STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of August 23, 1997 (the "Agreement"),
by and between PerSeptive Biosystems, Inc., a Delaware corporation ("Issuer"),
and The Xxxxxx-Xxxxx Corporation, a New York corporation ("Grantee").
WHEREAS, Grantee, Issuer and Seven Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of Grantee ("Sub"), are concurrently
herewith entering into an Agreement and Plan of Merger, dated as of the date
hereof (the "Merger Agreement"; capitalized terms not defined herein shall have
the meanings set forth in the Merger Agreement), providing for, among other
things, the merger of Sub with and into Issuer with Issuer as the surviving
corporation; and
WHEREAS, as a condition and inducement to Grantee's willingness to
enter into the Merger Agreement, Grantee has requested that Issuer agree, and
Issuer has agreed, to grant Grantee the Option (as defined below);
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Merger Agreement, Issuer and Grantee agree as follows:
1. Grant of Option. Subject to the terms and conditions set forth
herein, Issuer hereby grants to Grantee an irrevocable option (the "Option") to
purchase up to 4,478,308 (as adjusted as set forth herein) shares (the "Option
Shares") of Common Stock, par value $.01 per share, of Issuer (the "Issuer
Common Stock") at a purchase price of $13.00 per Option Share (the "Purchase
Price").
2. Exercise of Option. (a) If not in material breach of the Merger
Agreement, Grantee may exercise the Option, in whole or in part, at any time
(or, to the extent permitted pursuant to Section 2(c) hereof, from time to time)
following the occurrence of a Purchase Event (as defined below); provided that,
except as otherwise provided herein, the Option shall terminate and be of no
further force and effect upon the earliest to occur of (i) the Effective Time of
the Merger, (ii) 12 months after the first occurrence of a Purchase Event or
(iii) termination of the Merger Agreement prior to the occurrence of a Purchase
Event. The termination of the Option shall not affect any rights hereunder which
by their terms extend beyond the date of such termination.
(b) As used herein, a "Purchase Event" means the termination of the
Merger Agreement under any circumstance which would entitle Grantee or Issuer to
receive any fee from Issuer pursuant to Section 8.02(a) of the Merger Agreement,
provided, however, that the termination of the Merger Agreement (except pursuant
to Section 7.01(b) thereof) after the occurrence of any event described in
Section 8.02(a)(i)(B)(x) thereof shall constitute a Purchase Event hereunder
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whether or not any event described forth in Section 8.02(a)(i)(B)(y) of the
Merger Agreement shall have occurred.
(c) Except as otherwise provided in this Section 2(c), Grantee shall be
entitled to exercise the Option, in whole or in part, on only one occasion and,
if Grantee elects to exercise the Option only in part, the unexercised portion
of the Option shall be forfeited and cancelled. Notwithstanding the foregoing,
in the event that by virtue of (i) any statute, law, rule or regulation
applicable to Grantee or Issuer, (ii) any order, decree or injunction to which
Grantee or Issuer is subject, (iii) any provision of Issuer's Certificate of
Incorporation or By-Laws, (iv) any agreement, instrument or other document to
which Issuer is a party or by which it is bound or (v) the terms of any security
issued by Issuer, (A) Grantee shall be prohibited from acquiring or holding any
of the Option Shares, (B) Grantee shall be unable to exercise full rights of
ownership with respect to any of the Option Shares (including, without
limitation, the right to vote such Option Shares on all matters properly
presented to the stockholders of Issuer) or (C) any of such Option Shares shall
be in any way distinguishable from, or of lesser economic value than, any other
shares of Issuer Common Stock (any of the conditions described in clauses (A)
through (C), an "Impairment"; and the portion of the Option Shares affected by
an Impairment, the "Impaired Portion" of the Option Shares), then upon a partial
exercise of the Option by Grantee, the portion of the Option relating to the
Impaired Portion of the Option Shares shall not be forfeited or cancelled but
shall remain exercisable by Grantee in accordance with the terms of this
Agreement. When all Impairments relating to any Impaired Portion of the Option
Shares have been eliminated, Grantee may from time to time exercise the Option
with respect to Option Shares previously affected by such Impairment and upon
any such exercise, the unexercised portion of the Option (other than any
remaining Impaired Portion) shall be forfeited and cancelled.
