AGREEMENT AND PLAN OF MERGER between JOHNSON & JOHNSON, KITE MERGER SUB, INC. and COUGAR BIOTECHNOLOGY, INC. dated as of
Exhibit
1
between
XXXXXXX
& XXXXXXX,
KITE
MERGER SUB, INC.
and
COUGAR
BIOTECHNOLOGY, INC.
dated as
of
May 21,
2009
i
ii
This AGREEMENT AND PLAN OF MERGER
(hereinafter referred to as this “Agreement”), dated as
of May 21, 2009, is by and among Xxxxxxx & Xxxxxxx, a New Jersey corporation
(“Parent”),
Kite Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of
Parent (“Purchaser”), and
Cougar Biotechnology, Inc., a Delaware corporation (the “Company”). All
capitalized terms used in this Agreement shall have the meaning ascribed to such
terms in Section
9.5 or as otherwise defined elsewhere in this Agreement unless the
context clearly provides otherwise.
RECITALS
WHEREAS, Parent desires to acquire the
Company on the terms and subject to the conditions set forth in this
Agreement;
WHEREAS, in furtherance thereof and
pursuant to this Agreement, Purchaser has agreed to commence a tender offer (as
it may be amended from time to time as permitted under this Agreement, the
“Offer”) to
purchase all of the outstanding shares of the Company’s Common Stock, par value
$0.0001 per share (the “Shares”), at a price
per Share of $43.00 (such amount or any different amount per Share that may be
paid pursuant to the Offer being hereinafter referred to as the “Offer Price”) net to
the seller in cash, without interest, on the terms and subject to the conditions
set forth in this Agreement;
WHEREAS, following the acceptance for
payment of the Shares pursuant to the Offer and upon the terms and subject to
the conditions set forth in this Agreement, Purchaser shall be merged with and
into the Company with the Company as the Surviving Corporation (the “Merger,” and together
with the Offer and the other transactions contemplated by this Agreement, the
“Transactions”), in
accordance with the General Corporation Law of the State of Delaware (the “DGCL”), whereby each
issued and outstanding Share, other than (i) Shares owned directly or indirectly
by Parent, Purchaser or the Company and (ii) the Dissenting Shares, shall be
converted into the right to receive an amount equal to the Merger
Consideration;
WHEREAS, the board of directors of the
Company (the “Company
Board of Directors”) has, on the terms and subject to the conditions set
forth herein, (i) determined that the Transactions are fair to and in the best
interests of the Company and its stockholders, (ii) approved and declared
advisable this Agreement and the Transactions, including the Offer and the
Merger, and (iii) recommended that the Company’s stockholders accept the Offer,
tender their Shares to Purchaser and, to the extent applicable, adopt this
Agreement and approve the Merger;
WHEREAS, the boards of directors of
Parent and Purchaser have, on the terms and subject to the conditions set forth
herein, approved and declared advisable this Agreement and the Transactions,
including the Offer and the Merger; and
WHEREAS, as an inducement to and
condition to Parent’s and Purchaser’s willingness to enter into this Agreement,
certain stockholders of the Company are entering into Tender and Support
Agreements with Parent simultaneously with the execution of this Agreement in
substantially the form attached hereto as Exhibit A,
whereby, among other things, such stockholders have agreed, upon the terms and
subject to the conditions set forth therein, to tender the Shares held by them
in the Offer and support any and all corporate action necessary to consummate
the Merger.
AGREEMENT
NOW, THEREFORE, in consideration of the
mutual covenants and premises contained in this Agreement and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties to this Agreement agree as follows:
THE
OFFER AND MERGER
(a) Provided
that this Agreement shall not have been terminated in accordance with Section 8.1, as
promptly as practicable (and in any event within ten (10) business days) after
the date hereof, Purchaser shall (and Parent shall cause Purchaser to) commence
(within the meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder (the “Exchange Act”)) the
Offer.
(b) The
obligation of Purchaser to accept for payment and pay for any Shares validly
tendered and not validly withdrawn pursuant to the Offer shall be subject
to: (i) there being validly tendered in the Offer and not
validly withdrawn prior to any then scheduled Expiration Time that number of
Shares which, together with the Shares then beneficially owned by Parent or
Purchaser (if any), represents at least a majority of the Shares then
outstanding (determined on a fully diluted basis) (the “Minimum Condition”);
and (ii) the satisfaction, or waiver by Parent or Purchaser, of the other
conditions and requirements set forth in Annex I (together with the Minimum
Condition, the “Offer
Conditions”). Subject to the prior satisfaction of the Minimum
Condition and the satisfaction, or waiver by Parent or Purchaser, of the other
Offer Conditions, Purchaser shall (and Parent shall cause Purchaser to)
consummate the Offer in accordance with its terms and accept for payment and pay
for all Shares validly tendered and not validly withdrawn pursuant to the Offer
as promptly as practicable after the Expiration Time. The Offer Price
payable in respect of each Share validly tendered and not validly withdrawn
pursuant to the Offer shall be paid net to the seller in cash, without interest,
on the terms and subject to the conditions set forth in this
Agreement.
(c) The
Offer shall be made by means of an offer to purchase (the “Offer to Purchase”)
that describes the terms and conditions of the Offer as set forth in this
Agreement, including the Offer Conditions. Parent and Purchaser
expressly reserve the right (in their sole discretion) to waive, in whole or in
part, any Offer Condition, to increase the Offer Price or to make any other
changes in the terms and conditions of the Offer; provided, however, that unless
otherwise provided by this Agreement or as previously approved in writing by the
Company, Purchaser shall not (i) decrease the Offer Price, (ii) change the form
of consideration payable in the Offer, (iii) reduce the number of Shares to be
purchased in the Offer, (iv) amend or modify any of the Offer Conditions in a
manner that is adverse to the holders of Shares or impose conditions to the
Offer that are different than or in addition to the Offer Conditions, (v) amend
or waive the Minimum Condition, (vi) amend or modify any of the terms of the
Offer in a manner that is adverse to the holders of Shares or (vii) extend or
otherwise change the Expiration Time in a manner other than pursuant to and in
accordance with this Agreement.
(d) Unless
extended pursuant to and in accordance with the terms of this Agreement, the
Offer shall expire at midnight (New York City time) on the date that is twenty
(20) business days following the commencement (within the meaning of Rule 14d-2
under the Exchange Act) of the Offer (the “Initial Expiration
Time”) or, in the event the Initial Expiration Time has been extended
pursuant to and in accordance with this Agreement, the date and time to which
the Offer has been so extended (the Initial Expiration Time, or such later date
and time to which the Initial Expiration Time has been extended pursuant to and
in accordance with this Agreement, is referred to as the “Expiration
Time”).
(e) The
Offer shall be extended from time to time only as follows:
(i) Offer Conditions Not
Satisfied. Subject to the right of Parent to terminate this
Agreement (and the Offer) in accordance with Section 8.1, if on
any then scheduled Expiration Time, any of the Offer Conditions shall not have
been satisfied, or waived by Parent or Purchaser if permitted hereunder,
Purchaser may (in its sole discretion, without consent of the Company), and to
the extent requested in writing by the Company prior to such scheduled
Expiration Time Purchaser shall (and Parent shall cause Purchaser to), extend
the Offer for one or more periods of up to ten (10) business days each until the
Offer Conditions are satisfied or waived; provided, however, that
Purchaser shall not be required to extend the Offer beyond November
21, 2009 (the “Outside
Date”).
(ii) Required by Applicable
Law. Subject to the right of Parent to terminate this
Agreement (and the Offer) in accordance with Section 8.1,
Purchaser shall extend the Offer for any period or periods required by
applicable Law, interpretation or position of the SEC (or its staff) applicable
to the Offer.
(f) Nothing
in this Section
1.1 shall affect any termination rights in Section 8.1.
(g) If
necessary to obtain sufficient Shares (without regard to the exercise of the
Top-Up Option) to reach the Short Form Threshold, Purchaser may, in its sole
discretion, provide for a “subsequent offering period” (and one or more
extensions thereof) in accordance with Rule 14d-11 under the Exchange Act of up
to twenty (20) business days. Subject to the terms and conditions of
this Agreement and the Offer, Purchaser shall (and Parent shall cause Purchaser
to) immediately accept for payment, and pay for, all Shares that are validly
tendered pursuant to the Offer during such “subsequent offering
period.” The Offer Documents shall provide for the possibility of a
“subsequent offering period” in a manner consistent with the terms of this Section
1.1(g).
(h) Purchaser
shall not terminate the Offer prior to any scheduled Expiration Time without the
prior written consent of the Company except in the event that this Agreement is
terminated pursuant to Section
8.1. In the event that this Agreement is terminated pursuant
to Section 8.1,
Purchaser shall (and Parent shall cause Purchaser to) promptly (and in any event
within twenty-four (24) hours of such termination), irrevocably and
unconditionally terminate the Offer.
