===============================================================================
AGREEMENT AND PLAN OF MERGER
by and among
ELAN CORPORATION, PLC,
GANESH ACQUISITION CORP.
and
NEUREX CORPORATION
Dated as of April 29, 1998
===============================================================================
TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER
Section 1.01. The Merger.....................................................1
Section 1.02. Effective Time.................................................2
Section 1.03. Certificate of Incorporation and By-Laws of
Surviving Corporation........................................2
Section 1.04. Directors and Officers of Surviving Corporation................2
Section 1.05. Stockholders' Meeting..........................................2
Section 1.06. Filing of Certificate of Merger................................3
Section 1.07. Further Assurances.............................................3
ARTICLE II
CONVERSION OF SHARES
Section 2.01. Shares.........................................................4
Section 2.02. Subco Common Stock.............................................5
Section 2.03. Exchange of Certificates.......................................5
Section 2.04. Effect on Company Options and Warrants.........................8
Section 2.05. Fractional Shares..............................................9
Section 2.06. No Appraisal Rights............................................9
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUBCO
Section 3.01. Organization, Etc..............................................9
Section 3.02. Board Recommendation..........................................10
Section 3.03. Authority Relative to This Agreement..........................10
Section 3.04. No Violations, Etc............................................11
Section 3.05. Finders or Brokers............................................12
Section 3.06. Registration Statement; Company Proxy Statement...............12
Section 3.07. SEC Filings...................................................12
Section 3.08. Financial Statements..........................................13
Section 3.09. Absence of Undisclosed Liabilities............................14
Section 3.10. Absence of Changes or Events..................................14
Section 3.11. Capitalization................................................14
Section 3.12. Litigation....................................................15
-i-
Page
Section 3.13. Tax Treatment; Officer's Certificate as to Tax Matters........15
Section 3.14. Taxes.........................................................15
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.01. Organization, Etc.............................................16
Section 4.02. Authority Relative to This Agreement..........................16
Section 4.03. No Violations, Etc............................................17
Section 4.04. Fairness Opinion..............................................17
Section 4.05. Board Recommendation..........................................18
Section 4.06. State Antitakeover Statutes...................................18
Section 4.07. Affiliates....................................................18
Section 4.08. Finders or Brokers............................................18
Section 4.09. Registration Statement; Company Proxy Statement...............18
Section 4.10. Capitalization................................................19
Section 4.11. SEC Filings...................................................19
Section 4.12. Financial Statements..........................................20
Section 4.13. Absence of Undisclosed Liabilities............................21
Section 4.14. Absence of Changes or Events..................................21
Section 4.15. Capital Stock of Subsidiary...................................23
Section 4.16. Litigation....................................................24
Section 4.17. Insurance.....................................................24
Section 4.18. Contracts and Commitments.....................................24
Section 4.19. Labor Matters; Employment and Labor Contracts.................25
Section 4.20. Compliance with Laws..........................................25
Section 4.21. Intellectual Property Rights..................................26
Section 4.22. Taxes.........................................................27
Section 4.23. Employee Benefit Plans; ERISA.................................29
Section 4.24. Environmental Matters.........................................32
Section 4.25. Tax Treatment; Officer's Certificate as to Tax Matters........35
ARTICLE V
COVENANTS
Section 5.01. Conduct of Business of the Company............................35
Section 5.02. No Solicitation...............................................40
Section 5.03. Access to Information.........................................41
Section 5.04. Registration Statement and Company Proxy Statement............42
Section 5.05. Commercially Reasonable Efforts; Other Actions................43
-ii-
Page
Section 5.06. Public Announcements..........................................43
Section 5.07. Notification of Certain Matters...............................43
Section 5.08. Indemnification...............................................44
Section 5.09. Expenses......................................................44
Section 5.10. Affiliates....................................................45
Section 5.11. Stock Exchange Listings.......................................45
Section 5.12. Resignation of Directors......................................45
Section 5.13. Stock Purchase Plans..........................................45
Section 5.14. Governance....................................................45
Section 5.15. Employee Benefits.............................................45
ARTICLE VI
CONDITIONS TO THE OBLIGATIONS OF PARENT, SUBCO AND THE COMPANY
Section 6.01. Registration Statement........................................46
Section 6.02. Stockholder Approval..........................................46
Section 6.03. Listing.......................................................46
Section 6.04. Certain Proceedings...........................................46
Section 6.05. Tax Matters...................................................47
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF PARENT AND SUBCO
Section 7.01. Representations and Warranties True...........................48
Section 7.02. Performance...................................................48
Section 7.03. Certificates..................................................48
Section 7.04. Material Adverse Change.......................................48
Section 7.05. Consents, Approvals and Notifications.........................48
Section 7.06. FDA Matters...................................................48
Section 7.07. Additional Agreements.........................................49
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF THE COMPANY
Section 8.01. Representations and Warranties True...........................49
Section 8.02. Performance...................................................49
Section 8.03. Certificates..................................................50
Section 8.04. Material Adverse Change.......................................50
Section 8.05. Consents, Approvals and Notifications.........................50
-iii-
ARTICLE IX
CLOSING
Section 9.01. Time and Place................................................50
Section 9.02. Filings at the Closing........................................50
ARTICLE X
TERMINATION AND ABANDONMENT
Section 10.01. Termination...................................................51
Section 10.02. Termination by Parent.........................................51
Section 10.03. Termination by the Company....................................53
Section 10.04. Procedure for Termination.....................................53
Section 10.05. Effect of Termination and Abandonment.........................54
ARTICLE XI
DEFINITIONS
Section 11.01. Terms Defined in This Agreement...............................55
ARTICLE XII
MISCELLANEOUS
Section 12.01. Amendment and Modification....................................57
Section 12.02. Waiver of Compliance; Consents................................57
Section 12.03. Survivability; Investigations.................................58
Section 12.04. Notices.......................................................58
Section 12.05. Assignment; Third Party Beneficiaries.........................59
Section 12.06. Governing Law.................................................59
Section 12.07. Counterparts..................................................60
Section 12.08. Severability..................................................60
Section 12.09. Interpretation................................................60
Section 12.10. Entire Agreement..............................................60
Signatures...................................................................S-1
EXHIBITS
Exhibit A Form of Company Affiliate Letter
Exhibit B Form of Covenant not to Sell American
Depository Shares
-iv-
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of April 29, 1998 (the "Agreement"),
by and among ELAN CORPORATION, PLC, a public limited company organized under the
laws of Ireland ("Parent"), GANESH ACQUISITION CORP., a Delaware corporation
("Subco"), which is a newly-formed direct wholly-owned Subsidiary of Parent, and
NEUREX CORPORATION, a Delaware corporation (the "Company"). Subco and the
Company are hereinafter sometimes collectively referred to as the "Constituent
Corporations."
RECITALS
WHEREAS, Parent and the Company believe it is in the long-term strategic
interests of their respective stockholders to combine their businesses;
WHEREAS, the combination will be effected by the merger of Subco with and
into the Company pursuant to which stockholders of the Company will receive
Parent ADSs (as defined in Section 2.01) and the Company will become a
wholly-owned subsidiary of Parent, all upon the terms and subject to the
conditions of this Agreement;
WHEREAS, Parent, Subco and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
merger of Subco and the Company; and
WHEREAS, such combination is intended to qualify for Federal income tax
purposes as a tax-free reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, agreements and conditions contained
herein, the parties hereto agree as follows:
ARTICLE I
THE MERGER
Section 1.01. The Merger. (a) In accordance with the provisions of this
Agreement and the General Corporation Law of the State of Delaware (the
"Delaware Act"), at the Effective Time (as defined in Section 1.02), Subco shall
be
-2-
merged (the "Merger") with and into the Company, and the Company shall be the
surviving corporation (hereinafter sometimes called the "Surviving Corporation")
and shall continue its corporate existence under the laws of the State of
Delaware. At the election of Parent, any direct wholly-owned consolidated
subsidiary of Parent incorporated under the laws of the United States may be
substituted for Subco as a Constituent Corporation in the Merger. The name of
the Surviving Corporation shall be "Neurex Corporation." At the Effective Time
the separate existence of Subco shall cease.
(b) The Merger shall have the effects on Subco and the Company as
constituent corporations of the Merger as provided under the Delaware Act.
Section 1.02. Effective Time. The Merger shall become effective at the time
of filing of, or at such later time specified in, a certificate of merger, in
the form required by and executed in accordance with the Delaware Act, with the
Secretary of State of the State of Delaware in accordance with the Delaware Act
(the "Certificate of Merger"). The date and time when the Merger shall become
effective is herein referred to as the "Effective Time."
Section 1.03. Certificate of Incorporation and By-Laws of Surviving
Corporation. The Amended and Restated Certificate of Incorporation and Amended
and Restated By-Laws of the Company, as in effect immediately prior to the
Effective Time, shall be the Certificate of Incorporation and By-Laws of the
Surviving Corporation until thereafter amended as provided by law.
Section 1.04. Directors and Officers of Surviving Corporation. The
directors of Subco immediately prior to the Effective Time will be the initial
directors of the Surviving Corporation, and the officers of the Company
immediately prior to the Effective Time will be the initial officers of the
Surviving Corporation, in each case until their successors are elected and
qualified.
Section 1.05. Stockholders' Meeting. The Company shall take all action
necessary in accordance with applicable law and its Amended and Restated
Certificate of Incorporation and Amended and Restated By-Laws to call and
convene a special meeting of its stockholders (a "Special Meeting") as soon as
practicable to consider and vote upon the approval of this Agreement. The
Company, through its Board of Directors, (i) shall recommend to its stockholders
approval of this Agree-
-3-
ment, which recommendation shall be contained in the proxy statement of the
Company (the "Company Proxy Statement") and (ii) shall use all commercially
reasonable efforts to solicit from its stockholders proxies in favor of approval
and adoption of this Agreement; provided, however, that the Board of Directors
of the Company may, in response to an unsolicited bona fide, written proposal
from a corporation, partnership, person, or other entity or group (a "Third
Party") regarding a Superior Proposal (as defined in Section 5.02), withdraw,
modify or change its recommendation to the stockholders, but only if the Board
of Directors determines in good faith by a majority vote that withdrawing,
modifying or changing its recommendation is reasonably likely to lead to an
Acquisition Transaction (as defined in Section 5.02) that is more favorable to
the stockholders of the Company than the Merger and that failing to take such
action would be reasonably likely to constitute a breach of the Board's
fiduciary duties, having received prior to such determination (x) the written
advice of outside legal counsel of the Company that failing to take such action
would be reasonably likely to constitute a breach of the fiduciary duties of
such Board of Directors and (y) the written advice of Xxxxxx Xxxxxxx & Co.
Incorporated, or another financial advisor of nationally recognized reputation,
that the Superior Proposal would be reasonably likely to provide greater value
to the Company and its stockholders than the Merger.
Section 1.06. Filing of Certificate of Merger. At the Closing (as defined
in Section 9.01), Parent, Subco and the Company shall cause a Certificate of
Merger to be executed and filed with the Secretary of State of the State of
Delaware, as provided in the Delaware Act, and shall take any and all other
lawful actions and do any and all other lawful things to cause the Merger to
become effective.
Section 1.07. Further Assurances. If, at any time after the Effective Time,
the Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, obligation, title or interest in, to or under any of the
rights, properties or assets of either of the Constituent Corporations acquired
or to be acquired by the Surviving Corporation as a result of, or in connection
with, the Merger or otherwise to carry out this Agreement, the officers and
directors of the Surviving Corporation shall be authorized to execute and
deliver, in the name and on behalf of each of the Constituent Corporations or
otherwise, all such deeds, bills of sale, assignments and assurances and
-4-
to take and do, in the name and on behalf of each of the Constituent
Corporations or otherwise, all such other actions and things as may be necessary
or desirable to vest, perfect or confirm any and all right, obligation, title
and interest in, to and under such rights, properties or assets in the Surviving
Corporation or otherwise to carry out this Agreement.
ARTICLE II
CONVERSION OF SHARES
Section 2.01. Shares. (a) Each share of common stock, par value $.01 per
share, of the Company (the "Company Common Stock") issued and outstanding
immediately prior to the Effective Time (except for shares, if any, owned by the
Company as treasury stock or owned by the Subsidiary (as defined in Section
4.01) or owned by Parent or the Parent Subsidiaries (as defined in Section 3.01)
shall, by virtue of the Merger and without any action on the part of the holder
thereof, be converted into the right to receive 0.5100 of an American Depositary
Share ("Parent ADSs"), evidenced by American Depositary Receipts ("ADRs") (the
"Exchange Ratio"), each Parent ADS representing one Ordinary Share ("Parent
Ordinary Shares"), par value 4 Irish xxxxx, of Parent.
The Parent ADSs to be delivered in exchange for shares of Company Common
Stock pursuant to this Section 2.01(a) are hereinafter sometimes called the
"Closing Consideration." In the event of any change in Parent ADSs or Parent
Ordinary Shares or Company Common Stock by reason of any stock split,
readjustment, stock dividend, exchange of shares, reclassification,
recapitalization or otherwise, the Exchange Ratio shall be correspondingly
adjusted.
(b) At the Effective Time all shares of Company Common Stock, by virtue of
the Merger and without any action on the part of the holders thereof, shall no
longer be outstanding and shall be canceled and retired and shall cease to
exist, and each holder of a Certificate (as defined in Section 2.03) shall
thereafter cease to have any rights with respect to the number of shares of
Company Common Stock evidenced by such Certificate, except the right to receive
the Closing Consideration for such shares of Company Common Stock specified in
the foregoing clause (a) upon the surrender of such Certificate in accordance
with Section 2.03.
-5-
Section 2.02. Subco Common Stock. All shares of common stock, par value
$.01 per share, of Subco issued and outstanding immediately prior to the
Effective Time shall, by virtue of the Merger and without any action on the part
of the holder thereof, be converted into such number of newly issued shares of
common stock of the Surviving Corporation as shall equal the sum of the number
of shares of Company Common Stock outstanding immediately prior to the Effective
Time and the number of shares of Company Common Stock underlying options,
warrants, calls, subscriptions or other rights or other agreements or
commitments of the Company assumed by Parent.
Section 2.03. Exchange of Certificates. (a) Exchange Agent. From and after
the Effective Time, (i) Parent shall make available to a bank or trust company
designated by Parent who shall be the depositary under Parent's ADR program (the
"Exchange Agent"), for the benefit of the holders of shares of Company Common
Stock, for exchange in accordance with this Article II through the Exchange
Agent, certificates evidencing a sufficient number of Parent Ordinary Shares as
would permit the Exchange Agent to issue such number of Parent ADSs issuable to
holders of Company Common Stock pursuant to Section 2.01 (such certificates for
Parent ADSs, together with any dividends or distributions with respect thereto,
being hereinafter referred to as the "Exchange Fund"). As promptly as
practicable after the Effective Time, Parent shall cause the Exchange Agent to
deliver the Parent ADSs contemplated to be issued pursuant to Section 2.01 out
of the Exchange Fund in accordance with the procedures specified in this Section
2.03. Except as contemplated by Section 2.03(f) hereof, the Exchange Fund shall
not be used for any other purpose.
(b) Exchange Procedures. As promptly as practicable after the Effective
Time, Parent shall cause the Exchange Agent to mail to each record holder of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of Company Common Stock (the "Certificates") (i)
a letter of transmittal (which shall be in customary form and shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon proper delivery of the Certificates to the Exchange Agent) and
(ii) instructions for use in effecting the surrender of the Certificates in
exchange for the Merger Consideration.
