant to which shares of Surviving Company Common Stock issued in the
Merger will be registered under the Securities Act (the "Registration
Statement"), shall not at the time the Registration Statement is declared
effective by the SEC contain any untrue statement of a material fact or omit to
state any material fact required to be stated in the Registration Statement or
necessary in order to make the statements in the Registration Statement not
misleading. The information to be supplied by the Company for inclusion in the
joint proxy statement/prospectus (the "Joint Proxy Statement") to be sent to
the stockholders of the Companies in connection with the meetings of the
Companies' stockholders to consider this Agreement and the Merger (the "Company
Meetings") shall not, on the date the Joint Proxy Statement is first mailed to
stockholders of the Companies, at the time of the Company Meetings, or at the
Effective Time, contain any statement which, at such time and in light of the
circumstances under which it shall be made, is false or misleading with respect
to any material fact, or omit to state any material fact necessary in order to
make the statements made in the Joint Proxy Statement not false or misleading;
or omit to state any material fact necessary to correct any statement in any
earlier communication with respect to the solicitation of proxies for the
Company Meetings which has become false or misleading. If at any time prior to
the Effective Time any event relating to the Company or any of its Affiliates,
officers or directors should be discovered by the Company which should be set
forth in an amendment to the Registration Statement or a supplement to the
Joint Proxy Statement, the Company shall promptly inform the other Companies.
3.19 Labor Matters. The Company is not a party to or otherwise bound by any
collective bargaining agreement, contract or other agreement or understanding
with a labor union or labor organization. The Company is not the subject of any
proceeding asserting that the Company has committed an unfair labor practice or
is seeking to compel it to bargain with any labor union or labor organization
or that, individually or in the aggregate, is reasonably likely to have a
Company Material Adverse Effect, nor is there pending or, to the Knowledge of
the Company, threatened, any labor strike, dispute, walkout, work stoppage,
slow-down or lockout involving the Company that, individually or in the
aggregate, is reasonably likely to have a Company Material Adverse Effect.
3.20 Insurance. All fire and casualty, general liability, business
interruption, product liability, clinical trial and sprinkler and water damage
insurance policies maintained by the Company are with reputable insurance
carriers, provide full and adequate coverage for all normal risks incident to
the business of the Company and its properties and assets, and are in character
and amount at least equivalent to that carried by persons engaged in similar
businesses and subject to the same or similar perils or hazards, except for any
such failures to maintain insurance policies that, individually or in the
aggregate, are not reasonably likely to have a Company Material Adverse Effect.
The Company Disclosure Schedule sets forth the insurance coverages maintained
by the Company and a history of any claims paid.
3.21 No Existing Discussions. As of the date hereof, the Company is not
engaged, directly or indirectly, in any discussions or negotiations with any
other party with respect to an Acquisition Proposal (as defined in Section
6.1).
3.22 Opinion of Financial Advisor. The financial advisor of each of Creative
and Ontogeny has delivered to such Company an opinion dated the date of this
Agreement to the effect, as of such date, that the applicable Exchange Ratio is
fair to the holders such Company's capital stock from a financial point of
view, and such Company has furnished a copy of such opinion to the other
Companies.
3.23 Section 203 of the DGCL Not Applicable. The Board of Directors of each
of Creative and Ontogeny has taken all actions, if any, necessary so that the
restrictions contained in Section 203 of the DGCL applicable to a "business
combination" (as defined in Section 203) will not apply to the execution,
delivery or performance of this Agreement or the Stockholder Agreements or the
consummation of the Merger or the other transactions contemplated by this
Agreement or the Stockholder Agreements.
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3.24 No Brokers. Except with respect to Chase H&Q (in the case of Creative),
Pacific Growth Equities, Inc. (in the case of Reprogenesis) and XX Xxxxx
Securities Corporation (in the case of Ontogeny), the Company has no contract,
arrangement or understanding with any broker, finder, agent, financial advisor
or other intermediary with respect to the transactions contemplated by this
Agreement. Each Company has provided to each other Company a copy of such
Company's financial advisor contract.
3.25 Stockholder Rights.
(a) Other than as set forth in Section 3.2 of the Company Disclosure
Schedule, there are no outstanding securities, options, warrants, calls,
rights, commitments, agreements, arrangements, obligations or undertakings of
any kind (contingent or otherwise) to which the Company is a party or by which
it is bound that will obligate or require the Surviving Company after the
Merger to (i) issue, deliver or sell, or cause to be issued, delivered or sold,
shares of capital stock or other voting securities of the Surviving Company,
(ii) issue, grant, extend or enter into any such security, option, warrant,
call, right, commitment, agreement, arrangement or undertaking or (iii)
repurchase, redeem or otherwise acquire any shares of capital stock (or options
to acquire any such shares) of the Surviving Company.
(b) Other than as set forth in Section 3.2 of the Company Disclosure
Schedule, there are no agreements, arrangements, obligations or commitments of
any character (contingent or otherwise) pursuant to which any Person is or may
be entitled (A) to cause the Surviving Company to file a registration statement
under the Securities Act or which will otherwise relate to the registration of
any securities of the Surviving Company or (B) to preemptive rights or similar
contractual rights or arrangements with respect to the issuance or sale of
capital stock of the Surviving Company or any securities convertible into or
evidencing the right to subscribe for any shares of its capital stock.
(c) Other than the Stockholder Agreements, the Affiliate Agreements and the
Lock-up Agreements there are no voting trusts, proxies or other agreements,
arrangements, obligations or commitments of any character (contingent or
otherwise) to which the Company is a party or, to the Knowledge of the Company,
by which any of its stockholders is bound that, after the Merger, will (i)
relate to the voting of any shares of capital stock of the Surviving Company or
(ii) impose restrictions on or otherwise encumber the transfer of the capital
stock of the Surviving Company.
ARTICLE IV
Representations and Warranties of Xxxxx
Xxxxx hereby represents and warrants to each Company that the statements
contained in this Article IV are true and correct with respect to it, except as
set forth herein or in the disclosure schedule attached by Curis to this
Agreement (the "Curis Disclosure Schedule"). The Curis Disclosure Schedule
shall be arranged in sections corresponding to the numbered and lettered
sections contained in this Article IV, and the disclosure in any section shall
qualify other sections in this Article IV only the extent that it is reasonably
apparent from a reading of such disclosure that it also qualifies or applies to
such other sections.
4.1 Organization of Curis. Curis is a corporation duly organized, validly
existing and good standing under the laws of the State of Delaware. The
Certificate of Incorporation of Curis as in effect on the date of this
Agreement is attached as Exhibit D hereto (the "Curis Certificate of
Incorporation"). Curis has all requisite corporate power to own, lease and
operate its properties and assets and to carry on the business as now being
conducted, and is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which the failure to be so
qualified, individually or in the aggregate, would be reasonably likely to have
a material adverse effect on the business, properties, financial condition,
results of operations or prospects of Curis or to have a material adverse
effect on the ability of Curis to consummate the transactions contemplated by
this Agreement (a "Curis Material Adverse Effect"). Curis does not directly or
indirectly own
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any equity or similar interest in, or any interest convertible into or
exchangeable or exercisable for, any corporation, partnership, joint venture or
other business association or entity.
4.2 Curis' Capital Structure.
(a) The authorized capital stock of Curis consists of one hundred twenty-
five million shares of Curis Common Stock and twenty million shares, par value
$.01 per share, of undesignated preferred stock of Curis ("Curis Preferred
Stock"). As of the date of this Agreement, there are 300 shares of Curis Common
Stock issued and outstanding, 100 shares of which are each owned by Creative,
Ontogeny and Reprogenesis, and no shares of which are held in the treasury of
Curis. There are no shares of Curis Preferred Stock issued and outstanding or
held in the treasury of Curis. All of such shares of Curis Common Stock are
duly authorized, validly issued, fully-paid and non-assessable, were not issued
in violation of any purchase option, call option, right of first refusal,
preemptive right, subscription right or any similar right under the DGCL,
Curis's Certificate of Incorporation or By-laws or any agreement to which Curis
is a party or is otherwise bound.
(b) There are no options, warrants, equity securities, calls, rights,
commitments or agreements of any character to which Curis is a party or by
which it is bound obligating Curis to issue, deliver or sell, or cause to be
issued, delivered or sold, shares of capital stock of or other equity interests
in Curis. To the Knowledge of Curis, other than as provided in this Agreement,
there are no voting trusts, proxies or other voting agreements or
understandings with respect to the shares of capital stock of or other equity
interests in Curis.
(c) Curis does not (i) own of record or beneficially, directly or
indirectly, (A) any shares of capital stock or securities convertible into
capital stock of any other corporation or (B) any participating interest in any
partnership, limited liability company, joint venture or other non-corporate
business enterprise or (ii) control, directly or indirectly, any other entity.
4.3 Authority; No Conflict; Required Filings and Consents.
(a) Curis has all requisite power and authority to enter into this Agreement
and to consummate the transactions contemplated by this Agreement. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement by Curis have been duly authorized
by all the necessary corporate action on the part of Curis, subject only to the
approval of the Merger by Curis' stockholders under the DGCL. This Agreement
has been duly executed and delivered by Curis and constitutes the valid and
binding obligation of Curis, enforceable in accordance with its terms, subject
to the Bankruptcy and Equity Exception.
(b) The execution and delivery of this Agreement by Curis does not, and the
consummation of the transactions contemplated by this Agreement will not, (i)
conflict with, or result in any violation or breach of, any provision of the
Certificate of Incorporation or By-laws of Curis, (ii) result in any violation
or breach of, or constitute (with or without notice or lapse of time, or both)
a default (or give rise to a right of termination, cancellation or acceleration
of any obligation or loss of any material benefit) under, or require a consent
or waiver under, or constitute a change in control under, any of the terms,
conditions or provisions of any note, bond mortgage, indenture, lease, license,
contract or other agreement, instrument or obligation to which Curis is a party
or by which it or any of its properties or assets may be bound, or (iii)
conflict with or violate any permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to Curis
or by which it or any of its properties or assets may be bound, except in the
case of (ii) and (iii) for any such conflicts, violations, defaults,
terminations, cancellations or accelerations which are not, individually or in
the aggregate, reasonably likely to have a Curis Material Adverse Effect.
(c) No consent, approval, license, permit, order or authorization of, or
registration, declaration or filing with, any Governmental Authority is
required by or with respect to Curis in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby, except for (i) the filing of a pre-merger notification report under the
HSR Act, (ii) the filing of the Certificate of Merger with the
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Delaware Secretary of State, (iii) the filing of the Articles of Merger with
the Secretary of State of the State of Texas and the issuance of a certificate
of merger by the Secretary of State of the State of Texas, (iv) the filing of
the Registration Statement with the SEC and the effectiveness thereof, (v) the
registration of the Surviving Company Common Stock under the Exchange Act, (vi)
such, consents, approvals, orders, authorizations, registrations, declarations
and filings as may be required under applicable state securities laws and (vii)
such other consents, licenses, permits, orders, authorizations, filings,
approvals and registrations which, if not obtained or made, would not be
reasonably likely, individually or in the aggregate, to have a Curis Material
Adverse Effect.
4.4 Continuity of Business Enterprise; Reorganization Classification. Curis
hereby represents and warrants to each Company and to the stockholders of each
Company (which representation and warranty shall survive the Closing) that the
Merger will satisfy the continuity of business enterprise test of Treasury
Regulation Section 1.368-1(d).
ARTICLE V
Conduct of Business Pending the Merger
5.1 Conduct of Business by Company Pending the Merger. Each Company
covenants and agrees with the other Parties that, between the date hereof and
the Effective Time, except as expressly required or permitted by this Agreement
or unless each other Party shall otherwise agree in writing, such Company shall
conduct and shall cause the businesses of each of its Subsidiaries to be
conducted only in, and such Company and its Subsidiaries shall not take any
action except in, the ordinary course of business and in a manner consistent
with past practice. Each Company shall use its commercially reasonable best
efforts to preserve intact the business organization and assets of such Company
and each of its Subsidiaries, and to operate, and cause each of its
Subsidiaries to operate, according to plans and budgets provided to each other
Party, to keep available the services of the present officers, employees and
consultants of such Company and each of its Subsidiaries and, except as set
forth in Section 5.1 of the Company Disclosure Schedule, to maintain in effect
Company Material Contracts and to preserve the present relationships of the
Company and each of its Subsidiaries with licensors, licensees, sponsors,
customers, suppliers, consultants and other Persons with which the Company or
any of its Subsidiaries has business relations. By way of amplification and not
limitation, except as expressly permitted by this Agreement or except as set
forth in the Company Disclosure Schedule, neither the Companies nor any of
their respective Subsidiaries shall, between the date hereof and the Effective
Time, directly or indirectly do, or propose to do, any of the following without
the prior written consent of each other Party:
(a) amend or otherwise change the Certificate or Articles of Incorporation
or By-laws or equivalent organizational document of the Company or any of its
Subsidiaries or alter through merger, liquidation, reorganization,
restructuring or in any other fashion the corporate structure or ownership of
Company or any of its Subsidiaries;
(b) issue, sell, transfer, pledge, dispose of or encumber, or authorize the
issuance, sale, transfer, pledge, disposition or encumbrance of, any shares of
capital stock of any class, or any options, warrants, convertible securities or
other rights of any kind to acquire any shares of capital stock, or any other
ownership interest of the Company or any of its Subsidiaries (except for the
issuance of Company Common Stock upon the exercise of Company Options or
Company Warrants outstanding on the date hereof or upon the conversion of any
convertible securities outstanding on the date hereof); or sell, transfer,
pledge, dispose of or encumber, or authorize the sale, transfer, pledge,
disposition or encumbrance, of any assets of the Company or any of its
Subsidiaries (except for sales of assets in the ordinary course of business and
in a manner consistent with past practice) or redeem, purchase or otherwise
acquire, directly or indirectly, any of the capital stock of the Company or
interest in or securities of any Subsidiary;
(c) declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of any of its
capital stock (except that a wholly owned Subsidiary of any
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Company may declare and pay a dividend to its parent); split, combine or
reclassify any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock or amend the terms of, repurchase, redeem or
otherwise acquire, or permit any Subsidiary to repurchase, redeem or otherwise
acquire, any of its securities or any securities of its Subsidiaries, or
propose to do any of the foregoing;
(d) sell, transfer, lease, out-license, out-sublicense, mortgage, pledge,
dispose of, encumber, grant or otherwise dispose of any Intellectual Property
Rights, or amend or modify in any material way any existing agreements with
respect to any Intellectual Property Rights, except for (i) non-exclusive
licenses granted pursuant to material transfer agreements entered into in the
ordinary course of business consistent with past practice and (ii) non-
exclusive research licenses granted as part of a research agreement that is
otherwise permitted under this Agreement;
(e) acquire (by merger, consolidation, acquisition of stock or assets or
otherwise) any corporation, limited liability company, partnership, joint
venture or other business organization or division thereof; incur any
indebtedness for borrowed money or issue any debt securities or assume,
guarantee or endorse or otherwise as an accommodation become responsible for,
the obligations of any Person, or make any loans, advances or enter into any
financial commitments, except in the ordinary course of business consistent
with past practice and as otherwise permitted under any loan or credit
agreement to which the Company is a party; authorize any capital expenditures
which are, in the aggregate, in excess of $100,000 for the Company and its
Subsidiaries taken as a whole; or enter into or amend in any material respect
any contract, agreement, commitment or arrangement with respect to any of the
matters set forth in this Section 5.1(e);
(f) hire any employee or consultant; terminate any employee or consultant,
except in the ordinary course of business consistent with past practice;
increase the compensation (including, without limitation, bonus) payable or to
become payable to its officers or employees, except for increases in salary or
wages of employees of the Company or its Subsidiaries who are not officers of
the Company in the ordinary course of business consistent with past practices,
or grant any severance or termination pay or stock options to, or enter into
any employment or severance agreement with any director, officer or other
employee of the Company or any of its Subsidiaries, or establish, adopt, enter
into or amend any collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any current or former
directors, officers or employees;
(g) change any accounting policies or procedures (including procedures with
respect to reserves, revenue recognition, payments of accounts payable and
collection of accounts receivable) unless required by statutory accounting
principles or GAAP;
(h) create, incur, suffer to exist or assume any Lien on any of their
material assets other than Liens outstanding on the date hereof;
(i) other than in the ordinary course of business consistent with past
practice, (i) enter into any Company Material Contract, (ii) modify, amend or
transfer in any material respect or terminate any Company Material Contract or
waive, release or assign any material rights or claims thereto or thereunder or
(iii) enter into or extend any lease with respect to real property with any
third party;
(j) make any Tax election or settle or compromise any federal, state, local
or foreign income Tax liability or agree to an extension of a statute of
limitations;
(k) settle any material Litigation or waive, assign or release any material
rights or claims except, in the case of Litigation, any Litigation which
settlement would not (i) impose either material restrictions on the conduct of
the Company's business or any of its Subsidiaries or (ii) for any individual
Litigation item settled, exceed $50,000 in cost or value to the Company or any
of its Subsidiaries;
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(l) pay, discharge or satisfy any liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), except in the
ordinary course of business consistent with past practice in an amount or value
not exceeding $100,000 in any instance or series of related instances or
$250,000 in the aggregate or in accordance with their terms as in effect as of
the date hereof;
(m) engage in any transaction, or enter into any agreement, arrangement, or
understanding with, directly or indirectly, any Affiliate, other than those
contemplated pursuant to the terms of this Agreement and those existing as of
the date hereof which are listed in the Company Disclosure Schedule;
(n) fail to renew or maintain in full force and effect all insurance
policies, as the case may be, currently in effect or fail to pay any insurance
premiums thereon; and
(o) authorize, recommend, propose or announce an intention to do any of the
foregoing, or agree or enter into any agreement, contract commitment or
arrangement to do any of the foregoing.