(i) As
soon as practicable on the date of the commencement of the Offer (within the
meaning of Rule 14d-2 under the Exchange Act), Parent and Purchaser shall file
with the Securities and Exchange Commission (the “SEC”), pursuant to
Regulation M-A under the Exchange Act (“Regulation M-A”), a
Tender Offer Statement on Schedule TO with respect to the Offer (together with
all amendments, supplements and exhibits thereto, the “Schedule
TO”). The Schedule TO shall include, as exhibits, the Offer to
Purchase and a form of letter of transmittal and summary advertisement (such
Schedule TO and the documents included therein pursuant to which the Offer will
be made, together with any amendments and supplements thereto, the “Offer
Documents”). The Company shall promptly after the date hereof
furnish to Parent and Purchaser all information concerning the Company required
by the Exchange Act to be set forth in the Offer Documents. Parent
and Purchaser agree to take all steps necessary to cause the Offer Documents to
be filed with the SEC and disseminated to holders of Shares, in each case as and
to the extent required by the Exchange Act. Parent and Purchaser, on
the one hand, and the Company, on the other hand, agree to promptly correct any
information provided by it for use in the Offer Documents if and to the extent
that such information shall have become false or misleading in any material
respect or as otherwise required by applicable Law. Parent and
Purchaser further agree to take all steps necessary to cause the Offer
Documents, as so corrected (if applicable), to be filed with the SEC and
disseminated to holders of Shares, in each case to the extent required by the
Exchange Act. The Company and its counsel shall be given a reasonable
opportunity to review the Offer Documents before they are filed with the SEC,
and Parent and Purchaser shall give due consideration to all the reasonable
additions, deletions or changes suggested thereto by the Company and its
counsel. In addition, Parent and Purchaser shall provide the Company
and its counsel with copies of any written comments, and shall inform them of
any oral comments, that Parent, Purchaser or their counsel may receive from time
to time from the SEC or its staff with respect to the Offer Documents promptly
after receipt of such comments, and any written or oral responses
thereto. The Company and its counsel shall be given a reasonable
opportunity to review any such written responses and Parent and Purchaser shall
give due consideration to all reasonable additions, deletions or changes
suggested thereto by the Company and its counsel. If the Offer is
terminated or withdrawn by Purchaser, or this Agreement is terminated prior to
the purchase of Shares in the Offer, Purchaser shall promptly return, and shall
cause any depository acting on behalf of Purchaser to return, all tendered
Shares to the registered holders thereof.
(a) On
the date the Offer Documents are filed with the SEC, the Company shall file with
the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 with respect
to the Offer (together with all amendments, supplements and exhibits thereto,
the “Schedule
14D-9”) that shall, subject to the provisions of Section 5.2, contain
a recommendation by the Company Board of Directors recommending that the holders
of the Shares accept the Offer, tender their Shares to Purchaser pursuant to the
Offer and, if necessary under applicable Law, adopt this Agreement and approve
the Merger in accordance with the applicable provisions of the DGCL (the “Company
Recommendation”). The Company agrees to take all steps
necessary to cause the Schedule 14D-9 to be filed with the SEC and disseminated
to holders of Shares, in each case as and to the extent required by the Exchange
Act. Parent and Purchaser shall promptly after the date hereof
furnish to the Company all information concerning Parent and Purchaser required
by the Exchange Act to be set forth in the Schedule 14D-9. The
Company, on the one hand, and Parent and Purchaser, on the other hand, agree to
promptly correct any information provided by it for use in the Schedule 14D-9 if
and to the extent that it shall have become false or misleading in any material
respect or as otherwise required by applicable Law. The Company
further agrees to take all steps necessary to cause the Schedule 14D-9, as so
corrected (if applicable), to be filed with the SEC and disseminated to holders
of Shares, in each case as and to the extent required by the Exchange
Act. Parent, Purchaser and their counsel shall be given a reasonable
opportunity to review the Schedule 14D-9 before it is filed with the SEC and the
Company shall give due consideration to all reasonable additions, deletions or
changes suggested thereto by Parent, Purchaser and their counsel. In
addition, the Company shall provide Parent, Purchaser and their counsel with
copies of any written comments, and shall inform them of any oral comments, that
the Company or its counsel may receive from time to time from the SEC or its
staff with respect to the Schedule 14D-9 promptly after the Company’s receipt of
such comments, and any written or oral responses thereto. Parent,
Purchaser and their counsel shall be given a reasonable opportunity to review
any such written responses and the Company shall give due consideration to all
reasonable additions, deletions or changes suggested thereto by Parent,
Purchaser and their counsel. The Company hereby consents to the
inclusion in the Offer Documents of the Company Recommendation contained in the
Schedule 14D-9.
(b) In
connection with the Offer, the Company shall promptly furnish or cause to be
furnished to Purchaser mailing labels, security position listings and any other
available listings or computer files containing the names and addresses of the
record holders or beneficial owners of the Shares as of the most recent
practicable date, and shall promptly furnish Purchaser with such information and
assistance (including lists of record holders or beneficial owners of the
Shares, updated from time to time upon Purchaser’s or its agent’s request, and
their addresses, mailing labels and lists of security positions) as Purchaser or
its agent may reasonably request for the purpose of communicating the Offer to
the record holders and beneficial owners of the Shares. Subject to
the requirements of applicable Law, and except for such steps as are necessary
to disseminate the Offer Documents and any other documents necessary to
consummate the Offer, the Merger and the other Transactions contemplated by this
Agreement, Parent and Purchaser shall hold in confidence the information
contained in any such labels, listings and files in accordance with the
Confidentiality Agreement and shall use such information only in connection with
the Offer and the Merger and, if this Agreement shall be terminated, shall
promptly deliver (and shall use their respective commercially reasonable efforts
to cause their agents and Representatives to deliver) to the Company (or
destroy) all copies and any extract or summaries of such information then in
their possession or control. In addition, in connection with the
Offer, the Company shall, and shall use its commercially reasonable efforts to
cause its Representatives to, cooperate with Parent and Purchaser to disseminate
the Offer Documents to holders of Shares held in or subject to any Company Stock
Plan or other Benefit Plans, and to permit such holders of Shares to tender
Shares in the Offer.
(a) Provided
that the Minimum Condition is satisfied, promptly after the first time that
Purchaser accepts for payment any Shares tendered and not validly withdrawn
pursuant to the Offer (the “Acceptance Time”),
and at all times thereafter, Purchaser shall be entitled to elect or designate,
from time to time, such number of directors, rounded up to the next whole
number, on the Company Board of Directors as is equal to the product of the
total number of directors on the Company Board of Directors (giving effect to
the directors elected or designated by Purchaser pursuant to this sentence)
multiplied by the percentage that the aggregate number of Shares beneficially
owned by Parent and Purchaser (including Shares accepted for payment pursuant to
the Offer and any Top-Up Option Shares) bears to the total number of Shares then
outstanding. Upon Purchaser’s request at any time following the
Acceptance Time, the Company shall as promptly as practicable take all actions,
including filling vacancies or newly created directorships on the Company Board
of Directors, increasing the size of the Company Board of Directors (including
by amending the Company Bylaws if necessary so as to increase the size of the
Company Board of Directors) and/or using its commercially reasonable efforts to
secure the resignations of such number of its incumbent directors, in each case
as is reasonably necessary to enable Purchaser’s designees to be so elected or
designated to the Company Board of Directors, and shall as promptly as
practicable cause Purchaser’s designees to be so elected or designated at such
time. The Company shall, upon Purchaser’s request following the
Acceptance Time, also cause Persons elected or designated by Purchaser to
constitute the same percentage (rounded up to the next whole number) as is on
the Company Board of Directors of (i) each committee of the Company Board of
Directors, (ii) the board of directors of each Company Subsidiary and (iii) each
committee (or similar body) of each such board, in each case to the extent
permitted by applicable Law and the Nasdaq Marketplace Rules. The
Company’s obligations under this Section 1.3(a) shall
be subject to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder. The Company shall promptly upon execution of this
Agreement take all actions required pursuant to Section 14(f) and Rule 14f-1 in
order to fulfill its obligations under this Section 1.3(a),
including mailing to stockholders (together with the Schedule 14D-9) the
information required by Section 14(f) and Rule 14f-1 as is necessary to enable
Purchaser’s designees to be elected or designated to the Company Board of
Directors. Purchaser shall supply the Company with, and solely be
responsible for, information with respect to Purchaser’s designees and Parent’s
and Purchaser’s respective officers, directors and affiliates to the extent
required by Section 14(f) and Rule 14f-1. The provisions of this
Section 1.3(a)
are in addition to and shall not limit any rights that any of Purchaser, Parent
or any of their respective affiliates may have as a record holder or beneficial
owner of Shares as a matter of applicable Law with respect to the election of
directors or otherwise.