(d) In the event Grantee wishes to exercise the Option, it shall send to
Issuer a written notice (the date of which being herein referred to as the
"Notice Date") specifying (i) the total number of Option Shares it intends to
purchase pursuant to such exercise and (ii) a place and date not earlier than
three business days nor later than 20 business days from the Notice Date for the
closing of such purchase (the "Closing"; and the date of such Closing, the
"Closing Date"); provided that the Closing shall be held only if (i) such
purchase would not otherwise violate or cause the violation of applicable law
(including the HSR Act) and (ii) no statute, rule, regulation, decree, order or
injunction shall have been promulgated, enacted, entered into, or enforced by
any Governmental Entity which prohibits delivery of the Option Shares, whether
temporary, preliminary or permanent (provided, however, that the parties hereto
shall use their best efforts to have any such decree, order or injunction
vacated or reversed). If the Closing cannot be consummated by reason of a
restriction set forth in clause (i) or (ii) above, notwithstanding the
provisions of Section 2(a), the Closing Date shall be within 10 business days
following the elimination of such restriction.
3. Payment and Delivery of Certificates. (a) On each Closing Date,
Grantee shall pay to Issuer in immediately available funds by wire transfer to a
bank account designated by Issuer
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an amount equal to the Purchase Price multiplied by the Option Shares to be
purchased on such Closing Date.
(b) At each Closing, simultaneously with the delivery of immediately
available funds as provided in Section 3(a), Issuer shall deliver to Grantee a
certificate or certificates representing the Option Shares to be purchased at
such Closing, which Option Shares shall be free and clear of all Liens, and
Grantee shall deliver to Issuer a letter agreeing that Grantee shall not offer
to sell or otherwise dispose of such Option Shares in violation of applicable
law or the provisions of this Agreement. If at the time of issuance of any
Option Shares pursuant to an exercise of all or part of the Option hereunder,
Issuer shall not have redeemed the Rights, or shall have issued any similar
securities, then each Option Share issued pursuant to such exercise shall also
represent a corresponding Right or new rights with terms substantially the same
as and at least as favorable to Grantee as are provided under the Rights
Agreement or any similar agreement then in effect.
(c) Certificates for the Option Shares delivered at each Closing shall be
endorsed with a restrictive legend which shall read substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF AUGUST 23,
1997. A COPY OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF
WITHOUT CHARGE UPON RECEIPT BY THE ISSUER OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that (i) the reference to restrictions arising under
the Securities Act in the above legend shall be removed by delivery of
substitute certificate(s) without such reference if Grantee shall have delivered
to Issuer a copy of a letter from the staff of the SEC, or an opinion of counsel
in form and substance reasonably satisfactory to Issuer and its counsel, to the
effect that such legend is not required for purposes of the Securities Act and
(ii) the reference to restrictions pursuant to this Agreement in the above
legend shall be removed by delivery of substitute certificate(s) without such
reference if the Option Shares evidenced by certificate(s) containing such
reference have been sold or transferred in compliance with the provisions of
this Agreement under circumstances that do not require the retention of such
reference.
4. Authorized Stock. Issuer hereby represents and warrants to Grantee
that Issuer has taken all necessary corporate and other action to authorize and
reserve and to permit it to issue, and, at all times from the date hereof until
the obligation to deliver Issuer Common Stock upon the exercise of the Option
terminates, will have reserved for issuance, upon exercise of the Option, shares
of Issuer Common Stock necessary for Grantee to exercise the Option, and Issuer
will take all necessary corporate action to authorize and reserve for issuance
all additional shares of Issuer Common Stock or other securities which may be
issued pursuant to Section 6 upon exercise of the Option. The shares of Issuer
Common Stock to be issued upon due exercise of the Option, including all
additional shares of Issuer Common Stock or other securities which
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may be issuable upon exercise of the Option pursuant to Section 6, upon issuance
pursuant hereto, shall be duly and validly issued, fully paid and nonassessable,
and shall be delivered free and clear of all Liens, including any preemptive
rights of any stockholder of Issuer.