5.2 Cooperation. Subject to compliance with applicable law, from the date
hereof until the Effective Time, each Company shall, and shall cause each of
their respective Subsidiaries to, make its officers available to confer on a
regular and frequent basis with one or more representatives of the other
Parties at reasonable times and upon reasonable advance notice to report on the
general status of ongoing operations and shall promptly provide the other
Parties or their counsel with copies of all filings made by such party with any
Governmental Authority in connection with this Agreement, the Merger and the
transactions contemplated hereby and thereby.
5.3 Confidentiality. The parties acknowledge that each of (i) the Non-
Disclosure Agreement dated June 11, 1998 between Creative and Ontogeny (as
amended, the "CO Agreement"), (ii) the Non-Disclosure Agreement between
Creative and Reprogenesis (as amended, the "CR Agreement") (iii) the Non-
Disclosure Agreement between Ontogeny and Reprogenesis (the "OR Agreement") and
(iv) the Agreement Regarding Disclosure of Confidential Documents and
Information dated January 10, 2000 by and among the Companies (the "IP NDA"
and, collectively with the CO Agreement, the CR Agreement and the OR Agreement,
the "Confidentiality Agreements"), shall continue in full force and effect in
accordance with its terms.
5.4 Curis Certificate of Incorporation. Curis covenants and agrees with the
other Parties that, between the date hereof and the Effective Time, Curis shall
not amend or modify the Curis Certificate of Incorporation without the prior
written consent of each Company.
ARTICLE VI
Solicitation of Other Proposals
6.1 Solicitation of Other Proposals.
(a) From the date hereof until the earlier of the Effective Time or the
termination of this Agreement in accordance with its terms, no Company shall,
nor shall any Company permit any of their respective Subsidiaries or any of
their respective officers, directors, employees, investment bankers, attorneys
or other representatives, advisors or agents (collectively, the
"Representatives") to, and each Company shall use its best efforts to cause
each of its respective non-officer and non-director Affiliates not to, directly
or indirectly, (i) solicit, facilitate, initiate or encourage, or take any
action to solicit, facilitate, initiate or encourage, the making of any
proposal or offer that constitutes an Acquisition Proposal or the making of any
inquiries concerning an Acquisition Proposal or (ii) participate or engage in
discussions or negotiations with, or provide any information to, any Person
concerning an Acquisition Proposal or which might reasonably be expected to
lead to an Acquisition Proposal; provided that, if such Company has not
breached this Section 6.1(a), nothing contained in this Agreement shall prevent
such Company or its Board of Directors, prior to the vote of the stockholders
of such Company for approval of this Agreement and the Merger, from furnishing
non-public
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information to, or entering into discussions or negotiations with, any Person
(other than another Company) in response to an unsolicited bona fide written
Acquisition Proposal by such Person if and only to the extent that (A) the
Board of Directors of such Company believes in good faith (after consultation
with its financial advisor) that such Acquisition Proposal is reasonably
capable of being completed on the terms proposed and would, if so consummated,
result in a Superior Proposal (as defined below), (B) such Company's Board of
Directors determines in good faith after consultation with outside legal
counsel that such action is necessary for such Board of Directors to comply
with its fiduciary duties to stockholders under applicable law, (C) prior to
furnishing such non-public information to, or entering into discussions or
negotiations with, such Person, such Board of Directors receives from such
Person an executed confidentiality agreement with terms no more favorable to
such Person than those contained in the Confidentiality Agreements and (D)
prior to furnishing such non-public information to, or entering into
discussions or negotiations with, such Person, such Company has complied with
the provisions of Section 6.1(c). Without limiting the foregoing, it is
understood that any violation of the restrictions set forth in this Section
6.1(a) by any Representative of a Company or its Subsidiaries or any non-
officer and non-director Affiliate of such Company, whether or not acting on
behalf of such Company or any of its Subsidiaries, shall be deemed to be a
breach of this Section 6.1(a) by such Company.
For purposes of this Agreement, the term "Acquisition Proposal" shall mean
any inquiry, proposal or offer after the date of this Agreement from any Person
relating to:
(1) any merger, consolidation, recapitalization, liquidation or other
direct or indirect business combination, involving a Company or any of its
Subsidiaries or the issuance or acquisition of shares of capital stock or
other equity securities of a Company or any of its Subsidiaries (excluding
the issuance of Company Common Stock upon the exercise of Company Options
or Company Warrants outstanding on the date hereof or upon the conversion
of any convertible securities outstanding on the date hereof) or any tender
or exchange offer that if consummated would result in any Person, together
with all Affiliates thereof, beneficially owning shares of capital stock or
other equity securities of a Company or any of its Subsidiaries; provided,
however, that if any pharmaceutical or biopharmaceutical company engaged in
discussions with a Company regarding the licensing of Intellectual Property
Rights makes, in connection with and relating to such discussions, an
unsolicited inquiry, proposal or offer regarding the acquisition of shares
of capital stock representing 5% or less of the outstanding capital stock
of such Company, such an inquiry, proposal or offer shall not constitute an
Acquisition Proposal if, and only if, such inquiry, proposal or offer is
disclosed in reasonable detail in writing to the other Companies within
three (3) Business Days and the Chief Executive Officers of such other
Companies agree that such inquiry, proposal or offer does not constitute an
Acquisition Proposal, with written confirmation to follow within three (3)
Business Days of such agreement; or
(2) other than as set forth in Section 6.1 of the Company Disclosure
Schedule or as permitted pursuant to Section 5.1(d), the sale, lease,
exchange, license (whether exclusive or not), or any other disposition of
any significant portion of a material Intellectual Property Right, or any
significant portion of the business or other assets of a Company or any its
Subsidiaries, or any other transaction, the consummation of which sale,
lease, exchange, license, disposition or transaction could reasonably be
expected to impede, interfere with, prevent or materially delay the
consummation of the transactions contemplated hereby or which would
reasonably be expected to diminish significantly the benefits to each other
Company and Curis of the transactions contemplated hereby; provided,
however, that if any pharmaceutical or biopharmaceutical company makes an
inquiry, proposal or offer regarding any such sale, lease, exchange,
license, disposition or transaction, such inquiry, proposal or offer shall
not constitute an Acquisition Proposal if, and only if, such inquiry,
proposal or offer is disclosed in reasonable detail in writing to the other
Companies within three (3) Business Days and the Chief Executive Officers
of such other Companies agree that such inquiry, proposal or offer does not
constitute an Acquisition Proposal, with written confirmation to follow
within three (3) Business Days of such agreement.
Each Party shall immediately cease and cause to be terminated and shall
cause its respective Representatives (and shall use its best efforts to cause
its non-officer and non-director Affiliates) to terminate
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all existing discussions or negotiations with any Persons conducted heretofore
with respect to, or that could reasonably be expected to lead to, an
Acquisition Proposal. Each Party shall promptly notify its respective
Representatives and non-officer and non-director Affiliates of its obligations
under this Section 6.1(a).
(b) Except as permitted by this Section 6.1(b), neither the Board of
Directors of each Company nor any committee thereof shall:
(1) approve or recommend, or publicly (or in a manner reasonably likely
to become public) propose to approve or recommend, any Acquisition Proposal
other than the Merger,
(2) withdraw or modify or publicly (or in a manner reasonably likely to
become public) propose to withdraw or modify in a manner adverse to each
other Party its approval or, except as provided below, recommendation (or
the approval or, except as provided below, recommendation of any committee
of such Board of Directors) of the Merger, this Agreement or the
transactions contemplated hereby,
(3) upon a request by any of the other Parties to reaffirm its approval
or, except as provided below, recommendation of this Agreement or the
Merger, fail to do so within two (2) Business Days after such request is
made,
(4) enter, or cause such Company or any its Subsidiaries to enter, into
any letter of intent, agreement in principle, acquisition agreement or
other similar agreement related to any Acquisition Proposal, or
(5) resolve or announce its intention to do any of the foregoing.
The immediately preceding sentence notwithstanding, in the event that prior
to a Company Meeting, the Board of Directors of such Company receives a
Superior Proposal, then the Board of Directors of such Company may, if such
Company has complied with the provisions of Section 6.1(a), (i) withdraw or
modify, or propose to withdraw or modify, in a manner adverse to the other
Parties its recommendation of the Merger, this Agreement or the transactions
contemplated hereby, or (ii) fail to reaffirm its recommendation of this
Agreement or the Merger after a request by the other Parties to do so; provided
that (A) such Board of Directors determines in good faith, after consultation
with its outside counsel that taking such action is required to satisfy the
fiduciary duties of such directors and (B) such Company furnishes the other
Parties five Business Days' prior written notice of the taking of such action
(which notice shall include a description of the material terms and conditions
of the Superior Proposal), during which time the other Parties may make, and
such Company shall consider, a counterproposal to such Superior Proposal.
For purposes of the Agreement, the term "Superior Proposal" means any bona
fide proposal by a third party to acquire all or substantially all of the
assets or capital stock of a Company pursuant to a tender or exchange offer, a
merger, consolidation, a liquidation or dissolution, a recapitalization, a sale
of its assets or otherwise which is on terms which the Board of Directors of
such Company determines by a majority vote of its directors in their good faith
judgment to be more favorable to the stockholders of such Company than the
Merger (or any counterproposal made by the other Parties), after receiving the
written advice of the Company's independent financial advisor and after
consultation with its outside counsel, and after taking into account the terms
and conditions of such Superior Proposal and all other relevant factors
relating thereto, including, the timing of the closing thereof, the risk of
non-consummation, the ability of the Person making the Acquisition Proposal to
finance the transaction contemplated thereby and any required governmental or
other consents, filings and approvals.
(c) In addition to the other obligations of the Parties set forth in this
Section 6.1, the Parties shall immediately (and in any event within one day)
advise one another orally and in writing of any Acquisition Proposal, any
request for information with respect to any Acquisition Proposal, or any
inquiry with respect to or which could result in an Acquisition Proposal, and
the material terms and conditions of such Acquisition Proposal, request or
inquiry (including the identity of the Person making such Acquisition Proposal,
request or inquiry). The Parties shall inform one another on a prompt and
current basis of the status and content of any discussions regarding any
Acquisition Proposal with a third party and as promptly as practicable of any
change in the price, structure or form of the consideration or material terms
of and conditions regarding any
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Acquisition Proposal or of any other developments or circumstances which could
reasonably be expected to culminate in the taking of any of the actions
referred to in Section 6.1(b).
(d) Nothing in this Section 6.1 shall (i) permit a Company to terminate this
Agreement (except as specifically provided in Section 9.1 hereof), (ii) permit
a Company to enter into any agreement with respect to an Acquisition Proposal
during the term of this Agreement (it being agreed that during the term of this
Agreement, no Company shall enter into any agreement with any Person that
provides for, or in any way facilitates, an Acquisition Proposal (other than a
confidentiality agreement of the type referred to in clause (C) of Section
6.1(a) above)) or (iii) affect any other obligation of each Company under this
Agreement.
(e) Nothing contained in this Section 6.1 shall prevent the Board of
Directors of a Company that is a Public Company from at anytime taking or
disclosing to its stockholders a position contemplated by Rule 14e-2
promulgated under the Exchange Act; provided that no Company or its Board of
Directors shall, except to the extent permitted by Section 6.1(b), propose to
approve or recommend an Acquisition Proposal.
ARTICLE VII
Additional Agreements
7.1 Proxy Statement/Prospectus; Registration Statement.
(a) As promptly as practicable following the date of this Agreement, Curis
shall prepare and file with the SEC the Registration Statement on Form S-4, in
which the Joint Proxy Statement shall be included as a prospectus, and shall
use reasonable efforts to have the Registration Statement declared effective by
the SEC as promptly as practicable. Curis shall obtain and furnish the
information required to be included in the Registration Statement and, after
consultation with each Company respond promptly to any comments made by the SEC
with respect to the Registration Statement (which comments shall promptly be
furnished to each Company) and cause the prospectus included therein, including
any amendment or supplement thereto, to be mailed to the stockholders of each
Company at the earliest practicable date after the Registration Statement is
declared effective by the SEC, provided that no amendment or supplement to the
Registration Statement will be made by Curis without consultation with each
Company and each of their respective counsels. Curis shall also take any action
required to be taken under Blue Sky or other securities Laws in connection with
the issuance of Surviving Company Common Stock in the Merger.
(b) Each Company shall (i) as promptly as practicable following the date
hereof prepare a preliminary proxy or information statement relating to the
Merger and this Agreement, (ii) obtain and furnish the information required to
be included by the SEC in the Joint Proxy Statement, (iii) cause the Joint
Proxy Statement and the prospectus to be included in the Registration
Statement, including any amendment or supplement thereto, to be mailed to their
respective stockholders at the earliest practicable date after the Registration
Statement is declared effective by the SEC, and (iv) use all reasonable efforts
to obtain the necessary approval of the Merger and this Agreement by their
stockholders. No Company shall file with or supplementally provide to the SEC
or mail to its stockholders the Joint Proxy Statement or any amendment or
supplement thereto without the prior written consent of each other Company.
Each Company shall allow each other Company's full participation in the
preparation of the Joint Proxy Statement and any amendment or supplement
thereto and shall consult with each other Company and its advisors concerning
any comments from the SEC with respect thereto.
(c) Each Company shall include in the Joint Proxy Statement the
recommendation of its Board of Directors in favor of approval and adoption of
this Agreement and the Merger, except to the extent that the Board of Directors
of such Company shall have withdrawn or modified its recommendation of this
Agreement or the Merger as permitted by Section 6.1(b). Without limiting the
foregoing, each Company agrees that its obligation under Section 7.2 to duly
call, give notice of and hold its Company Meeting as soon as practicable
following the date upon which the Registration Statement becomes effective
shall not be affected by (i) the commencement, public proposal, public
disclosure or communication to such Company of any Acquisition
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Proposal or (ii) the withdrawal or modification by the Board of Directors of
such Company of its approval or recommendation of this Agreement or the Merger.
(d) The Parties shall, as promptly as practicable, make all necessary
filings with respect to the Merger under the Securities Act and the Exchange
Act and the rules and Regulations thereunder (including, without limitation,
registration of the Surviving Company Common Stock on a Form 8-A (the "Exchange
Act Registration Statement")) and under applicable Blue Sky or similar
securities laws, rules and Regulations, and shall use all reasonable efforts to
obtain required approvals and clearances with respect thereto.