(b) In
the event that Purchaser’s designees are elected or designated to the Company
Board of Directors pursuant to Section 1.3(a), then,
until the Effective Time, the Company shall cause the Company Board of Directors
to maintain three (3) directors who are members of the Company Board of
Directors on the date hereof, each of whom shall be an “independent director” as
defined by Rule 4200(a)(15) of the Nasdaq Marketplace Rules and eligible to
serve on the Company’s audit committee under the Exchange Act and the Nasdaq
Marketplace Rules and at least one of whom shall be an “audit committee
financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K and the
instructions thereto (the “Continuing
Directors”); provided, however, that if any
Continuing Director is unable to serve due to death, disability or resignation,
the Company shall take all necessary action (including creating a committee of
the Company Board of Directors) so that the Continuing Director(s) shall be
entitled to elect or designate another Person (or Persons) to fill such vacancy,
and such Person (or Persons) shall be deemed to be a Continuing Director for
purposes of this Agreement. If no Continuing Director then remains,
the other directors shall designate three (3) Persons who shall each qualify as
an “independent director” as defined by Rule 4200(a)(15) of the Nasdaq
Marketplace Rules and eligible to serve on the Company’s audit committee under
the Exchange Act and Nasdaq Marketplace Rules and, at least one of whom shall be
an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of
Regulation S-K and the instructions thereto, to fill such vacancies and such
Persons shall be deemed Continuing Directors for all purposes of this
Agreement. Notwithstanding anything in this Agreement to the
contrary, if Purchaser’s designees constitute a majority of the Company Board of
Directors after the Acceptance Time and prior to the Effective Time, then the
affirmative vote of a majority of the Continuing Directors shall (in addition to
the approval rights of the Company Board of Directors or the stockholders of the
Company as may be required by the Company Governing Documents or applicable Law)
be required for the Company (i) to amend or terminate this Agreement, (ii) to
extend the time of performance of, or waive, any of the obligations or other
acts of Parent or Purchaser under this Agreement, or to exercise or waive any of
the Company’s rights, benefits or remedies hereunder, if such action would
adversely affect the holders of Shares (other than Parent or Purchaser), (iii)
except as provided herein, to amend the Company Governing Documents in a manner
that would reasonably be expected to adversely affect the holders of Shares
(other than Parent or Purchaser), or (iv) to take any other action or make any
other determination of the Company Board of Directors under or in connection
with this Agreement if such action would reasonably be expected to adversely
affect the holders of Shares (other than Parent or Purchaser). The
Continuing Directors shall have, and Parent shall cause the Continuing Directors
to have, the authority to retain such counsel (which may include current counsel
to the Company or the Company Board of Directors) and other advisors at the
expense of the Company as determined by the Continuing Directors, and the
authority to institute any action on behalf of the Company to enforce
performance of this Agreement.
(a) Subject
to the terms and conditions of this Agreement, and in accordance with the DGCL,
at the Effective Time, the Company and Purchaser shall consummate the Merger
pursuant to which (i) Purchaser shall be merged with and into the Company and
the separate corporate existence of Purchaser shall thereupon cease, (ii) the
Company shall be the surviving corporation in the Merger, and (iii) the separate
corporate existence of the Company with all its rights, privileges, immunities,
powers and franchises shall continue unaffected by the Merger. The
corporation surviving the Merger is sometimes hereinafter referred to as the
“Surviving
Corporation.” The Merger shall have the effects set forth in
the DGCL.
(b) At
the Effective Time, the Company Certificate shall, by virtue of the Merger, be
amended and restated in its entirety so as to read as the certificate of
incorporation of Purchaser in effect immediately prior to the Effective Time,
except that Article I thereof shall read as follows: “The name of the
corporation is Cougar Biotechnology, Inc.,” and as so amended shall be the
certificate of incorporation of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable Law. At the
Effective Time, the bylaws of the Surviving Corporation shall be the bylaws of
the Purchaser immediately prior to the Effective Time until thereafter changed
or amended as provided therein or by applicable Law.
Section 1.5 Closing. The
closing of the Merger (the “Closing”) shall take
place at 9:00 a.m., California time, on a date to be specified by the parties,
such date to be no later than the second (2nd) business day after satisfaction
or (to the extent permitted by applicable Law) waiver of all of the conditions
set forth in Article VII (other than those conditions that by their terms are to
be satisfied at the Closing, but subject to the satisfaction or (to the extent
permitted by Law) waiver of those conditions) (the “Closing Date”), at
the offices of Xxxxxx & Xxxxxxx LLP, 000 Xxxx Xxxxxx Xxxxx, 00xx xxxxx,
Xxxxx Xxxx, Xxxxxxxxxx 00000, unless another date or place is agreed to in
writing by the Company and Purchaser.
Section 1.6 Effective
Time. Parent, Purchaser and the Company shall cause an
appropriate certificate of merger or other appropriate documents (the “Certificate of
Merger”) to be executed and filed on the Closing Date (or on such other
date as Parent and the Company may agree) with the Secretary of State of the
State of Delaware in accordance with the relevant provisions of the DGCL and
shall make all other filings or recordings required under the
DGCL. The Merger shall become effective at the time such Certificate
of Merger shall have been duly filed with, and accepted by, the Secretary of
State of the State of Delaware or such other date and time as is agreed upon by
the parties and specified in the Certificate of Merger, such date and time
hereinafter referred to as the “Effective
Time.” From and after the Effective Time, the Surviving
Corporation shall possess all properties, rights, privileges, powers and
franchises of the Company and Purchaser, and all of the claims, obligations,
liabilities, debts and duties of the Company and Purchaser shall become the
claims, obligations, liabilities, debts and duties of the Surviving
Corporation.
Section 1.7 Directors and Officers of
the Surviving Corporation. The directors of Purchaser
immediately prior to the Effective Time shall, from and after the Effective
Time, be appointed as the directors of the Surviving Corporation, and the
officers of Purchaser immediately prior to the Effective Time, from and after
the Effective Time, shall be appointed as the officers of the Surviving
Corporation, in each case until their respective successors shall have been duly
elected, designated or qualified, or until their earlier death, resignation or
removal in accordance with the Surviving Corporation’s certificate of
incorporation and bylaws.
Section 1.8 Stockholders’
Meeting. If adoption of this Agreement by the stockholders
of the Company is required under the DGCL in order to consummate the
Merger:
(a) As
promptly as practicable following the Acceptance Time, the Company shall, after
consultation with Parent, prepare and file with the SEC (i) a proxy or
information statement for the Special Meeting (together with any amendments
thereof or supplements thereto and any other required proxy materials, the
“Proxy
Statement”) or (ii) if Parent specifies that adoption of this Agreement
be effected by the written consent of the stockholders of the Company, an
information statement with respect to such written consent (together with any
amendments thereof or supplements thereto and any other required materials, the
“Information
Statement”), in each case relating to the Merger and this Agreement;
provided, that Parent,
Purchaser and their counsel shall be given a reasonable opportunity to review
the Proxy Statement or Information Statement, as applicable, before it is filed
with the SEC and the Company shall give due consideration to all reasonable
additions, deletions or changes suggested thereto by Parent, Purchaser and their
counsel. Subject to Section 5.2, the
Company shall include in the Proxy Statement or Information Statement, as
applicable, the recommendation of the Company Board of Directors that
stockholders of the Company vote in favor of or consent to, as applicable, the
adoption of this Agreement and approval of the Merger in accordance with the
DGCL. The Company shall use its commercially reasonable efforts to
obtain and furnish the information required to be included by the SEC in the
Proxy Statement or Information Statement, as applicable, and, after consultation
with Purchaser, respond promptly to any comments made by the SEC with respect to
the Proxy Statement or Information Statement, as applicable. The
Company shall provide Parent, Purchaser and their counsel with copies of any
written comments, and shall inform them of any oral comments, that the Company
or its counsel may receive from time to time from the SEC or its staff with
respect to the Proxy Statement or Information Statement, as applicable, promptly
after the Company’s receipt of such comments, and any written or oral responses
thereto. Parent, Purchaser and their counsel shall be given a
reasonable opportunity to review any such written responses and the Company
shall give due consideration to all reasonable additions, deletions or changes
suggested thereto by Parent, Purchaser and their counsel. The
Company, on the one hand, and Parent and Purchaser, on the other hand, agree to
promptly correct any information provided by it for use in the Proxy Statement
or Information Statement, as applicable, if and to the extent that such
information shall have become false or misleading in any material respect or as
otherwise required by applicable Law and, the Company further agrees to cause
the Proxy Statement or Information Statement, as applicable, as so corrected (if
applicable), to be filed with the SEC and, if any such correction is made
following the mailing of the Proxy Statement or Information Statement, as
applicable, as provided in Section 1.8(b)(ii),
mailed to holders of Shares, in each case as and to the extent required by the
Exchange Act or the SEC (or its staff).