(c) Exchange of Certificates. Upon surrender to the Exchange Agent of a
Certificate for cancellation, together with such letter of transmittal, duly
executed and completed in accordance with the instructions thereto, and such
other docu-
-6-
ments as may be reasonably required pursuant to such instructions, the holder of
such Certificate shall be entitled to receive in exchange therefor a certificate
representing that number of whole shares of Parent ADSs, if any, to which such
holder is entitled pursuant to this Article II (including any cash in lieu of
any fractional Parent ADSs to which such holder is entitled pursuant to Section
2.05 and any dividends or other distributions to which such holder is entitled
pursuant to Section 2.03(d) (together, the "Additional Payments")), and the
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of shares of Company Common Stock which is not registered
in the transfer records of the Company, the applicable Closing Consideration and
Additional Payments, if any, may be issued to a transferee if the Certificate
representing such shares of Company Common Stock is presented to the Exchange
Agent, accompanied by all documents required to evidence and effect such
transfer and by evidence that any applicable stock transfer taxes have been
paid. Until surrendered as contemplated by this Section 2.03, each Certificate
shall be deemed at all times after the Effective Time to represent only the
right to receive upon such surrender the applicable Closing Consideration with
respect to the shares of Company Common Stock formerly represented thereby and
Additional Payments, if any.
(d) Distributions with Respect to Unsurrendered Certificates. No dividends
or other distributions declared or made after the Effective Time with respect to
Parent ADSs (or underlying Parent Ordinary Shares) with a record date after the
Effective Time shall be paid to the holder of any unsurrendered Certificate with
respect to the Parent ADSs the holder thereof entitled to receive upon surrender
thereof, and no cash payment in lieu of any fractional shares shall be paid to
any such holder pursuant to Section 2.05, until the holder of such Certificate
shall surrender such Certificate. Subject to the effect of escheat, tax or other
applicable laws, following surrender of any such Certificate, there shall be
paid to the holder of the certificates representing whole shares of Parent ADSs
issued in exchange therefor, without interest, (i) promptly, the amount of any
cash payable with respect to a fractional Parent ADS to which such holder is
entitled pursuant to Section 2.05 and the amount of dividends or other
distributions with a record date after the Effective Time and theretofore paid
with respect to such whole shares of Parent ADSs, and (ii) at the appropriate
payment date, the amount of dividends or other distributions, with a record date
after the Effective Time but prior to surrender and a payment date occurring
after surrender, payable with respect to such whole Parent ADSs. Af-
-7-
ter the Effective Time, each outstanding Certificate which therefore represented
shares of Company Common Stock shall, until surrendered for exchange in
accordance with this Section 2.03, be deemed for all purposes to evidence
ownership of the number of shares of Parent ADSs into which the shares of
Company Common Stock (which, prior to the Effective Time, were represented
thereby) shall have been so converted.
(e) No Further Rights in Company Common Stock. At the Effective Time all
outstanding shares of Company Common Stock, by virtue of the Merger and without
any action on the part of the holders thereof, shall no longer be outstanding
and shall be canceled and retired and shall cease to exist, and each holder of a
certificate representing any such shares of Company Common Stock shall
thereafter cease to have any rights with respect to such shares of Company
Common Stock, except the right to receive Closing Consideration for such shares
of Company Common Stock. All Parent ADSs issued upon conversion of the shares of
Company Common Stock in accordance with the terms hereof (including any cash
paid pursuant to Section 2.03(d)or 2.05) shall be deemed to have been issued in
full satisfaction of all rights pertaining to such shares of Company Common
Stock.
(f) Termination of Exchange Fund. Any portion of the Exchange Fund which
remains undistributed to the holders of Company Common Stock for six months
after the Effective Time shall be delivered to Parent, upon demand, and any
holders of Company Common Stock who have not theretofore complied with this
Article II shall thereafter look only to Parent for the applicable Merger
Consideration and any Additional Payments to which they are entitled. Any
portion of the Exchange Fund remaining unclaimed by holders of shares of Company
Common Stock as of a date which is immediately prior to such time as such
amounts would otherwise escheat to or become property of any government entity
shall, to the extent permitted by applicable law, become the property of Parent
free and clear of any claims or interest of any person previously entitled
thereto.
(g) No Liability. None of the Exchange Agent, Parent or the Surviving
Corporation shall be liable to any holder of Certificates for any Parent ADSs
(or dividends or distributions with respect thereto), or cash delivered to a
public official pursuant to any abandoned property, escheat or similar law.
(h) Lost Certificates. If any Certificate shall have been lost, stolen or
destroyed, upon the making of an af-
-8-
fidavit of that fact by the person claiming such Certificate to be lost, stolen
or destroyed and, if required by the Surviving Corporation or Parent, the
posting by such person of a bond, in such reasonable amount as the Surviving
Corporation or Parent may direct, as indemnity against any claim that may be
made against it with respect to such Certificate, the Exchange Agent will issue
in exchange for such lost, stolen or destroyed Certificate the applicable
Closing Consideration and Additional Payments, if any.
Section 2.04. Effect on Company Options and Warrants. (a) As of the
Effective Time, by virtue of the Merger and without any action on the part of
the holders thereof, Parent shall assume all of the obligations of the Company
under its 1988 Employee and Consultant Stock Option Plan and its 1998 Employee,
Consultant and Director Stock Option Plan in the form adopted by the Board of
Directors of the Company in February 1998 (together, the "Company Option
Plans"), with the effect that each option to purchase shares of Company Common
Stock that is outstanding under the Company Option Plans immediately prior to
the Effective Time, whether or not then vested, shall be assumed by Parent in
such a manner that each such option shall be exercisable upon the same terms and
conditions as under the applicable Company Option Plan, except that (i) each
such option shall be exercisable for that number of Parent ADSs (rounded down to
the nearest whole share) equal to the number of shares of Company Common Stock
subject to such option multiplied by the Exchange Ratio and (ii) the option
price per share of Parent ADSs shall be an amount equal to the option price per
share of Company Common Stock subject to such option in effect immediately prior
to the Effective Time divided by the Exchange Ratio (rounded up to the nearest
whole cent) (the "Parent Exchange Options").
(b) Parent agrees to file with the Securities and Exchange Commission (the
"SEC") at the Effective Time a Registration Statement on Form S-8 or other
appropriate form under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the "Securities Act"), to register Parent
ADSs issuable upon exercise of the Parent Exchange Options and use its
reasonable efforts to cause such Registration Statement to remain effective
until the exercise or expiration of such options.
(c) As of the Effective Time, by virtue of the Merger and without any
action on the part of the holders thereof, Parent shall assume all of the
obligations of the Company under (i) the Warrant "A", dated as of August 3,
1995, to
-9-
purchase 169,646 shares of Company Common Stock (the "A Warrant") and (ii) the
Warrant "B", dated as of October 16, 1995, to purchase 500,000 shares of Company
Common Stock (the "B Warrant" and, together with the A Warrant, the "Company
Warrants"), in each case, with the effect that each Company Warrant will be
exercisable for Parent ADSs upon the terms and subject to the conditions set
forth in the A Warrant and the B Warrant, as the case may be.
Section 2.05. Fractional Shares. Notwithstanding any other provision of
this Agreement, each holder of shares of Company Common Stock who, upon
surrender of Certificates, would be entitled to receive a fractional Parent ADS
shall not be entitled to receive dividends on or vote such fractional share and
shall receive, in lieu of such fractional share, cash in an amount equal to such
fraction multiplied by the Market Value (as defined below). "Market Value" shall
mean, with respect to Parent ADSs issued, the mean between the high and low
prices of the Parent ADSs as reported on the New York Stock Exchange, Inc.
("NYSE") composite tape on the NYSE trading day immediately prior to the
Effective Time. The fractional share interests of each Company stockholder will
be aggregated, and no Company stockholder will receive cash in an amount equal
to or greater than the value of one full share of Parent ADSs. All references in
this Agreement to Parent ADSs to be issued as Closing Consideration shall be
deemed to include any cash in lieu of fractional shares payable pursuant to this
Section 2.05.
Section 2.06. No Appraisal Rights. In accordance with Section 262(b) of the
Delaware Act, no holder of shares of Company Common Stock shall be entitled to
appraisal rights.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF PARENT AND SUBCO
Except as disclosed in a separate disclosure schedule referring to the
Sections contained in this Agreement, which has been delivered by Parent to the
Company prior to the execution of this Agreement (the "Parent Disclosure
Statement") each of Parent and Subco jointly and severally represents and
warrants to the Company as follows:
Section 3.01. Organization, Etc. Each of Parent and its subsidiaries
(collectively, the "Parent Subsidiaries") is a
-10-
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization and has all requisite power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted. Each of Parent and the Parent Subsidiaries is duly
qualified as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of its properties owned, leased or
operated or the nature of its activities makes such qualification necessary,
except for failures to be so qualified or in good standing that would not,
individually or in the aggregate, have a material adverse effect on the general
affairs, management, business, operations, assets, condition (financial or
otherwise), results of operations or prospects of Parent and the Parent
Subsidiaries taken as a whole ("Parent Material Adverse Effect"). Neither Parent
nor Subco is in violation of any provision of its charter documents. Parent has
heretofore furnished to the Company accurate and complete copies of the charter
documents and bylaws, as currently in effect, of each of Parent and Subco. Subco
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. Parent owns directly all of the outstanding
capital stock of Subco.
Section 3.02. Board Recommendation. The Board of Directors of Parent has,
by a unanimous vote at a meeting of such Board duly held on April 24, 1998,
approved and adopted this Agreement, the Merger and the other transactions
contemplated hereby and determined that the Merger is fair to the holders of
Parent Ordinary Shares.
Section 3.03. Authority Relative to This Agreement. Each of Parent and
Subco has full corporate power and authority to execute and deliver this
Agreement and to consummate the Merger and the other transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
Merger and the other transactions contemplated hereby have been duly and validly
authorized by the Board of Directors of each of Parent and Subco and by Parent
as the sole stockholder of Subco and no other corporate proceedings on the part
of Parent or Subco are necessary to authorize this Agreement or to consummate
the Merger or the other transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by each of Parent and Subco and,
assuming the due authorization, execution and delivery hereof by the Company,
constitutes a valid and binding agreement of each of Parent and Subco,
enforceable against each of them in accordance with its terms, except to the
extent that its enforceability may be limited by applicable bankruptcy,
insolvency, reorganization,
-11-
moratorium or other laws affecting the enforcement of creditors' rights
generally or by general equitable principles.
Section 3.04. No Violations, Etc. (a) Assuming that all filings, permits,
authorizations, consents and approvals have been duly made or obtained as
contemplated by this Section 3.04, the execution and delivery of this Agreement
and the consummation by Parent and Subco of the Merger and the other
transactions contemplated hereby will not (i) violate any provision of the
charter, by-laws or other organizational documents of either Parent or Subco,
(ii) violate any statute, rule, regulation, order or decree of any public body
or authority by which Parent, Subco or any of their respective properties is
bound, or (iii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default under, any license,
franchise, permit, indenture, agreement or other instrument to which Parent or
Subco is a party, or by which Parent, Subco or any of their respective
properties is bound, excluding from the foregoing clauses (ii) and (iii),
violations, breaches and defaults that, individually or in the aggregate, would
not prevent or materially delay the ability of Parent or Subco to consummate the
Merger or the other transactions contemplated hereby or have a Parent Material
Adverse Effect on the general affairs, management, business, operations, assets,
condition (financial or otherwise), results of operations or prospects of the
Parent Subsidiaries.
(b) No filing or registration with, or authorization, consent or approval
of, or notification to, any governmental entity is required by Parent or Subco
in connection with the execution and delivery of this Agreement or the
consummation by Parent and Subco of the Merger and the other transactions
contemplated hereby, except (i) in connection with the applicable requirements
of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), (ii) in connection with the applicable requirements of the Mergers,
Take-overs and Monopolies (Control) Act, 1978 (as amended) of Ireland (the
"Irish Mergers Act"), (iii) in connection with the provisions of the Securities
Act, (iv) the filing of appropriate merger documents as required by the Delaware
Act, (v) the listing on the NYSE of the Parent ADSs to be issued in connection
with the Merger, (vi) the agreement of the Irish Stock Exchange and the London
Stock Exchange (subject to allotment) to admit to their respective Official
Lists the Parent Ordinary Shares to be represented by Parent ADSs constituting
the Closing Consideration, (vii) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
the corporation, takeover or blue sky laws of
-12-
various states, (viii) such authorizations, orders, consents, licenses,
confirmations, clearances, permissions and approvals as may be required in any
foreign jurisdiction for the purposes of applicable anti-trust, competition,
takeover or similar legislation and (ix) such other consents, orders,
authorizations, registrations, declarations and filings the failure of which to
be obtained or made, individually or in the aggregate, would not prevent or
materially delay the ability of Parent or Subco to consummate the Merger and the
other transactions contemplated hereby or have a Parent Material Adverse Effect.
Section 3.05. Finders or Brokers. Except for Xxxxxxx Sachs International,
neither Parent nor any Parent Subsidiary has employed any investment banker,
broker, finder or intermediary in connection with the transactions contemplated
hereby who might be entitled to a fee or any commission the receipt of which is
conditioned upon consummation of the Merger.
Section 3.06. Registration Statement; Company Proxy Statement. None of the
information provided by either Parent or Subco for inclusion or incorporation by
reference in (i) the registration statement registering under the Securities Act
the Parent ADSs to be issued at the Effective Time (such registration statement,
as amended by any amendments thereto, being referred to herein as the
"Registration Statement") or (ii) the Company Proxy Statement shall, in the case
of the Registration Statement, at (i) the time the Registration Statement
becomes effective and (ii) the Effective Time, and, in the case of the Company
Proxy Statement, on the date the Company Proxy Statement is first mailed to
stockholders, at the time of the Special Meeting and at the Effective Time,
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading. If, at any time prior to the Effective Time, any event
with respect to Parent or Subco shall occur that is required to be described in
the Registration Statement or Company Proxy Statement, such event shall be so
described, and an amendment or supplement shall be promptly filed with the SEC
and, as required by law, disseminated to the stockholders of the Company. The
Registration Statement and Company Proxy Statement will (with respect to Parent
and Subco) comply as to form in all material respects with the applicable
provisions of the Securities Act and the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder (the "Exchange
Act"), as the case may be.
Section 3.07. SEC Filings. (a) Parent has filed with the SEC its Annual
Report on Form 20-F for the year ended
-13-
December 31, 1996 and its reports on Form 6-K dated April 28, 1997, August 21,
1997, October 31, 1997 and February 9, 1998 (collectively, the "Parent SEC
Reports"), each of which complied as to form when filed in all material respects
with the applicable provisions of the Exchange Act. As of their respective
dates, the Parent SEC Reports (including all exhibits and schedules thereto and
documents incorporated by reference therein) did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) Parent will deliver to the Company as soon as they become available
true and complete copies of any Annual Report on Form 20-F and any report on
Form 6-K relating to Parent's results for a fiscal quarter filed by it with the
SEC, in each case subsequent to the date hereof and prior to the Effective Time.
The audited consolidated financial statements and unaudited consolidated interim
financial statements of the Parent and the Parent Subsidiaries to be included or
incorporated by reference in such reports will be prepared in accordance with
generally accepted accounting principles in the United States ("U.S. GAAP")
applied on a consistent basis throughout the periods involved (except as may be
indicated in the notes thereto) and will fairly present in all material respects
the consolidated financial position of the Parent and the Parent Subsidiaries as
of the dates thereof and the consolidated results of operations and consolidated
cash flows for the periods then ended (subject, in the case of any unaudited
interim financial statements, to normal year-end adjustments and to the extent
they may not include footnotes or may be condensed or summary statements).