(e) In the event that Curis is not permitted to include in the Registration
Statement all shares of Surviving Company Common Stock to be issued as Merger
Consideration ("Excluded Securities") then, as promptly as practicable after
the filing of the Registration Statement, Curis shall file and shall use its
commercially reasonable best efforts to have declared effective a "shelf"
registration statement pursuant to Rule 415 under the Securities Act for the
resale of the Excluded Securities and use its commercially reasonable best
efforts to keep such registration statement effective for a period of two (2)
years following the Effective Time or, if shorter, until (i) all Excluded
Securities have been sold pursuant to such registration statement or (ii) the
first date on which each holder of Excluded Securities may sell all of such
Excluded Securities held by such holder without registration pursuant to Rule
144 under the Securities Act within a three-month period.
7.2 Meetings of Stockholders. Each Company shall promptly after the date
hereof take all action necessary in accordance with the provisions of the DGCL
or the TBCA and each of their Certificates or Articles of Incorporation and By-
laws, respectively, to duly call, give notice of and hold its Company Meeting
as soon as practicable following the date upon which the Registration Statement
becomes effective and shall consult with Curis in connection therewith. Once
such Company Meeting has been called and noticed, the Company shall not
postpone or adjourn (other than for the absence of a quorum and then only to a
future date agreed to by the other Parties) such Company Meeting without the
consent of each other Company. The Boards of Directors of each Company shall
have declared that this Agreement and the Merger is advisable and, subject to
Section 6.1(b), recommended that this Agreement and the Merger be approved and
authorized by the stockholders of such Company and include in the Registration
Statement and Joint Proxy Statement a copy of such recommendation; provided,
that each Company, through its Board of Directors, shall submit this Agreement
and the Merger to their respective stockholders whether or not such Board of
Directors at any time subsequent to making such recommendation takes any action
permitted by Section 6.1(b). Each Company shall solicit from their respective
stockholders proxies in favor of the Merger and shall take all other action
necessary or advisable to secure the vote or consent of such stockholders
required by the DGCL or the TBCA to authorize the Merger; provided that this
provision shall not prohibit the Boards of Directors of the Companies from
taking any action permitted by Section 6.1(b).
7.3 Access to Information. Upon reasonable notice, each Company shall (and
shall cause each of its Subsidiaries to) afford to the other Parties' officers,
employees, accountants, counsel and other representatives, reasonable access,
during normal business hours during the period prior to the Effective Time, to
all its properties, books, contracts, commitments and records and, during such
period, each Company shall (and shall cause each of its Subsidiaries to)
furnish promptly to the other Parties (i) a copy of each report, schedule,
registration statement and other document filed or received by it during such
period pursuant to the requirements of federal securities laws and (ii) all
other information concerning its business, properties and personnel as each
other Party may reasonably request. Unless otherwise required by law, each
Party shall, and shall cause its officers, employees, accountants, counsel and
other representatives or persons who have access to such information to, hold
any such information which is non-public in confidence in accordance with the
Confidentiality Agreements. No information or knowledge obtained in any
investigation pursuant to this Section 7.3 or otherwise shall affect or be
deemed to modify any representation or warranty contained in this Agreement or
the conditions to the obligations of the Parties to consummate the Merger.
7.4 All Reasonable Efforts; Further Assurances.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each Party shall use all reasonable efforts to take, or cause to be
taken, all appropriate actions, and do, or cause to be done, and to
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assist and cooperate with the other Parties in doing, all things necessary,
proper or advisable to consummate and make effective, in the most expeditious
manner practicable, the Merger and the other transactions contemplated hereby.
The Parties shall use all reasonable efforts to:
(i) obtain all licenses, permits, consents, waivers, approvals,
authorizations, qualifications or Orders (including all United States and
foreign governmental and regulatory rulings and approvals), required to be
obtained by each of them, or any of their respective Subsidiaries,
respectively, and the Parties shall make all filings (including, without
limitation, all filings with United States and foreign governmental or
regulatory agencies) under applicable Law required in connection with the
authorization, execution and delivery of this Agreement by them and the
consummation by them of the transactions contemplated hereby and thereby,
including the Merger (in connection with which the Parties will cooperate
with each other in connection with the making of all such filings,
including providing copies of all such documents to the non-filing party
and its advisors prior to filings and, if requested, will accept all
reasonable additions, deletions or changes suggested in connection
therewith);
(ii) furnish all information required for any application or other
filing to be made pursuant to any applicable law or any applicable
Regulations of any Governmental Authority (including all information
required to be included in the Joint Proxy Statement or the Registration
Statement) in connection with the transactions contemplated by this
Agreement; and
(iii) lift, rescind or mitigate the effects of any injunction,
restraining order or other order adversely affecting the ability of any
party hereto to consummate the transactions contemplated hereby and thereby
and to prevent, with respect to any threatened injunction, restraining
order or other Order, the issuance or entry thereof,
provided that no Party shall be under any obligation to (x) make proposals,
execute or carry out agreements or submit to Orders providing for the sale or
other disposition or holding separate (through the establishment of a trust or
otherwise) of any assets or categories of assets material (in nature or
amount) to such Party or imposing or seeking to impose any material limitation
on the ability of such Party to conduct its business or own such assets or (y)
otherwise take any step to avoid or eliminate any impediment which may be
asserted under any Law governing competition, monopolies or restrictive trade
practices which, in the reasonable judgment of such Party, might result in a
limitation of the benefit expected to be derived by Curis as a result of the
transactions contemplated hereby or might adversely affect the Parties as a
whole. None of the Parties hereto will take any action which results in any of
the representations or warranties made by such Party pursuant to Articles III
or IV, as the case may be, becoming untrue or inaccurate in any material
respect.
(b) The Parties shall use all reasonable efforts to satisfy or cause to be
satisfied all of the conditions precedent that are set forth in Article VIII,
as applicable to each of them, and to cause the transactions contemplated by
this Agreement to be consummated. Each Party, at the reasonable request of
another Party, shall execute and deliver such other instruments and do and
perform such other reasonable acts and things as may be necessary or desirable
for effecting completely the consummation of this Agreement and the
transactions contemplated hereby.
7.5 Stock Options and Warrants.
(a) At the Effective Time, each outstanding Company Stock Option under the
Company Stock Plans, whether vested or unvested, shall, in accordance with the
terms of such Company Stock Option and such Company Stock Plan, by virtue of
the Merger and without any action on the part of the holder thereof, become
and represent an option to acquire, on the same terms and conditions as were
applicable under such Company Stock Option, the same number of shares of
Surviving Company Common Stock as the holder of such Company Stock Option
would have been entitled to receive pursuant to the Merger had such holder
exercised such option in full immediately prior to the Effective Time (rounded
downward to the nearest whole number), at a price per share (rounded upward to
the nearest whole cent) equal to (i) the aggregate exercise price for shares
of Company Common Stock purchasable pursuant to such Company Stock Option
immediately prior to the Effective Time divided by (ii) the number of full
shares of Surviving Company Common Stock deemed purchasable pursuant to such
Company Stock Option in accordance with the foregoing.
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(b) As soon as practicable after the Effective Time, the Surviving Company
shall deliver to the participants in Company Stock Plans appropriate notice
setting forth such participants' rights pursuant thereto and the grants
pursuant to Company Stock Plans shall continue in effect on the same terms and
conditions (subject to the adjustments required by this Section 7.5 after
giving effect to the Merger).
(c) Curis shall take all corporate action necessary to reserve for issuance
a sufficient number of shares of Surviving Company Common Stock for delivery
under the Company Stock Plans assumed in accordance with this Section 7.5. As
soon as practicable after the Effective Time, and in any event within 30 days
thereafter, the Surviving Company shall file one or more registration
statements on Form S-8 (or any successor or other appropriate forms) with
respect to the shares of Surviving Company Common Stock subject to such options
and shall use its commercially reasonable best efforts to maintain the
effectiveness of such registration statement or registration statements (and
maintain the current status of the prospectus or prospectuses contained
therein) for so long as such options remain outstanding.
(d) The Board of Directors of each Company (or Board committee administering
such plans) shall have approved, prior to the date of this Agreement, and shall
take, prior to or as of the Effective Time, all necessary actions, if any,
pursuant to and in accordance with the terms of the Company Stock Plans and the
instruments evidencing the Company Stock Options, to provide for the conversion
of the Company Stock Options into options to acquire Surviving Company Common
Stock in accordance with this Section 7.5, and to provide that no consent of
the holders of the Company Stock Options is required in connection with such
conversion.
(e) At the Effective Time, each outstanding Company Warrant (other than any
Company Warrant that by its terms otherwise expires by virtue of the Merger)
shall, in accordance with the terms of such Company Warrant, by virtue of the
Merger and without any action on the part of the holder thereof, become and
represent a warrant to acquire, on the same terms and conditions as were
applicable under such Company Warrant, the same number of shares of Surviving
Company Common Stock as the holder of such Company Warrant would have been
entitled to receive pursuant to the Merger (including with respect to the
treatment of fractional shares) had such holder exercised such Company Warrant
in full immediately prior to the Effective Time, at a price per share (rounded
upward to the nearest whole cent) equal to (i) the aggregate exercise price for
the shares of Company Common Stock purchasable pursuant to such Company Warrant
immediately prior to the Effective Time divided by (ii) the number of full
shares of Surviving Company Common Stock deemed purchasable pursuant to such
Company Warrant in accordance with the foregoing.
(f) The Board of Directors of each Company shall have approved, prior to the
date of this Agreement, and shall take, prior to or as of the Effective Time,
all necessary actions, pursuant to and in accordance with the terms of the
Company Warrants, to provide for the conversion of the Company Warrants into
warrants to acquire Surviving Company Common Stock in accordance with this
Section 7.5, and to provide that no consent of the holders of any Company
Warrant is required in connection with such conversion.
(g) Immediately prior to the Effective Time, the Subordinated Note of
Ontogeny payable to Xxxxxx Holdings Limited (the "Ontogeny Convertible Note")
shall in accordance with the terms of the Ontogeny Convertible Note and the
Common Stock Purchase Agreement pursuant to which such Ontogeny Convertible
Note was issued, by virtue of the Merger and without any action on the part of
the holder thereof, become and represent (and Ontogeny will issue to the holder
of such note) an aggregate of 819,673 shares of Ontogeny Common Stock.
7.6 Notification of Certain Matters.
(a) A Party shall give prompt notice to the other Parties of the occurrence,
or non-occurrence, of any event the occurrence, or non-occurrence, of which
results in any representation or warranty contained in this Agreement being
untrue or inaccurate in any material respect (or, in the case of any
representation or warranty qualified by its terms by materiality or Material
Adverse Effect, then untrue or inaccurate in any respect) and any failure of
the Parties, as the case may be, to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or satisfied
by it hereunder; provided, however, that the delivery of any notice pursuant to
this Section 7.6 shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
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(b) A Party shall give prompt notice to the other Parties of (i) any notice
or other communication from any Person alleging that the consent of such Person
is or may be required in connection with the Merger; (ii) any notice or other
communication from any Governmental Authority in connection with the Merger;
(iii) any Litigation, relating to or involving or otherwise affecting such
Party that relates to the consummation of the Merger; (iv) the occurrence of a
default or event that, with notice or lapse of time or both, will become a
default under any contract which is material to Curis or any Company Material
Contract of such Party; and (v) any change that is reasonably likely to have a
Material Adverse Effect on such Party or is likely to delay or impede the
ability of any Party to consummate the transactions contemplated by this
Agreement or to fulfill their respective obligations set forth herein.
(c) Each of the Parties shall give (or shall cause their respective
Subsidiaries to give) any notices to third Persons, and use, and cause their
respective Subsidiaries to use, all reasonable efforts to obtain any consents
from third Persons (i) necessary, proper or advisable to consummate the
transactions contemplated by this Agreement, (ii) otherwise required under any
contracts, licenses, leases or other agreements in connection with the
consummation of the transactions contemplated hereby or (iii) required to
prevent a Material Adverse Effect on any of the Parties from occurring. If any
Party shall fail to obtain any such consent from a third Person, such Party
shall use all reasonable efforts, and will take any such actions reasonably
requested by the other Parties, to limit the adverse effect upon them, their
respective Subsidiaries, and their respective businesses resulting, or which
would result after the Effective Time, from the failure to obtain such consent.
7.7 Listing on the NASDAQ. Curis shall use its commercially reasonable best
efforts to cause the Surviving Company Common Stock to be issued in the Merger
to be approved for listing on NASDAQ National Market, subject to official
notice of issuance, prior to the Effective Time.
7.8 Public Announcements. A Party shall consult with and obtain the approval
of the other Parties before issuing any press release or other public
announcement with respect to the Merger or this Agreement and shall not issue
any such press release prior to such consultation and approval, except as may
be required by applicable law or any listing agreement related to the trading
of the shares of either party on any national securities exchange or national
automated quotation system, in which case the Party proposing to issue such
press release or make such public announcement shall use reasonable efforts to
consult in good faith with each other Party before issuing any such press
release or making any such public announcement.
7.9 Accountant's Letters. Upon reasonable notice, the Parties shall use
reasonable efforts to cause their respective independent public accountants to
deliver to the other Parties, as the case may be, a letter covering such
matters as are requested by the requesting Party, as the case may be, and as
are customarily addressed in accountant's "comfort" letters in connection with
registration statements similar to Form S-4.
7.10 Indemnification of Directors and Officers.
(a) From and after the Effective Time, Curis (as the Surviving Company)
shall, to the fullest extent permitted by Law, honor all of each Company's
obligations to indemnify (including any obligations to advance funds for
expenses) the current or former directors or officers of such Company for acts
or omissions by such directors and officers occurring prior to the Effective
Time to the extent that such obligations of such Company to indemnify and
advance expenses exist on the date of this Agreement, whether pursuant to a
Company's Certificate or Articles of Incorporation, a Company's By-laws,
individual indemnity agreements or otherwise, and such obligations shall
survive the Merger and shall continue in full force and effect in accordance
with the terms of the Companies' Certificates or Articles of Incorporations,
By-laws and such individual indemnity agreements from the Effective Time until
the later of (i) the expiration of the applicable statute of limitations with
respect to any claims against such directors or officers arising out of such
acts or omissions or (ii) in the case of any claims made prior to the
expiration of the applicable statute of limitations, the final disposition of
such claims.
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(b) For a period of six years after the Effective Time, Curis (as the
Surviving Company) shall maintain in effect, if available, directors' and
officers' liability insurance covering those Persons who, as of immediately
prior to the Effective Time, are covered by each Company's directors' and
officers' liability insurance policy (the "Insured Parties") on terms no less
favorable to the Insured Parties than those of such Company's present
directors' and officers' liability insurance policy.
(c) The provisions of this Section 7.10 (i) are intended to be for the
benefit of, and will be enforceable by, each indemnified party, his or her
heirs and his or her representatives and (ii) are in addition to, and not in
substitution for, any other rights to indemnification or contribution that any
such person may have by contract or otherwise.
7.11 Covenants for Tax-Free Status. Prior to and after the Effective Time,
each Party shall use all commercially reasonable efforts to cause the Merger to
qualify as a reorganization within the meaning of Section 368(a) of the Code,
and will not take any action reasonably likely to cause the Merger not to so
qualify. After the Effective Time, Curis (as the Surviving Company) shall
continue at least one significant historic business line of each Company, or
use at least a significant portion of each Company's historic business assets
in a business, in each case within the meaning of Treasury Regulation Section
1.368-1(d).