(b) The
Company, acting through the Company Board of Directors, shall, in accordance
with and subject to the requirements of applicable Law:
(i) (A)
(1) as promptly as reasonably practicable following the Acceptance Time, in
consultation with Parent, duly set a record date for, call and give notice of a
special meeting of its stockholders (the “Special Meeting”) for
the purpose of considering and taking action upon this Agreement (with the
record date and meeting date set in consultation with Purchaser), and (2) as
promptly as reasonably practicable following the Acceptance Time, convene and
hold the Special Meeting or (B) if Parent specifies that adoption of this
Agreement be effected by the written consent of the stockholders of the Company,
as promptly as reasonably practicable following the Acceptance Time and in
accordance with the DGCL, set a record date for and solicit such written
consents;
(ii) as
promptly as reasonably practicable following the Acceptance Time, file the
definitive Proxy Statement (or, in the case of written consent, the Information
Statement) with the SEC and cause the Proxy Statement (or, in the case of
written consent, the Information Statement) to be mailed to its stockholders;
and
(iii) (A)
solicit from its stockholders proxies or written consents in favor of the
adoption of this Agreement and approval of the Merger and (B) use its
commercially reasonable efforts to secure any other approval of stockholders of
the Company that is required by the DGCL and any other applicable Law to effect
the Merger.
(c) At
the Special Meeting or any postponement or adjournment thereof, Parent shall
cause to be present and vote, or cause to be voted (or, if Parent specifies that
adoption of this Agreement be effected by the written consent of the
stockholders of the Company, Parent shall consent, or cause such consent to be
given with respect to), all of the Shares then owned of record by it, Purchaser
or any of their other Subsidiaries in favor of the adoption of this Agreement
and approval of the Merger and to deliver or provide, in its capacity as a
stockholder of the Company, any other approvals that are required by the DGCL
and any other applicable Law to effect the Merger.
Section 1.9 Merger Without Meeting of
Stockholders. Notwithstanding the terms of Section 1.8, in the
event that Parent, Purchaser and their respective Subsidiaries shall hold, in
the aggregate, at least ninety percent (90%) of the outstanding Shares (the
“Short Form
Threshold”), following the Acceptance Time and the expiration of any
“subsequent offering period” provided by Purchaser pursuant to and in accordance
with this Agreement, if applicable, and the exercise of the Top-Up Option, if
applicable, Parent shall cause the Merger to become effective promptly, without
a meeting of stockholders of the Company, in accordance with Section 253 of the
DGCL.
Section 1.10 Withholding
Rights. Parent, Purchaser, the Company or the Paying Agent
shall be entitled to deduct and withhold from the Offer Price and the Merger
Consideration, as the case may be, otherwise payable pursuant to this Agreement
to any holder of Shares such amounts as Parent, Purchaser, the Company or the
Paying Agent is required to deduct and withhold with respect to the making of
such payment under the Internal Revenue Code of 1986, as amended (the “Code”), or any
provision of state, local or foreign Tax Law. To the extent that
amounts are so withheld and paid over to the appropriate Taxing authority by
Parent, Purchaser, the Company or the Paying Agent, such withheld amounts shall
be treated for all purposes of this Agreement as having been paid to the holder
of the Shares in respect of which such deduction and withholding was made by
Parent, Purchaser, the Company or the Paying Agent.
CONVERSION
OF SECURITIES
Section 2.1 Conversion of Capital
Stock. At the Effective Time, by virtue of the Merger and
without any action on the part of the holders of any securities of the Company
or common stock, par value $0.01 per share, of Purchaser (the “Purchaser Common
Stock”):
(a) Purchaser Common
Stock. Each issued and outstanding share of Purchaser Common
Stock immediately prior to the Effective Time shall be converted into and become
one fully paid and nonassessable share of common stock of the Surviving
Corporation.
(b) Cancellation of Treasury
Stock and Parent-Owned Stock. All Shares owned by the Company
and any Shares owned by Parent, Purchaser or any of their respective
Subsidiaries immediately prior to the Effective Time shall be cancelled and
shall cease to exist, and no consideration shall be delivered in exchange
therefor.
(c) Conversion of Common
Stock. Each Share issued and outstanding immediately prior to
the Effective Time (other than Shares to be cancelled in accordance with Section 2.1(b) and
other than Dissenting Shares) shall be converted into the right to receive an
amount equal to the Offer Price, payable to the holder thereof in cash, without
interest (the “Merger
Consideration”). From and after the Effective Time, all such
Shares shall no longer be outstanding and shall automatically be cancelled and
shall cease to exist, and each holder of a Share shall cease to have any rights
with respect thereto, except the right to receive the Merger Consideration
therefor upon the surrender of such Share in accordance with Section 2.2, without
interest thereon.
(a) Paying
Agent. Parent or Purchaser shall designate a bank or trust
company to act as the payment agent in connection with the Merger (the “Paying
Agent”). Prior to or at the Effective Time, Parent or
Purchaser shall deposit, or cause to be deposited, with the Paying Agent the
aggregate Merger Consideration with respect to Shares converted into the right
to receive the Merger Consideration pursuant to Section 2.1(c) (the
“Exchange
Fund”). In the event the Exchange Fund shall be insufficient
to make the payments contemplated by Section 2.1(c),
Parent shall, or shall cause Purchaser to, promptly deposit additional funds
with the Paying Agent in an amount which is equal to the deficiency in the
amount required to make such payment. The Exchange Fund shall not be
used for any purpose that is not expressly provided for in this
Agreement. The Exchange Fund shall be invested by the Paying Agent as
reasonably directed by Parent; provided, however, that no such
investment or gain or loss thereon shall affect the amounts payable to holders
of Certificates or Book-Entry Shares pursuant to this Article
II. Any interest and other income resulting from such
investments shall be paid to the Surviving Corporation on the earlier of one
year after the Effective Time or full payment of the Exchange Fund.
(b) Procedures for
Surrender. Promptly after the Effective Time, Parent shall,
and shall cause the Surviving Corporation to, cause the Paying Agent to mail to
each holder of record of a certificate or certificates which immediately prior
to the Effective Time represented outstanding Shares (the “Certificates”) or
non-certificate Shares represented by book-entry (“Book-Entry Shares”)
and whose Shares were converted pursuant to Section 2.1 into the
right to receive the Merger Consideration (i) a letter of transmittal, which
shall specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates (or affidavits
of loss together with any required indemnity) or Book-Entry Shares to the Paying
Agent and shall be in such form and have such other provisions as Parent may
reasonably specify and (ii) instructions for effecting the surrender of the
Certificates (or affidavits of loss together with any required indemnity) or
Book-Entry Shares in exchange for payment of the Merger
Consideration. Upon surrender of a Certificate (or an affidavit of
loss together with any required indemnity) or Book-Entry Share for cancellation
to the Paying Agent or to such other agent or agents as may be appointed by
Parent or the Surviving Corporation, together with such letter of transmittal
duly completed and validly executed in accordance with the instructions thereto,
and such other documents as may be required pursuant to such instructions, the
holder of such Certificate or Book-Entry Share shall be entitled to receive in
exchange therefor the applicable Merger Consideration for each Share formerly
represented by such Certificate or Book-Entry Share, to be mailed as promptly as
practicable following the Paying Agent’s receipt of such Certificate (or
affidavit of loss together with any required indemnity) or Book-Entry Share
(together with such duly completed and validly executed letter of transmittal
and such other required documents), and the Certificate (or affidavit of loss
together with any required indemnity) or Book-Entry Share so surrendered shall
be forthwith cancelled. The Paying Agent shall accept such
Certificates (or affidavits of loss together with any required indemnity) or
Book-Entry Shares upon compliance with such reasonable terms and conditions as
the Paying Agent may impose to effect an orderly exchange thereof in accordance
with normal exchange practices. If payment of the Merger
Consideration is to be made to a Person other than the Person in whose name the
surrendered Certificate is registered, it shall be a condition precedent of
payment that (A) the Certificate so surrendered shall be properly endorsed or
shall be otherwise in proper form for transfer and (B) the Person requesting
such payment shall have paid any transfer and other similar Taxes required by
reason of the payment of the Merger Consideration to a Person other than the
registered holder of the Certificate surrendered or shall have established to
the satisfaction of the Surviving Corporation that such Tax either has been paid
or is not required to be paid. Payment of the Merger Consideration
with respect to Book-Entry Shares shall only be made to the Person in whose name
such Book-Entry Shares are registered. Until surrendered as
contemplated by this Section 2.2, each
Certificate and Book-Entry Share shall be deemed at any time after the Effective
Time to represent only the right to receive the Merger Consideration in cash as
contemplated by this Section 2.2, without
interest thereon.
(c) Transfer Books; No Further
Ownership Rights in Shares. At the Effective Time, the stock
transfer books of the Company shall be closed and thereafter there shall be no
further registration of transfers of Shares on the records of the
Company. From and after the Effective Time, the holders of
Certificates or Book-Entry Shares outstanding immediately prior to the Effective
Time shall cease to have any rights with respect to such Shares except as
otherwise provided for herein or by applicable Law. If, after the
Effective Time, Certificates or Book-Entry Shares are presented to the Surviving
Corporation for any reason, they shall be cancelled and exchanged as provided in
this Article II.