Section 3.08. Financial Statements. The audited consolidated financial
statements and unaudited consolidated interim financial statements of Parent and
the Parent Subsidiaries included or incorporated by reference in the Parent SEC
Reports have been prepared in accordance U.S. GAAP, in each case applied on a
consistent basis throughout the periods indicated (except as may be indicated in
the notes thereto), and fairly present in all material respects the consolidated
financial position of Parent and the Parent Subsidiaries as of the date thereof
and the consolidated results of operations and consolidated cash flows for the
periods then ended (subject, in the case of any unaudited interim financial
statements, to normal year-end adjustments and to the extent they may not
include footnotes or may be condensed or summary statements) and such
-14-
audited consolidated financial statements have been certified as such (without
exception) by Parent's independent accountants.
Section 3.09. Absence of Undisclosed Liabilities. At December 31, 1996,
neither Parent nor any of the Parent Subsidiaries has any liabilities or
obligations of any nature, whether absolute, accrued, unmatured, contingent or
otherwise, or any unsatisfied judgments or any unusual or extraordinary
commitments, except the liabilities recorded on the Consolidated Balance Sheet
as at December 31, 1996 of Parent and the Parent Subsidiaries contained in its
audited financial statements for the year ended December 31, 1996 and/or
reflected in the notes thereto, and except for liabilities or obligations that
would not, individually or in the aggregate, have a Parent Material Adverse
Effect.
Section 3.10. Absence of Changes or Events. Since December 31, 1996, except
as set forth in the Parent SEC Reports and in the periodic reports and documents
required under the Exchange Act to have been filed by Parent with the SEC since
December 31, 1996 and prior to the date of this Agreement, including all
exhibits filed therewith, there has not been any event or events having, or
reasonably likely to have, individually or in the aggregate, a Parent Material
Adverse Effect.
Section 3.11. Capitalization. The authorized capital stock of Parent
consists of 150,000,000 Parent Ordinary Shares, 1,000 executive shares, par
value 1 Irish pound per share ("Parent Executive Shares") and 25,000 'B'
executive shares, par value 4 Irish xxxxx per share ("Parent 'B' Executive
Shares"). As of March 31, 1998, there were 111,741,005 Parent Ordinary Shares
issued and outstanding, no Parent Ordinary Shares held in Parent's treasury,
1,000 Parent Executive Shares outstanding and 21,375 Parent 'B' Executive Shares
outstanding. As of such date there were (i) 12,829,083 Parent Ordinary Shares
reserved for issuance upon the exercise of outstanding options under the stock
option plans of Parent (the "Parent Plans"), (ii) 4,574,887 Parent Ordinary
Shares reserved for issuance upon the exchange of the Exchangeable Notes due
2005 (the "Exchangeable Notes") issued by Athena Neurosciences, Inc., a
wholly-owned subsidiary of Parent, and guaranteed by Parent, and (iii)
13,913,288 Parent Ordinary Shares reserved for issuance upon the exercise of the
outstanding warrants (the "Parent Warrants"). Except for the Exchangeable Notes,
the Parent Warrants and the options granted under the Parent Plans, there were
not as of such date any existing options, warrants,
-15-
calls, subscriptions, or other rights or other agreements or commitments
obligating Parent to issue, transfer or sell any shares of its capital stock or
any other securities convertible into or evidencing the right to subscribe for
any such shares. All issued and outstanding Parent Ordinary Shares are, and all
Parent ADSs to be issued at the Effective Time shall be, when issued, duly
authorized and validly issued, fully paid, non-assessable and free of preemptive
rights with respect thereto. The Parent ADSs to be issued at the Effective Time
will, when issued, be registered under the Securities Act and the Exchange Act
and registered or exempt from registration under applicable Blue Sky laws.
Section 3.12. Litigation. There is no (i) claim, action, suit or proceeding
pending or, to the best knowledge of Parent, threatened against Parent or any of
the Parent Subsidiaries before any court or governmental or regulatory authority
or body or arbitration tribunal or (ii) outstanding judgment, order, writ,
injunction or decree, or application, request or motion therefor, of any court,
governmental agency or arbitration tribunal in a proceeding to which Parent, any
Parent Subsidiary or any of their respective assets was or is a party except, in
the case of clauses (i) and (ii) above, such as would not, individually or in
the aggregate, either impair Parent's ability to consummate the Merger or the
other transactions contemplated hereby or have a Parent Material Adverse Effect.
Section 3.13. Tax Treatment; Officer's Certificate as to Tax Matters.
Neither Parent nor, to Parent's knowledge, any of its affiliates has taken,
agreed to take, or will take any action that would prevent the Merger from
constituting a transaction qualifying under Section 368(a) of the Code.
Section 3.14. Taxes. As of December 31, 1997, Parent was not a passive
foreign investment company, as defined in Section 1297(a) of the Code, and, to
the best of Parent's knowledge, there is no reasonable basis to believe that it
may become one in the foreseeable future.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as disclosed in a separate disclosure schedule referring to the
Sections contained in this Agreement, which has been delivered by the Company to
Parent prior to the execution of this Agreement (the "Company Disclosure
Statement"),
-16-
the Company represents and warrants to Parent and Subco as follows:
Section 4.01. Organization, Etc. Each of the Company and Neurex
International Company Limited, a corporation organized under the laws of
Liechtenstein (the "Subsidiary"), is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization and has all requisite power and authority to own, lease and operate
its properties and to carry on its business as now being conducted. Each of the
Company and its Subsidiary is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
the properties owned, leased or operated or the nature of its activities makes
such qualification necessary, except for failures to be so qualified or in good
standing that would not, individually or in the aggregate, have a material
adverse effect on the general affairs, management, business, operations, assets,
condition (financial or otherwise), results of operations or prospects of the
Company and its Subsidiary taken as a whole (a "Material Adverse Effect").
Neither the Company nor its Subsidiary is in violation of any of the provisions
of its Amended and Restated Certificate of Incorporation (or other applicable
charter document) or by-laws. The Company has heretofore furnished to Parent
accurate and complete copies of the Amended and Restated Certificate of
Incorporation (or other applicable charter document) and by-laws, as currently
in effect, of each of the Company and its Subsidiary.
Section 4.02. Authority Relative to This Agreement. The Company has full
corporate power and authority to execute and deliver this Agreement and to
consummate the Merger and the other transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the Merger and
the other transactions contemplated hereby have been duly and validly authorized
by the Board of Directors of the Company and no other corporate proceedings on
the part of the Company are necessary to authorize this Agreement or to
consummate the Merger and the other transactions contemplated hereby (other
than, with respect to the Merger, the approval of a majority of the outstanding
shares of Company Common Stock at the Special Meeting or any adjournment thereof
as required by the Delaware Act). This Agreement has been duly and validly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery hereof by Parent and Subco, constitutes a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except to the extent that its enforceability may be limited by
applicable
-17-
bankruptcy, insolvency, reorganization, moratorium or other laws affecting the
enforcement of creditors' rights generally or by general equitable principles.
Section 4.03. No Violations, Etc. Except for the filings of the Certificate
of Merger and the Company Proxy Statement under and as contemplated by the
Exchange Act and the filings required under and in compliance with the HSR Act,
no filing with, notification to and no permit, authorization, consent or
approval of, any public body is necessary on the part of the Company for the
consummation by the Company of the Merger, the other transactions contemplated
hereby or the exercise by Parent and the Surviving Corporation of full rights to
own and operate the business of the Company and its Subsidiary. Neither the
execution and delivery of this Agreement nor the consummation of the Merger or
the other transactions contemplated hereby nor compliance by the Company with
any of the provisions hereof nor, to the Knowledge of the Company, the exercise
by Parent and the Surviving Corporation of full rights to own and operate the
business of the Company and its Subsidiary will (i) subject to obtaining the
approval of a majority of the outstanding shares of Company Common Stock at the
Special Meeting or any adjournment thereof as required by the Delaware Act,
conflict with or result in any breach of any provision of the Amended and
Restated Certificate of Incorporation (or other comparable charter documents) or
by-laws of the Company or its Subsidiary, (ii) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Company, its
Subsidiary or any of their respective properties or assets or (iii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation,
acceleration, redemption or repurchase) under, any of the terms, conditions or
provisions of any (x) note, bond, mortgage, indenture or deed of trust or (y)
license, lease, agreement or other instrument or obligation to which the Company
or its Subsidiary is a party or by which either of them or any of their
properties or assets may be bound, excluding from the foregoing clauses (ii) and
(iii), violations, breaches or defaults that, individually or in the aggregate,
would not either prevent or materially delay the Company's ability to consummate
the Merger or the other transactions contemplated hereby or have a Material
Adverse Effect.
Section 4.04. Fairness Opinion. The Company has received the opinion of
Xxxxxx Xxxxxxx & Co. Incorporated to the effect that as of the date hereof the
Exchange Ratio is fair to the Company's stockholders from a financial point of
view.
-18-
Section 4.05. Board Recommendation. The Board of Directors of the Company
has, by a unanimous vote at a meeting of such Board duly held on April 28, 1998,
approved and adopted this Agreement, the Merger and the other transactions
contemplated hereby, and determined that this Agreement, the Merger and the
other transactions contemplated hereby, taken together, are fair to and in the
best interest of the stockholders of the Company, and resolved to recommend that
the holders of shares of Company Common Stock approve and adopt this Agreement,
the Merger and the other transactions contemplated hereby.
Section 4.06. State Antitakeover Statutes. The Company has granted all
approvals and taken all other steps necessary to exempt the Merger and the other
transactions contemplated hereby from the requirements and provisions of ss.203
of the Delaware Act and any other state antitakeover statute or regulation such
that none of the provisions of such ss.203 or any other "business combination,"
"moratorium," "control share," or other state antitakeover statute or regulation
(x) prohibits or restricts the Company's ability to perform its obligations
under this Agreement or its ability to consummate the Merger and the other
transactions contemplated hereby, (y) would have the effect of invalidating or
voiding this Agreement or any provision hereof or (z) would subject Parent or
Subco to any material impediment or condition in connection with the exercise of
any of their respective rights under this Agreement or their ownership and
operation of the business of the Company and its Subsidiary.
Section 4.07. Affiliates. Set forth in Section 4.07 of the Company
Disclosure Statement is a list identifying all persons who may be deemed to be
"affiliates" of the Company for purposes of Rule 145 under the Securities Act
("Affiliates") and, promptly after the execution of this Agreement, the Company
will use its best efforts to deliver to Parent the written agreement of each
such person, substantially in the form of Exhibit A hereto.
Section 4.08. Finders or Brokers. Except for Xxxxxx Xxxxxxx & Co.
Incorporated, whose fees have been disclosed to Parent, neither the Company nor
its Subsidiary has employed any investment banker, broker, finder or
intermediary in connection with the transactions contemplated hereby who might
be entitled to a fee or any commission the receipt of which is conditioned upon
consummation of the Merger.
Section 4.09. Registration Statement; Company Proxy Statement. Except for
information concerning Parent that has
-19-
been provided by Parent for inclusion or incorporation by reference in the
Company Proxy Statement, such information, at the date the Company Proxy
Statement is first mailed to stockholders, at the time of the Special Meeting
and at the Effective Time, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading. If, at any
time prior to the Effective Time, any event with respect to the Company or its
Subsidiary shall occur that is required to be described in the Company Proxy
Statement, such event shall be so described, and an amendment or supplement
shall be promptly filed with the SEC and, as required by law, disseminated to
the stockholders of the Company. The Company Proxy Statement will comply as to
form in all material respects with the applicable provisions of the Securities
Act and Exchange Act, as the case may be.
Section 4.10. Capitalization. The authorized capital stock of the Company
consists of 45,000,000 shares of Company Common Stock and 15,000,000 shares of
Convertible Preferred Stock, par value $.01 per share (the "Company Preferred
Stock"). No shares of Company Preferred Stock are outstanding. As of December
31, 1997, there were 22,239,267 shares of Company Common Stock outstanding and
no treasury shares. Set forth in Section 4.10 of the Company Disclosure
Statement is a list identifying and describing the number of shares of Company
Common Stock to be received upon exercise or conversion, and the exercise or
conversion price, of each option, warrant and convertible or exchangeable note
outstanding on the date hereof (the "Company Common Stock Equivalents") and the
date of grant or issuance, as the case may be, of each such option, warrant or
convertible or exchangeable note. Except for the Company Common Stock
Equivalents, there are no existing options, warrants, calls, subscriptions or
other rights, or other agreements or commitments, obligating the Company or its
Subsidiary to issue, transfer or sell any shares of capital stock of the Company
or its Subsidiary or any other securities convertible into or evidencing the
right to subscribe for any such shares. There are no outstanding stock
appreciation rights with respect to the capital stock of the Company or its
Subsidiary. All issued and outstanding shares of Company Common Stock are duly
authorized and validly issued, fully paid, non-assessable and free of preemptive
rights with respect thereto.
Section 4.11. SEC Filings. (a) The Company has filed with the SEC all
required forms, reports, registration statements and documents required to be
filed by it with the SEC since December 31, 1997 (collectively, the "Company SEC
Re-
-20-
ports"), all of which complied as to form when filed in all material respects
with the applicable provisions of the Securities Act and the Exchange Act, as
the case may be. As of their respective dates, the Company SEC Reports
(including all exhibits and schedules thereto and documents incorporated by
reference therein) did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(b) The Company will deliver to Parent as soon as they become available
true and complete copies of any report, registration statement or statement
mailed by it to its securityholders generally or filed by it with the SEC, in
each case subsequent to the date hereof and prior to the Effective Time. As of
their respective dates, such reports and statements (excluding any information
therein provided by Parent or Subco, as to which the Company makes no
representation) will not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they are made, not
misleading and will comply in all material respects with all applicable
requirements of law. The audited consolidated financial statements and unaudited
consolidated interim financial statements of the Company and its Subsidiary to
be included or incorporated by reference in such reports and statements will be
prepared in accordance with U.S. GAAP applied on a consistent basis throughout
the periods involved (except as may be indicated in the notes thereto) and will
fairly present in all material respects the consolidated financial position of
the Company and its Subsidiary as of the dates thereof and the consolidated
results of operations and consolidated cash flows for the periods then ended
(subject, in the case of any unaudited interim financial statements, to normal
year-end adjustments and to the extent they may not include footnotes or may be
condensed or summary statements).
Section 4.12. Financial Statements. The audited consolidated financial
statements and unaudited consolidated interim financial statements of the
Company and its Subsidiary included or incorporated by reference in any of the
Company SEC Reports have been prepared in accordance with U.S. GAAP applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto), and fairly present in all material respects the consolidated
financial position of the Company and its Subsidiary as of the dates thereof and
the consolidated results of operations and consolidated cash flows
-21-
for the periods then ended (subject, in the case of any unaudited interim
financial statements, to normal year-end adjustments and to the extent they may
not include footnotes or may be condensed or summary statements) and such
audited financial statements are accompanied by an unqualified opinion thereon
by the Company's independent auditors.
Section 4.13. Absence of Undisclosed Liabilities. At December 31, 1997,
neither the Company nor its Subsidiary has any liabilities or obligations of any
nature, whether absolute, accrued, unmatured, contingent or otherwise, or any
unsatisfied judgments or any unusual or extraordinary commitments, except the
liabilities recorded on the Consolidated Balance Sheet as of December 31, 1997
of the Company and its Subsidiary (the "1997 Balance Sheet") and/or reflected in
the notes thereto, and except for liabilities or obligations that would not,
individually or in the aggregate, have a Material Adverse Effect.