7.12 Stockholder Agreements.
(a) Concurrently with the execution of this Agreement, each Company is
delivering to the Other Companies a Stockholder Agreement in the form of
Exhibit A attached hereto executed by each director and officer of such
Company, and each of their respective Affiliates, from whom such Company has by
then obtained such a Stockholder Agreement. If and to the extent the following
has not already been accomplished at the time of execution of this Agreement,
then, within 14 days after the date hereof, (i) Creative shall use its best
efforts to cause a Stockholder Agreement in the form of Exhibit A attached
hereto to be executed and delivered to the other Companies by each of
Creative's directors and officers, and each of their respective Affiliates, and
any other Affiliates of Creative (the "Creative Voting Commitment"), (ii)
Ontogeny shall use its best efforts to cause such a Stockholder Agreement to be
executed and delivered to the other Companies by each of Ontogeny's directors
and officers, and each of their respective Affiliates, and such of its other
stockholders as are necessary to obtain the requisite vote of the stockholders
of Ontogeny to approve this Agreement and the Merger, as well as the amendment
of the Ontogeny Certificate of Incorporation in substantially the form of
Exhibit G attached hereto, in accordance with the DGCL and its Certificate of
Incorporation (the "Ontogeny Required Stockholder Vote"), and (iii)
Reprogenesis shall use its best efforts to cause such a Stockholder Agreement
to be executed and delivered to the other Companies by each of Reprogenesis'
directors and officers, and each of their respective Affiliates, and such of
its other stockholders as are necessary to obtain the requisite vote of the
stockholders of Reprogenesis to approve this Agreement and the Merger, as well
as the amendment of the Reprogenesis Articles of Incorporation in substantially
the form of Exhibit H attached hereto, in accordance with the TBCA and its
Articles of Incorporation (the "Reprogenesis Required Stockholder Vote");
provided, however, that the obligation of Ontogeny to deliver the Stockholder
Agreements representing the Ontogeny Required Stockholder Vote, and the
obligation of Reprogenesis to deliver Stockholder Agreements representing the
Reprogenesis Required Stockholder Vote, is subject to the satisfaction of such
obligation by the other such Company.
(b) If, within 14 days after the date of this Agreement, Ontogeny has been
able to obtain Stockholder Agreements representing the Ontogeny Required
Stockholder Vote, except that it has not been able to obtain Stockholder
Agreements from stockholders whose vote is sufficient to approve amendment of
any or all of Sections D.4(h) or E.4(h) of Article Fourth of the Ontogeny
Certificate of Incorporation, Section 4(h) of the Certificate of Designation of
the Series C-1 Convertible Preferred Stock thereunder, or Section 4(h) of the
Certificate of Designation of the Series G Convertible Preferred Stock
thereunder (as the case may be, the "Applicable Preferred Stock Provisions") in
substantially the manner contemplated by Exhibit G attached hereto (the
Ontogeny Required Stockholder Vote, excluding the requisite stockholder vote
described in the foregoing exception, being referred to herein as the "Ontogeny
Minimum Required Stockholder Vote"), and if
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Reprogenesis has been able to obtain Stockholder Agreements representing the
Reprogenesis Stockholder Vote, then Curis and the Companies shall cooperate in
good faith, within 28 days after the date of this Agreement, to prepare and
adopt mutually acceptable amendments to the Certificate of Incorporation of
Curis and to this Agreement that will (i) authorize a class or series of
convertible capital stock of Curis which has the minimum rights necessary to
satisfy the requirements of the Applicable Preferred Stock Provisions as they
apply to the Merger, (ii) provide for the conversion of the shares of Ontogeny
Preferred Stock to which the Applicable Preferred Stock Provisions relate into
such new class or series of convertible stock of Curis (rather than into Common
Stock of Curis) on a basis otherwise consistent with Section 2.1(b), and (iii)
make such other changes, if any, as may be necessary or appropriate to give
effect to the foregoing.
(c) Each Company acknowledges and agrees to be bound by and comply with the
provisions of paragraph 2 of each of the Stockholder Agreements, as applicable
to such Company, as if a party thereto, with respect to transfers of record of
ownership of shares of Company Stock, and agrees to notify the transfer agent
for any such shares and provide such documentation and do such other things as
may be necessary to effectuate the provisions of such Stockholder Agreements.
7.13 Affiliate Agreements.
(a) Identified in Section 7.13 of each Company Disclosure Schedule is a list
of each Person who is a director or executive officer of the Company and, to
the Company's best Knowledge, each Person who is a holder of 10% or more of the
outstanding Voting Stock of such Company, and such Persons are, in the
reasonable judgment of such Company, all Persons who are "affiliates" of such
Company within the meaning of Rule 145 promulgated under the Securities Act
("Rule 145"). Each Company shall provide such information and documents as any
other Party shall reasonably request for purposes of reviewing such list and
shall notify such other Parties in writing regarding any change in the identity
of its affiliates prior to the Closing Date. Each Company shall use its best
efforts to deliver or cause to be delivered to the other Parties no later than
the date of the filing of the Registration Statement from each of their
respective affiliates, an executed agreement, in substantially the form
attached hereto as Exhibit E (an "Affiliate Agreement"), by which each such
affiliate agrees to comply with the applicable requirements of Rule 145 and
other applicable securities laws. Curis shall be entitled to place appropriate
legends on the certificates evidencing any Surviving Company Common Stock to be
received by such affiliates pursuant to the terms of this Agreement, and to
issue appropriate stop transfer instructions to the transfer agent for the
Surviving Company Common Stock, consistent with the terms of the Affiliate
Agreements (provided that such legends or stop transfer instructions shall be
promptly removed, after the required restricted period).
(b) Curis shall, at all times during the two (2) year period beginning on
the Closing Date, whether or not it is subject to the reporting requirements of
Section 13 or Section 15(d) of the Exchange Act, comply with the current public
information requirements of Rule 144(c)(1) promulgated under the Securities
Act.
7.14 SEC Filings. Prior to the Effective Time, each Company that is a Public
Company shall (a) timely file with the SEC each periodic or current report
required to be filed by it under the Exchange Act and (b) promptly after filing
such report, furnish each other Party with a copy.
7.15 Maintenance, Prosecution and Filing Obligations. Each Company shall pay
the costs of preparation for filing, prosecution and maintenance of each of
their respective Intellectual Property Rights as required and shall not permit
the lapse of any filings following the execution of this Agreement, except in
its reasonable business judgment in light of the transactions contemplated
hereby. Each Company shall provide copies of all filings and evidence of
payments under this Section 7.15 to the other Parties.
7.16 Certain Agreements. Each Company irrevocably and unconditionally agrees
that it (a) will vote all of the shares of Curis Common Stock owned by it in
favor of the Merger Agreement and the Merger at any meeting or meetings of
Curis's stockholders called to vote upon the Merger Agreement and the Merger;
(b) will not vote such shares (or otherwise provide a proxy or consent or a
voting agreement with respect thereto) in
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favor of any other Acquisition Proposal; and (c) will timely take all action
necessary to (i) elect as directors of Curis the persons designated on or
pursuant to Schedule 1.5, (ii) amend the Curis Certificate of Incorporation to
eliminate the ability of Curis stockholders to act by written consent and (iii)
approve a Curis employee, director and consultant stock plan.
7.17 Lock-Up Agreements. Each Company shall use its best efforts to deliver
or cause to be delivered to the other Parties no later than the date of the
filing of the Registration Statement from each Company officer and director and
each Person who is an Affiliate of each such officer and director, an executed
agreement, in substantially the form attached hereto as Exhibit F (a "Lock-Up
Agreement"); provided, however, that no Company shall be obligated to deliver
its Lock-Up Agreements to the other Companies unless both other Companies also
deliver all of their required Lock-Up Agreements. The Surviving Company may
impose stop-transfer instructions with respect to the shares subject to the
foregoing restriction until the end of said period.
7.18 Curis Board Authorization. In connection with obtaining the exemption
of certain transactions from the requirements of Section 16 of the Exchange Act
pursuant to Rule 16b-3 thereunder, Curis shall use its best efforts to approve,
by resolution of its Board of Directors, the acquisition of Surviving Company
Common Stock by its officers and directors in the Merger.
7.19 Best Efforts Obligations. Where provisions of this Agreement
(including, without limitation, Sections 7.4, 7.12, 7.13, 7.17 and 7.18)
require a Company to use its best efforts or its reasonable efforts to obtain
consents, waivers, approvals, authorizations, agreements (including Stockholder
Agreements, Affiliate Agreements and Lock-Up Agreements) or the like from any
other Person, or otherwise to cause any other Person to take action or refrain
from taking action, such Company shall not be obligated to pay any amount or
provide anything of value (other than filing fees and other required amounts in
the case of Governmental Authorities) to such other Person to induce such
Person to act in the desired manner.
ARTICLE VIII
Conditions of Merger
8.1 Conditions to Obligation of All Parties to Effect the Merger. The
respective obligations of each Party to effect the Merger shall be subject to
the satisfaction at or prior to the Effective Time of the following conditions:
(a) Effectiveness of the Registration Statements. The Registration Statement
and the Exchange Act Registration Statement shall have been declared effective;
no stop order suspending the effectiveness of the Registration Statement or the
Exchange Act Registration Statement shall have been issued by the SEC and no
proceedings for that purpose shall have been initiated; and no similar
proceeding in respect of the Joint Proxy Statement shall have been initiated
or, to the Knowledge of any Party, threatened by the SEC.
(b) Stockholder Approval. This Agreement and the Merger shall have been
authorized by the requisite vote of the stockholders of each Company in
accordance with the provisions of the DGCL or the TBCA (as the case may be) and
the Certificate or Articles of Incorporation and By-laws of each respective
Party.
(c) HSR Act. The waiting period applicable to the consummation of the Merger
under the HSR Act shall have expired or been terminated.
(d) No Injunctions or Restraints; Illegality. No Court or Governmental
Authority having jurisdiction over any Party shall have enacted, issued,
promulgated, enforced or entered any Law, Regulation or Order (whether
temporary, preliminary or permanent) which is then in effect and which has the
effect of making the Merger illegal or otherwise preventing or prohibiting
consummation of the Merger.
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(e) NASDAQ. The shares of Surviving Company Common Stock issuable to the
stockholders of the Companies pursuant to this Agreement shall have been
approved for listing on NASDAQ National Market subject to official notice of
issuance.
(f) Appraisal Shares. The Appraisal Shares of Ontogeny shall comprise not
more than 5% of the issued and outstanding Ontogeny Common Stock and not more
than 5% of the issued and outstanding Ontogeny Preferred Stock.
(g) Dissenting Shares. The Dissenting Shares of Reprogenesis shall comprise
not more than 5% of the issued and outstanding Reprogenesis Common Stock and
not more than 5% of the issued and outstanding Reprogenesis Preferred Stock.
(h) Charter Amendments. An amendment to the Amended and Restated Certificate
of Incorporation of Ontogeny in substantially the form of Exhibit G attached
hereto shall have been duly adopted and filed with the Secretary of State of
the State of Delaware, unless Section 7.12(b) of this Agreement has become
applicable, in which case such amendment shall not include an amendment of the
Applicable Preferred Stock Provisions. Articles of Amendment to the Articles of
Incorporation of Reprogenesis in substantially the form of Exhibit H attached
hereto shall have been duly adopted and filed with the Secretary of State of
the State of Texas. If Section 7.12(b) has become applicable, an amendment to
the Curis Certificate of Incorporation as contemplated by Section 7.12(b) shall
have been duly adopted and filed with the Secretary of State of the State of
Delaware.
8.2 Additional Conditions to Obligation of Each Party to Effect the
Merger. The respective obligations of each Party to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of the additional
following conditions by each other Party, any or all of which may be waived by
such Party, in whole or in part, to the extent permitted by applicable Law:
(a) Representations and Warranties. The representations and warranties of
each other Party contained in this Agreement shall be true and correct in all
material respects on and as of the Effective Time, except for (x) changes
contemplated by this Agreement (including the Disclosure Schedules hereto), (y)
those representations and warranties that are qualified by materiality or by
Company Material Adverse Effect or Curis Material Adverse Effect, as the case
may be, in which case such representations and warranties shall be true and
correct in all respects subject to such qualifications and (z) those
representations and warranties which address matters only as of a particular
date (in which case such representations and warranties shall be true and
correct in all material respects, on and as of such particular date, with the
same force and effect as if made on and as of the Effective Time), and such
Party shall have received certificates to such effect signed by the Chief
Executive Officer and Chief Financial Officer of each other Party.
(b) Agreements and Covenants. Each other Party shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the
Effective Time, and such Party shall have received certificates to such effect
signed by the Chief Executive Officer and Chief Financial Officer of each of
other Party.
(c) Regulatory Approvals. All approvals and consents of applicable Courts
and/or Governmental Authorities required for each other Party to consummate the
Merger shall have been received, except for such approvals and consents the
failure of which to have been so received, shall not have had, or be reasonably
be expected to have, a Company Material Adverse Effect or a Curis Material
Adverse Effect, as the case may be.
(d) Third Party Consents. Such Party shall have received evidence, in form
and substance reasonably satisfactory to it, that the licenses, permits,
consents, waivers, approvals, authorizations, qualifications or Orders of
Governmental Authorities and other third parties required by each of the other
Parties as described in the Company Disclosure Schedule of such other Parties
have been obtained, except where failure to have been so obtained, either
individually or in the aggregate, is not reasonably likely to have a Company
Material Adverse Effect or a Curis Material Adverse Effect, as the case may be.
Notwithstanding the foregoing, (i) Creative shall
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have received evidence, in form and substance reasonably satisfactory to it,
that the licenses, permits, consents, waivers, approvals, authorizations,
qualifications or Orders of Governmental Authorities and other third parties
set forth on Schedule 8.2(d) of the Company Disclosure Schedules of each of the
other two Companies shall have been obtained; (ii) Ontogeny shall have received
evidence, in form and substance reasonably satisfactory to it, that the
licenses, permits, consents, waivers, approvals, authorizations, qualifications
or Orders of Governmental Authorities and other third parties set forth on
Schedule 8.2(d) of the Company Disclosure Schedules of each of the other two
Companies shall have been obtained; and (iii) Reprogenesis shall have received
evidence, in form and substance reasonably satisfactory to it, that the
licenses, permits, consents, waivers, approvals, authorizations, qualifications
or Orders of Governmental Authorities and other third parties set forth on
Schedule 8.2(d) of the Company Disclosure Schedules of each of the other two
Companies shall have been obtained.
(e) Tax Opinions. Such Party shall have received a written opinion from its
counsel to the effect that the Merger will be treated for federal income tax
purposes as a tax-free reorganization within the meaning of Section 368(a) of
the Code; provided that if such counsel does not render such opinion, this
condition shall nonetheless be deemed satisfied if counsel for any other
Company renders such opinion to such Party (it being agreed that each Company
shall provide reasonable cooperation, including making reasonable
representations, to each Company counsel to enable it to render such opinion).