(d) Termination of Exchange
Fund; No Liability. At any time following twelve (12) months
after the Effective Time, the Surviving Corporation shall be entitled to require
the Paying Agent to deliver to it any funds (including any interest received
with respect thereto) remaining in the Exchange Fund that have not been
disbursed, or for which disbursement is pending subject only to the Paying
Agent’s routine administrative procedures, to holders of Certificates or
Book-Entry Shares, and thereafter such holders shall be entitled to look only to
the Surviving Corporation and Parent (subject to abandoned property, escheat or
other similar Laws) as general creditors thereof with respect to the Merger
Consideration payable upon due surrender of their Certificates or Book-Entry
Shares and compliance with the procedures in Section 2.2(b),
without any interest thereon. Notwithstanding the foregoing, none of
the Surviving Corporation, Parent or the Paying Agent shall be liable to any
holder of a Certificate or Book-Entry Share for Merger Consideration delivered
to a public official pursuant to any applicable abandoned property, escheat or
similar Law.
(e) Lost, Stolen or Destroyed
Certificates. In the event that any Certificates shall have
been lost, stolen or destroyed, the Paying Agent shall issue in exchange for
such lost, stolen or destroyed Certificates, upon the making of an affidavit of
that fact by the holder thereof, the Merger Consideration payable in respect
thereof pursuant to Section 2.1 hereof;
provided, however, that Parent may, in
its discretion and as a condition precedent to the payment of such Merger
Consideration, require the owners of such lost, stolen or destroyed Certificates
to deliver a bond in such sum as it may reasonably direct as indemnity against
any claim that may be made against Parent, the Surviving Corporation or the
Paying Agent with respect to the Certificates alleged to have been lost, stolen
or destroyed.
(a) Notwithstanding
anything in this Agreement to the contrary, Shares outstanding immediately prior
to the Effective Time and held by a holder who is entitled to demand and
properly demands appraisal of such Shares (“Dissenting Shares”)
pursuant to, and who complies in all respects with, Section 262 of the DGCL (the
“Appraisal
Rights”) shall be entitled to payment of the fair value of such
Dissenting Shares in accordance with the Appraisal Rights (subject to and
reduced by the amount of any withholding that is required under applicable Tax
Law); provided, however, that if any such
holder shall fail to perfect or otherwise shall waive, withdraw or lose the
right to dissent under the Appraisal Rights, then the right of such holder to be
paid the fair value of such holder’s Dissenting Shares shall cease and such
Dissenting Shares shall be deemed to have been converted as of the Effective
Time into, and to have become exchangeable solely for the right to receive, the
Merger Consideration. At the Effective Time, all Dissenting Shares
shall no longer be outstanding, shall automatically be cancelled and shall cease
to exist, and each holder of Dissenting Shares shall cease to have any rights
with respect thereto, except the right to receive the fair value of such
Dissenting Shares in accordance with the provisions of Section 262 of the DGCL
(subject to and reduced by the amount of any withholding that is required under
applicable Tax Law).
(b) The
Company shall serve prompt notice to Purchaser of any demands received by the
Company for appraisal rights of any Shares, and Purchaser shall have the right
to participate in and direct all negotiations and proceedings with respect to
such demands. Prior to the Effective Time, the Company shall not,
without the prior written consent of Purchaser, make any payment with respect
to, or settle or compromise or offer to settle or compromise, any such demand,
or agree to do any of the foregoing.
(a) The
Company hereby grants to Purchaser an irrevocable option (the “Top-Up Option”),
exercisable only upon the terms and subject to the conditions set forth herein,
to purchase, at a price per share equal to the Offer Price, an aggregate number
of newly issued shares of Common Stock (the “Top-Up Option
Shares”) equal to the lesser of (i) one (1) share less than twenty
percent (20%) of the shares of Common Stock issued and outstanding immediately
prior to the exercise of the Top-Up Option and (ii) the lowest number of shares
of Common Stock that, when added to the number of shares of Common Stock then
owned by Parent, Purchaser and their respective Subsidiaries and affiliates at
the time of such exercise, shall constitute ten thousand (10,000) shares more
than ninety percent (90%) of the Common Stock then outstanding on a fully
diluted basis (after giving effect to the issuance of the Top-Up Option Shares);
provided, however, that the Top-Up
Option shall not be exercisable unless, immediately after such exercise and the
issuance of shares of Common Stock pursuant thereto, the Short Form Threshold
would be reached (after giving effect to the issuance of the Top-Up Option
Shares); provided,
further, that in no
event shall the Top-Up Option be exercisable for a number of shares of Common
Stock in excess of the Company’s total authorized but unissued shares of Common
Stock. The Purchaser may pay the Company the aggregate price required
to be paid for the Top-Up Option Shares either (i) entirely in cash or (ii) at
the Purchaser’s election, by (x) paying in cash an amount equal to not less than
the aggregate par value of the Top-Up Option Shares and (y) executing and
delivering to the Company a promissory note having a principal amount equal to
the aggregate purchase price pursuant to the Top-Up Option less the amount paid
in cash pursuant to the preceding clause (x) (a “Promissory
Note”). Any such Promissory Note shall be full recourse
against Parent and the Purchaser and (i) shall bear interest at the rate of
six percent (6%) per annum, (ii) shall mature on the first (1st)
anniversary of the date of execution and delivery of such Promissory Note and
(iii) may be prepaid, in whole or in part, without premium or
penalty.
(b) Provided
that no applicable Law, order, injunction or other legal impediment shall
prohibit the exercise of the Top-Up Option or the issuance of the Top-Up Option
Shares pursuant thereto, or otherwise make such exercise or issuance illegal,
Purchaser may exercise (subject to the restrictions contained in Section 2.4(a)) the
Top-Up Option on one or more occasions, in whole or in part, only after the
Acceptance Time and prior to the earlier to occur of (i) the Effective Time and
(ii) the termination of this Agreement in accordance with its
terms.
(c) Each
time that Purchaser wishes to exercise the Top-Up Option, Purchaser shall send
to the Company a written notice (a “Top-Up Exercise
Notice”) specifying the denominations of the certificate or certificates
evidencing the Top-Up Option Shares which Purchaser wishes to receive, and the
place, time and date for the closing of the purchase and sale pursuant to the
Top-Up Option (the “Top-Up
Closing”). The Company shall, promptly after receipt of the
Top-Up Exercise Notice, deliver a written notice to Purchaser confirming the
number of Top-Up Option Shares and the aggregate purchase price therefor (the
“Top-Up Notice
Receipt”). At the Top-Up Closing, Purchaser shall pay the
Company the aggregate price required to be paid for the Top-Up Option Shares as
specified in the Top-Up Notice Receipt, by delivery of cash or a combination of
cash and the Promissory Note as contemplated by Section 2.4(a),
and the Company shall cause to be issued and delivered to Purchaser a
certificate or certificates representing the Top-Up Option Shares or, if the
Company does not then have certificated Shares, the applicable number of
Book-Entry Shares. Such certificates or Book-Entry Shares may include
any legends that are required by federal or state securities Laws.
(d) Parent
and the Purchaser acknowledge that the Top-Up Option Shares which the Purchaser
may acquire upon exercise of the Top-Up Option shall not be registered under the
Securities Act and shall be issued in reliance upon an exemption for
transactions not involving a public offering. Parent and the
Purchaser represent and warrant to the Company that the Purchaser is, or shall
be upon any purchase of Top-Up Option Shares, an “accredited investor”, as
defined in Rule 501 of Regulation D under the Securities Act. The
Purchaser agrees that the Top-Up Option, and the Top-Up Option Shares to be
acquired upon exercise of the Top-Up Option, if any, are being and shall be
acquired by the Purchaser for the purpose of investment and not with a view to,
or for resale in connection with, any distribution thereof (within the meaning
of the Securities Act).
(a) Subject
to the occurrence of the Acceptance Time, the Company and the Company Board of
Directors (or the appropriate committee thereof): (i) shall cause,
effective as of immediately prior to the Acceptance Time, the vesting and
exercisability of each then outstanding Company Option held by any Person then
performing services as an employee, director or consultant of the Company
immediately prior to the Acceptance Time to be fully accelerated, and (ii) shall
cause, effective as of the Acceptance Time, each then outstanding Company
Option, without regard to the identity of the holder, to be cancelled and
terminated as of the Acceptance Time (if not exercised prior to the Acceptance
Time) and the holder thereof to become entitled to receive an amount of cash, if
any, from the Company equal to the product of (A) the excess, if any, of the
Offer Price over the exercise price per Share of such Company Option, and (B)
the number of Shares subject to the exercisable portion of such Company Option
(such amount being hereinafter referred to as the “Option
Consideration”). The Option Consideration shall be paid by the
Surviving Corporation as soon as practicable following the Effective
Time.
(b) Subject
to the consummation of the Merger, each Company Warrant which has been issued by
the Company and is outstanding at the Effective Time, whether or not then
exercisable and without regard to the identity of the holder, (i) shall be
exchanged for, and the holder of such Company Warrant shall be entitled to
receive, upon surrender of such holder’s Company Warrants to the Company for
cancellation, or (ii) shall become exercisable for, and the holder of such
Company Warrant shall be entitled to receive upon such exercise and surrender of
the Company Warrant for cancellation, cash equal to the product of (i) the
excess, if any, of the Merger Consideration over the exercise price per Share of
such Company Warrant and (ii) the number of Shares subject to the exercisable
portion of such Company Warrant (such amount being hereinafter referred to as
the “Warrant
Consideration”). The Warrant Consideration shall be paid by
the Surviving Corporation as soon as practicable following the later of the
Effective Time or such exercise and surrender of such Company
Warrant.