Section 4.14. Absence of Changes or Events. Since December 31, 1997, the
Company and its Subsidiary have not, directly or indirectly:
(a) purchased, otherwise acquired, or agreed to purchase or otherwise
acquire, any shares of capital stock of the Company or its Subsidiary, or
declared, set aside or paid any dividend or otherwise made a distribution
(whether in cash, stock or property or any combination thereof) in respect
of their capital stock;
(b) authorized for issuance, issued, sold, delivered, granted or
issued any options, warrants, calls, subscriptions or other rights for, or
otherwise agreed or committed to issue, sell or deliver, any shares of any
class of capital stock of the Company or its Subsidiary or any securities
convertible into or exchangeable or exercisable for shares of any class of
capital stock of the Company or its Subsidiary, other than pursuant to and
in accordance with and subject to the limitations set forth in (i) the
Company Option Plans, (ii) the Company Purchase Plans (as defined below in
Section 5.12) or (iii) the Company Common Stock Equivalents;
(c) (i) except in the ordinary course of business and consistent with
past practice, created or incurred any material indebtedness for borrowed
money, (ii) assumed, guaranteed, endorsed or otherwise as an accommodation
become liable or responsible for the obligations of any
-22-
other individual, firm or corporation any of which obligations would be
material to the Company and its Subsidiary taken as a whole, (iii) made any
material loans, advances or capital contributions to or material
investments in any other individual, firm or corporation, (iv) entered into
any commitment or transaction material to the Company and its Subsidiary
taken as a whole, (v) amended or supplemented any material contract,
agreement, commitment or other instrument in existence on or prior to
December 31, 1997 or (vi) incurred any liabilities, except for liabilities
that, individually or in the aggregate, would not have a Material Adverse
Effect;
(d) instituted any change in their accounting methods, principles or
practices;
(e) revalued any of their respective assets, including, without
limitation, writing down the value of inventory or writing off notes or
accounts receivables, except for amounts previously reserved as reflected
in the 1997 Balance Sheet;
(f) suffered any damage, destruction or loss, whether covered by
insurance or not, except for such as would not, individually or in the
aggregate, have a Material Adverse Effect;
(g) suffered any event or events (i) having, or reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect,
excluding any such event or events relating solely to Ziconotide and (ii)
that would, or would reasonably be likely to, jeopardize the final approval
by the FDA for sale in the United States of Ziconotide for the treatment of
pain by September 30, 2000 (a "Ziconotide Event");
(h) (i) increased in any manner the compensation of any of their
respective directors or officers or, except in the ordinary course of
business and consistent with past practice, their respective employees;
(ii) paid or agreed to pay any pension, retirement allowance or other
employee benefit, or entered into any contract, agreement or understanding
with any of their respective past or present employees relating to any such
pension, retirement allowance or other employee benefit, except, in each
case, as required under agreements, plans or arrangements existing at
December 31, 1997; (iii) granted any severance or termination pay to, or
entered into any employment con-
-23-
sulting or severance agreement with, any person; (iv) entered into any
contract, agreement or understanding with any of the Company's or its
Subsidiary's past or present employees; (v) except in the ordinary course
of business and consistent with past practice, or as may be required to
comply with applicable law, become obligated under any new pension plan,
welfare plan, multiemployer plan, employee benefit plan, benefit
arrangement, or similar plan or arrangement that was not in existence on or
prior to December 31, 1997, including any bonus, incentive, deferred
compensation, stock purchase, stock option, stock appreciation right, group
insurance, severance pay, retirement or other benefit plan, contract,
agreement or understanding, or amended any such plans, contracts,
agreements or understandings in existence at or prior to December 31, 1997;
or (vi) sold, transferred, leased, licensed, pledged, mortgaged, or
otherwise disposed of, or encumbered, or agreed to sell, transfer, lease,
license, pledge, mortgage or otherwise dispose of or encumber, any material
properties, real, personal or mixed; and
(i) agreed to (i) do any of the things described in the preceding
clauses (a) through (h) other than as expressly contemplated or provided
for in this Agreement or (ii) take, whether in writing or otherwise, any
action that, if taken prior to the date of this Agreement, would have made
any representation or warranty in this Article IV untrue or incorrect.
Section 4.15. Capital Stock of Subsidiary. The Company is directly or
indirectly the record and beneficial owner (including all such qualifying
shares) of all of the outstanding shares of capital stock of its Subsidiary.
There are no proxies with respect to such shares, and there are not any existing
options, warrants, calls, subscriptions, or other rights or other agreements or
commitments obligating the Company or its Subsidiary to issue, transfer or sell
any shares of capital stock of the Subsidiary or any other securities
convertible into or evidencing the right to subscribe for any such shares. All
of such shares so owned by the Company are duly authorized and validly issued,
fully paid, nonassessable and free of preemptive rights with respect thereto and
are owned by the Company free and clear of any claim, lien or encumbrance of any
kind with respect thereto. The Company does not, directly or indirectly, own any
interest in any corporation, partnership, joint venture or other business
association or entity.
-24-
Section 4.16. Litigation. There is no (i) claim, action, suit or proceeding
pending or, the Knowledge of the Company, threatened against the Company or its
Subsidiary before any court or governmental or regulatory authority or body or
arbitration tribunal or (ii) outstanding judgment, order, writ, injunction or
decree of any court, governmental agency or arbitration tribunal in a proceeding
to which the Company, its Subsidiary or any of their respective assets was or is
a party except, in the case of clauses (i) and (ii) above, such as would not,
individually or in the aggregate, prevent or materially delay the Company's
ability to consummate the Merger or the other transactions contemplated hereby
or have a Material Adverse Effect.
Section 4.17. Insurance. The Company has heretofore furnished to Parent a
list identifying and describing all insurance policies in force on the date
hereof covering the businesses, properties and assets of the Company and its
Subsidiary, the premiums and coverages of such policies and all claims against
such policies. All such policies are currently in effect and true and complete
copies of all such policies have been made available to Parent. The Company has
not received notice of the cancellation of any of such insurance in effect on
the date of this Agreement.
Section 4.18. Contracts and Commitments. (a) Neither the Company nor its
Subsidiary is a party to any existing contract, obligation or commitment of any
type in any of the following categories:
(i) any contract that materially limits or restricts where either of
the Company or its Subsidiary may conduct its business or the type or line
of business that the Company or its Subsidiary may engage in;
(ii) any material contract containing any agreement with respect to a
change of control of the Company or its Subsidiary; and
(iii) any hedging, option, derivative or other similar transaction.
(b) Each material contract to which the Company or its Subsidiary is a
party or by which either of them or any of their properties or assets is bound
is valid and binding upon the Company and/or its Subsidiary, as the case may be
(and, to the Company's Knowledge, on all other parties thereto), in accordance
with its terms and is in full force and effect; there
-25-
is no material breach or violation of or default by the Company or its
Subsidiary (or, to the Company's Knowledge, by the other parties thereto) under
any such material contract, whether or not such breach, violation or default has
been waived; and no event has occurred with respect to the Company or its
Subsidiary which, with notice or lapse of time or both, would constitute a
material breach, violation or default, or give rise to the right of termination,
cancellation, foreclosure, imposition of a lien, prepayment or acceleration
under any such material contract.
Section 4.19. Labor Matters; Employment and Labor Contracts. (a) Neither
the Company nor its Subsidiary is a party to any union contract or other
collective bargaining agreement. Each of the Company and its Subsidiary is in
compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, except for
those failures to comply that, individually or in the aggregate, would not have
a Material Adverse Effect. There is no labor strike, slowdown or stoppage
pending (or any labor strike or stoppage threatened) against or affecting the
Company or its Subsidiary. No petition for certification has been filed and is
pending before the National Labor Relations Board with respect to any employees
of the Company or its Subsidiary who are not currently organized.
(b) Neither the Company nor its Subsidiary is a party to any employment,
management services, consultation or other contract or agreement with any past
or present officer, director or employee or, to the best of the Company's
Knowledge, any entity affiliated with any past or present officer, director or
employee, which contract or agreement is required to be described under Item 404
of Regulation S-K of the SEC.
Section 4.20. Compliance with Laws. Neither the Company nor its Subsidiary
has violated or failed to comply with any statute, law, ordinance, regulation,
rule or order of any foreign, federal, state or local government or any other
governmental department or agency, or any judgment, decree or order of any
court, applicable to its business or operations, except where any such
violations or failures to comply would not, individually or in the aggregate,
have a Material Adverse Effect. Each of the Company and its Subsidiary have all
permits, licenses and franchises from governmental agencies required to conduct
its business as now being conducted, except for such permits, licenses and
franchises the absence of which would not, individually or in the aggregate,
have a Material Adverse Effect.
-26-
(a) To the Company's Knowledge, as to each product subject to FDA's
jurisdiction under the Federal Food, Drug and Cosmetic Act ("FDCA") and the
jurisdiction of the Drug Enforcement Agency ("DEA") under the Comprehensive Drug
Abuse Prevention and Control Act of 1970 ("CSA") that is manufactured, tested,
distributed, held, and/or marketed by the Company or its Subsidiary, such
product is being manufactured, held and distributed in substantial compliance
with all applicable requirements under the FDCA and the CSA including, but not
limited to, those relating to investigational use, premarket clearance, good
manufacturing practices, labeling, advertising, record keeping, filing of
reports, and security.
(b) The Company will promptly provide Parent with copies of any document
that is issued, prepared (by the Company or otherwise), or otherwise becomes
available from the date of this Agreement until the Effective Time that bears on
the regulatory status under the FDCA or the CSA of the Company, its Subsidiary
or any product of the Company or its Subsidiary, including, but not limited to,
any deficiency letter, warning letter, non-approvable letter/order, and
withdrawal letter/order.
(c) The Company will, within five days after signing of this Agreement,
provide Parent copies of or make available for Parent's review any and all
documents in its or its Subsidiary's possession relevant to assessing the
Company's or its Subsidiary's compliance with the FDCA or the CSA and
implementing regulations, including, but not limited to, copies of (i) all 483s
issued during the last three years; (ii) all audit reports performed during the
last three years, whether performed by the Company, its Subsidiary, or an
outside consultant; (iii) any document (prepared by the Company or otherwise)
concerning any oral or written communication received from the FDA, the DEA, or
the Department of Justice during the last three years; (iv) any administrative
or judicial order, ruling or agreement issued or entered into during the last
three years in which the Company, its Subsidiary, or their respective
predecessor companies were a named party or were identified as an interested
person; or (v) any recall notice or order.
Section 4.21. Intellectual Property Rights. To the best of the Company's
Knowledge, the Company and its Subsidiary own or have the right to use all
Intellectual Property Rights (as defined below in this Section 4.21) necessary
to the conduct of their respective businesses. The Company has heretofore
furnished to Parent a worldwide list of all patents, trade names, trademarks and
service marks, and applications for the
-27-
foregoing owned or possessed by the Company or its Subsidiary and true and
complete copies of all such materials have been made available to Parent. No
material rights or licenses to use Intellectual Property Rights (or covenants
not to xxx in respect thereof) have been granted or acquired by the Company or
its Subsidiary. The Company has received no notice of any claims or assertions
made by others that the Company has infringed any material Intellectual Property
Rights of others by the sale of products or any other activity in the preceding
five year period and there has been no such material infringement by the Company
during this period. The Company has received no Knowledge of any infringement of
Intellectual Property Rights of the Company by others. All issued patents,
registered trademarks, and service marks owned by the Company or its Subsidiary
are recorded on the public record in the name of the Company or its Subsidiary.
"Intellectual Property Rights" shall mean and include rights to use
patents, trademarks, service marks, trade names, trade secrets, know-how,
copyrights, and any and all currently pending applications for any thereof.
Section 4.22. Taxes. Except for those matters that individually or in the
aggregate would not have a Material Adverse Effect, (i) the Company and its
Subsidiary have prepared and timely filed or will timely file with the
appropriate governmental agencies all franchise, income and all other Tax (as
defined below in this Section 4.22) returns, information statements and reports
and any other filings (Tax returns, information statements and reports and any
other filings are hereinafter collectively referred to as "Tax Returns")
required to be filed for any period (or portion thereof) ending on or before the
Effective Time, taking into account any extension of time to file granted to or
obtained on behalf of the Company and/or its Subsidiary (copies of which for the
past three fiscal years have been provided or made available to Parent); (ii)
all Taxes of the Company and its Subsidiary in respect of any taxable period (or
portion thereof) ending prior to or at the Effective Time have been paid in full
to the proper authorities or fully accrued on the publicly available financial
statements of the Company or its Subsidiary, other than such Taxes as are being
contested in good faith by appropriate proceedings and are adequately reserved
for in accordance with U.S. GAAP; (iii) all deficiencies resulting from Tax
examinations of federal, state, local and foreign income, sales and franchise
and all other Tax Returns filed by the Company and its Subsidiary have either
been paid or fully settled, and no issue previously raised by any taxing
authority could reasonably be expected to result in
-28-
a proposed deficiency for any prior, parallel or subsequent period (including
periods subsequent to the Effective Time); (iv) to the best Knowledge of the
Company, no deficiency has been asserted or assessed against the Company or its
Subsidiary and is pending, and no examination of the Company or its Subsidiary
is pending or threatened for any material amount of Tax by any taxing authority;
(v) no extension of the period for assessment or collection of any Tax is
currently in effect and no extension of time within which to file any Tax Return
has been requested, which Tax Return has not since been filed; (vi) no Tax liens
have been filed with respect to any Taxes of the Company or its Subsidiaries,
except for property taxes that have accrued but are not yet due or payable;
(vii) there are no Tax sharing agreements or arrangements under which the
Company or its Subsidiary will have any obligation or liability on or after the
Effective Time; (viii) neither the Company nor its Subsidiary is, or has been at
any time during the five-year period prior to the Effective Time, a "United
States real property holding corporation," as defined for purposes of Section
897(c)(ii) of the Code; (ix) to the best Knowledge of the Company, there are no
transfer pricing agreements made by the Company or its Subsidiary with any
taxation authority; (x) neither the Company nor its Subsidiary has made an
election under Section 341(f) of the Code; and (xi) neither the Company nor its
Subsidiary is obligated to make any payments or provide any other benefits, or
is a party to any agreement that on account of the transactions contemplated in
this Agreement, would obligate it, or reasonably be expected to obligate it, to
make any payments or provide any other benefits that would constitute parachute
payments within the meaning of Section 280G of the Code.
"Tax" or "Taxes" means (i) all federal, state, local or foreign taxes,
charges, fees, imposts, levies or other assessments, including, without
limitation, all net income, alternative minimum, gross receipts, capital, sales,
use, ad valorem, value added, transfer, franchise, profits, inventory, capital
stock, license, withholding, payroll, employment, social security, unemployment,
excise, severance, stamp, occupation, property and estimated taxes, customs
duties, fees, assessments and charges of any kind whatsoever, (ii) all interest,
penalties, fines, additions to tax or other additional amounts imposed by any
taxing authority in connection with any item described in clause (i) and (iii)
all transferee, successor, joint and several or contractual liability
(including, without limitation, liability pursuant to United States Treasury
Regulation ("Treas. Reg.") ss. 1.1502-6 (or any comparable
-29-
state, local or foreign provisions)) in respect of any items described in clause
(i) or (ii) above.
Section 4.23. Employee Benefit Plans; ERISA. (a) There are no "employee
pension benefit plans" as defined in Section 3(2) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") ("Pension Benefit Plans"),
"welfare benefit plans" as defined in Section 3(1) of ERISA ("Welfare Plans"),
or stock bonus, stock option, restricted stock, stock appreciation right, stock
purchase, bonus, incentive, deferred compensation, severance, or vacation plans,
or any other employee benefit plan, program, policy or arrangement, covering
employees (or former employees), maintained or contributed to by the Company or
its Subsidiary or any of their ERISA Affiliates (as hereinafter defined), or to
which the Company or its Subsidiary or any of their ERISA Affiliates contributes
or is obligated to make payments thereunder or otherwise may have any liability
(collectively, the "Employee Benefit Plans"). For purposes of this Agreement,
"ERISA Affiliate" shall mean any person (as defined in Section 3(9) of ERISA)
that is or has been a member of any group of persons described in Section
414(b), (c), (m) or (o) of the Code including the Company or its Subsidiary.