5. Purchase Not for Distribution. Grantee hereby represents and warrants
to Issuer that any Option Shares or other securities acquired by Grantee upon
exercise of the Option will not be taken with a view to the public distribution
thereof and will not be transferred or otherwise disposed of except in a
transaction registered or exempt from registration under the Securities Act.
6. Adjustment upon Changes in Capitalization, etc. (a) In the event of
any change in Issuer Common Stock by reason of a stock dividend, split-up,
recapitalization, combination, exchange of shares or similar transaction, the
type and number of shares or securities subject to the Option, and the Purchase
Price therefor, shall be adjusted appropriately, and proper provision shall be
made in the agreements governing such transaction, so that Grantee shall receive
upon exercise of the Option the number and class of shares or other securities
or property that Grantee would have received in respect of Issuer Common Stock
if the Option had been exercised immediately prior to such event or the record
date therefor, as applicable. If any additional shares of Issuer Common Stock
are issued after the date of this Agreement at a price per share less than the
Purchase Price, the number of shares of Issuer Common Stock subject to the
Option shall be adjusted so that, after such issuance, it equals 19.9% of the
number of shares of Issuer Common Stock then issued and outstanding, without
giving effect to any shares subject to or issued pursuant to the Option.
(b) In the event that Issuer shall enter into an agreement (i) to
consolidate with or merge into any person, other than Grantee or one of its
subsidiaries, and shall not be the continuing or surviving corporation of such
consolidation or merger, (ii) to permit any person, other than Grantee or one of
its subsidiaries, to merge into Issuer and Issuer shall be the continuing or
surviving corporation, but, in connection with such merger, the shares of Issuer
Common Stock outstanding immediately prior to the consummation of such merger
shall be changed into or exchanged for stock or other securities of Issuer or
any other person or cash or any other property, or the shares of Issuer Common
Stock outstanding immediately prior to the consummation of such merger shall
after such merger represent less than 50% of the outstanding voting securities
of the merged company, or (iii) to sell or otherwise transfer all or
substantially all of its assets to any person, other than Grantee or one of its
subsidiaries, then, and in each such case, the agreement governing such
transaction shall make proper provisions so that the Option shall, upon the
consummation of any such transaction and upon the terms and conditions set forth
herein, be converted into, or exchanged for, an option (the "Substitute
Option"), at the election of Grantee, of either (I) the Acquiring Corporation
(as defined below) or (II) any person that controls the Acquiring Corporation
(any such person specified in clause (I) or (II) being referred to as
"Substitute Option Issuer").
(c) The Substitute Option shall have the same terms as the Option;
provided that the exercise price therefor and number of shares subject thereto
shall be as set forth in this Section 6
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and the repurchase rights relating thereto shall be as set forth in Section 8;
provided, further, that the Substitute Option shall be exercisable immediately
upon issuance without the occurrence of a Purchase Event with respect to the
Substitute Option; and provided, further, that if the terms of the Substitute
Option cannot, for legal reasons, be the same as the Option (subject to the
variations described in the foregoing provisos), such terms shall be as similar
as possible and in no event less advantageous to Grantee. Substitute Option
Issuer shall also enter into an agreement with Grantee in substantially the same
form as this Agreement (subject to the variations described in the foregoing
provisos), which shall be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number of shares
of Substitute Common Stock (as defined below) as is equal to the Assigned Value
(as defined below) multiplied by the number of shares of Issuer Common Stock for
which the Option was theretofore exercisable, divided by the Average Price (as
defined below), rounded up to the nearest whole share. The exercise price per
share of Substitute Common Stock of the Substitute Option (the "Substitute
Option Price") shall then be equal to the Purchase Price multiplied by a
fraction in which the numerator is the number of shares of Issuer Common Stock
for which the Option was theretofore exercisable and the denominator is the
number of shares of Substitute Common Stock for which the Substitute Option is
exercisable.