(c) The
Company shall take all corporate or other actions necessary to effectuate the
treatment of the Company Options and the Company Warrants as contemplated by
this Section
2.5 and to ensure that (i) all awards issued under the Company Stock Plan
shall be settled as of the Effective Time, and (ii) neither any holder of
Company Options and Company Warrants, nor any other participant in any Company
Stock Plan, shall have any right thereunder to acquire any securities of the
Company, the Surviving Corporation or Parent, or to receive any payment or
benefit with respect to any award previously granted under the Company Stock
Plan, except as provided in this Section
2.5.
(d) As
soon as practicable after the execution of this Agreement, the Company shall,
after consultation with Parent, deliver to the holders of Company Options
appropriate notices setting forth such holders’ rights pursuant to the Company
Stock Plan and this Agreement. As soon as practicable after the
execution of this Agreement, the Company shall, after consultation with Parent,
deliver to the holders of Company Warrants appropriate notices setting forth
such holders’ rights pursuant to the applicable warrant and this
Agreement.
Section 2.6 Additional Benefits and
Warrant Matters. The Company shall take all necessary
actions, including obtaining any required consents from all holders of
outstanding Company Options and Company Warrants, that are necessary to effect
the transactions described in Section 2.5 above
pursuant to the terms of the applicable Company Stock Plan and agreements
evidencing the Company Options and the Company Warrants. All amounts
payable pursuant to Section 2.5 shall be
paid without interest. Any payments made pursuant to Section 2.5 shall be
net of all applicable withholding taxes that Parent, Purchaser, the Surviving
Corporation and the Paying Agent, as the case may be, shall be required to
deduct and withhold from such payments under the Code, the rules and regulations
promulgated thereunder or any provision of applicable Law. To the
extent that amounts are so deducted and withheld by Parent, Purchaser, the
Surviving Corporation or the Paying Agent, such amounts shall be treated for all
purposes of this Agreement as having been paid in respect of which such
deduction and withholding was made by Parent, Purchaser, the Surviving
Corporation or the Paying Agent.
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
The following representations and
warranties by the Company to Parent and Purchaser are qualified in their
entirety by reference to the disclosure (i) in the Company SEC Documents filed
or furnished prior to the date hereof (without giving effect to any amendment to
any such Company SEC Document filed on or after the date hereof and excluding
any disclosures that constitute general cautionary, predictive or
forward-looking statements set forth in any section of a Company SEC Document
entitled “Risk Factors” or “Forward-Looking Statements” or any other sections of
such filings) and (ii) set forth in the disclosure schedule delivered by the
Company to Parent immediately prior to the execution of this Agreement (the
“Company Disclosure
Schedule”). Each disclosure set forth in the Company
Disclosure Schedule shall identify items of disclosure by reference to a
particular Section or Subsection of this Agreement; provided, however, that any disclosure
contained in any Section of the Company Disclosure Schedule shall qualify or
modify each of the representations and warranties set forth in this Article III to the
extent the applicability of the disclosure to such other section is reasonably
apparent from the text of the disclosure made.
(a) The
Company and each of the Company Subsidiaries is a corporation or other legal
entity duly organized, validly existing and in good standing under the Laws of
the jurisdiction in which it is organized and has all requisite corporate or
other power, as the case may be, and authority to own, lease and operate its
respective properties and assets and to conduct its business as now being
conducted. The Company and each of the Company Subsidiaries is duly
qualified or licensed to do business and is in good standing (with respect to
jurisdictions which recognize such concept) in each jurisdiction in which the
nature of its business or the ownership, leasing or operation of its properties
or assets makes such qualification or licensing necessary, except for those
jurisdictions where the failure to be so qualified or licensed or to be in good
standing would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect. The Company has
delivered to or made available to Parent and Purchaser prior to the execution of
this Agreement true and complete copies of any amendments to the Company
Governing Documents not filed as of the date hereof with the SEC. The
Company is in compliance with the terms of the Company Governing
Documents. The Company has made available to Parent complete and
accurate copies of the minutes (or, in the case of minutes that have not yet
been finalized, drafts thereof) of all meetings of the stockholders of the
Company and each of the Company Subsidiaries, the Company Board of Directors and
the board of directors of each of the Company Subsidiaries and the committees of
each of such boards of directors, in each case held since January 1, 2007 and
prior to the date hereof except in each case such minutes and draft minutes
relating to any Competing Proposals made prior to the date hereof, this
Agreement or the Transactions.
(b) Subsidiaries. All
Company Subsidiaries are set forth on Schedule 3.1(b). Except
as set forth on Schedule 3.1(b), the
Company does not, directly or indirectly, beneficially own any Equity Interests
in any Person.
(a) The
authorized capital stock of the Company consists of (i) 100,000,000 shares of
common stock, par value $0.0001 per share (the “Common Stock”), and
(ii) 10,000,000 shares of preferred stock, par value $0.001 per share, all of
which are designated Series A Convertible Preferred Stock (the “Preferred
Stock”). As of May 18, 2009, (A) 20,791,368 shares of Common
Stock were issued and outstanding, (B) no shares of Preferred Stock were issued
and outstanding, (C) no shares of Common Stock were issued and held in the
treasury of the Company or otherwise owned by the Company, (D) 4,600,000 shares
of Common Stock were reserved for issuance pursuant to the Company Stock Plan,
including 3,348,751 shares of Common Stock reserved for issuance upon exercise
of the Company Options, and (E) 378,943 shares of Common Stock reserved for
issuance upon exercise of the Company Warrants. All of the
outstanding shares of the Company’s capital stock are, and all Shares which may
be issued pursuant to the exercise of outstanding Company Options and Company
Warrants will be, when issued in accordance with the terms thereof, duly
authorized, validly issued, fully paid and non-assessable. There are
no bonds, debentures, notes or other indebtedness having the right to vote on
any matters on which stockholders of the Company may vote (or convertible into
securities having such rights) (“Voting Debt”) of the
Company issued and outstanding. Except for the Company Options and
the Company Warrants described in the second sentence of this Section 3.2(a),
there are no (x) options, warrants, calls, pre-emptive rights, subscriptions,
equity or equity-based compensation awards, whether granted under the Company
Stock Plan or otherwise, or other rights, agreements, arrangements or
commitments of any kind, including any stockholder rights plan, relating to the
issued or unissued capital stock of the Company, obligating the Company to
issue, transfer or sell or cause to be issued, transferred or sold any shares of
capital stock or Voting Debt of, or other equity or equity-based interest in,
the Company or securities convertible into or exchangeable for such shares or
equity or equity-based interests, or obligating the Company to grant, extend or
enter into any such option, warrant, call, subscription, equity or equity-based
compensation awards, whether granted under the Company Stock Plan or otherwise,
or other right, agreement, arrangement or commitment (collectively and together
with capital stock, “Equity Interests”) or
(y) outstanding contractual obligations of the Company to repurchase, redeem or
otherwise acquire any Shares or any capital stock of, or other Equity Interests
in, the Company or to provide funds to make any investment (in the form of a
loan, capital contribution or otherwise) in the Company.
(b) Schedule 3.2(b) sets
forth a complete and accurate list, as of May 18, 2009, of (A) all outstanding
Company Options, the number of shares of Common Stock subject thereto, the grant
dates, expiration dates, exercise or base prices (if applicable) and vesting
schedules thereof and the names of the holders thereof, and (B) all outstanding
Company Warrants, the number of shares of Common Stock subject thereto, the
grant dates, expiration dates, exercise price and vesting schedules thereof and
the names of the holders thereof. All Company Options are evidenced
by stock option agreements or other award agreements, in each case, in the forms
set forth in Schedule 3.2(b),
other than differences with respect to the number of shares covered thereby, the
exercise price, regular vesting schedule and expiration date applicable thereto
and, except for such differences, no stock option agreement or other award
agreement contains material terms that are inconsistent with, or in addition to,
such forms. Each grant of Company Options was duly authorized no
later than the date on which the grant of such Company Option was by its terms
to be effective (the “Grant Date”) by all
necessary corporate action, including, as applicable, approval by the Company
Board of Directors (or a duly constituted and authorized committee thereof) and
any required stockholder approval by the necessary number of votes or written
consents; such grant was made in accordance with the terms of the applicable
compensation plan or arrangement of the Company, the Exchange Act and all other
applicable Laws, including the Nasdaq Marketplace Rules; and the per share
exercise price of such grant was equal to or greater than the fair market value
(within the meaning of Section 422 of the Code, in the case of each Company
Option intended to qualify as an “incentive stock option”, and within the
meaning of Section 409A of the Code, in the case of each other Company Option)
of a share of Common Stock on the applicable Grant Date. Each Company
Option intended to qualify as an “incentive stock option” under Section 422 of
the Code, if any, so qualifies. Each Company Option may, by its
terms, be treated at the Effective Time as set forth in Section
2.5(a). All outstanding Company Warrants have been granted
pursuant to the warrant agreements identified on Schedule 3.2(b),
true and complete copies of which have been provided to Parent prior to the date
hereof. Each Company Warrant may, by its terms, be treated at the
Effective Time as set forth in Section
2.5(b).