ARTICLE IX
Termination, Amendment and Waiver
9.1 Termination. This Agreement may be terminated and the Merger
contemplated hereby may be abandoned at any time prior to the Effective Time,
notwithstanding approval thereof by the stockholders of each Party:
(a) By mutual written consent duly authorized by the Boards of Directors of
each Party; or
(b) By any Company if the Merger shall not have been consummated on or
before August 31, 2000; provided, that the right to terminate this Agreement
under this Section 9.1(b) shall not be available to any Company whose failure
to fulfill any obligation under this Agreement has been the cause of, or
resulted in, the failure of the Merger to have been consummated on or before
such date; or
(c) By any Company if a Court of competent jurisdiction or Governmental
Authority shall have issued an Order, decree or ruling or taken any other
action, in each case which has become final and non-appealable, which
restrains, enjoins or otherwise prohibits the Merger; or
(d) By any Company, if, at the Company Meeting of any other Company
(including any adjournment or postponement thereof), the requisite vote of the
stockholders of such other Company to authorize this Agreement shall not have
been obtained; provided that the right to terminate this Agreement under this
Section 9.1(d) shall not be available to any Company where the failure to
obtain such stockholder approval shall have been caused by the action or
failure to act of such Company in breach of this Agreement; or
(e) By any Company, if the Board of Directors of any other Company or any
committee thereof (the "Defaulting Party") shall have (1) approved or
recommended any Acquisition Proposal other than the Merger, (2) failed to
present and recommend the authorization of this Agreement and the Merger to the
stockholders of such other Company, or withdrawn or modified in a manner
adverse to such Company, its recommendation of the Merger, this Agreement or
the transactions contemplated hereby, (3) failed to mail the Joint Proxy
Statement to its stockholders within five (5) Business Days of when the Joint
Proxy Statement was available for mailing or failed to include therein such
approval and recommendation (including the recommendation that the stockholders
of such other Party vote in favor of the Merger), (4) upon a request by any
Party to reaffirm the approval and recommendation of the Merger, failed to do
so within five (5) Business Days after such request is
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made, (5) entered, or caused such other Company to enter, into any letter of
intent, agreement in principle, acquisition agreement or other similar
agreement related to any Acquisition Proposal, (6) recommended to the
stockholders of such other Company, following the commencement of a tender or
exchange offer for outstanding shares of such other Company's Common Stock,
that such stockholders tender their shares in such tender or exchange offer or
failed, within 10 days of the commencement of such offer, to recommend against
acceptance of such offer, (7) taken any action prohibited by Section 6.1, or
(8) resolved by the Board of Directors of such other Company or announced its
intention to do any of the foregoing;
(f) By any Company, if such Company is not in material breach of its
obligations or its representations and warranties under this Agreement, and if
(i) there has been a breach at any time by any other Company of any of their
respective representations and warranties hereunder such that Section 8.2(a) of
this Agreement would not be satisfied (treating such time as if it were the
Effective Time for purposes of this Section 9.1(f)) or (ii) there has been the
willful breach on the part of any other Company of any of its covenants or
agreements contained in this Agreement (other than the breach of a covenant
which is dealt with in Section 9.1(e) above) such that Section 8.2(b) of this
Agreement would not be satisfied (treating such time as if it were the
Effective Time for purposes of this Section 9.1(f)), and, in the case of either
clause (i) or (ii) above, such breach (if curable) has not been cured within 30
days after written notice to both other Companies;
(g) By Creative, no later than 21 days after the date of this Agreement, if
Ontogeny shall have failed to deliver Stockholder Agreements representing the
Ontogeny Minimum Required Stockholder Vote, or Reprogenesis shall have failed
to deliver Stockholder Agreements representing the Reprogenesis Required
Stockholder Vote, in either case within 14 days after the date of this
Agreement;
(h) By Ontogeny, no later than 21 days after the date of this Agreement, if
Creative shall have failed to deliver Stockholder Agreements representing the
Creative Voting Commitment, or Reprogenesis shall have failed to deliver
Stockholder Agreements representing the Reprogenesis Required Stockholder Vote,
in either case within 14 days after the date of this Agreement; or
(i) By Reprogenesis, no later than 21 days after the date of this Agreement,
if Ontogeny shall have failed to deliver Stockholder Agreements representing
the Ontogeny Minimum Required Stockholder Vote, or Creative shall have failed
to deliver Stockholder Agreements representing the Creative Voting Commitment,
in either case within 14 days after the date of this Agreement.
9.2 Effect of Termination. Except as provided in this Section 9.2, in the
event of the termination of this Agreement pursuant to Section 9.1, this
Agreement (other than this Section 9.2 and Sections 5.3, 9.3 and Article X
hereof, which shall survive such termination) will forthwith become void, and
there will be no liability on the part of any Party or any of their respective
officers or directors to the other and all rights and obligations of any Party
hereto will cease, except that nothing herein will relieve any Party from
liability for any breach, prior to termination of this Agreement in accordance
with its terms, of any representation, warranty, covenant or agreement
contained in this Agreement.
9.3 Fees and Expenses.
(a) Except as set forth in this Section 9.3, all fees and expenses incurred
in connection with this Agreement and the transactions contemplated hereby
shall be paid by the Party incurring such expenses, whether or not the Merger
is consummated; provided that each Company shall share pro rata, in proportion
to its proposed relative ownership of Curis upon consummation of the Merger,
all fees and expenses, other than attorneys' fees, incurred in relation to the
printing and filing of the Joint Proxy Statement (including any preliminary
materials related thereto), the Registration Statement (including financial
statements and exhibits) and any amendments or supplements thereto, and any
fees and expenses required to be paid by Curis (it being understood that the
HSR Act filing fee shall be borne equally by the Companies).
(b) In the event that any of the following occurs:
(i) any Party terminates this Agreement pursuant to Section 9.1(e)
hereof; or
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(ii) (A) any Company or Companies (as applicable) terminates this
Agreement pursuant to (y) Section 9.1(d) hereof as a result of the failure
to receive the requisite vote of the stockholders of any other Company (the
"Breaching Party") at the Company Meeting of the Breaching Party if, at the
time of such failure an Acquisition Proposal to the Breaching Party shall
have been made, or proposed, communicated or disclosed in a manner which is
or otherwise becomes public (including being known by any stockholder of
such Party) or (z) Section 9.1(f) hereof after a breach by any other
Company (the "Breaching Party") of any of the Breaching Party's covenants
or agreements contained in this Agreement and (B) within one year of such
termination, either (1) the Breaching Party or any of its Subsidiaries
enters into an agreement with any Person with respect to an Acquisition
Proposal which provides for (x) transfer or issuance of securities
representing more than 50% of the equity or voting interests in the
Breaching Party, (y) a merger, consolidation, recapitalization or another
transaction resulting in the issuance of cash or securities of any Person
(other than a reincorporation or a holding company merger that results in
the stockholders of the Breaching Party owning all of the equity interests
in the surviving corporation) to the stockholders of the Breaching Party in
exchange for more than 50% of the equity or voting interests in the
Breaching Party or (z) transfer of assets, securities or ownership
interests representing more than 50% of the consolidated assets or earning
power of the Breaching Party or (2) any Person commences a tender offer
that results in the acquisition by the Person making the tender offer of a
majority of the outstanding Company Common Stock,
then the Defaulting Party or the Breaching Party, as the case may be, shall pay
to each other Company that is not in material breach of its obligations or its
representations and warranties under this Agreement at the time of such
termination (and, only in the case of clause (ii)(A)(y) above, that has
received the requisite vote of its stockholders at its Company Meeting to
approve this Agreement), a fee in cash in the amount of $5 million (and
therefore a total of $10,000,000 to both other Companies, if both are entitled
to receive such fees), plus the amount of such Company's Stipulated Expenses
(the "Termination Fee"), which Termination Fee shall be payable by wire
transfer of immediately available funds (i) in the case of a termination
pursuant to Section 9.1(e), at the time of such termination or (ii) in the case
of a termination pursuant to Section 9.1(d) or 9.1(f), at the time such
agreement is entered into or such tender offer is commenced, as the case may
be, except as otherwise provided in Section 9.3(c) with respect to Stipulated
Expenses. Termination by any Company pursuant to Section 9.1(d) or 9.1(f) under
circumstances where the Termination Fee is then payable shall not be effective
with respect to the Company owing such Termination Fee until receipt of the
Termination Fee by the other Companies.
(c) If this Agreement is terminated pursuant to Section 9.1(f) (other than
due to an event after the date of this Agreement that results in a breach of a
representation or warranty, which event is entirely outside the control of the
Breaching Party and due to no act or omission to act of the Breaching Party),
then the Breaching Party causing such termination shall reimburse each other
Party for all Stipulated Expenses not later than two (2) Business Days after
the date of such termination.
(d) As used in this Agreement, the term "Stipulated Expenses" shall mean
those reasonable fees and expenses actually incurred by any Company in
connection with this Agreement and the transactions contemplated hereby,
including fees and expenses of counsel, investment bankers, accountants,
experts, consultants and other Representatives, including (y) such Company's
efforts to merge and (z) salaries, travel costs and expenses incurred by such
Company as a result of changes to its business plan in contemplation of the
Merger; provided that the Stipulated Expenses of any Company shall not exceed
$750,000.
(e) Nothing in this Section 9.3 shall be deemed to be exclusive of any other
rights or remedies any Party may have hereunder or at law or in equity for any
breach of this Agreement.
(f) In the event that Reprogenesis terminates this Agreement pursuant to
Section 9.1(d) hereof as a result of the failure to receive the requisite vote
of the Stockholders of Creative at the Company Meeting of Creative, then
Creative shall pay Reprogenesis a fee in the aggregate amount of $1,500,000,
which shall be payable by wire transfer of immediately available funds within
five (5) business days of such termination.
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(g) In the event that (i) any Company or Companies, as applicable,
terminates this Agreement pursuant to Section 9.1(d) hereof as a result of the
failure to receive the requisite vote of the stockholders of any other Company
(the "Failing Party") at its Company Meeting to approve this Agreement, and
(ii) each such terminating Company has received the requisite vote of its
stockholders at its Company Meeting to approve this Agreement, and (iii) within
one year of such termination, the Failing Party or its Subsidiaries enters into
an agreement with any Person with respect to an Equity Financing (as defined
below) providing the Failing Company with gross proceeds equal to or greater
than $50,000,000, then the Failing Party shall pay, to each other Company that
both has received the requisite vote of its stockholders at its Company Meeting
to approve this Agreement and is not in material breach of its obligations or
its representations and warranties under this Agreement at the time of such
termination, a fee in the amount of $5,000,000 (and therefore a total of
$10,000,000 to both other Companies, if both are entitled to receive such
fees). Such fee shall be payable by wire transfer of immediately available
funds at the time the Failing Party has received at least $50,000,000 of gross
proceeds from such Equity Financing. Termination by any Company pursuant to
Section 9.1(d) under circumstances where the fee under this Section 9.3(g) is
then payable shall not be effective with respect to the Failing Party until
receipt of such fee by each Company entitled to receive it. As used is this
Section 9.3, the term "Equity Financing" means a financing transaction (or
series of related transactions) in which a Company raises proceeds by selling
shares of its capital stock or any security convertible into, or exchangeable
or exercisable for, its capital stock.
(h) In the event that (i) any Company or Companies, as applicable,
terminates this Agreement pursuant to Section 9.1(f) hereof after a breach by
any other Company (the "Breaching Party") of any of the Breaching Party's
covenants or agreements contained in this Agreement, and (ii) within one year
of such termination, the Breaching Party or its Subsidiaries enters into an
agreement with any Person with respect to an Equity Financing providing the
Breaching Company with gross proceeds equal to or greater than $50,000,000,
then the Breaching Party shall pay, to each other Company that is not in
material breach of its obligations or its representations and warranties under
this Agreement at the time of such termination, a fee in the amount of
$5,000,000 (and therefore a total of $10,000,000 to both other Companies, if
both are entitled to receive such fees). Such fee shall be payable by wire
transfer of immediately available funds at the time the Breaching Party has
received at least $50,000,000 of gross proceeds from such Equity Financing.
Termination by any Company pursuant to Section 9.1(f) under circumstances where
the fee under this Section 9.3(h) is then payable shall not be effective with
respect to the Breaching Party until receipt of such fee by each Company
entitled to receive it.
(i) Notwithstanding any other provision hereof to the contrary, (i) the
maximum amount of the fees that any Company shall be obligated to pay to any
other Company pursuant to Sections 9.3(b), 9.3(f), 9.3(g) and 9.3(h), even if
more than one of such Sections is applicable, shall be $5,000,000 (and
therefore a total of $10,000,000 to both other Companies, if both are entitled
to receive such fees), and (ii) any Company shall be obligated to pay the
Stipulated Expenses of any other Company only once pursuant to Sections 9.3(b)
and 9.3(c), even if more than one of such Sections is applicable.
9.4 Amendment. This Agreement may be amended by the Parties hereto by action
taken by or on behalf of their respective Boards of Directors at any time prior
to the Effective Time, subject to Section 252 of the DGCL. This Agreement may
not be amended except by an instrument in writing signed by all of the Parties
hereto.
9.5 Waiver. At any time prior to the Effective Time, any Party hereto may
extend the time for the performance by any other Party of any of the
obligations or other acts required hereunder, waive any inaccuracies in the
representations and warranties of any other Party contained herein or in any
document delivered pursuant hereto and waive compliance by any other Party with
any of the agreements or conditions contained herein. Any such extension or
waiver shall be valid if set forth in an instrument in writing signed by the
Party or Parties to be bound thereby.
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ARTICLE X
General Provisions
10.1 Survival of Representations and Warranties.
(a) Except as set forth in Section 10.1(b) of this Agreement, the
representations, warranties and agreements of each Party hereto will remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any other Party hereto, any Person controlling any such Party
or any of their officers, directors, representatives or agents whether prior to
or after the execution of this Agreement.
(b) The representations and warranties in this Agreement will terminate at
the Effective Time; provided, however, this Section 10.1(b) shall in no way
limit any covenant or agreement of the Parties which by its terms contemplates
performance after the Effective Time or after the termination of this Agreement
pursuant to Article IX.
10.2 Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered personally
or sent by a nationally-recognized overnight courier or by registered or
certified mail, postage prepaid, return receipt requested, or by electronic
mail, with a copy thereof to be delivered by mail (as aforesaid) within 24
hours of such electronic mail, or by telecopier, with confirmation as provided
above addressed as follows:
If to Creative:Creative Biomolecules, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopier:(000) 000-0000
Attention:Xxxxxxx Xxxxxx, President
Xxxxxx Xxxxxx, Esq., General Counsel
and Vice President, Administration
With a copy to:
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopier:(000) 000-0000
Attention:Xxxxxxx X. Xxxxxx, Esq.
Xxxxx X. Xxxxxx, Esq.
If to Reprogenesis:Reprogenesis, Inc.
00 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telecopier:(000) 000-0000
Attention:Xxxxxx X. Xxxxxxx, President
With a copy to:
Xxxxx Xxxxx LLP
One Shell Plaza
000 Xxxxxxxx
Xxxxxxx, XX 00000
Telecopier:(000) 000-0000
Attention:Xxxxxx X. Xxxxx, Esq.
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If to Ontogeny:Ontogeny, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Telecopier:(000) 000-0000
Attention:Doros Platika, President
Xxxxx X. Xxxxxxx, Vice President and General
Counsel
With a copy to:
Xxxxx, Xxxx & Xxxxx LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopier:(000) 000-0000
Attention:Xxxxxx Xxxxxxxx, Esq.
Xxxxxxxx Xxxxxxx, Esq.
If to Curis:to each of the Companies (with copies to its counsel).
or to such other address as the Party to whom notice is to be given may have
furnished to the other Parties in writing in accordance herewith. All such
notices or communications shall be deemed to be received (a) in the case of
personal delivery, on the date of such delivery, (b) in the case of a
nationally-recognized overnight courier, on the next Business Day after the
date when sent (c) in the case of facsimile transmission or telecopier or
electronic mail, upon confirmed receipt, and (d) in the case of mailing, on
the third Business Day following the date on which the piece of mail
containing such communication was posted.
10.3 Certain Definitions. For purposes of this Agreement, the term:
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly, through one or more intermediaries, Controls, is
Controlled by, or is under common Control with, such Person.
"Business Day" means any day other than a Saturday, Sunday or day on which
banks are permitted to close in the State of New York or in the State of
Delaware.
"Control" (including the terms "controlled by" and "under common control
with") means the possession, directly or indirectly or as trustee or executor,
of the power to direct or cause the direction of the management or policies of
a Person, whether through the ownership of stock, as trustee or executor, by
contract or credit arrangement or otherwise.
"Court" means any court or arbitration tribunal of the United States, any
domestic state, or any foreign country, and any political subdivision thereof.
"Exchange Agent" means any bank or trust company organized under the Laws
of the United States or any of the states thereof and having a net worth in
excess of $100 million designated and appointed to act in the capacities
required under Section 2.6.
"Governmental Authority" means any governmental agency or authority (other
than a Court) of the United States, any domestic state, or any foreign
country, and any political subdivision or agency thereof, and includes any
authority having governmental or quasi-governmental powers.
"Knowledge" means (i) in the case an individual, knowledge of a particular
fact or other matter if such individual is actually aware of such fact or
other matter and (ii) in the case of an entity (other than an individual) such
entity will be deemed to have "Knowledge" of a particular fact or other matter
if any individual who is serving, or has at any time served, as a director,
officer, partner, executor, or trustee of such Person has (while such
individual is serving in such capacity), or at any time had (while such
individual was serving in such capacity), Knowledge of such fact or other
matter.