(b) The Company and its Subsidiary, and each of the Pension Benefit Plans
and Welfare Plans, are in compliance with the applicable provisions of ERISA,
the Code and other applicable laws, except where the failure to comply would
not, individually or in the aggregate, have a Material Adverse Effect.
(c) All contributions to, and payments from, the Pension Benefit Plans that
are required to have been made in accordance with the Pension Benefit Plans have
been timely made, except where the failure to make such contributions or
payments on a timely basis would not, individually or in the aggregate, either
impair the Company's ability to consummate the Merger and the other transactions
contemplated hereby or have a Material Adverse Effect.
(d) Any Pension Benefit Plans intended to qualify under Section 401 of the
Code have been determined by the Internal Revenue Service ("IRS") to be so
qualified and no event has occurred and no condition exists with respect to the
form or operation of such Pension Benefit Plans that would cause the loss of
such qualification or exemption or the imposition of any material liability,
penalty or tax under ERISA or the Code.
-30-
(e) There are (i) no investigations pending by any governmental entity
(including the Pension Benefit Guaranty Corporation) involving the Pension
Benefit Plans or Welfare Plans and (ii) no pending or threatened claims (other
than routine claims for benefits), suits or proceedings against any Pension
Benefit or Welfare Plan, against the assets of any of the trusts under any
Pension Benefit or Welfare Plan or against any fiduciary of any Pension Benefit
or Welfare Plan with respect to the operation of such plan or asserting any
rights or claims to benefits under any Pension Benefit Plan or against the
assets of any trust under such plan, except for those that would not,
individually or in the aggregate, give rise to any liability that would have a
Material Adverse Effect, nor, to the best of the Company's Knowledge, are there
any facts that would give rise to any liability, except for those that would
not, individually or in the aggregate, either impair the Company's ability to
consummate the Merger and the other transactions contemplated hereby or have a
Material Adverse Effect in the event of any such investigation, claim, suit or
proceeding.
(f) None of the Company, its Subsidiary or any employee of the foregoing,
nor any trustee, administrator, other fiduciary or, to the Knowledge of the
Company, any other "party in interest" or "disqualified person" with respect to
the Pension Benefit Plans or Welfare Plans, has engaged in a "prohibited
transaction" (as such term is defined in Section 4975 of the Code or Section 406
of ERISA) that could result in a tax or penalty on the Company or its Subsidiary
under Section 4975 of the Code or Section 502(i) of ERISA, except any such event
that would not, individually or in the aggregate, either impair the Company's
ability to consummate the Merger and the other transactions contemplated hereby
or have a Material Adverse Effect.
(g) None of the Company, its Subsidiary or any of their ERISA Affiliates
maintains or contributes to, nor have they ever maintained or contributed to,
any pension plan subject to Title IV of ERISA or Sections 412 of the Code or 302
of ERISA.
(h) None of the Company, its Subsidiary or any ERISA Affiliate has incurred
any material liability under Title IV of ERISA.
(i) None of the Company, its Subsidiary or any ERISA Affiliate has incurred
any material liability (including any contingent liability under Section 4204 of
ERISA) with respect
-31-
to any multiemployer plan, within the meaning of Section 3(37) of ERISA.
(j) With respect to each of the Employee Benefit Plans, true, correct and
complete copies of the following documents have been made available to Parent:
(i) the plan document and any related trust agreement, including amendments
thereto, (ii) any current summary plan descriptions and other material
communications to participants relating to the Employee Benefit Plans, (iii) the
most recent Forms 5500, if applicable, and (iv) the most recent IRS
determination letter, if applicable.
(k) None of the Welfare Plans maintained by the Company or its Subsidiary
provide for continuing benefits or coverage for any participant or any
beneficiary of a participant following termination of employment, except as may
be required under the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended ("COBRA"). The Company and its Subsidiary (to the extent that the
Subsidiary maintains a "group health plan" within the meaning of Section
5000(b)(1) of the Code) have complied with the notice and continuation
requirements of Section 4980B of the Code, COBRA, Part 6 of Subtitle B of Title
I of ERISA and the regulations thereunder, except where the failure to comply
would not, individually or in the aggregate, either impair the Company's ability
to consummate the Merger and the other transactions contemplated hereby or have
a Material Adverse Effect.
(l) No liability under any Pension Benefit or Welfare Plan has been funded
nor has any such obligation been satisfied with the purchase of a contract from
an insurance company as to which the Company or its Subsidiary has received
notice that such insurance company is in rehabilitation or a comparable
proceeding.
(m) The consummation of the transactions contemplated by this Agreement
will not result in an increase in the amount of compensation or benefits or
accelerate the vesting or timing of payment of any benefits or compensation
payable to or in respect of any employee of the Company or its Subsidiary;
provided, however, that the vesting and exercisability schedule of the unvested
and unexercisable portion of each option to purchase Company Common Stock that
is outstanding immediately prior to the date of this Agreement will accelerate
in a manner that is consistent with the acceleration schedule adopted by the
Board of Directors of the Company by resolution dated December 21, 1995.
-32-
(n) The Company has heretofore furnished to Parent each Foreign Plan (as
hereinafter defined) to the extent the benefits provided thereunder are not
mandated by the laws of the applicable foreign jurisdiction. The Company and its
Subsidiary and each of the Foreign Plans are in compliance with applicable laws
and all required contributions have been made to the Foreign Plans, except where
the failure to comply or make contributions would not, individually or in the
aggregate, either impair the Company's ability to consummate the Merger and the
other transactions contemplated hereby or have a Material Adverse Effect. Each
of the Foreign Plans that is a funded defined benefit plan has a fair market
value of plan assets that is greater than the plan's liabilities, as determined
in accordance with applicable laws. For purposes hereof, the term "Foreign Plan"
shall mean any plan, program, policy, arrangement or agreement maintained or
contributed to by, or entered into with, the Company or its Subsidiary with
respect to employees (or former employees) employed outside the United States.
Section 4.24. Environmental Matters. (a) Except to the extent otherwise
disclosed in the Company's Annual Report on Form 10-K for the year ended
December 31, 1997, respecting material environmental liabilities and risks, (i)
to the Knowledge of the Company, the Company possesses all Environmental Permits
required under applicable Environmental Laws to conduct its current business,
and is, and within the last three years has been, in compliance with the terms
and conditions of such Environmental Permits, except where the failure to so
possess or comply would not reasonably be expected to have a Material Adverse
Effect; to the Company's Knowledge, no Environmental Permits possessed by the
Company will be revoked, suspended, or will not be renewed;
(ii) except as would not have a Material Adverse Effect, to the Knowledge
of the Company, the execution and delivery of this Agreement and the
consummation by the Company of the Merger and other transactions contemplated
hereby will not affect the validity or require the transfer of any Environmental
Permits held by the Company, and will not require any notification, disclosure,
registration, reporting, filing, investigation, or remediation under any
Environmental Law;
(iii) to the Knowledge of the Company, the Company is in compliance, and
within the last three years has complied, with all applicable Environmental
Laws, except where the failure to so comply would not reasonably be expected to
have a Material Adverse Effect;
-33-
(iv) except as would not reasonably be expected to have a Material Adverse
Effect, (a) the Company has not received written notice of a civil, criminal, or
administrative action, suit, demand, claim, hearing, adjudicatory proceeding,
notice of violation, investigation, notice or demand letter, or request for
information pending or threatened under any Environmental Law against the
Company, and (b) the Company has not received written notice of actual or
potential liability or of violations of or by the Company under any
Environmental Law, including, but not limited to, resulting from the activities
of any Contractor for or on behalf of the Company, or liability assumed by the
Company pursuant to any contract entered into by the Company;
(v) to the Knowledge of the Company, no property or facility presently or
formerly owned, operated or leased by the Company is listed or proposed for
listing on the National Priorities List promulgated under the Comprehensive
Environmental Response, Compensation and Liability Act, as amended ("CERCLA"),
or on any state "superfund" list established under any Environmental Law;
(vi) except as would not reasonably be expected to have a Material Adverse
Effect, to the Knowledge of the Company, there has been no disposal, spill,
discharge or release of any Hazardous Material generated, used, owned, stored or
controlled by the Company on, at, or under any property presently or formerly
owned, leased or operated by the Company, and there are no Hazardous Materials
located in, at, on, or under any such facility or property, or at any other
location at which hazardous material generated, used, owned, stored, or
controlled by the Company has been disposed of, in any case that could
reasonably be expected to require investigation, removal, remedial or corrective
action by the Company or that would reasonably likely result in liability of, or
costs to, the Company under any Environmental Law;
(vii) to the Knowledge of the Company, except as would not reasonably be
expected to have a Material Adverse Effect, there has not been any underground
or above-ground storage tank or other underground storage receptacle or related
piping used by the Company, or any impoundment or other disposal area containing
Hazardous Materials, except as in compliance with applicable Environmental Law,
located on any facility or property owned, leased or operated and used by the
Company during the period of such ownership, lease or operation, and no asbestos
or polychlorinated biphenyls have been used or disposed of, or have been located
at, on, or under any such facility or prop-
-34-
erty during the period of such ownership, lease or operation except in
compliance with applicable Environmental Law;
(viii) to the Knowledge of the Company, no lien has been recorded against
any properties, assets or facilities owned, leased or operated by the Company or
under any Environmental Law; and
(ix) as to such Form 10-K report referenced above in this Section 4.24(a),
the Company has no Knowledge of any facts or circumstances which would lead to
the realization of risks or liabilities listed as qualifications or exceptions
to such Form 10-K report.
(b) To the Knowledge of the Company, the Company has provided or made
available to Parent, Subco, and their authorized representatives all records and
files not subject to the attorney-client or attorney work product privileges,
including, but not limited to, all assessments, reports, studies, audits,
analyses, tests and data currently in the possession of the Company concerning
the existence of Hazardous Materials at facilities or properties currently or
formerly owned, operated, or leased by the Company or concerning compliance by
the Company with, or liability under, any Environmental Law. This Section shall
not create any obligation to create any records or files or to conduct any
tests, assessments or analyses that currently do not exist or are not in the
possession of the Company.
(c) For purposes of this Agreement:
(i) "Contractor" shall mean any person or entity, including, but not
limited to, suppliers, vendors, or service providers with which the Company
formerly or presently has any written contract or other formal agreement to
provide maintenance, facilities, building operations or cleaning services, or
other ministerial services unrelated to product development or manufacturing.
(ii) "Environmental Law" shall mean CERCLA, the Resource Conservation and
Recovery Act of 1976, as amended, and any other applicable federal, state or
local statute, rule, regulation, order, judgment, directive, decree or, as
decided as of the date of this Agreement, common law applicable to the Company,
and regulating or imposing liability or enforceable standards of conduct
concerning air emissions, waste water discharges, the release or threatened
release or discharge of any Hazardous Material into the environment, the
generation, han-
-35-
dling, treatment, storage, transport or disposal of any Hazardous Material, or
otherwise concerning pollution or the protection of the outdoor or indoor
environment, public health, or the disposal of biological material or
biohazardous waste.
(iii) "Environmental Permit" shall mean any permit, license, approval,
consent, or other authorization by a federal, state, or local government or
regulatory entity pursuant to any Environmental Law.
(iv) "Hazardous Material" shall mean any pollutant, contaminant or
hazardous or toxic substances or wastes, or medical, biohazardous, biological or
infectious waste or material, regulated or governed as such in or by any
Environmental Law, including, without limitation, any asbestos, any petroleum,
oil (including crude oil or any fraction thereof), any radioactive substance,
any polychlorinated biphenyls, and any other substance that is adjudicated to
impose liability under any Environmental Law.
Section 4.25. Tax Treatment; Officer's Certificate as to Tax Matters. The
Company has not taken, agreed to take, or will take any action that would
prevent the Merger from constituting a transaction qualifying under Section
368(a) of the Code. The Company is not aware of any agreement, plan or other
circumstance that would prevent the Merger from qualifying under Section 368(a)
of the Code or that would prevent an exchange of Company Common Stock for Parent
ADSs pursuant to the Merger from qualifying as an exchange described in Section
354 of the Code (except with respect to any cash received in lieu of a
fractional share) to which Section 367(a)(1) of the Code does not apply, and to
the Company's Knowledge, the Merger and each such exchange will so qualify. As
of the date hereof, the Company knows of no reason why it will be unable to
deliver to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP and to Xxxxxx Xxxxxx &
Xxxxxxx at the Closing representation letters with respect to the Company in
form and substance sufficient to enable such counsel to render the opinions
required by Section 6.05 of this Agreement.
ARTICLE V
COVENANTS
Section 5.01. Conduct of Business of the Company. Except as contemplated by
this Agreement or as expressly agreed to in writing by Parent, during the period
from the date of
-36-
this Agreement to the Effective Time, the Company and its Subsidiary will each
conduct its operations according to its ordinary and usual course of business
consistent in all material respects with past practice, and will use
commercially reasonable efforts to preserve intact its business organization, to
keep available the services of its officers and employees and to preserve the
current relationships with suppliers, distributors, customers and others having
significant business relationships with it and will take no action that would
adversely affect its ability to consummate the Merger or the other transactions
contemplated hereby. Without limiting the generality of the foregoing, and
except as otherwise expressly provided in this Agreement, prior to the Effective
Time, neither the Company nor its Subsidiary will, without the prior written
consent of Parent:
(a) amend its Amended and Restated Certificate of Incorporation (or
other applicable charter document) or by-laws;
(b) authorize for issuance, issue, sell, deliver, grant any options,
warrants, calls, subscriptions or other rights for, or otherwise agree or
commit to issue, sell or deliver any shares of any class of capital stock
of the Company or its Subsidiary or any securities convertible into or
exchangeable or exercisable for shares of any class of capital stock of the
Company or its Subsidiary, other than, in the case of the Company, (i)
pursuant to and in accordance with and subject to the limitations set forth
in (x) the Company Purchase Plans or (y) the Company Common Stock
Equivalents and (ii) options to purchase up to 50,000 shares of Company
Common Stock pursuant to and in accordance with and subject to the
limitations set forth in the Company Option Plans; provided, however, that
the Company shall be permitted to take such action as may be necessary to
accelerate the vesting and exercisability schedule of the unvested and
unexercisable portion of each option to purchase Company Common Stock that
is outstanding immediately prior to date of this Agreement in a manner that
is consistent with the acceleration schedule adopted by the Board of
Directors of the Company by resolution dated December 21, 1995;
(c) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its
capital stock
-37-
or purchase, redeem or otherwise acquire any shares of its own capital
stock or that of any subsidiary;
(d) (i) (x) create or incur indebtedness for borrowed money, (y)
assume, guarantee, endorse or otherwise as an accommodation become liable
or responsible for the obligations of any other individual, firm or
corporation or (z) make any loans, advances or capital contributions to or
investments in any other individual, firm or corporation, except, in the
case of each of clause (x),(y) and (z), in the ordinary course of business
and consistent with past practice but in no event in an amount in excess of
$500,000 in the aggregate; (ii) enter into or amend any material contract,
agreement, commitment arrangement or transaction material to the Company
and its Subsidiary taken as a whole; or (iii) incur any liabilities except
for liabilities that, individually or in the aggregate, would not have a
Material Adverse Effect;
(e) (i) increase in any manner the compensation of any of its
directors, officers or, except in the ordinary course of business and
consistent with past practice, its employees; (ii) pay or agree to pay any
pension, retirement allowance or other employee benefit, or enter into any
contract, agreement or understanding with any of its past or present
employees relating to any such pension, retirement allowance or other
employee benefit, except, in each case, as required under agreements, plans
or arrangements existing as of December 31, 1997; (iii) grant any severance
or termination pay to, or enter into any employment, consulting or
severance agreement with, any person; (iv) except in the ordinary course of
business and consistent with past practice, or as may be required to comply
with applicable law, become obligated under any new pension plan, welfare
plan, multiemployer plan, employee benefit plan, benefit arrangement, or
similar plan or arrangement that was not in existence on or prior to
December 31, 1997, including any bonus, incentive, deferred compensation,
stock purchase, stock option, stock appreciation right, group insurance,
severance pay, retirement or other benefit plan, contract, agreement or
understanding, or amend any such plans, contracts, agreements or
understandings in existence prior to December 31, 1997; and (v) initiate,
approve or allow to begin any new Purchase Period (as defined in the 1997
Company Purchase Plan) under the 1997 Company Purchase Plan or new Offer
Period (as defined in the 1992 Company Purchase Plan) under the 1992
Company Purchase Plan.