(c) There
are no voting trusts or other agreements to which the Company is a party with
respect to the voting of the Company’s Common Stock or any capital stock of, or
other Equity Interest, of the Company. The Company has not granted
any preemptive rights, anti-dilutive rights or rights of first refusal or
similar rights.
Section 3.3 Authorization; Validity of
Agreement; Company Action. The Company has all necessary
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and, subject to the receipt of the Requisite
Stockholder Approval in the case of the Merger, if applicable, to consummate the
Transactions. The execution, delivery and performance by the Company
of this Agreement, and the consummation by it of the Transactions, have been
duly and validly authorized by the Company Board of Directors and no other
corporate action on the part of the Company, pursuant to the DGCL or otherwise,
is necessary to authorize the execution and delivery by the Company of this
Agreement, and the consummation by it of the Transactions, subject, in the case
of the Merger, to the receipt of the Requisite Stockholder Approval, if
applicable (which is the only stockholder vote or consent that is required for
adoption of this Agreement and the approval of the Merger and the consummation
of the Merger by the Company), and the filing of the Certificate of
Merger. This Agreement has been duly executed and delivered by the
Company and, assuming due and valid authorization, execution and delivery hereof
by Parent and Purchaser, is a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except that the
enforcement hereof may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar Laws, now or hereafter in effect,
affecting creditors’ rights generally and (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at Law).
Section 3.4 Board
Approvals. The Company Board of Directors, at a meeting
duly called and held, has unanimously (a) determined that this Agreement, the
Offer, the Merger and the other Transactions are fair to, and in the best
interests of, the Company and its stockholders, (b) duly approved and taken all
corporate action required to be taken by the Company Board of Directors to
authorize the consummation of the Offer, the Merger and the other Transactions,
(c) approved and declared advisable this Agreement, the Offer, the Merger and
the other Transactions, which approval, to the extent applicable, constituted
approval under the provisions of Section 203 of the DGCL as a result of which
this Agreement, the Offer, the Merger and the other Transactions are not and
will not be subject to the restrictions on “business combinations” under the
provision of Section 203 of the DGCL and (d) subject to Section 5.2,
recommended that the stockholders of the Company accept the Offer, tender their
Shares to Purchaser pursuant to the Offer and, if required by applicable Law,
adopt this Agreement and approve the Merger.
Section 3.5 Consents and Approvals; No
Violations. None of the execution, delivery or performance
of this Agreement by the Company, the acceptance for payment or acquisition of
Shares pursuant to the Offer, the consummation by the Company of the Merger or
any other Transaction or compliance by the Company with any of the provisions of
this Agreement will (a) conflict with or result in any breach of any provision
of the Company Governing Documents or the organizational documents of any
Company Subsidiary, (b) require any filing by the Company or any Company
Subsidiary with, or the obtaining of any permit, authorization, consent or
approval of, any court, arbitral tribunal, administrative agency or commission
or other governmental or other regulatory authority or agency, whether foreign,
federal, state, local or supernational (a “Governmental Entity”)
(except for (i) compliance with any applicable requirements of the Exchange Act,
(ii) any filings as may be required under the DGCL, (iii) filings, permits,
authorizations, consents and approvals as may be required under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and any
other Required Governmental Approvals, (iv) such filings with the SEC as may be
required to be made by the Company or (v) such filings as may be required under
Nasdaq Marketplace Rules, in each case in connection with this Agreement, the
Offer and the Merger), (c) result in a modification, violation or breach of, or
constitute a default under (with or without notice or lapse of time or both), or
give rise to any right, including any right of termination, amendment,
cancellation or acceleration under, any of the terms, conditions or provisions
of any Company Agreement, or (d) violate any order, writ, injunction, decree or
Law applicable to the Company, any Company Subsidiary or any of their respective
properties or assets; except in each of clauses (b), (c) or (d) where (i) any
failure to obtain such permits, authorizations, consents or approvals, (ii) any
failure to make such filings, or (iii) any such modifications, violations,
rights, breaches or defaults have not had and would not reasonably be expected
to, individually or in the aggregate, (A) have a Company Material Adverse Effect
or (B) prevent or materially impede, materially interfere with, materially
hinder or materially delay the consummation of the Offer, the Merger or any of
the other Transactions contemplated by this Agreement.
Section 3.6 Company SEC Documents and
Financial Statements. The Company has filed or furnished
(as applicable) with the SEC all forms, reports, schedules, statements and other
documents required by it to be filed or furnished (as applicable) since and
including January 1, 2007, under the Exchange Act or the Securities Act of 1933,
as amended, and the rules and regulations promulgated thereunder (the “Securities Act”)
(together with all certifications required pursuant to the Xxxxxxxx-Xxxxx Act of
2002 and the rules and regulations promulgated thereunder (the “Xxxxxxxx-Xxxxx Act”))
(such documents and any other documents filed by the Company with the SEC, as
have been amended since the time of their filing, collectively, the “Company SEC
Documents”). As of their respective filing dates the Company
SEC Documents (a) did not (or with respect to Company SEC Documents filed after
the date hereof, will not) contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading and (b) complied in all material respects
with the applicable requirements of the Exchange Act or the Securities Act, as
the case may be, the Xxxxxxxx-Xxxxx Act. None of the Company
Subsidiaries is currently required to file any forms, reports, schedules,
statements or other documents with the SEC. All of the audited
consolidated financial statements and unaudited consolidated interim financial
statements of the Company and its consolidated Subsidiaries included in the
Company SEC Documents (collectively, the “Financial
Statements”), (i) have been or will be, as the case may be, prepared
from, are in accordance with, and accurately reflect the books and records of
the Company and its consolidated Subsidiaries in all material respects, (ii)
have been or will be, as the case may be, prepared in accordance with United
States generally accepted accounting principles (“GAAP”) applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto or, in the case of interim financial statements, for normal and
recurring year-end adjustments and as may be permitted by the SEC on Form 10-Q,
Form 8-K or any successor or like form under the Exchange Act), and (iii) fairly
present in all material respects the consolidated financial position and the
results of operations and cash flows of the Company and its consolidated
Subsidiaries as of the times and for the periods referred to
therein.
(a) The
Company and each of the Company Subsidiaries have designed and maintain a system
of internal controls over financial reporting (as defined in and satisfying the
requirements of Rules 13a-15(f) and 15d-15(f) of the Exchange Act) sufficient to
provide reasonable assurances regarding the reliability of financial
reporting. The Company (i) has designed and maintains disclosure
controls and procedures (as defined in and satisfying the requirements of Rules
13a-15(e) and 15d-15(e) of the Exchange Act) to ensure that material information
required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the SEC’s rules and forms and is accumulated and
communicated to the Company’s management as appropriate to allow timely
decisions regarding required disclosure and (ii) to the Company’s knowledge, has
disclosed to the Company’s auditors and the audit committee of the Company Board
of Directors (and made summaries of such disclosures available to Parent) (A)
any significant deficiencies and material weaknesses in the design or operation
of internal controls over financial reporting that are reasonably likely to
adversely affect in any material respect the Company’s ability to record,
process, summarize and report financial information and (B) any fraud, whether
or not material, that involves management or other employees who have a
significant role in the Company’s internal controls over financial
reporting.
(b) The
Company is in compliance in all material respects with (i) the applicable
provisions of the Xxxxxxxx-Xxxxx Act and (ii) the applicable Nasdaq Marketplace
Rules.
(c) Neither
the Company nor any of the Company Subsidiaries is a party to, or has any
commitment to become a party to, any joint venture, off balance sheet
partnership or any similar contract or arrangement (including any contract or
arrangement relating to any transaction or relationship between or among the
Company and any of the Company Subsidiaries, on the one hand, and any
unconsolidated affiliate, including any structured finance, special purpose or
limited purpose entity or Person, on the other hand, or any “off balance sheet
arrangements” (as defined in Item 303(a) of Regulation S-K under the Exchange
Act)), where the result, purpose or intended effect of such contract or
arrangement is to avoid disclosure of any material transaction involving, or
material liabilities of, the Company or any of the Company Subsidiaries in the
Company’s published financial statements or other Company SEC
Documents.
(a) Except
as contemplated by this Agreement or in the Company SEC Documents filed or
furnished prior to the date hereof, since December 31, 2008, the Company and
each Company Subsidiary has conducted, in all material respects, its business in
the ordinary course of business consistent with past practice.