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"Law" means all laws, statutes and ordinances of any Governmental Agency
including all decisions of Courts having the effect of law within its
jurisdiction.
"Lien" means any mortgage, pledge, security interest, attachment,
encumbrance, lien (statutory or otherwise), option, conditional sale
agreement, right of first refusal, first offer, termination, participation or
purchase or charge of any kind (including any agreement to give any of the
foregoing); provided, however, that the term "Lien" shall not include (i)
statutory liens for Taxes, which are not yet due and payable or are being
contested in good faith by appropriate proceedings, (ii) statutory or common
law liens to secure landlords, lessors or renters under leases or rental
agreements confined to the premises rented, (iii) deposits or pledges made in
connection with, or to secure payment of, workers' compensation, unemployment
insurance, old age pension or other social security programs mandated under
applicable Laws, (iv) statutory or common law liens in favor of carriers,
warehousemen, mechanics and materialmen, to secure claims for labor, materials
or supplies and other like liens, and (v) restrictions on transfer of
securities imposed by applicable state and federal securities Laws.
"Litigation" means any suit, action, arbitration, cause of action, claim,
complaint, criminal prosecution, investigation, demand letter, governmental or
other administrative proceeding, whether at law or at equity, before or by any
Court or Governmental Authority, or before any arbitrator or other tribunal.
"Order" means any judgment, order, writ, injunction or decree of any Court
or Governmental Authority.
"Person" means an individual, corporation, partnership, association, trust,
unincorporated organization, limited liability company, other entity or group
(as defined in Section 13(d)(3) of the Exchange Act).
"Regulation" means any rule or regulation of any Governmental Authority
having the effect of Law.
"Subsidiary" or "Subsidiaries" of any Party or any other Person means any
corporation, partnership, joint venture, limited liability company or other
legal entity of which such Party or such other Person, as the case may be,
(either alone or through or together with any other Subsidiary) owns, directly
or indirectly, 50% or more of the stock or other equity interests the holders
of which are generally entitled to vote for the election of the board of
directors or other governing body of such corporation or other legal entity.
"Voting Stock" of any Company means the capital stock of such Company
entitled to vote upon the election of directors and upon other matters
generally submitted to stockholders of such Company for voting purposes.
10.4 Interpretation. When a reference is made in this Agreement to
Sections, subsections, Schedules or Exhibits, such reference shall be to a
Section, subsection, Schedule or Exhibit to this Agreement unless otherwise
indicated. The words "include," "includes" and "including" when used herein
shall be deemed in each case to be followed by the words "without limitation."
The word "herein" and similar references mean, except where a specific Section
or Article reference is expressly indicated, the entire Agreement rather than
any specific Section or Article. The table of contents and the headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.
10.5 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any
manner adverse to any Party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the Parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the Parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are fulfilled to the
extent possible.
A-40
10.6 Entire Agreement. This Agreement (including all exhibits and schedules
hereto) constitutes the entire agreement and supersedes all prior agreements
and undertakings (other than the Confidentiality Agreements), both written and
oral, among the Parties, or any of them, with respect to the subject matter
hereof and, except as otherwise expressly provided herein, are not intended to
confer upon any other Person any rights or remedies hereunder.
10.7 Assignment. This Agreement shall not be assigned by operation of law or
otherwise.
10.8 Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of each Party hereto, and other than with respect to
Section 7.10 which the Parties intend to establish third party beneficiary
rights, nothing in this Agreement, express or implied, is intended to or shall
confer upon any other Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
10.9 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or
delay on the part of any Party hereto in the exercise of any right hereunder
will impair such right or be construed to be a waiver of, or acquiescence in,
any breach of any representation, warranty or agreement herein, nor will any
single or partial exercise of any such right preclude other or further exercise
thereof or of any other right. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive to, and not exclusive of, any
rights or remedies otherwise available.
10.10 Governing Law. This agreement and the agreements, instruments and
documents contemplated hereby will be governed by and construed in accordance
with the Law of the State of Delaware (exclusive of conflicts of law
principles). State Courts within the State of Delaware and, more particularly
to the fullest extent such Court shall have subject matter jurisdiction over
the matter, the Court of Chancery of the State of Delaware, will have exclusive
jurisdiction over any and all disputes between the Parties, whether in law or
equity, arising out of or relating to this Agreement and the agreements,
instruments and documents contemplated hereby. The Parties consent to and agree
to submit to the jurisdiction of such Courts, provided, however, that such
consent to jurisdiction is solely for the purpose referred to in this Section
10.10 and shall not be deemed to be a general submission to the jurisdiction of
such Courts or in the State of Delaware other than for such purpose. Each Party
hereby waives, and agrees not to assert in any such dispute, to the fullest
extent permitted by applicable Delaware Law, any claim that (i) such Party is
not personally subject to the jurisdiction of such Courts, (ii) such Party and
such Party's property is immune from any legal process issued by such Courts or
(iii) any Litigation commenced in such Courts is brought in an inconvenient
forum.
10.11 Counterparts. This Agreement may be executed in one or more
counterparts, and by the Parties in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
A-41
IN WITNESS WHEREOF, the Parties have caused this Agreement and Plan of
Merger to be executed as of the date first written above by their respective
officers thereunto duly authorized.
Creative Biomolecules, Inc.
/s/ Xxxxxxx X. Xxxxxx
By___________________________________
Name: Xxxxxxx X. Xxxxxx
Title: President and CEO
Reprogenesis, Inc.
/s/ Xxxxxx X. Xxxxxxx
By___________________________________
Name: Xxxxxx X. Xxxxxxx
Title: President and CEO
Ontogeny, Inc.
/s/ Doros Platika
By___________________________________
Name: Doros Platika
Title: President and CEO
Curis, Inc.
/s/ Doros Platika
By___________________________________
Name: Doros Platika
Title: President and CEO
A-42
Index of Defined Terms
Acquisition Proposal..................................... 6.1(a)
Affiliate................................................ 10.3
Affiliate Agreement...................................... 7.13
Agreement................................................ Caption
Appraisal Shares......................................... 2.11
Bankruptcy and Equity Exception.......................... 3.3(a)
Breaching Party.......................................... 9.3(b), 9.3(h)
Business Day............................................. 10.3
Certificate of Merger.................................... 1.2
Certificates............................................. 2.6(c)
Closing.................................................. 2.8
Closing Date............................................. 2.8
Code..................................................... Recitals
Company.................................................. Caption
Company Balance Sheet.................................... 3.4(b)
Company Common Stock..................................... 3.2(a)
Company Disclosure Schedule.............................. Article III Caption
Company Employee Plans................................... 3.14(a)
Company Financial Statements............................. 3.4(a)
Company Intellectual Property Rights..................... 3.9(b)
Company Material Adverse Effect.......................... 3.1
Company Material Contract................................ 3.11
Company Meeting.......................................... 3.18
Company Preferred Stock.................................. 3.2(a)
Company Stock............................................ 2.1(f)
Company Stock Option..................................... 3.2(a)
Company Stock Plan....................................... 3.2(a)
Company Warrants......................................... 3.2
Confidentiality Agreements............................... 5.3
Control.................................................. 10.3
Court.................................................... 10.3
Creative Common Stock.................................... 2.1(a)
Creative Exchange Ratio.................................. 2.1(a)
Creative Merger Consideration............................ 2.1(a)
Creative Voting Commitment............................... 7.12(a)
Curis Certificate of Incorporation....................... 4.1
Curis Material Adverse Effect............................ 4.1
DGCL..................................................... Preamble
Effective Time........................................... 1.2
Environmental Law........................................ 3.13(b)
Equity Financing......................................... 9.3(g)
ERISA.................................................... 3.14(a)
ERISA Affiliate.......................................... 3.14(a)
Exchange Act............................................. 3.3(c)
Exchange Agent........................................... 10.3
Exchange Ratio........................................... 2.1(d)
Exchange Act Registration Statement...................... 7.1(d)
Failing Party............................................ 9.3(g)
FDA...................................................... 3.10
GAAP..................................................... 3.4(b)
A-43
GLP............................................................. 3.16(b)
GMP............................................................. 3.16(b)
Governmental Authority.......................................... 10.3
Hazardous Substance............................................. 3.13(c)
HSR Act......................................................... 3.3(c)
Intellectual Property Rights.................................... 3.9(b)
IP Assignee..................................................... 3.9(e)
IPO............................................................. 9.3(g)
IRS............................................................. 3.7(b)
Joint Proxy Statement........................................... 3.18
Knowledge....................................................... 10.3
Law............................................................. 10.3
Lien............................................................ 10.3
Litigation...................................................... 10.3
Merger.......................................................... Preamble
Merger Consideration............................................ 2.1(d)
Ongoing Clinical Programs....................................... 3.9(b)
Ontogeny Exchange Ratio......................................... 2.1(b)
Ontogeny Minimum Required Stockholder Vote...................... 7.12(b)
Ontogeny Merger Consideration................................... 2.1(b)
Ontogeny Common Stock........................................... 2.1(b)
Ontogeny Preferred Stock........................................ 2.1(b)
Ontogeny Required Stockholder Vote.............................. 7.12(a)
Order........................................................... 10.3
Person.......................................................... 10.3
Public Company.................................................. 3.1
Registration Statement.......................................... 3.18
Regulation...................................................... 10.3
Representatives................................................. 6.1(a)
Reprogenesis Common Stock....................................... 2.1(c)
Reprogenesis Exchange Ratio..................................... 2.1(c)
Reprogenesis Fully Diluted Merger Consideration................. 2.1(c)
Reprogenesis Merger Consideration............................... 2.1(c)
Reprogenesis Preferred Stock.................................... 2.1(c)
Reprogenesis Required Stockholder Vote.......................... 7.12(a)
Reprogenesis Series A Consideration............................. 2.1(c)
Rule 145........................................................ 7.13
SEC............................................................. 3.3
Section 262..................................................... 2.11
Securities Act.................................................. 2.3(b)
Stipulated Expenses............................................. 9.3(d)
Stockholder Agreement........................................... Preamble
Subsidiary, Subsidiaries........................................ 10.3
Superior Proposal............................................... 6.1(b)
Surviving Company............................................... 1.1
Tax............................................................. 3.7(a)
Taxes........................................................... 3.7(a)
Tax Returns..................................................... 3.7(b)
Termination Fee................................................. 9.3(b)
Third Party Licenses............................................ 9.3(a)
Voting Stock.................................................... 10.3
A-44
SCHEDULE 1.5
Directors and Officers
DIRECTORS:
Class I:
Xxxxx X. XxXxx, Xx.
Xxxxx Xxxxx
Doros Platika
Class II:
Xxxxxxx X. Xxxxxx
Xxxxxxx Xxxxxxxxxx
[Person as yet to be determined]
Class III:
Xxxx X. Xxxxxx
Xxxxxx Xxxxxxxxx
OFFICERS:
The Officers at the Effective Time shall be appointed by the Board of
Directors.
A-45
EXHIBIT A
Form of Stockholder Agreement
February , 2000
Creative Biomolecules, Inc. Reprogenesis, Inc. Ontogeny, Inc
000 Xxxxxxxxxx Xxx. 00 Xxxx Xxxxxx 00 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000 Xxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
Attention: President Attention: President Attention: President
Re: Stockholder Agreement
Gentlemen:
The undersigned (the "Stockholder") owns of record and beneficially the
number of shares (the "Owned Shares") of common stock [and/or preferred stock]
of [Name of Company], a [Delaware] [Texas] corporation ("Company"), as set
forth below. [On even date herewith], the Company, and (the "Other
Companies") and Curis [intend to enter] into an Agreement and Plan of Merger
(the "Merger Agreement") with respect to the merger (the "Merger") of the
Company and the Other Companies with and into Curis. Such Company common stock
[and/or preferred stock] will be converted in the Merger into shares of the
common stock, par value $.01 per share, of Curis (the "Surviving Company Common
Stock"). The Stockholder wishes to facilitate the proposed Merger, acknowledges
that the proposed Merger will benefit the Stockholder and agrees that the Other
Companies [would not enter into the Merger Agreement] unless the Stockholder
enters into this Agreement. For all purposes of this Agreement, the term "Owned
Shares" shall include any additional shares of Company capital stock as to
which the Stockholder acquires beneficial ownership after the execution hereof.
In consideration of the foregoing, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and intending to be legally bound hereby, the Stockholder agrees as follows:
1. The Stockholder irrevocably and unconditionally agrees that he, she
or it (a) will vote all of the Owned Shares in favor of the Merger
Agreement and the Merger at any meeting or meetings of the Company's
stockholders called to vote upon the Merger Agreement and the Merger and
(b) will not vote such shares (or otherwise provide a proxy or consent or a
voting agreement with respect thereto) in favor of any other Acquisition
Proposal (as defined in the Merger Agreement) [and (c) will vote to amend
the Certificate/Articles of Incorporation of the Company as contemplated by
Section 8.1(h) of the Merger Agreement.]
2. The Stockholder agrees that he, she or it will not (a) directly or
indirectly, sell, transfer, pledge, assign or otherwise dispose of, or
enter into any contract, option, commitment or other arrangement or
understanding with respect to the sale, transfer, pledge, assignment or
other disposition of, any of the Owned Shares or (b) take any action or
omit to take any action which would prohibit, prevent or preclude
Stockholder from performing its obligations under this Agreement.
3. The Stockholder agrees that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed by it
in accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the Company and each other Company shall be
entitled to an injunction or injunctions to prevent breaches of this
Agreement by the Stockholder and to enforce specifically the terms and
provisions hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which it is
entitled at law or in equity, and that the Stockholder waives the posting
of any bond or security in connection with any proceeding related thereto.
A-46
4. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to constitute an original. This Agreement shall
become effective when one counterpart signature page has been signed by the
Stockholder and delivered to the Company (which delivery may be by
facsimile).
5. The Stockholder agrees to execute and deliver all such further
documents, certificates and instruments and take all such further
reasonable action as may be necessary or appropriate, in order to
consummate the transactions contemplated hereby. The Stockholder hereby
agrees not to engage in any transaction involving any securities of the
Other Companies that would violate applicable securities laws.
6. Notwithstanding anything in this Agreement to the contrary, the
Company and the Other Companies understand and agree that (i) Owned Shares
may be subject to liens, encumbrances or restrictions (other than those
relating to voting) arising in connection with pledges of Owned Shares by
the Stockholder or its affiliates that exist as of the date hereof and (ii)
any transfer of Owned Shares pursuant to any bona fide foreclosure under
any such pledge shall not violate this Agreement.
7. The Stockholder represents and warrants to the Company and the Other
Companies that:
(a) the Stockholder has all necessary power and authority to execute
this letter agreement including the irrevocable proxy attached hereto;
(b) the Stockholder owns or controls (regardless of in what
capacity) the number of Owned Shares set forth below free from any
lien, encumbrance or restriction whatsoever (except as otherwise
permitted by Section 6 above) and with full power to vote the Owned
Shares without the consent or approval of any other person;
(c) this letter agreement and the attached proxy have been duly
executed and delivered by the Stockholder and each constitutes a valid
and binding agreement of the Stockholder, enforceable in accordance
with its terms; and
(d) neither the execution nor delivery of this letter agreement and
the attached proxy by the Stockholder will (i) require the consent,
waiver, approval, license or authorization, or any filing with, any
person or public authority, (ii) with or without the giving of notice
or the lapse of time, or both, conflict with or constitute a violation
of, or default under, or give rise to any right of acceleration under
any indenture, contract, commitment, agreement, arrangement or other
instrument of any kind to which the Stockholder is a party or by which
the Stockholder is bound, or (iii) violate any applicable law, rule,
regulation, judgment, order or decree of any governmental
instrumentality or court having jurisdiction over the Stockholder.
8. The Agreement shall terminate on the termination of the Merger
Agreement or at the Effective Time of the Merger provided for in the Merger
Agreement, as the case may be.
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IN WITNESS WHEREOF, the parties have executed this agreement as of the date
and year first above written.