(e) In no event, pursuant to any of the foregoing paragraphs, shall the
Substitute Option be exercisable for more than 19.9% of the aggregate of the
shares of Substitute Common Stock outstanding prior to exercise of the
Substitute Option. In the event that the Substitute Option would be exercisable
for more than 19.9% of the aggregate of the shares of outstanding Substitute
Common Stock but for the limitation in the first sentence of this Section 6(e),
Substitute Option Issuer shall make a cash payment to Grantee equal to the
excess of (i) the value of the Substitute Option without giving effect to the
limitation in the first sentence of this Section 6(e) over (ii) the value of the
Substitute Option after giving effect to the limitation in the first sentence of
this Section 6(e). This difference in value shall be determined by a nationally
recognized investment banking firm selected by Grantee.
(f) Issuer shall not enter into any transaction described in Section 6(b)
unless the Acquiring Corporation and any person that controls the Acquiring
Corporation assume in writing all the obligations of Issuer hereunder and take
all other actions that may be necessary so that the provisions of this Agreement
are given full force and effect (including, without limitation, any action that
may be necessary so that the holders of the other shares of common stock issued
by Substitute Option Issuer are not entitled to exercise any rights comparable
to the Rights by reason of the issuance or exercise of the Substitute Option and
the shares of Substitute Common Stock are otherwise in no way distinguishable
from or have lesser economic value than other shares of common stock issued by
Substitute Option Issuer (other than any diminution in value resulting from the
fact, if applicable, that the shares of Substitute Common Stock are restricted
securities, as defined in Rule 144 under the Securities Act or any successor
provision)).
(g) For purposes of this Agreement, the following terms have the following
meanings:
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(1) "Acquiring Corporation" means (i) the continuing or surviving
corporation of a consolidation or merger with Issuer (if other than
Issuer), (ii) Issuer in a merger in which Issuer is the continuing or
surviving corporation and (iii) the transferee of all or substantially all
of Issuer's assets.
(2) "Assigned Value" means the highest of (w) the price per share of
Issuer Common Stock at which a tender offer or exchange offer for Issuer
Common Stock has been made after the date hereof and prior to the
consummation of the consolidation, merger or sale referred to in Section
6(b), (x) the price per share to be paid by any third party or the
consideration per share to received by holders of Issuer Common Stock, in
each case pursuant to the agreement with Issuer with respect to the
consolidation, merger or sale referred to in Section 6(b), (y) the highest
closing sales price per share for Issuer Common Stock quoted on the NYSE
(or if such Issuer Common Stock is not quoted on the NYSE, the highest bid
price per share as quoted on the National Association of Securities Dealers
Automated Quotation System or, if the shares of Issuer Common Stock are not
quoted thereon, on the principal trading market on which such shares are
traded as reported by a recognized source) during the 12-month period
immediately preceding the consolidation, merger or sale referred to in
Section 6(b) and (z) in the event the transaction referred to in Section
6(b) is a sale of all or substantially all of Issuer's assets, an amount
equal to (i) the sum of the price paid in such sale for such assets and the
current market value of the remaining assets of Issuer, as determined by a
nationally recognized investment banking firm selected by Grantee divided
by (ii) the number of shares of Issuer Common Stock outstanding at such
time. In the event that a tender offer or exchange offer is made for
Issuer Common Stock or an agreement is entered into for a merger or
consolidation involving consideration other than cash, the value of the
securities or other property issuable or deliverable in exchange for Issuer
Common Stock shall be determined by a nationally recognized investment
banking firm selected by Grantee.
(3) "Average Price" means the average closing sales price per share of
a share of Substitute Common Stock quoted on the NYSE (or if such
Substitute Common Stock is not quoted on the NYSE, the highest bid price
per share as quoted on the National Association of Securities Dealers
Automated Quotation System or, if the shares of Substitute Common Stock are
not quoted thereon, on the principal trading market on which such shares
are traded as reported by a recognized source) for the twenty trading days
immediately preceding the fifth business day prior to the consolidation,
merger or sale in question, but in no event higher than the closing price
of the shares of Substitute Common Stock on the day preceding such
consolidation, merger or sale; provided that if Substitute Option Issuer is
Issuer, the Average Price shall be computed with respect to a share of
common stock issued by Issuer, the person merging into Issuer or by any
company which controls such person, as Grantee may elect.