-38-
(f) except as otherwise expressly contemplated hereby, sell, transfer,
lease, license, pledge, mortgage or otherwise dispose of, or encumber, or
agree to sell, transfer, lease, license, pledge, mortgage or otherwise
dispose of or encumber, any material properties, real, personal or mixed;
(g) except in the ordinary course of business or as otherwise
expressly contemplated hereby, grant any material licenses to use any
Intellectual Property Rights or unpatented inventions set forth in Section
4.21 of the Disclosure Statement or acquire any material licenses to use
Intellectual Property Rights having a cost in excess of $500,000 in the
aggregate; provided that the Company and its Subsidiary shall not grant any
material licenses to use any material Intellectual Property Rights or
unpatented inventions so set forth without the prior written consent of
Parent, which consent shall not be unreasonably withheld;
(h) except as otherwise expressly contemplated hereby, enter into any
other agreements, commitments or contracts, except agreements, commitments
or contracts for the purchase, sale or lease of goods or services in the
ordinary course of business and consistent in all material respects with
past practice and having a term of no more than one year;
(i) authorize, recommend, propose or announce an intention to
authorize, recommend or propose, or enter into any agreement in principle
or an agreement with any other person with respect to, any plan of
liquidation or dissolution, any acquisition of a material amount of assets
or securities, any disposition of a material amount of assets or securities
or any material change in its capitalization, or any entry into a material
contract or any amendment or modification of any material contract or any
release or relinquishment of any material contract rights not in the
ordinary course of business and consistent with past practice, except as
expressly contemplated by this Agreement;
(j) except as previously approved by the Board of Directors of the
Company prior to the date hereof and as identified to Parent prior to the
date hereof, authorize, commit to make or make capital expenditures in
excess of $500,000 in the aggregate; provided, however, that the Company
may make capital expenditures of up to $1.0 mil-
-39-
lion in the aggregate in connection with its facility located at 0000
Xxxxxxxxxxxx Xxxxxx, Xxxxx Xxxx, Xxxxxxxxxx;
(k) permit any insurance policy naming it as a beneficiary or a loss
payee to be canceled, terminated or materially altered, except in the
ordinary course of business and consistent with past practice and following
written notice to Parent;
(l) maintain its books and records in a manner not in the ordinary
course of business and consistent with past practice;
(m) enter into any hedging, option, derivative or other similar
transaction;
(n) institute any change in its accounting methods, principles or
practices or revalue any of its respective assets, including, without
limitation, writing down the value of inventory or writing off notes or
accounts receivables;
(o) settle or compromise any material federal, state, local or foreign
Tax liability, make any new material Tax election, revoke or modify any
existing Tax election, or request or consent to a change in any method of
Tax accounting;
(p) except for payment of professional fees relating to the Merger,
pay, discharge or satisfy any material claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction of liabilities (including
accounts payable) in the ordinary course of business and consistent with
past practice, or collect, or accelerate the collection of, any amounts
owed (including accounts receivable) other than the collection in the
ordinary course of business;
(q) take, cause or permit to be taken any action, whether before or
after the Effective Time, that could reasonably be expected to prevent the
Merger from constituting a "reorganization" within the meaning of Section
368(a) of the Code or prevent an exchange of Company Common Stock for
Parent ADSs pursuant to the Merger from qualifying as an exchange described
in Section 354 of the Code (except with respect to any cash received in
lieu of
-40-
a fractional share) to which Section 367(a)(1) of the Code does not apply;
(r) amend, modify, terminate, waive or permit to lapse other than by
the passage of time any material right of first refusal, preferential
right, right of first offer or any other material right of the Company or
its Subsidiary;
(s) take any action that would or is reasonably likely to result in
any of the covenants and agreements set forth in Article I and V of this
Agreement or any of the conditions set forth in Article VI of this
Agreement not being satisfied as of the Closing Date; and (t) agree to do
any of the foregoing.
Section 5.02. No Solicitation. (a) The Company agrees that, prior to the
Effective Time, it shall not, and shall not authorize or permit its Subsidiary
or any of its or its Subsidiary's directors, officers, employees, agents or
representatives to, directly or indirectly, solicit, initiate, facilitate or
encourage (including by way of furnishing or disclosing non-public information)
any inquiries or the making of any proposal with respect to any merger,
consolidation or other business combination involving the Company or its
Subsidiary or any acquisition of any kind of a material portion of the assets or
capital stock of the Company and its Subsidiary taken as a whole (an
"Acquisition Transaction") or negotiate, explore or otherwise communicate in any
way with any third party with respect to any Acquisition Transaction or enter
into any agreement, arrangement or understanding requiring it to abandon,
terminate or fail to consummate the Merger or any other transactions
contemplated by this Agreement; provided, however, that the Company may, in
response to an unsolicited bona fide, written proposal from a Third Party
regarding a Superior Proposal (as defined below in this Section 5.02(a)) furnish
information to, engage in discussions and negotiate with such Third Party, but
only if the Board of Directors of the Company determines in good faith by a
majority vote that taking such action is reasonably likely to lead to an
Acquisition Transaction that is more favorable to the stockholders of the
Company than the Merger and that failing to take such action would be reasonably
likely to constitute a breach of the Board's fiduciary duties, having received
prior to such determination (i) the written advice of outside legal counsel of
the Company that failing to take such action would be reasonably likely to
constitute a breach of the fiduciary duties of the Board of Directors and
-41-
(ii) the written advice of Xxxxxx Xxxxxxx & Co. Incorporated or another
financial advisor of nationally recognized reputation that the Superior Proposal
would be reasonably likely to provide greater value to the Company and its
stockholders than the Merger. As used herein, "Superior Proposal" means a bona
fide, written and unsolicited offer made by any financially responsible Third
Party (other than Parent) with respect to an Acquisition Transaction for which
any required financing is committed in writing by reputable financing sources.
(b) The Company shall promptly notify Parent of (i) receipt of any proposal
relating to an Acquisition Transaction or any request for nonpublic information
relating to the Company in connection with an Acquisition Transaction or for
access to the properties, books or records of the Company or its Subsidiary by
any person or entity that informs the Board of Directors of the Company that it
is considering making, or has made, a proposal relating to an Acquisition
Transaction or (ii) any action, failure to act, determination or resolution by
the Company or its Board of Directors referred to in Section 1.05, 5.02(a),
10.02(c), 10.02(d) or 10.03(c). Such notice to Parent shall be made orally and
in writing and shall include a copy of any writing submitted by such person or
entity and shall identify the offeror and indicate in reasonable detail the
terms and conditions of such proposal, inquiry or contract.
(c) During the period from the date of this Agreement through the Effective
Time, the Company shall not terminate, amend, modify or waive any provision of
any confidentiality or standstill agreement to which it or its Subsidiary is a
party. During such period, the Company shall enforce, to the fullest extent
permitted under applicable law, the provisions of any such agreement, including,
but not limited to, by obtaining injunctions to prevent any breaches of any such
agreement and to enforce specifically the terms and provisions thereof in any
court of the United States of America or of any state having jurisdiction.
Section 5.03. Access to Information. (a) From the date of this Agreement
until the Effective Time, each party will give the other party and their
authorized representatives (including counsel, environmental and other
consultants, accountants, auditors and agents) full access during normal
business hours to all facilities, personnel and operations and to all books and
records of it and its subsidiaries, will permit and cooperate with such other
party and their authorized representatives to conduct inspections as they may
reasonably require (including, without limitation, any air, water, soil or
-42-
other environmental testing and monitoring deemed necessary by them) and will
cause its officers and those of its subsidiaries to furnish such other party
with such financial and operating data and other information with respect to its
business and properties as such other party may from time to time reasonably
request; provided, however, that the performance by either party of any such
environmental testing or monitoring shall be subject to the prior receipt by the
other party of reasonably satisfactory indemnity relating thereto.
(b) Each of Parent and Subco will hold and will cause their respective
authorized representatives, including consultants and advisors, to hold in
strict confidence pursuant to the Confidentiality Agreement, dated as of January
22, 1998, between Parent and the Company (the "Confidentiality Agreement"), all
documents and information (whether oral or written) concerning the Company and
its Subsidiary furnished to Parent or Subco in connection with the transactions
contemplated by this Agreement. The Company will hold and will cause its
authorized representatives, including consultants and advisors, to hold in
strict confidence pursuant to the Confidentiality Agreement, all documents and
information (whether oral or written) concerning Parent and the Parent
Subsidiaries furnished to the Company in connection with the transactions
contemplated by this Agreement. Notwithstanding any provision of Article X
hereof, nothing herein shall relieve any party of liabilities for any and all
damages to the other party by reason of any breach of this Section 5.03(c).
Section 5.04. Registration Statement and Company Proxy Statement. The
Company, with the assistance of Parent (only with respect to information to be
provided by Parent) shall prepare and file with the SEC as soon as is reasonably
practicable after the date hereof the Company Proxy Statement and Parent, with
the assistance of the Company (only with respect to information to be provided
by the Company), shall file the Registration Statement in which the Company
Proxy Statement shall be included. Parent and the Company shall use all
commercially reasonable efforts to have the Registration Statement declared
effective by the SEC and the Company Proxy Statement cleared by the staff of the
SEC as promptly as practicable. Parent shall take any action required to be
taken under applicable state blue sky or securities laws in connection with the
Parent ADSs to be issued as Closing Consideration. Parent and the Company shall
promptly furnish to each other all information, and take such other actions
(including, without limitation, using all commercially reasonable efforts to
provide any required consents of their respective independent accountants
-43-
or auditors, as the case may be), as may reasonably be requested in connection
with any action by any of them in connection with the preceding sentences of
this Section 5.04.
Section 5.05. Commercially Reasonable Efforts; Other Actions. Subject to
the terms and conditions herein provided, Parent, Subco and the Company shall
use all commercially reasonable efforts to take, or cause to be taken, all other
actions and do, or cause to be done, all other things necessary, proper or
appropriate under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement, including, without
limitation, (i) the filing of Notification and Report Forms under the HSR Act
with the Federal Trade Commission (the "FTC") and the Antitrust Division of the
Department of Justice (the "Antitrust Division") and using all commercially
reasonable efforts to respond as promptly as practicable to any inquiries
received from the FTC or the Antitrust Division for additional information or
documentation, (ii) the obtaining of all necessary consents, approvals or
waivers and (iii) the lifting of any legal bar to the Merger. Parent shall cause
Subco to perform all of its obligations under this Agreement and shall not take
any action that would cause the Company to fail to perform its obligations
hereunder.
Section 5.06. Public Announcements. Before issuing any press release or
otherwise making any public statement with respect to the Merger or any of the
other transactions contemplated hereby, Parent, Subco and the Company will
consult with each other as to its form and substance and shall not issue any
such press release or make any such public statement prior to obtaining the
consent of each of the other parties to this Agreement (which consent will not
be unreasonably withheld or delayed), except as may be required by law.
Section 5.07. Notification of Certain Matters. The Company shall give
prompt notice to Parent of any notice of, or other communication relating to, a
default or event that, with notice or lapse of time or both, would become a
default, received by the Company or its Subsidiary subsequent to the date of
this Agreement and prior to the Effective Time, under any contract material to
the general affairs, management, business, operations, assets, condition
(financial or otherwise) or prospects of the Company and its Subsidiary taken as
a whole, to which the Company or its Subsidiary is a party or is subject. The
Company shall keep Parent and Subco informed of all non-routine actions the
Company intends to take in connection with any Environmental Law and all actions
shall be on terms and conditions reasonably satisfactory to Parent and Subco.
Each
-44-
of the Company and Parent shall give prompt notice to the other party of (a) any
notice or other communication from any third party alleging that the consent of
such third party is or may be required in connection with the Merger or other
transactions contemplated hereby, (b) any change or prospective change that is
likely to have, respectively, a Material Adverse Effect or Parent Material
Adverse Effect or (c) the occurrence or existence of any event that would, or
could with the passage of time or otherwise, make any representation or warranty
contained herein untrue.
Section 5.08. Indemnification. (a) Parent shall cause the Surviving
Corporation to maintain and perform in the same manner the Company's existing
indemnification provisions with respect to present and former directors and
officers of the Company for all losses, claims, damages, expenses or liabilities
arising out of actions or omissions or alleged actions or omissions occurring at
or prior to the Effective Time, to the extent permitted or required under
applicable law, and the Company's Amended and Restated Certificate of
Incorporation and Amended and Restated By-Laws in effect at the date hereof (to
the extent consistent with applicable law).
(b) For a period of six years after the Effective Time, Parent shall cause
the Surviving Corporation to maintain in effect the current policies of
directors' and officers' liability insurance maintained by the Company (provided
that the Surviving Corporation may substitute therefor policies of at least the
same coverage and amounts containing terms and conditions that are no less
advantageous) with respect to claims arising from facts or events that occurred
at or before the Effective Time; provided, however, that the Surviving
Corporation shall not be obligated to make annual premium payments for such
insurance to the extent such premiums exceed 150% of the annual premiums paid as
of the date hereof by the Company for such insurance.
Section 5.09. Expenses. Except as set forth in Section 10.05, Parent and
Subco, on the one hand, and the Company, on the other hand, shall bear their
respective expenses incurred in connection with this Agreement, the Merger, and
the transactions contemplated hereby, including, without limitation, the
preparation, execution and performance of this Agreement and the transactions
contemplated hereby and all fees and expenses of investment bankers, finders,
brokers, agents, representatives, counsel and accountants, except that expenses
incurred in printing, mailing and filing (including, without limitation, SEC
filing fees and stock exchange listing applica-
-45-
tion fees) the Company Proxy Statement shall be shared equally by the Company
and Parent.
Section 5.10. Affiliates. The Company shall advise Parent in writing of any
person who becomes an Affiliate after the date hereof and prior to the Effective
Time and shall use all commercially reasonable efforts to cause each such person
to deliver to Parent, no later than the date such person becomes an Affiliate, a
written agreement substantially in the form of Exhibit A hereto.
Section 5.11. Stock Exchange Listings. Parent shall use all commercially
reasonable efforts to list on (i) the NYSE, upon official notice of issuance,
the Parent ADSs to be issued in connection with the Merger and (ii) the Irish
Stock Exchange and the London Stock Exchange (subject to allotment) the Parent
Ordinary Shares to be represented by Parent ADSs constituting the Closing
Consideration.
Section 5.12. Resignation of Directors. Prior to the Effective Time, the
Company shall take all commercially reasonable efforts to deliver to Parent at
no cost the resignations of such directors of the Subsidiary as Parent shall
specify, effective at the Effective Time. In connection with any such
resignation, the directors shall simultaneously reconvey their directors'
qualifying shares, if any, to the Subsidiary or such other persons as Parent
shall specify at no additional expense to Parent, Subco or the Subsidiary other
than customary expenses directly relating to the transfer and issuance of
directors' qualifying shares, if any.