Stockholder:
_____________________________________
Name: _______________________________
Address: ____________________________
_____________________________________
_____________________________________
Spouse (if applicable)
Name: _______________________________
Number of Shares of
Common Stock _______________________
[Number of Shares of Series A
Preferred Stock ____________________
Number of Shares of Series B
Preferred Stock ____________________]
[Number of Shares of Series C
Preferred Stock _____________________
Number of Shares of Series C-1
Preferred Stock ____________________]
[Number of Shares of Series D
Preferred Stock _____________________
Number of Shares of Series E
Preferred Stock ____________________]
[Number of Shares of Series F
Preferred Stock _____________________
Number of Shares of Series G
Preferred Stock ____________________]
A-48
IRREVOCABLE PROXY FOR THE
STOCKHOLDER AGREEMENT OF COMPANY
By its execution hereof and in order to secure the obligations of the
undersigned set forth in the Stockholder Agreement ("Stockholder Agreement")
dated February , 2000, by and among (the "Company"), the Other Companies
and the undersigned, the undersigned hereby irrevocably constitutes and
appoints the President and the Secretary of each Other Company, and each of
such officers singly, as its true and lawful attorneys-in-fact, to : (1) vote,
in accordance with the Stockholder Agreement, all shares of capital stock of
the Company which the undersigned may be entitled to vote upon the matters set
forth in the Stockholder Agreement at any annual or special meeting of the
stockholders of the Company (but not to vote such shares on any other matter);
(2) to exercise written consent in lieu of voting with respect to the matters
set forth in clause (1); and (3) to execute, acknowledge, swear to and file in
the undersigned's name, place and stead any consent, approval, or other
documents to be executed by the stockholders in connection with the items in
clauses (1) and (2). The Proxy hereby granted is irrevocable and shall be
deemed coupled with an interest in the Stockholder Agreement for the term
stated therein and it shall survive the undersigned's insolvency.
IN WITNESS WHEREOF, the undersigned has executed this Irrevocable Proxy this
day of February, 2000.
_____________________________________
Name: _______________________________
Address: ____________________________
_______________________________
_______________________________
Spouse (if applicable)
_____________________________________
Name: _______________________________
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EXHIBIT B
FORM OF
CERTIFICATE OF MERGER
OF
EACH OF
CREATIVE BIOMOLECULES, INC., a Delaware Corporation,
ONTOGENY, INC., a Delaware Corporation and
REPROGENESIS, INC., a Texas Corporation
WITH AND INTO
CURIS, INC., a Delaware Corporation
Pursuant to Section 252 of the General Corporation Law of the State of
Delaware, the undersigned corporations organized and existing under and by
virtue of the General Corporation Law of the State of Delaware and the Texas
Business Corporation Act, DO HEREBY CERTIFY:
FIRST: That the name and state of incorporation of each of the constituent
corporations are as follows:
State Of
Name Incorporation
---- -------------
Creative Biomolecules,
1. Inc. Delaware
2. Ontogeny, Inc. Delaware
3. Reprogenesis, Inc. Texas
4. Curis, Inc. Delaware
SECOND: That an Agreement and Plan of Merger dated as of February 14, 2000
by and among Creative Biomolecules, Inc., Ontogeny, Inc., Reprogenesis, Inc.
and Curis, Inc. has been approved, adopted, certified, executed and
acknowledged by each of the constituent corporations in accordance with the
requirements of Section 252 of the General Corporation Law of the state of
Delaware.
THIRD: That the name of the surviving corporation of the merger is Curis,
Inc. (the "Surviving Corporation").
FOURTH: That the Certificate of Incorporation of CURIS shall be the
Certificate of Incorporation of the Surviving Corporation.
FIFTH: That the executed copy of the Agreement and Plan of Merger is on
file at an office of the Surviving Corporation. The address of such office is:
Curis, Inc.
__________________________________
__________________________________
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SIXTH: That a copy of the Agreement and Plan of Merger will be furnished by
the Surviving Corporation, on request and without cost, to any stockholder of
the constituent corporations.
SEVENTH: That the authorized capital stock of Reprogenesis, Inc. is as
follows:
Common Stock: 30,084,501
Preferred
Stock: 7,747,153
Series A: 2,702,702
Series B: 5,044,451
Total: 37,831,654
IN WITNESS WHEREOF, the undersigned, being the President of CURIS, does
hereby execute this Certificate of Merger and so certifies, affirms and
acknowledges under penalties of perjury that this is his free act and deed and
that the facts stated herein are true, this , 2000.
[ ]
By: _________________________________
, President
A-51
EXHIBIT C
ARTICLES OF MERGER
merging
REPROGENESIS, INC.
(a Texas corporation),
ONTOGENY, INC.
(a Delaware corporation),
and
CREATIVE BIOMOLECULES, INC.
(a Delaware corporation)
with and into
CURIS, INC.
(a Delaware corporation)
Pursuant to the provisions of Article 5.04 of the Texas Business Corporation
Act (the "TBCA"), Reprogenesis, Inc., a Texas corporation (the "Company"),
Ontogeny, Inc., a Delaware corporation ("Ontogeny"), Creative Biomolecules,
Inc., a Delaware corporation ("Creative"), and Curis, Inc., a Delaware
corporation (the "Surviving Corporation"), hereby adopt the following Articles
of Merger for the purpose of effecting the merger (the "Merger") of the
Company, Ontogeny and Creative with and into the Surviving Corporation, with
the Surviving Corporation continuing in existence following the Merger as the
surviving corporation:
FIRST: The name and state of incorporation of each party (the "Constituent
Entities") to the Agreement and Plan of Merger attached as Exhibit A (the
"Agreement and Plan of Merger") are as follows:
Name State of Incorporation
---- ----------------------
Reprogenesis, Inc. Texas
Ontogeny, Inc. Delaware
Creative Biomolecules, Inc. Delaware
Curis, Inc. Delaware
SECOND: The Agreement and Plan of Merger was approved by the stockholders of
the Company in the manner required by Article 5.03 of the TBCA and by the
stockholders of each of Ontogeny, Creative and the Surviving Corporation in the
manner required by Section 252 of the Delaware General Corporation Law.
THIRD: An executed copy of the Agreement and Plan of Merger is on file at
the principal place of business of the Surviving Corporation at 00 Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, and a copy of the Agreement and Plan of
Merger will be furnished by such entity, on written request and without cost,
to any shareholder of any of the Constituent Entities.
FOURTH: The outstanding capital stock of the Company consists of 14,744,524
shares of common stock, par value $0.01 per share (the "Company Common Stock"),
2,702,702 shares of Series A Convertible Preferred Stock, par value $0.01 per
share (the "Company Series A Preferred Stock") and 4,729,134 shares of Series B
Convertible Preferred Stock, par value $0.01 per share (the "Company Series B
Preferred Stock" and, together with the Company Series A Preferred Stock, the
"Company Preferred Stock"). shares of the Company Common Stock and the
Company Preferred Stock were voted in favor of and shares of the
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Company Common Stock and the Company Preferred Stock were voted against the
Merger pursuant to the terms and conditions of the Agreement and Plan of
Merger. of the shares of the Company Series A Preferred Stock and shares
of the Company Series B Preferred Stock were voted in favor of and shares
of the Company Series A Shares and shares of Company Series B Shares were
voted against the Merger pursuant to the terms and conditions of the Agreement
and Plan of Merger.
FIFTH: The outstanding capital stock of Creative consists of 37,138,705
shares of common stock, par value $0.01 per share (the "Creative Common
Stock"). shares of the Creative Common Stock were voted in favor of and
shares of Creative Common Stock were voted against the Merger pursuant to the
terms and conditions of the Agreement and Plan of Merger.
SIXTH: The outstanding capital stock of Ontogeny consists of 2,892,815
shares of common stock, par value $0.01 per share (the "Ontogeny Common
Stock"), 4,853,334 shares of Series A Convertible Preferred Stock, par value
$0.01 per share (the "Ontogeny Series A Preferred Stock"), 7,447,223 shares of
Series B Convertible Preferred Stock, par value $0.01 per share (the "Ontogeny
Series B Preferred Stock"), 400,000 shares of Series C Convertible Preferred
Stock, par value $0.01 per share (the "Ontogeny Series C Preferred Stock"),
800,000 shares of Series C-1 Convertible Preferred Stock, par value $0.01 per
share (the "Ontogeny Series C-1 Preferred Stock"), 600,000 shares of Series D
Convertible Preferred Stock, par value $0.01 per share (the "Ontogeny Series D
Preferred Stock"), 10,000,000 shares of Series E Convertible Preferred Stock,
par value $0.01 per share (the "Ontogeny Series E Preferred Stock"), 8,379,593
shares of Series F Convertible Preferred Stock, par value $0.01 per share (the
"Ontogeny Series F Preferred Stock"), and 400,000 shares of Series G
Convertible Preferred Stock, par value $0.01 per share (the "Ontogeny Series G
Preferred Stock" and, together with the Ontogeny Series A Preferred Stock,
Ontogeny Series B Preferred Stock, Ontogeny Series C Preferred Stock, Ontogeny
Series C-1 Preferred Stock, Ontogeny Series D Preferred Stock, Ontogeny Series
E Preferred Stock and Ontogeny Series F Preferred Stock, the "Ontogeny
Preferred Stock"). shares of the Ontogeny Common Stock and Ontogeny
Preferred Stock were voted in favor of and shares of Ontogeny Common Stock
and Ontogeny Preferred Stock were voted against the Merger pursuant to the
terms and conditions of the Agreement and Plan of Merger. shares of
Ontogeny Series A Preferred Stock, Ontogeny Series B Preferred Stock, Ontogeny
Series E Preferred Stock and Ontogeny Series F Preferred Stock were voted in
favor of and shares of Ontogeny Series A Preferred Stock, Ontogeny Series B
Preferred Stock, Ontogeny Series E Preferred Stock and Ontogeny Series F
Preferred Stock were voted against the Merger pursuant to the terms and
conditions of the Agreement and Plan of Merger.
SEVENTH: The outstanding capital stock of the Surviving Corporation consists
of 300 shares of common stock, par value $0.01 per share ("Surviving
Corporation Common Stock"). Each of the Company, Ontogeny and Creative owns 100
shares of the Surviving Corporation's Common Stock. All shares of Surviving
Corporation Common Stock were voted in favor of the Merger pursuant to the
terms and conditions of the Agreement and Plan of Merger.
EIGHTH: The Agreement and Plan of Merger and the performance of its terms
were duly authorized by all action required by the laws of the State of
Delaware and by the constituent documents of each of Ontogeny, Creative and the
Surviving Corporation.
NINTH: The Agreement and Plan of Merger and the performance of its terms
were duly authorized by all actions required by the laws of the State of Texas
and by the constituent documents of the Company.
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IN WITNESS WHEREOF, each of the undersigned corporations has caused these
Articles of Merger to be executed on its behalf on , 2000.
REPROGENESIS, INC.
a Texas corporation
By: _________________________________
Name:
Title:
ONTOGENY, INC.
a Delaware corporation
By: _________________________________
Name:
Title:
CREATIVE BIOMOLECULES, INC.
a Delaware corporation
By: _________________________________
Name:
Title:
CURIS, INC.
a Delaware corporation
By: _________________________________
Name:
Title:
A-54
EXHIBIT D
FORM OF CURIS CERTIFICATE OF INCORPORATION
CERTIFICATE OF INCORPORATION
OF
CURIS, INC.
FIRST: The name of this corporation (the "Corporation") is Curis, Inc.
SECOND: The address of the registered office of the Corporation in the State
of Delaware is 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, County of New
Castle, and the name of its registered agent at such address is The Corporation
Trust Company.
THIRD: The purpose for which the Corporation is organized is to engage in
any lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware.
FOURTH: The Corporation is authorized to issue two classes of capital stock,
one of which is designated as common stock, $.01 par value per share ("Common
Stock"), and the other of which is designated as preferred stock, $.01 par
value per share ("Preferred Stock"). The total number of shares of both classes
of capital stock that the Corporation shall have authority to issue is 145
million shares, consisting of 125 million shares of Common Stock and 20 million
shares of Preferred Stock. The Preferred Stock may be issued from time to time
in one or more series as set forth in Section (b) of this Article FOURTH. The
following is a statement of the designations and the powers, preferences and
rights of, and the qualifications, limitations or restrictions applicable to,
each class of capital stock of the Corporation.
(a) Common Stock
(1) General. The voting, dividend and liquidation rights of holders of
Common Stock are subject to and qualified by the rights of holders of
Preferred Stock of any series as may be designated in any resolution or
resolutions providing for the issue of such series as may be adopted by the
board of directors as hereinafter provided.
(2) Voting. Holders of Common Stock are entitled to one vote for each
share held at all meetings of stockholders. The number of authorized shares
of Common Stock may be increased or deceased (but not below the number of
shares thereof then outstanding) by the affirmative vote of the holders of
a majority of the capital stock of the Corporation entitled to vote,
irrespective of the provisions of Section 242(b)(2) of the General
Corporation Law of the State of Delaware.
(3) Dividends. Dividends may be declared and paid on Common Stock from
funds lawfully available therefor, as and when determined by the board of
directors and subject to any preferential dividend rights of any series of
Preferred Stock then outstanding.
(4) Liquidation. Upon the dissolution or liquidation of the Corporation,
whether voluntary or involuntary, holders of Common Stock will be entitled
to receive all assets of the Corporation available for distribution to
stockholders of the Corporation, subject to any preferential rights of any
series of Preferred Stock then outstanding.
(b) Preferred Stock
(1) Issuance. Preferred Stock may be issued from time to time in one or
more series, each of which series shall have such terms as are set forth
herein and in any resolution or resolutions providing for the issue of such
series as may be adopted by the board of directors as hereinafter provided.
Any shares of Preferred Stock that may be redeemed, purchased or acquired
by the Corporation may be reissued except as otherwise expressly provided
in this Certificate of Incorporation or provided by law. Different series
of Preferred Stock shall not be construed to constitute different classes
of capital stock for the purposes of voting by classes unless expressly
provided.
A-55
(2) Authority of Board. Authority is hereby expressly granted to the
board of directors to provide for the issuance of Preferred Stock from time
to time in one or more series, and in connection with the creation of any
such series, to determine and fix such voting powers, full or limited, or
no voting powers, and such designations, preferences and relative
participating, optional or other special rights thereof, and
qualifications, limitations or restrictions applicable thereto, as shall be
stated and expressed in such resolutions, all to the full extent now or
hereafter permitted by the General Corporation Law of the State of
Delaware. Without limiting the generality of the foregoing, a resolution or
resolutions providing for issuance of any series of Preferred Stock may
provide for dividend rights, conversion rights, redemption privileges and
liquidation preferences applicable to such series and may provide that such
series shall rank superior, equal or junior to the Preferred Stock of any
other series, in each case except as otherwise expressly provided in this
Certificate of Incorporation or as provided by law. Except as otherwise
provided in this Certificate of Incorporation, no vote of holders of Common
Stock or holders of Preferred Stock shall be a prerequisite to the
designation or issuance of any shares of any series of Preferred Stock
authorized by and complying with the conditions of this Certificate of
Incorporation.
FIFTH: Special meetings of stockholders may be called at any time by the
Chairman of the Board, the Chief Executive Officer (or if there is no Chief
Executive Officer, the President) or the board of directors. Business
transacted at any special meeting of stockholders shall be limited to matters
relating to the purpose or purposes stated in the notice of the general
meeting.
SIXTH: No director shall be personally liable to the Corporation or to any
of its stockholders for monetary damages arising out of such director's breach
of fiduciary duty as a director of the Corporation, except to the extent that
the elimination or limitation of such liability is not permitted by the General
Corporation Law of the State of Delaware, as the same exists or may hereafter
be amended. No amendment to or repeal of the provisions of this Article SIXTH
shall deprive any director of the Corporation of the benefit of the provisions
of this Article SIXTH with respect to any act or failure to act of any director
occurring prior to such amendment or repeal.
SEVENTH: In furtherance of and not in limitation of powers conferred by
statute, it is further provided that:
(a) Amendment of By-Laws
Subject to the limitations and exceptions, if any, contained in the by-laws
of the Corporation, the by-laws may be adopted, amended or repealed by the
board of directors.