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(4) "Substitute Common Stock" means the shares of capital stock (or
similar equity interest) with the greatest voting power in respect of the
election of directors (or persons similarly responsible for the direction
of the business and affairs) of the Substitute Option Issuer.
7. Repurchase of Option and Option Shares. (a) Notwithstanding the
provisions of Section 2(a), at any time commencing upon the first occurrence of
a Repurchase Event (as defined below) and ending 12 months after the occurrence
of a Purchase Event, Issuer (or any successor entity thereof) shall:
(i) at the request of Grantee, repurchase from Grantee the Option (if
and to the extent not previously terminated) at a price equal to the
excess, if any, of (x) the Applicable Price (as defined below) as of the
Section 7 Request Date (as defined below) for a share of Issuer Common
Stock over (y) the Purchase Price (subject to adjustment pursuant to
Section 6(a)), multiplied by the number of shares of Issuer Common Stock
with respect to which the Option has not been exercised (the "Option
Repurchase Price"); and
(ii) at the request of an owner of Option Shares from time to time,
repurchase such number of Option Shares as such owner shall designate at a
price equal to the Applicable Price as of the Section 7 Request Date
multiplied by the number of Option Shares requested to be repurchased by
such owner (the "Option Share Repurchase Price").
(b) If Grantee or an owner of Option Shares exercises its rights under
this Section 7, Issuer shall, within 10 business days after the Section 7
Request Date, pay the Option Repurchase Price or Option Share Repurchase Price,
as the case may be, in immediately available funds, and Grantee or such owner,
as the case may be, shall surrender to Issuer the Option or Option Shares, as
the case may be.
(c) For purposes of this Agreement, the following terms have the following
meanings:
(i) "Applicable Price," as of any date, means the highest of (A) the
highest price per share at which a tender offer or exchange offer has been
made for shares of Issuer Common Stock after the date hereof and on or
prior to such date, (B) the price per share to be paid by any third party
for shares of Issuer Common Stock or the consideration per share to be
received by holders of Issuer Common Stock, in each case pursuant to an
agreement for a merger or other business combination transaction with
Issuer entered into on or prior to such date or (C) the highest closing
sales price per share of Issuer Common Stock quoted on the NYSE (or if
Issuer Common Stock is not quoted on the NYSE, the highest bid price per
share as quoted on the National Association of Securities Dealers Automated
Quotations System or, if the shares of Issuer Common Stock are not quoted
thereon, on the principal trading market on which such shares are traded as
reported by a recognized source) during the 60 business days preceding such
date. If the consideration to be offered, paid or received pursuant to
either of the foregoing clauses (A) or (B)
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shall be other than in cash, the value of such consideration shall be
determined in good faith by an independent nationally recognized investment
banking firm selected by Grantee and reasonably acceptable to Issuer, which
determination shall be conclusive for all purposes of this Agreement.
(ii) "Repurchase Event" means the occurrence of a Purchase Event
followed by the consummation of any transaction the proposal of which would
constitute a Transaction Proposal; and
(iii) "Section 7 Request Date" means the date on which Grantee or an
owner of Option Shares exercises its rights under this Section.
8. Repurchase of Substitute Option. (a) At any time after issuance of the
Substitute Option, Substitute Option Issuer (or any successor entity thereof)
shall:
(i) at the request of Grantee, repurchase from Grantee the Substitute
Option (if and to the extent not previously terminated) at a price equal to
the excess, if any, of (x) the Highest Closing Price as of the Section 8
Request Date (as defined below) for a share of Substitute Common Stock over
(y) the Purchase Price (subject to adjustment pursuant to Section 6(a)),
multiplied by the number of shares of Substitute Common Stock with respect
to which the Substitute Option has not been exercised (the "Substitute
Option Repurchase Price"); and
(ii) at the request of an owner of shares of Substitute Common Stock
issued upon exercise of the Substitute Option, repurchase such number of
shares of Substitute Common Stock as such owner shall designate at a price
equal to the Highest Closing Price as of the Section 8 Request Date
multiplied by the number of shares of Substitute Common Stock requested to
be repurchased by such owner (the "Substitute Share Repurchase Price").