Section 5.13. Stock Purchase Plans. The Company shall, on or before the
Effective Time, terminate (i) effective as of May 1, 1998 its 1992 Employee
Stock Purchase Plan (the "1992 Company Purchase Plan") and (ii) effective as of
July 1, 1998 its 1997 Employee Stock Purchase Plan (the "1997 Company Purchase
Plan" and, together with the 1992 Company Purchase Plan, the "Company Purchase
Plans"). Any unused cash balances shall be refunded to participants (as defined
in the Purchase Plans) in cash, without interest.
Section 5.14. Governance. Immediately after the Effective Time, Parent
shall appoint Xxxx Xxxxxxx, Ph.D. (i) the President of Pharmaceutical Operations
of Parent and (ii) to the Executive Committee of Parent.
Section 5.15. Employee Benefits. For a period of 12 months following the
Effective Time, employees of the Company
-46-
immediately prior to the Effective Time shall be entitled to receive benefits
that are no less favorable, in the aggregate, than the benefits received by such
employees immediately prior to the Effective Time; provided, however, that
Parent and the Parent Subsidiaries shall not be required to continue any
employment relationship with any employee for any specified period of time.
ARTICLE VI
CONDITIONS TO THE OBLIGATIONS OF PARENT, SUBCO AND THE COMPANY
The respective obligations of each party to effect the Merger shall be
subject to the fulfillment at or prior to the Closing (as defined in Section
9.01) of each of the following conditions:
Section 6.01. Registration Statement. The Registration Statement shall have
become effective in accordance with the provisions of the Securities Act. No
stop order suspending the effectiveness of the Registration Statement shall have
been issued by the SEC and remain in effect. All necessary state securities and
blue sky authorizations shall have been received.
Section 6.02. Stockholder Approval. The approval of a majority of the
outstanding shares of Company Common Stock cast at the Special Meeting or any
adjournment thereof shall have been obtained.
Section 6.03. Listing. The Parent ADSs issuable in connection with the
Merger shall have been authorized for listing on the NYSE, subject to official
notice of issuance, and the Parent Ordinary Shares to be represented by Parent
ADSs constituting the Closing Consideration shall have been admitted (subject to
allotment) to the Official Lists of the Irish Stock Exchange and the London
Stock Exchange.
Section 6.04. Certain Proceedings. (a) No writ, order, decree or injunction
of a court of competent jurisdiction or governmental entity shall have been
entered and remain in effect against Parent, Subco or the Company that prohibits
the consummation of the Merger or limits the exercise by Parent and the
Surviving Corporation of full rights to own and operate the business of the
Company and its Subsidiary, and any waiting period applicable to the
consummation of the Merger under the HSR Act shall have expired or been
terminated and no action
-47-
shall have been taken under the Irish Mergers Act prohibiting the Merger and the
relevant period under the Irish Mergers Act for objection shall have expired.
(b) All material authorizations, orders, consents, licenses, confirmations,
clearances, permissions and approvals that may be required in any foreign
jurisdiction for the purposes of applicable anti-trust, competition, takeover or
similar legislation in connection with the consummation of the Merger and the
other transactions contemplated hereby shall have been received and shall remain
in full force and effect.
Section 6.05. Tax Matters. Parent shall have received an opinion of Xxxxxx
Xxxxxx & Xxxxxxx, counsel to Parent and Subco, and the Company shall have
received an opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel to the
Company, each such opinion dated as of the Closing Date, and each such opinion
substantially to the effect that (i) the Merger will be treated as a
reorganization within the meaning of Section 368(a) of the Code; (ii) each of
Parent, Subco and the Company will be a party to such reorganization within the
meaning of Section 368(b) of the Code; and (iii) except for cash received in
lieu of fractional Parent ADSs, no gain or loss will be recognized by a
stockholder of the Company as a result of the Merger with respect to the shares
of Company Common Stock converted into Parent ADSs; provided that (x) the
Company complies with the reporting requirements contained in Treas. Reg.
ss.1.367(a)-3(c)(6) and (y) with respect to any particular stockholder of the
Company, such stockholder owns (directly or indirectly and taking into account
certain attribution rules) less than five percent of the total voting power and
less than five percent of the total value of parent's outstanding capital stock
immediately after the Merger (a "less-than-5% holder") or alternatively, such
stockholder is not a less-than-5% holder but will still qualify for non
recognition treatment provided that such stockholder enters into the applicable
gain recognition agreement, as defined in Treasury Regulation section
1.367(a)-3(c)(ii). In rendering such opinions, such counsel may receive and rely
upon representations of fact contained in certificates as specified in Section
3.13 and 4.25.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF PARENT AND SUBCO
The obligation of Parent and Subco to effect the Merger and to perform
their other obligations to be performed
-48-
at or subsequent to the Closing shall be subject to the fulfillment at or prior
to the Closing of the following additional conditions, any one or more of which
may be waived by Parent or Subco:
Section 7.01. Representations and Warranties True. The representations and
warranties of the Company that are qualified by reference to a Material Adverse
Effect or materiality shall be true and correct in all respects and the
representations and warranties of the Company that are not so qualified shall be
true and correct in all material respects, in each case as of the date of this
Agreement and, except to the extent such representations and warranties speak as
of an earlier date, as of the Effective Time as though made at and as of the
Effective Time, except for changes expressly permitted or contemplated by this
Agreement.
Section 7.02. Performance. The Company shall have performed and complied in
all material respects with all agreements, obligations and conditions required
by this Agreement to be performed or complied with by it on or prior to the
Closing Date, except for those failures to so perform or comply that,
individually or in the aggregate, would not either prevent or materially delay
the Company's ability to consummate the Merger and the other transactions
contemplated hereby or have a Material Adverse Effect.
Section 7.03. Certificates. The Company shall furnish such certificates of
its officers to evidence compliance with the conditions set forth in Sections
7.01 and 7.02 as may be reasonably requested by Parent or Subco.
Section 7.04. Material Adverse Change. There shall not have occurred since
December 31, 1997 (i) any material adverse change in the general affairs,
management, business, operations, assets, condition (financial or otherwise) or
prospects of the Company and its Subsidiary taken as a whole (including the loss
of a significant portion of the employees of the Company), excluding any such
material adverse change relating solely to Ziconotide or (ii) any Ziconotide
Event.
Section 7.05. Consents, Approvals and Notifications. All the consents and
approvals, and notifications and disclosures, and filings and registrations
described in Section 4.03 of this Agreement shall have been obtained.
Section 7.06. FDA Matters. The meeting between the Company and the FDA
regarding, among other things, the filing
-49-
by the Company with the FDA of a New Drug Application relating to Ziconotide
shall have occurred; the FDA shall have granted such meeting and acknowledged
receipt of supporting materials for such meeting; the FDA shall have responded
during or after the meeting either verbally or in writing; the Company shall
have provided to Parent copies of all documents, materials and other information
prepared by the FDA or the Company in connection therewith; and Parent shall
have been provided the opportunity to attend and observe such meeting.
Section 7.07. Additional Agreements. Parent shall have received agreements
substantially in the form of Exhibit B hereto executed by each of the executive
officers of the Company restricting each such executive officer's ability to
dispose of Parent ADSs held by such executive officer for a period of one year
following the Effective Time
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF THE COMPANY
The obligations of the Company under this Agreement to effect the Merger
shall be subject to the fulfillment on or before the Closing Date of each of the
following additional conditions, any one or more of which may be waived by the
Company:
Section 8.01. Representations and Warranties True. The representations and
warranties of Parent and Subco that are qualified by reference to a Parent
Material Adverse Effect or materiality shall be true and correct in all respects
and the representations and warranties of Parent and Subco that are not so
qualified shall be true and correct in all material respects, in each case as of
the date of this Agreement and, except to the extent such representations and
warranties speak as of an earlier date, as of the Effective Time as though made
at and as of the Effective Time, except for changes expressly permitted or
contemplated by this Agreement.
Section 8.02. Performance. Parent and Subco shall have performed and
complied in all material respects with all agreements, obligations and
conditions required by this Agreement to be performed or complied with by them
on or prior to the Closing Date except for those failures to so perform or
comply that, individually or in the aggregate, would not either prevent or
materially delay the ability of Parent or Subco to
-50-
consummate the Merger and the other transactions contemplated hereby or have a
Parent Material Adverse Effect.
Section 8.03. Certificates. Parent and Subco shall furnish such
certificates of their respective officers to evidence compliance with the
conditions set forth in Sections 8.01 and 8.02 as may be reasonably requested by
the Company.
Section 8.04. Material Adverse Change. There shall not have occurred since
December 31, 1997 any material adverse change in the general affairs,
management, business, operations, assets, condition (financial or otherwise) or
prospects of Parent and its Parent Subsidiaries taken as a whole.
Section 8.05. Consents, Approvals and Notifications. All necessary consents
and approvals of, and notifications and disclosures to, and filings and
registration with, any United States or any other governmental authority or any
other third party required on the part of Parent and Subco for the consummation
of the Merger and the other transactions contemplated hereby shall have been
obtained or accomplished.
ARTICLE IX
CLOSING
Section 9.01. Time and Place. Subject to the provisions of Articles VI,
VII, VIII and X, the closing of the Merger (the "Closing") shall take place at
the offices of Xxxxxx Xxxxxx & Xxxxxxx, as soon as practicable but in no event
later than 9:30 A.M., local time, on the first business day after the date on
which each of the conditions set forth in Articles VI, VII and VIII have been
satisfied or waived by the party or parties entitled to the benefit of such
conditions; or at such other place, at such other time, or on such other date as
Parent, Subco and the Company may mutually agree. The date on which the Closing
actually occurs is herein referred to as the "Closing Date."
Section 9.02. Filings at the Closing. Subject to the provisions of Articles
VI, VII, VIII and X, the Company, Parent and Subco shall cause to be executed
and filed at the Closing the Certificate of Merger and shall cause the
Certificate of Merger to be recorded in accordance with the applicable
provisions of the Delaware Act and shall take any and all other lawful actions
and do any and all other lawful things necessary to cause the Merger to become
effective.
-51-
ARTICLE X
TERMINATION AND ABANDONMENT
Section 10.01. Termination. This Agreement may be terminated and the Merger
may be abandoned any time prior to the Effective Time, whether before or after
approval by the stockholders of the Company:
(a) by the written agreement of Parent and the Company duly authorized
by their respective Boards of Directors;
(b) by either Parent or the Company if, without fault of such
terminating party, the Merger shall not have been consummated on or before
November 30, 1998, which date may be extended by mutual consent of the
parties hereto;
(c) by either Parent or the Company, if any court of competent
jurisdiction or other governmental body shall have issued an order (other
than a temporary restraining order), decree or ruling or taken any other
action restraining, enjoining or otherwise prohibiting the Merger, and such
order, decree, ruling or other action shall have become final and
nonappealable; or
(d) by either Parent or the Company, if the approval of a majority of
the outstanding shares of Company Common Stock cast at the Special Meetings
or any adjournment thereof is not obtained.
Section 10.02. Termination by Parent. This Agreement may be terminated and
the Merger may be abandoned by action of the Board of Directors of Parent, at
any time prior to the Effective Time, before or after the approval by the
stockholders of the Company, if:
(a) the Company shall have failed to comply in any material respect with
any of the covenants or agreements contained in Articles I and V of this
Agreement to be complied with or performed by the Company at or prior to such
date of termination; provided, however, that, if such failure to comply is
capable of being cured prior to the Effective Time, such failure shall not have
been cured within 20 days of the delivery to the Company of written notice of
such failure;
-52-
(b) there exists a breach or breaches of any representation or warranty of
the Company contained in this Agreement such that the Closing condition set
forth in Section 7.01 would not be satisfied; provided, however, that if such
breach or breaches are capable of being cured prior to the Effective Time, such
breaches shall not have been cured within 20 days of delivery to the Company of
written notice of such breach or breaches;
(c) the Board of Directors of the Company (i) fails to recommend the
approval of this Agreement and the Merger to the Company's stockholders, (ii)
withdraws or amends or modifies in a manner adverse to Parent its recommendation
or approval in respect of this Agreement or the Merger or (iii) makes any
recommendation with respect to an Acquisition Transaction (including making no
recommendation or stating an inability to make a recommendation), other than a
recommendation to reject such Acquisition Transaction, or the Board of Directors
of the Company shall have resolved to take any of the foregoing actions referred
to in this clause and publicly discloses such resolution; or
(d) the Company or its representatives shall furnish or disclose non-public
information to, or negotiate, discuss, explore or otherwise communicate in any
way with, a Third Party with respect to an Acquisition Transaction, or the Board
of Directors of the Company shall have resolved to take any of the foregoing
actions referred to in this clause and publicly discloses such resolution;
provided, however, that in such event Parent shall have no right to terminate
pursuant to this clause (d) until the earlier of (i) June 29, 1998 and (ii) the
30th calendar day after the date on which the Company or any of its
representatives first takes any of the foregoing actions referred to in this
clause (d) (the "Trigger Date") and, in each case, only if the Company and its
representatives have not terminated all such activities prior to the Trigger
Date; provided, further, that if, at any time after the Trigger Date, a
Ziconotide Event shall have occurred and be continuing and each of the
conditions set forth in Articles VI, VII and VIII shall have been satisfied or
waived by the party or parties entitled to the benefit of such conditions, other
than any condition which shall not have been satisfied solely as a result of
such Ziconotide Event (the "Satisfaction Date"), then Parent shall have no right
to terminate pursuant to this clause (d) during the period from the 14th
calendar day following the Satisfaction Date to the 44th calendar day following
the Satisfaction Date and only if the Company and its representatives have not
terminated all such activities prior to such 44th day.
-53-
Section 10.03. Termination by the Company. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time, before
or after the approval by the stockholders of the Company, by action of the Board
of the Directors of the Company, if:
(a) Parent or Subco shall have failed to comply in any material respect
with any of the covenants or agreements contained in Articles I and V of this
Agreement to be complied with or performed by Parent or Subco at or prior to
such date of termination; provided, however, that, if such failure to comply is
capable of being cured prior to the Effective Time, such failure to comply shall
not have been cured within 20 days of the delivery to Parent of written notice
of such failure;
(b) there exists a breach or breaches of any representation or warranty of
Parent or Subco contained in this Agreement such that the Closing condition set
forth in Section 8.01 would not be satisfied; provided, however, that if such
breach or breaches are capable of being cured prior to the Effective Time, such
breaches shall not be cured within 20 days of delivery to Parent of written
notice of such breach or breaches; or
(c) if (i) the Company shall have received a Superior Proposal, (ii) the
Board of Directors of the Company reasonably determines in good faith by a
majority vote that such Superior Proposal is more favorable to the stockholders
of the Company than the Merger and is reasonably likely to be consummated and
that failing to take such action would be reasonably likely to constitute a
breach of the Board's fiduciary duties to the stockholders of the Company,
having received prior to such determination (x) the written advice of outside
legal counsel of the Company that failing to take such action would be
reasonably likely to constitute a breach of the fiduciary duties of the Board of
Directors and (y) the written advice of Xxxxxx Xxxxxxx & Co. Incorporated or
another financial advisor of nationally recognized reputation that the Superior
Proposal would be reasonably likely to provide greater value to the Company and
its stockholders than the Merger and (iii) the Company shall have given Parent
five days prior notice of its determination to terminate this Agreement.
Section 10.04. Procedure for Termination. In the event of termination and
abandonment of the Merger by Parent or the Company pursuant to this Article X,
written notice thereof shall forthwith be given to the other.