(b) Election of Directors
Elections of directors need not be by written ballot unless otherwise
provided in the by-laws of the Corporation.
(c) Location of Corporate Books
Subject to any applicable requirements of the General Corporation Law of the
State of Delaware, the books of the Corporation may be kept outside the State
of Delaware at such location or locations as may be designated from time to
time by the board of directors or in the by-laws of the Corporation.
EIGHTH: The Corporation shall indemnify each person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation), by
reason of the fact that such person is or was, or has agreed to become, a
director or officer of the Corporation, or is or was serving or has agreed to
serve, at the request of the Corporation, as a director, officer or trustee of,
or in a similar capacity with, another corporation (including any partially or
wholly owned subsidiary of the Corporation), partnership, joint venture, trust
or other enterprise (including any employee benefit plan), against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with any such action, suit or
proceeding to the maximum extent permitted by the
A-56
General Corporation Law of Delaware. The foregoing right of indemnification
shall in no way be exclusive of any other rights of indemnification to which
any such director or officer may be entitled, under any by-law, agreement, vote
of directors or stockholders or otherwise. No amendment to or repeal of the
provisions of this paragraph shall deprive a person of the benefit of this
paragraph with respect to any act or failure to act of such person occurring
prior to such amendment or repeal.
NINTH: Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them or between the Corporation
and its stockholders or any class of them, any court of equitable jurisdiction
within the State of Delaware may, on the application in a summary way of the
Corporation or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for the Corporation under Section 291 of
Title 8 of the Delaware Code or on the application of trustees in dissolution
or of any receiver or receivers appointed for the Corporation under Section 279
of Title 8 of the Delaware Code, order a meeting of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, to be summoned in such manner as the said
court directs. If a majority in number representing three-fourths in value of
the creditors or class of creditors, and/or of the stockholders or class of
stockholders of the Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of the Corporation as a consequence of
such compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the stockholders or class of stockholders, of the Corporation, as the case
may be, and also on the Corporation.
TENTH: The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation in the manner now
or hereafter prescribed by the General Corporation Law of the State of Delaware
and this Certificate of Incorporation, and all rights conferred upon
stockholders herein are granted subject to this reservation. Notwithstanding
any provision of law, any other provision of this Certificate of Incorporation
or any provision of the by-laws of the Corporation, the affirmative vote of the
holders of three- fourths of the shares of capital stock of the Corporation
issued and outstanding and entitled to vote shall be required to amend or
repeal, or to adopt any provision inconsistent with, any provision of Article
FIFTH or this Article TENTH.
ELEVENTH: The name of the sole incorporator of the Corporation is Xxxxxxxx
X. Xxxxxxx and his mailing address is c/o Foley, Xxxx & Xxxxx LLP, Xxx Xxxx
Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
IN WITNESS WHEREOF, I have hereunto set my hand as of February 14, 2000.
-------------------------------------
Xxxxxxxx X. Xxxxxxx
Sole Incorporator
A-57
EXHIBIT E
FORM OF AFFILIATE AGREEMENT
, 2000
Curis, Inc.
_____________________________________
_____________________________________
Attention: President
[Name of Company]
_____________________________________
_____________________________________
Attention: President
Ladies and Gentlemen:
I/We have been advised that I/we might be considered to be an "affiliate" of
[Company Name] (the "Company") for purposes of Rule 145 ("Rule 145") under the
Securities Act of 1933, as amended (the "Securities Act"), as promulgated by
the Securities and Exchange Commission (the "SEC").
, , ("Curis") and the Company have entered into an Agreement and
Plan of Merger dated as of the 14th day of February, 2000 (the "Plan of
Merger"). Upon consummation of the transactions contemplated by the Plan of
Merger (the "Merger"), I/we will receive shares of capital stock of Curis for
all of the shares of capital stock of the Company owned by me/us or as to which
I/we may be deemed a beneficial owner. I/We own shares of the common stock,
[$.01] par value per share, of the Company (the "Company's Common Stock")
[and/or shares of Preferred Stock, [$.01] par value per share (the "Preferred
Stock")] [and/or options to acquire shares of the Company's Common Stock
(the "Options")] [and/or warrants to acquire shares of the Company's Common
Stock (the "Warrants")]. The Company's Common Stock [the Company's Preferred
Stock] will be converted in the Merger into shares of the common stock, $.01
par value per share, of Curis (the "Curis Common Stock") as described in the
Plan of Merger. The shares of Curis Common Stock received by me/us in the
Merger are hereinafter collectively referred to as the "Exchange Stock". This
agreement is hereinafter referred to as the "Affiliate Agreement".
I/We represent and warrant to, and agree with, , , Curis and the
Company that:
A. I/We have read this Affiliate Agreement and the Plan of Merger and have
discussed their requirements and other applicable limitations upon my/our
ability to sell, transfer or otherwise dispose of the Exchange Stock, to the
extent I/we felt necessary, with my/our counsel or counsel for the Company.
B. I/We understand that my/our resale of Exchange Stock issued to me/us in
the Merger will be subject to certain restrictions on transfer in accordance
with Rule 145 under the Securities Act, and in connection therewith I/we agree
not to offer, sell, pledge, transfer or otherwise dispose of any of such shares
of Exchange Stock unless at such time either: (i) such transaction shall be
permitted pursuant to the provisions of Rule 145; (ii) I/we shall have
furnished to Curis an opinion of counsel, satisfactory to Curis, to the effect
that no registration under the Securities Act would be required in connection
with the proposed offer, sale, pledge, transfer or other disposition; (iii) a
registration statement under the Securities Act covering the proposed offer,
sale, pledge, transfer or other disposition shall be effective under the
Securities Act; or (iv) an authorized representative of the SEC shall have
rendered written advice to me/us to the effect that the SEC will take no
action, or that the staff of the SEC will not recommend that the SEC take
action, with respect to the proposed offer, sale, pledge transfer or other
disposition if consummated.
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C. I/We understand that all certificates representing the Exchange Stock
delivered to me/us pursuant to the Merger shall, until the occurrence of one of
the events referred to in paragraph B. above, bear a legend substantially as
follows:
"The shares represented by this certificate may not be offered, sold,
pledged, transferred or otherwise disposed of except in accordance with the
requirements of Rule 145 of the Securities Act of 1933, as amended."
D. I/We also understand and agree that Curis, in its discretion and in a
manner consistent with the legend set forth above, may cause stop transfer
orders to be placed with its transfer agent with respect to the certificates
for the shares of Exchange Stock which are required to bear the foregoing
legend.
E. I/we agree to comply with the prohibition described in Section 6.1(a) of
the Agreement.
It is understood and agreed that this Affiliate Agreement shall terminate
and be of no further force and effect if the Plan of Merger is terminated
pursuant to the terms thereof.
This Affiliate Agreement shall be binding on my/our heirs, legal
representatives and successors.
Very truly yours,
_____________________________________
Name:
A-59
EXHIBIT F
FORM OF LOCK-UP AGREEMENT
, 2000
Curis, Inc. (the "Surviving Company")
_____________________
_____________________
Re: Proposed Merger
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of
common stock and/or preferred stock of [Name of Company] (the "Company") or
securities convertible into or exchangeable or exercisable for common stock. It
is contemplated that the Company will merge (the "Merger") with and into the
Surviving Company pursuant to an Agreement and Plan of Merger (the "Agreement")
dated as of February 14, 2000. Pursuant to the Merger, each outstanding share
of capital stock of the Company will be exchanged and converted into shares of
Common Stock of the Surviving Company (the "Common Stock"), and securities
convertible into or exchangeable or exercisable for common stock of the Company
will become convertible into or exchangeable or exercisable for Common Stock,
all as more specifically provided in the Agreement. The undersigned wishes to
facilitate the proposed Merger and acknowledges that the proposed Merger will
be of benefit to the undersigned.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, until the earlier of the end of the [90] [180] day period
following from the Effective Time (as defined in the Agreement), or termination
of the Agreement in accordance with its terms, (1) offer, sell, contract to
sell, grant any option to purchase or acquire any right to dispose or otherwise
dispose for value, any shares of Common Stock or any securities convertible
into, or exchangeable for, or warrants to purchase, any shares of Common Stock
(including, without limitation, Common Stock which may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations promulgated under the federal securities laws), or (2) enter into
any swap, short sale, hedge or other agreement that transfers, in whole or in
part, the economic risk of ownership of the Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise, other than (a)
pursuant to bona fide gifts, (b) transfers which will not result in any change
in beneficial ownership, including, but not limited to, pro rata partnership
distributions and transfers into trusts for the benefit of the original holder
or (c) pursuant to the laws of testamentary or intestate descent, provided,
that, in any of the foregoing circumstances the donees or transferees agree, in
writing, to be bound by the provisions of this Lock Up Agreement. The
undersigned also agrees and consents to the entry of stop transfer instructions
imposed by the Surviving Company with the Surviving Company's transfer agent
and registrar against the transfer of shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock held by the
undersigned except in compliance with the foregoing restrictions.
A-60
This agreement is irrevocable and will be binding on the undersigned and the
respective successors, heirs, personal representatives, and assigns of the
undersigned.
Very truly yours,
_____________________________________
Printed Name of Holder
By: _________________________________
Signature
_____________________________________
Printed Name of Person Signing
(and indicate capacity of person
signing
if signing as custodian, trustee, or
on behalf of an entity)
Dated: , 2000
A-61
EXHIBIT G
FORM OF CERTIFICATE OF AMENDMENT TO
CERTIFICATE OF INCORPORATION
CERTIFICATE OF AMENDMENT
TO
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
ONTOGENY, INC.
ONTOGENY, INC. (the "Corporation"), a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation duly adopted
resolutions proposing and declaring advisable that the Amended and Restated
Certificate of Incorporation of the Corporation be amended in the manner set
forth below and that said amendments be submitted to the stockholders of the
Corporation for their consideration:
SECOND: That in lieu of a meeting and vote of stockholders, the stockholders
have given written consent to said amendments in accordance with the provisions
of Sections 228 and 242 of the General Corporation Law of the State of
Delaware.
THIRD: That the Certificate of Incorporation of the Corporation, as
previously amended and restated, is further amended as follows:
1. The following sentence shall be inserted at the end of Subsection
C.2(c) of Article FOURTH:
"Notwithstanding the foregoing, the provisions of this Subsection
2(c) shall not apply to a merger of the Corporation with and into
Curis, Inc., a Delaware corporation, (the "Excluded Merger") pursuant
to the Agreement and Plan of Merger dated as of February 14, 2000 among
the Corporation, Curis, Inc., Creative Biomolecules, Inc., a Delaware
corporation, and Reprogenesis, Inc., a Texas corporation, as such
agreement may be amended from time to time in accordance with the
provisions thereof, and the Excluded Merger shall not be deemed to be a
liquidation, dissolution or winding up of the Corporation."
2. The following sentence shall be inserted at the end of Subsection
C.4(i) of Article FOURTH:
"Notwithstanding the foregoing, the provisions of this Subsection
4(i) shall not apply to the Excluded Merger."
3. The following sentence shall be inserted at the end of Subsection
D.4(h) of Article FOURTH:
"Notwithstanding the foregoing, the provisions of this Subsection
4(h) shall not apply to the Excluded Merger."
4. The following sentence shall be inserted at the end of Subsection
E.4(h) of Article FOURTH:
"Notwithstanding the foregoing, the provisions of this Subsection
4(h) shall not apply to the Excluded Merger."
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5. The following sentence shall be inserted at the end of Subsection
4(h) of the Certificate of Designation of the Series C-1 Convertible
Preferred Stock:
"Notwithstanding the foregoing, the provisions of this Subsection
4(h) shall not apply to the Excluded Merger."
6. The following sentence shall be inserted at the end of Subsection
4(h) of the Certificate of Designation of the Series G Convertible
Preferred Stock:
"Notwithstanding the foregoing, the provisions of this Subsection
4(h) shall not apply to the Excluded Merger."
FOURTH: That the aforesaid amendments were duly adopted in accordance with
the applicable provisions of Sections 228 and 242 of the General Corporation
Law of the State of Delaware.
IN WITNESS WHEREOF, Ontogeny, Inc. has caused this certificate to be signed
by Doros Platika, its President, this day of 2000.
Ontogeny, Inc.
By: _________________________________
Doros Platika
Its: President
A-63
EXHIBIT H
ARTICLES OF AMENDMENT TO THE
SECOND AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
REPROGENESIS, INC.
Pursuant to the provisions of Article 4.04 of the Texas Business Corporation
Act (the "TBCA"), Reprogenesis, Inc., a Texas corporation (the "Corporation"),
hereby adopts the following Articles of Amendment to its Second Amended and
Restated Articles of Incorporation, as amended October 13, 1999:
Article I
The name of the corporation is Reprogenesis, Inc.
Article II
These Articles of Amendment to the Second Amended and Restated Articles of
Incorporation of the Corporation, as amended October 13, 1999, were adopted by
the written consent of the holders of the common stock of the Corporation, the
Series A Preferred Stock of the Corporation and the Series B Preferred Stock of
the Corporation as of , 2000.
Article III
In order to clarify the liquidation rights of the Corporation's Series A
Preferred Stock upon the consummation of the proposed merger of the Corporation
with Creative Biomolecules, Inc. ("Creative") and Ontogeny, Inc. ("Ontogeny")
into Curis, Inc. ("Curis"), the following new sentences are added to the last
line of Article Four D.3(a) before the words "After such payment":
Notwithstanding anything to the contrary in this section 3(a), upon the
consummation of the merger of the Corporation with Creative and
Ontogeny into Curis (the "Merger") pursuant to the Agreement and Plan
of Merger among Creative, Ontogeny, the Corporation and Curis dated as
of February 14, 2000, each holder of a share of Series A Preferred
shall be entitled to receive in respect of each share of Series A
Preferred that such holders own, in full satisfaction of the
liquidation preference specified in this section 3(a), the number of
fully paid and nonassessable shares of common stock, par value $0.01
per share, of the surviving entity (the "Surviving Company Common
Stock") equal to the Series A Consideration divided by 2,702,702. In
addition, each holder of Series A Preferred who would otherwise be
entitled to a fraction of a share shall receive cash in lieu of any
fraction of a share of Surviving Company Common Stock. "Series A
Consideration" shall mean the lesser of (A) the number of fully paid
and nonassessable shares of Surviving Company Common Stock whose
aggregate Trailing Average Market Price equals $6,000,000, and (B) the
Fully Diluted Merger Consideration. For the purposes of this section
3(a), "Trailing Average Market Price" shall mean the average of the
daily Market Price for each business day on the twenty (20) consecutive
business days the last day of which shall be the fifth business day
prior to the effective time of the Merger, divided by 0.30; "Fully
Diluted Merger Consideration" shall mean the product of 0.1956 and the
aggregate number of shares of Common Stock and Series Preferred either
issued or outstanding or subject to outstanding options or warrants to
purchase immediately prior to the consummation of the Merger [(other
than any such shares held in the treasury of the Corporation)]; and
"Market Price" at any date shall be deemed to be the last reported sale
price of common stock, par value $0.01 per share, of Creative, or, in
case no such reported sale takes place on such day, the average of the
bid and asked prices, in either case as officially reported by the
Nasdaq National Market, or, if the Nasdaq National Market is no longer
reporting such information, as reasonably determined in good faith by
resolution of the Board of Directors of the Corporation.
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Article IV
The designation and number of outstanding shares of each class or series
entitled to vote thereon and the number of shares which have signed a consent
in writing pursuant to Article 9.10A of the TBCA adopting said Articles of
Amendment were as follows:
Number of Number
Shares of
Outstanding Shares
and Signing
Entitled to Written
Vote Consent
----------- -------
Common Stock, par value $0.01........
Series A Preferred Stock, par value
$0.01...............................
Series B Preferred Stock, par value
$0.01...............................
IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment
to the Amended and Restated Articles of Incorporation to be duly executed as of
the day of , 2000.
REPROGENESIS, INC.
By: _________________________________
Name: _______________________________
Title: ______________________________
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