(b) If Grantee or an owner of shares of Substitute Common Stock issued
upon exercise of the Substitute Option exercises its rights under this Section
8, Issuer shall, within 10 business days after the Section 8 Request Date, pay
the Option Repurchase Price or Option Share Repurchase Price, as the case may
be, in immediately available funds, and Grantee or such owner, as the case may
be, shall surrender to Issuer the Option or shares of Substitute Common Stock,
as the case may be.
(c) For purposes of this Agreement, the following terms have the following
meanings:
(i) "Highest Closing Price" means the highest closing sales price for
shares of Substitute Common Stock quoted on the NYSE (or if the Substitute
Common Stock is not quoted on the NYSE, the highest bid price per share as
quoted on the National Association of Securities Dealers Automated
Quotations System or, if the shares of Substitute Common Stock are not
quoted thereon, on the principal trading market on
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which such shares are traded as reported by a recognized source) during the
six-month period preceding the Section 8 Request Date; and
(ii) "Section 8 Request Date" means the date on which Grantee or an
Owner exercises its rights under this Section.
9. Registration Rights. Issuer shall, if requested by Grantee or any
owner of Option Shares (collectively with Grantee, the "Owners") at any time and
from time to time within two years of the first exercise of the Option, as
expeditiously as possible prepare and file up to two registration statements
under the Securities Act if such registration is necessary in order to permit
the sale or other disposition of any or all shares of securities that have been
acquired by or are issuable to such Owners upon exercise of the Option in
accordance with the intended method of sale or other disposition stated by such
Owners, including a "shelf" registration statement under Rule 415 under the
Securities Act or any successor provision, and Issuer shall use its best efforts
to qualify such shares or other securities under any applicable state securities
laws. Issuer shall use all reasonable efforts to cause each such registration
statement to become effective, to obtain all consents or waivers of other
parties which are required therefor and to keep such registration statement
effective for such period not in excess of 180 days from the day such
registration statement first becomes effective as may be reasonably necessary to
effect such sale or other disposition. The obligations of Issuer hereunder to
file a registration statement and to maintain its effectiveness may be suspended
for one or more periods of time not exceeding 30 days in the aggregate if the
Board of Directors of Issuer shall have determined that the filing of such
registration statement or the maintenance of its effectiveness would require
disclosure of nonpublic information that would materially and adversely affect
Issuer. Any registration statement prepared and filed under this Section 9, and
any sale covered thereby, shall be at Issuer's expense except for underwriting
discounts or commissions, brokers' fees and the fees and disbursements of
Owners' counsel related thereto. The Owners shall provide all information
reasonably requested by Issuer for inclusion in any registration statement to be
filed hereunder. If during the time period referred to in the first sentence of
this Section 9 Issuer effects a registration under the Securities Act of Issuer
Common Stock for its own account or for any other stockholders of Issuer (other
than on Form S-4 or Form S-8, or any successor form), it shall allow the Owners
the right to participate in such registration, and such participation shall not
affect the obligation of Issuer to effect two registration statements for the
Owners under this Section 9; provided that, if the managing underwriters of such
offering advise Issuer in writing that in their opinion the number of shares of
Issuer Common Stock requested to be included in such registration exceeds the
number which can be sold in such offering, Issuer shall include the shares
requested to be included therein by the Owners pro rata with the shares
intended to be included therein by Issuer. In connection with any registration
pursuant to this Section 9, Issuer and the Owners shall provide each other and
any underwriter of the offering with customary representations, warranties,
covenants, indemnification and contribution in connection with such
registration.