-54-
Section 10.05. Effect of Termination and Abandonment. (a) In the event of
termination of this Agreement and abandonment of the Merger pursuant to this
Article X, no party hereto (or any of its directors or officers) shall have any
liability or further obligation to any other party to this Agreement, except as
provided in this Section 10.05 and except that nothing herein shall relieve any
party from liability for any breach of this Agreement.
(b) In the event of a termination of this Agreement by the Company pursuant
to Section 10.03(a) or (b), then Parent shall within two business days of such
termination pay the Company by wire transfer or immediately available funds to
an account specified by the Company up to $3.0 million to reimburse the Company
for its documented fees and expenses (including the fees and expenses of
counsel, accountants, consultants and advisors) incurred in connection with this
Agreement and the transactions contemplated hereby. In the event of a
termination of this Agreement by Parent pursuant to Section 10.02(a) or (b),
then the Company shall within two business days of such termination pay Parent
by wire transfer or immediately available funds to an account specified by
Parent up to $3.0 million to reimburse Parent for its documented fees and
expenses (including the fees and expenses of counsel, accountants, consultants
and advisors) incurred in connection with this Agreement and the transactions
contemplated hereby. In the event of a termination of this Agreement by Parent
pursuant to Section 10.02(b) and Parent and the Company mutually agree in
writing that such termination was valid and in accordance with this Agreement
and resulted solely from a Ziconotide Event then, at the Company's option
exercised at the time of such termination, Parent shall, within 30 days of such
termination, purchase 2,000,000 shares of Company Common Stock at a purchase
price in cash equal to $20 per share (subject to appropriate adjustments in the
event of any split, combination or reclassification of the Company Common Stock
at any time subsequent to the date of this Agreement). Parent shall be entitled
to customary registration rights relating to such Company Common Stock
including, but not limited to, one demand registration at Parent's expense.
(c) In the event of a termination of this Agreement (i) by Parent pursuant
to Section 10.02(c) or (d) or (ii) by the Company pursuant to Section 10.03(c),
then, in any such case, the Company shall within two business days of such
termination pay Parent by wire transfer or immediately available funds to an
account specified by Parent (a) up to $3.0 million to reimburse Parent for its
documented fees and expenses
-55-
(including the fees and expenses of counsel, accountants, consultants and
advisors) incurred in connection with this Agreement and the transactions
contemplated hereby and (b) a fee of $24.0 million as liquidated damages.
(d) In the event of a termination of this Agreement by Parent pursuant to
Section 10.01(b) and if Parent and the Company mutually agree in writing that
(i) such termination was valid and in accordance with this Agreement and (ii) at
the time of such termination a Ziconotide Event shall have occurred and be
continuing and each of the conditions set forth in Articles VI, VII and VIII
shall have been satisfied or waived by the party or parties entitled to the
benefit of such conditions, other than any condition which shall not have been
satisfied solely as a result of such Ziconotide Event, then, at the Company's
option exercised at the time of such termination, Parent shall, within 30 days
of such termination, purchase 2,000,000 shares of Company Common Stock at a
purchase price in cash equal $20 per share (subject to appropriate adjustments
in the event of any split, combination or reclassification of the Company Common
Stock at any time subsequent to the date of this Agreement). Parent shall be
entitled to customary registration rights relating to such Company Common Stock
including, but not limited to, one demand registration at Parent's expense.
ARTICLE XI
DEFINITIONS
Section 11.01. Terms Defined in This Agreement. The following capitalized
terms used herein shall have the meanings ascribed in the indicated sections.
1997 Balance Sheet............................. 4.13
1992 Company Purchase Plan..................... 5.13
1997 Company Purchase Plan..................... 5.13
A Warrant...................................... 2.04
Acquisition Transaction........................ 5.02
ADRs........................................... 2.01
Additional Payments............................ 2.03
Affiliates..................................... 4.07
Agreement...................................... First Paragraph
Antitrust Division............................. 5.05
Average Market Value........................... 6.06
B Warrant...................................... 2.04
CERCLA......................................... 4.24
Certificate of Merger.......................... 1.02
-56-
Certificates................................... 2.03
Closing........................................ 9.01
Closing Consideration.......................... 2.01
Closing Date................................... 9.01
COBRA.......................................... 4.23
Code........................................... RECITALS
Company........................................ First Paragraph
Company Common Stock........................... 2.01
Company Common Stock Equivalents............... 4.10
Company Disclosure Statement................... Article IV
Company Option Plans........................... 2.04
Company Preferred Stock........................ 4.10
Company Proxy Statement........................ 1.05
Company Purchase Plans......................... 5.13
Company SEC Reports............................ 4.11
Company Warrants............................... 2.04
Confidentiality Agreement...................... 5.03
Constituent Corporations....................... First Paragraph
Contractor..................................... 4.24
CSA............................................ 4.20
Delaware Act................................... 1.01
DEA............................................ 4.20
Effective Time................................. 1.02
Employee Benefit Plans......................... 4.23
Environmental Law.............................. 4.24
Environmental Permit........................... 4.24
ERISA.......................................... 4.23
ERISA Affiliate................................ 4.23
Exchange Act................................... 3.06
Exchange Agent................................. 2.03
Exchange Fund.................................. 2.03
Exchange Ratio................................. 2.01
Exchangeable Notes............................. 3.11
FDCA........................................... 4.20
Foreign Plan................................... 4.23
FTC............................................ 5.05
Hazardous Material............................. 4.24
HSR Act........................................ 3.04
Intellectual Property Rights................... 4.21
Irish Mergers Act.............................. 3.04
IRS............................................ 4.23
Less-than-5%-holder............................ 6.05
Market Value................................... 2.05
Material Adverse Effect........................ 4.01
Merger......................................... 1.01
NYSE........................................... 2.05
Parent......................................... First Paragraph
Parent ADSs.................................... 2.01
-57-
Parent 'B' Executive Shares.................... 3.11
Parent Disclosure Statement.................... Article III
Parent Exchange Options........................ 2.04
Parent Executive Shares........................ 3.11
Parent Material Adverse Effect................. 3.01
Parent Ordinary Shares......................... 2.01
Parent Plans................................... 3.11
Parent SEC Reports............................. 3.07
Parent Subsidiaries............................ 3.01
Parent Warrants................................ 3.11
Pension Benefit Plans.......................... 4.23
Registration Statement......................... 3.06
SEC............................................ 2.04
Securities Act................................. 2.04
Special Meeting................................ 1.05
Subco.......................................... First Paragraph
Subsidiary..................................... 4.01
Superior Proposal.............................. 5.02
Surviving Corporation.......................... 1.01
Tax............................................ 4.22
Tax Returns.................................... 4.22
Taxes.......................................... 4.22
Third Party.................................... 1.05
Treas. Reg..................................... 4.22
Trigger Date................................... 10.02
U.S. GAAP...................................... 3.07
Welfare Plans.................................. 4.23
Ziconotide Event............................... 4.14
ARTICLE XII
MISCELLANEOUS
Section 12.01. Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified or supplemented only by written agreement of
Parent, Subco and the Company at any time prior to the Effective Time with
respect to any of the terms contained herein; provided, however, that after this
Agreement is adopted by the stockholders of the Company, no such amendment or
modification shall change the amount or form of the Closing Consideration.
Section 12.02. Waiver of Compliance; Consents. Any failure of Parent or
Subco, on the one hand, or the Company, on the other hand, to comply with any
obligation, covenant, agreement or condition herein may be waived by the Company
or Parent or Subco, respectively, only by a written instrument signed by
-58-
the party granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on behalf of
any party hereto, such consent shall be given in writing in a manner consistent
with the requirements for a waiver of compliance as set forth in this Section
12.02.
Section 12.03. Survivability; Investigations. The respective
representations and warranties of Parent, Subco and the Company contained herein
or in any certificates or other documents delivered prior to or at the Closing
shall not be deemed waived or otherwise affected by any investigation made by
any party hereto and shall not survive the Closing.
Section 12.04. Notices. All notices and other communications hereunder
shall be in writing and shall be delivered personally, by next-day courier or
mailed by registered or certified mail (return receipt requested), first class
postage prepaid, or telecopied with written confirmation of receipt, to the
parties at the addresses specified below (or at such other address for a party
as shall be specified by like notice; provided that notices of a change of
address shall be effective only upon receipt thereof). Any such notice shall be
effective upon receipt, if personally delivered or telecopied, one day after
delivery to a courier for next-day delivery, or three days after mailing, if
deposited in the U.S. mail, first class postage prepaid.
(a) if to the Company, to
Neurex Corporation
0000 Xxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx Xxxxxxx, Ph.D.
with a copy to
Wise & Xxxxxxx LLP
0000 Xxxxxx Xxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx Xxxxxx, Esq.
-59-
and with a copy to
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. XxXxxxxx, Esq.
(b) if to Parent or Subco, to
Elan Corporation, plc
Xxxxxxx Xxxxx
Xxxxxxx Xxxxx
Xxxxxx 0, Xxxxxxx
Telecopy: 011-353-1-662-4963
Attention: Xxxxxx X. Xxxxx
with a copy to
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Section 12.05. Assignment; Third Party Beneficiaries. This Agreement and
all of the provisions hereof shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns
(including, without limitation, any wholly-owned Subsidiary of Parent
incorporated under the laws of the United States and substituted for Subco as
provided in Section 1.01), but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties. This Agreement is
not intended to confer any rights or remedies hereunder upon any other person
except the parties hereto and, with respect to Section 5.08, the officers,
directors and employees of the Company.
Section 12.06. Governing Law. This Agreement shall be governed by the laws
of the State of Delaware (regardless of the laws that might otherwise govern
under applicable Delaware principles of conflicts of law) as to all matters,
including,
-60-
but not limited to, matters of validity, construction, effect, performance and
remedies.
Section 12.07. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 12.08. Severability. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in any
respect against a party hereto, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby and such invalidity, illegality or unenforceability shall only
apply as to such party in the specific jurisdiction where such judgment shall be
made.
Section 12.09. Interpretation. The article and section headings contained
in this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement. As used in this Agreement, (i) the term
"person" shall mean and include an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a government or any
department or agency thereof; (ii) the term "subsidiary" of any specified
corporation shall mean any corporation of which a majority of the outstanding
securities having ordinary voting power to elect a majority of the board of
directors is directly or indirectly owned by such specified corporation or any
other person of which a majority of the equity interests therein is, directly or
indirectly, owned by such specified corporation; and (iii) the term "Knowledge"
means, solely with respect to the Company, the actual knowledge of the officers,
directors or senior managers of the Company, after reasonable inquiry.
Section 12.10. Entire Agreement. This Agreement, including the exhibits
hereto and the documents and instruments referred to herein (including the
Disclosure Statement), embodies the entire agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are no
representations, promises, warranties, covenants, or undertakings, other than
those expressly set forth or referred to herein and therein.
S-1
IN WITNESS WHEREOF, Parent, Subco and the Company have caused this
Agreement to be signed by their respective duly authorized officers as of the
date first above written.
ELAN CORPORATION, PLC
By: /s/ Xxxx Xxxxx
----------------------------------
Name: Xxxx Xxxxx
Title: President and Chief Operating
Officer
GANESH ACQUISITION CORP.
By: /s/ Xxxxxx Xxxxx
----------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President and
Chief Financial Officer
NEUREX CORPORATION
By: /s/ Xxxx Xxxxxxx
----------------------------------
Name: Xxxx Xxxxxxx
Title: C.E.O.
EXHIBIT A
Form of Company Affiliate Letter
Neurex Corporation
0000 Xxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Gentlemen:
The undersigned, a holder of shares of common stock, par value $.01 per
share ("Company Common Stock"), of Neurex Corporation, a Delaware corporation
(the "Company"), is entitled to receive, in connection with the merger (the
"Merger") between the Company and a direct wholly owned subsidiary of Elan
Corporation, plc ("Parent"), American Depositary Shares ("ADSs"), each ADS
representing one Ordinary Share, par value 4 Irish Xxxxx ("Parent ADSs"), of
Parent. The undersigned acknowledges that the undersigned may be deemed an
"affiliate" of the Company within the meaning of Rule 145 ("Rule 145")
promulgated under the Securities Act of 1933, as amended (the "Act"), although
nothing contained herein should be construed as an admission of such fact.
If, in fact, the undersigned is an affiliate under the Act, the
undersigned's ability to sell, assign or transfer the Parent ADSs received by
the undersigned upon conversion of any shares of Company Common Stock pursuant
to the Merger may be restricted unless such transaction is registered under the
Act or an exemption from such registration is available. The undersigned
understands that such exemptions are limited and the undersigned has obtained
advice and counsel as to the nature and conditions of such exemptions, including
information with respect to the applicability to the sale of such securities of
Rules 144 and 145(d) promulgated under the Act.
The undersigned hereby represents to and covenants with Parent that the
undersigned will not sell, assign or transfer any of the Parent ADSs received by
the undersigned upon conversion of shares of Company Common Stock pursuant to
the Merger except (i) pursuant to an effective registration statement under the
Act, (ii) in conformity with the limitations specified by Rules 144 and 145(d),
(iii) in a transaction which, in the opinion of counsel reasonably satisfactory
to
-2-
Parent is not required to be registered under the Act or (iv) in a transaction
that, as described in a "no-action" or interpretive letter from the Staff of the
Securities and Exchange Commission (the "SEC"), is not required to be registered
under the Act.
In the event of a sale or other disposition by the undersigned of Parent
ADSs pursuant to Rule 145(d)(1), the undersigned will supply Parent with
evidence of compliance with such Rule, in the form of a letter in the form of
Annex I hereto. The undersigned understands that Parent may instruct its
transfer agent to withhold the transfer of any Parent ADSs disposed of by the
undersigned, but that upon receipt of such evidence of compliance the transfer
agent shall effectuate the transfer of the Parent ADSs sold as indicated in the
letter.
The undersigned acknowledges and agrees that appropriate legends will be
placed on certificates representing Parent ADSs received by the undersigned in
the Merger or held by a transferee thereof, which legends will be removed by
delivery of substitute certificates upon receipt of an opinion in form and
substance reasonably satisfactory to Parent from independent counsel reasonably
satisfactory to Parent to the effect that such legends are no longer required
for the purposes of the Act or the third paragraph of this letter.
The undersigned acknowledges that (i) the undersigned has carefully read
this letter and understands the requirements hereof and the limitations imposed
upon the distribution, sale, transfer or other disposition of Parent ADSs and
(ii) the receipt by Parent of this letter is an inducement and a condition to
Parent's obligations to consummate the Merger.
Very truly yours,
ANNEX I
TO EXHIBIT A
[Name] [Date]
On _____________ the undersigned sold _____________ Ordinary Shares,
represented by American Depositary Shares ("ADSs"), par value 4 Irish Xxxxx (the
"Parent ADSs"), of Elan Corporation, plc (the "Parent"). The Parent ADSs were
received by the undersigned in connection with the merger of a direct wholly
owned subsidiary of Parent with and into Neurex Corporation.
Based upon the most recent report or statement filed by the Parent with the
Securities and Exchange Commission, the Parent ADSs sold by the undersigned were
within the prescribed limitations set forth in paragraph (e) of Rule 144
promulgated under the Securities Act of 1933, as amended (the "Act").
The undersigned hereby represents that the Parent ADSs were sold in
"brokers' transactions" within the meaning of Section 4(4) of the Act or in
transactions directly with a "market maker" as that term is defined in Section
3(a)(38) of the Securities Exchange Act of 1934, as amended. The undersigned
further represents that the undersigned has not solicited or arranged for the
solicitation of orders to buy the Parent ADSs, and that the undersigned has not
made any payment in connection with the offer or sale of the Parent ADSs to any
person other than to the broker who executed the order in respect of such sale.
Very truly yours,