10. Listing. If Issuer Common Stock or any other securities to be acquired
upon exercise of the Option are then listed on the NYSE, Issuer, upon the
request of any Owner, will
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promptly file an application to list the shares of Issuer Common Stock or other
securities to be acquired upon exercise of the Option on the NYSE and will use
its best efforts to obtain approval of such listing as soon as practicable.
11. Loss, Theft, Etc. of Agreement. Upon receipt by Issuer of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, Issuer will execute and deliver a new Agreement of like
tenor and date. Any such new Agreement executed and delivered shall constitute
an additional contractual obligation on the part of Issuer, whether or not the
Agreement so lost, stolen, destroyed or mutilated shall at any time be
enforceable by anyone.
12. Limitation of Grantee Profit. (a) Notwithstanding any other provision
herein, in no event shall Grantee's Total Profit (as defined below) exceed
$11,000,000, and, if it otherwise would exceed such amount, Grantee, at its sole
discretion, shall either (i) reduce the number of shares subject to the Option,
(ii) deliver to Issuer for cancellation shares of Issuer Common Stock (or other
securities into which such Option Shares are converted or exchanged), (iii) pay
cash to Issuer, or (iv) any combination of the foregoing, so that Grantee's
actually realized Total Profit shall not exceed $11,000,000 after taking into
account the foregoing actions.
(b) For purposes of this Agreement, "Total Profit" shall mean: (i) the
aggregate amount of (A) the excess of (x) the net cash amounts received by
Grantee pursuant to a sale of Option Shares (or securities into which such
shares are converted or exchanged) to any unaffiliated third party within 12
months after the exercise of the Option, over (y) the Grantee's purchase price
of such Option Shares (or other securities), plus (B) any amounts received by
Grantee on the transfer of the Option, plus (C) any equivalent amounts with
respect to the Substitute Option, plus (D) the amount received by Grantee
pursuant to Section 8.02(a) of the Merger Agreement, minus (ii) the amount of
cash paid to Issuer pursuant to this Section 12 plus the value of the Option
Shares (or other securities) delivered to Issuer for cancellation pursuant to
this Section 12.
(c) If Grantee receives cash or other consideration in the aggregate,
pursuant to Section 8.02(a) of the Merger Agreement together with proceeds in
connection with any sales or dispositions of the Option, Option Shares and any
dividends received by Grantee declared on Option Shares, more than the sum of
(i) $22,000,000 and (ii) the Purchase Price multiplied by the number of Option
Shares purchased by Grantee pursuant to the Option, than all proceeds of Grantee
in excess of such sum shall be remitted to Issuer within 30 days of the receipt
of such cash or other consideration.
(c) Notwithstanding any other provision of this Agreement, nothing in
this Agreement shall affect the ability of Grantee to receive, nor relieve
Issuer's obligation to pay, the fee pursuant to Section 8.02(a) of the Merger
Agreement; provided that if and to the extent the Total Profit received by
Grantee would exceed $11,000,000 following receipt of such fee, without limiting
Issuer's right of set-off, Grantee shall be obligated to comply with the terms
of
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Section 12(a) within 30 days of the latest of (i) the date of receipt of such
fee, (ii) the date of receipt of the net cash by Grantee pursuant to the sale of
Option Shares (or securities into which such Option Shares are converted or
exchanged) to any unaffiliated party within 12 months after the exercise of this
Option with respect to such Option Shares, (iii) the date of receipt of net cash
from disposition of the Option and (iv) the date of receipt of equivalent
amounts pursuant to the sale of the Substitute Option or shares of Substitute
Common Stock (or other securities into which such Substitute Common Stock is
converted or exchanged).
(d) For purposes of Section 12(a) and clause (ii) of Section 12(b),
the value of any Option Shares delivered to Issuer shall be the Assigned Value
of such Option Shares and the value of any Substitute Common Stock delivered to
Issuer shall be the Highest Closing Price of such Substitute Common Stock.
13. Miscellaneous. (a) Expenses. Except as otherwise provided in Section
9 hereof, each of the parties hereto shall bear and pay all costs and expenses
incurred by it or on its behalf in connection with the transactions contemplated
hereunder, including fees and expenses of its own financial consultants,
investment bankers, accountants and counsel.
(b) Waiver and Amendment. Any provision of this Agreement may be waived at
any time by the party that is entitled to the benefits of such provision. This
Agreement may not be modified, amended, altered or supplemented except upon the
execution and delivery of a written agreement executed by the parties hereto.
(c) Entire Agreement; No Third-Party Beneficiary; Severability. Except as
otherwise set forth in the Merger Agreement, this Agreement, together with the
Merger Agreement, (a) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof and (b) is not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction or a federal or state regulatory agency to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. If for any reason such court or
regulatory agency determines that the Option does not permit Grantee to acquire,
or does not require Issuer (or Substitute Option Issuer) to repurchase, the full
number of shares of Issuer Common Stock (or Substitute Common Stock) as provided
in Sections 2 and 7 (or in the case of Substitute Common Stock Sections 2 and
8), as adjusted pursuant to Section 6, it is the express intention of Issuer to
allow Grantee to acquire or to require Issuer to repurchase such lesser number
of shares as may be permissible without any amendment or modification hereof.
(D) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY
APPLICABLE CONFLICTS OF LAW RULES.
12
(e) Descriptive Headings. The descriptive headings contained herein are
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
(f) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (with
confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
If to Grantee to:
The Xxxxxx-Xxxxx Corporation
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Chief Executive Officer
Telecopier No.: 0-000-000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Xxxxxxx X. Xxxxxx, Esq.
Telecopier No.: (000) 000-0000
If to Issuer to:
PerSeptive Biosystems, Inc.
000 Xxx Xxxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Executive Officer
Telecopier No.: 0-000-000-0000
13
with a copy to:
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxx, Esq.
Xxxxx X. Xxxx, Esq.
Telecopier No.: 0-000-000-0000
(g) Counterparts. This Agreement and any amendments hereto may be executed
in two counterparts, each of which shall be considered one and the same
agreement and shall become effective when both counterparts have been signed by
each of the parties and delivered to the other party, it being understood that
both parties need not sign the same counterpart.
(h) Assignment. Grantee may assign this Agreement in whole to any
affiliate of Grantee at any time. Except as provided in the next sentence,
Grantee may not, without the prior written consent of Issuer (which shall not be
unreasonably withheld), assign this Agreement to any other person. Upon the
occurrence of a Purchase Event, Grantee may sell, transfer, assign or otherwise
dispose of, in whole at any time, its rights and obligations hereunder. In the
case of any sale, transfer, assignment or disposition of this Option, Issuer
shall do all things reasonably necessary to facilitate such transaction. This
Agreement shall not be assignable by Issuer except by operation of law. Subject
to the preceding sentence, this Agreement shall be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns.
(i) Representations and Warranties. The representations and warranties
contained in Sections 3.01(a) and 3.02(a) of the Merger Agreement, and, to the
extent they relate to this Stock Option Agreement, in Sections 3.01(d), (p), (q)
and (r) and 3.02(c) of the Merger Agreement, are incorporated herein by
reference.
(j) Further Assurances. In the event of any exercise of the Option by
Grantee, Issuer and Grantee shall execute and deliver all other documents and
instruments and take all other action that may be reasonably necessary in order
to consummate the transactions provided for by such exercise.
(k) Specific Performance. The parties hereto agree that this Agreement may
be enforced by either party through specific performance, injunctive relief and
other equitable relief. Both parties further agree to waive any requirement for
the securing or posting of any bond in connection with the obtaining of any such
equitable relief and that this provision is without prejudice to any other
rights that the parties hereto may have for any failure to perform this
Agreement.
Exhibit 4.1
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IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly authorized as
of the day and year first written above.
PERSEPTIVE BIOSYSTEMS, INC.
by /s/ Novbar X. Xxxxxx
------------------------------
Name: Novbar X. Xxxxxx
Title: Chief Executive Officer
THE XXXXXX-XXXXX CORPORATION
by /s/ Xxxxx Xxxxxxx
------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