(b) From
December 31, 2008 through the date of this Agreement, no fact(s), change(s),
event(s), development(s) or circumstance(s) have occurred or exist which have
had or would reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect. Except for liabilities incurred in
connection with this Agreement or as expressly permitted or contemplated by this
Agreement, since December 31, 2008 to the date hereof, there has not been any of
the following:
(i) any
declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock or property or any combination thereof) with respect to
any capital stock of the Company or any of the Company Subsidiaries, other than
any declaration setting aside or payment from a wholly owned Subsidiary of the
Company to the Company in the ordinary course of business consistent with past
practice;
(ii) any
purchase, redemption or other acquisition by the Company or any of the Company
Subsidiaries of any shares of capital stock or any other Equity
Interests;
(iii) any
split, combination, subdivision or reclassification of any capital stock of the
Company or any of the Company Subsidiaries or any issuance or the authorization
of any issuance of any other securities in respect of, in lieu of or in
substitution for shares of their respective capital stock;
(iv) except
as required to comply with applicable Law or any Benefit Plan in effect as of
December 31, 2008, any granting by the Company or any of the Company
Subsidiaries to any current or former director, officer, employee or consultant
of the Company or any of the Company Subsidiaries (each, a “Participant”) of any
increase in compensation or benefits, except in the case of employees and
consultants who are neither directors nor officers, for increases in
compensation or benefits in the ordinary course of business consistent with past
practice;
(v) except
as required to comply with applicable Law or any Benefit Plan in effect as of
December 31, 2008, any granting by the Company or any of the Company
Subsidiaries to any Participant of any increase in target bonus
opportunity;
(vi) except
as required to comply with applicable Law or any Benefit Plan in effect as of
December 31, 2008, any granting by the Company or any of the Company
Subsidiaries to any Participant of any right to receive, or any increase in,
change of control, retention, severance or termination pay;
(vii) except
as required to comply with applicable Law or any Benefit Plan in effect as of
December 31, 2008, any entry by the Company or any of the Company Subsidiaries
into, adoption of, or any amendment or termination of, any Benefit Plan or
collective bargaining agreement, except to reflect changes in plan
administration or in the ordinary course of business consistent with past
practice;
(viii) except
as required to comply with applicable Law or any Benefit Plan in effect as of
December 31, 2008, the taking of any action to accelerate the vesting or payment
of any compensation or benefits under any Benefit Plan or the taking of any
action to fund or in any other way secure the payment of compensation or
benefits under any Benefit Plan;
(ix) any
damage, destruction or loss to any asset of the Company or any of the Company
Subsidiaries, whether or not covered by insurance, that individually or in the
aggregate has had or would reasonably be expected to have a Company Material
Adverse Effect;
(x)
any change in accounting methods, principles or
practices by the Company materially affecting its assets, liabilities or
businesses, except insofar as may have been required by a change in GAAP or Law;
or
(xi) any
material Tax election or change in material Tax election, any change in material
method of accounting for Tax purposes or any settlement or compromise of any
material income Tax liability.
Section 3.9 No Undisclosed
Liabilities. Except (a) as reflected or otherwise reserved
against on the Financial Statements set forth in the Company SEC Documents filed
prior to the date hereof, (b) for liabilities and obligations incurred since
December 31, 2008 in the ordinary course of business consistent with past
practice (c) for liabilities and obligations incurred under this Agreement or in
connection with the Transactions, (d) for performance obligations on the
part of the Company or any Company Subsidiary pursuant to the terms of any
Company Material Contract (other than liabilities or obligations due to breaches
thereunder), and (e) for liabilities incurred under the terms of this Agreement,
the Company has not incurred any liabilities or obligations of any nature,
whether or not accrued, absolute, contingent or otherwise, other than as have
not had and would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.
Section 3.10 Litigation. There
is no claim, action, suit, arbitration, investigation, alternative dispute
resolution action or any other judicial or administrative proceeding, in Law or
equity (collectively, a “Legal Proceeding”),
pending against (or, to Company’s knowledge, threatened against or naming as a
party thereto), the Company, any Company Subsidiary or, to the Company’s
knowledge, any current or former executive officer or director of the Company or
any Company Subsidiary (in their capacity as such) other than as have not had
and would not reasonably be expected to have, individually or in the aggregate,
a Company Material Adverse Effect; provided, that the
representation and warranty in this sentence shall not apply to any Legal
Proceeding commenced or threatened after the date hereof and directly arising
out of this Agreement or the Transactions. Neither the Company nor
any Company Subsidiary is subject to any outstanding order, writ, injunction,
decree or arbitration ruling or judgment of a Governmental Entity which has had
or would reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect.
(a) Schedule 3.11(a) sets
forth a correct and complete list of all Benefit Plans. For purposes
of this Section
3.11, an entity is an “ERISA Affiliate” of
the Company if it would be, or would have ever been, required to be treated as a
single employer with the Company under Sections 414(b), (c), (m) or (o) of the
Code.
(b) Each
Benefit Plan that is intended to be qualified under Section 401(a) of the Code,
and each trust that is related to a Benefit Plan and intended to be Tax exempt
under Section 501(a) of the Code, has been determined by the Internal Revenue
Service to be qualified under Section 401(a) of the Code or exempt from Taxation
under Section 501(a) of the Code and, to the knowledge of the Company, nothing
has occurred that would adversely affect the qualification or Tax exemption of
any such Benefit Plan or related trust. Each Benefit Plan has been
administered in all material respects in accordance with its
terms. With respect to each Benefit Plan, each of the Company and the
Company Subsidiaries is in compliance in all material respects with the
applicable provisions of ERISA, the Code and all other applicable
Laws. Each Benefit Plan is in compliance in all material respects
with the applicable provisions of ERISA, the Code and all other applicable
Laws.
(c) No
Benefit Plan (i) is a “multiemployer plan” (as defined in Section 3(37) or
4001(a)(3) of ERISA), (ii) is subject to Part 3 of Subtitle B of Title I of
ERISA or Title IV of ERISA or Section 412 of the Code or (iii) provides for
post-retirement or other post-employment welfare benefits (other than health
care continuation coverage as required by applicable Law).
(d) Except
as may be required by applicable Law, or as contemplated under this Agreement,
neither the Company nor any Company Subsidiary has any announced plan or legally
binding commitment to create any additional Benefit Plans which are intended to
cover employees or former employees of the Company or any Company Subsidiary or
to amend or modify any existing Benefit Plan which covers or has covered
employees or former employees of the Company or any Company
Subsidiary.
(e) To
the extent applicable, correct and complete copies of the following have been
delivered or made available to Parent by the Company: (i) all Benefit
Plans (including all amendments and attachments thereto); (ii) written summaries
of any Benefit Plan not in writing; (iii) all related trust documents; (iv) all
insurance contracts or other funding arrangements; (v) the most recent annual
report (Form 5500) filed with the Internal Revenue Service; (vi) the most recent
determination letter from the Internal Revenue Service; and (vii) the most
recent summary plan description and any summary of material modification
thereto.
(f) Neither
the Company nor any ERISA Affiliate (A) has, within the prior six years,
sponsored, maintained, contributed to or been required to contribute to any
Benefit Plan that is subject to Part 3 of Subtitle B of Title I of ERISA or
Title IV of ERISA or Section 412 of the Code or (B) has any unsatisfied
liability under Title IV of ERISA or Section 412 of the Code.
(g) None
of the Company or any Company Subsidiary has received notice of, and to the
knowledge of the Company, there are no investigations by any Governmental Entity
with respect to, termination proceedings or other claims (except claims for
benefits payable in the normal operation of the Benefit Plans), suits or
proceedings against or involving any Benefit Plan or asserting any rights or
claims to benefits under any Benefit Plan that would give rise to any material
liability (except claims for benefits payable in the normal operation of the
Benefit Plan), and, to the knowledge of the Company, there are not any facts
that could give rise to any material liability in the event of any such
investigation, claim, suit or proceeding.
(h) With
respect to each Benefit Plan, there has not occurred any prohibited transaction
(within the meaning of Section 406 of ERISA or Section 4975 of the Code) that is
not otherwise exempt under Section 408 of ERISA in which the Company, any
Company Subsidiaries or any of their respective officers, directors or employees
or, to the knowledge of the Company, any trustee or other fiduciary or
administrator of any Benefit Plan or trust created thereunder, in each case, who
is not an officer, director or employee of the Company or any of its
Subsidiaries (a “Non-Affiliate Plan
Fiduciary”), has engaged that could subject the Company, any of the
Company Subsidiaries or any of their respective officers, directors or employees
or, to the knowledge of the Company, any Non-Affiliate Plan Fiduciary to a tax
or penalty on prohibited transactions imposed by Section 4975 of the Code or the
sanctions imposed under Title I of ERISA or any other applicable
Law.
(i) Each
Benefit Plan that is an employee welfare benefit plan may be amended or
terminated (including with respect to benefits provided to retirees and other
former employees) without material liability (other than for benefits then
payable under such plan without regard to such amendment or termination or for
ordinary administrative expenses typically incurred in a termination event) to
the Company or any Company Subsidiary at any time after the Effective
Time. The Company does not self-insure any of its employee welfare
Benefit Plans.
(j) None
of the execution and delivery of this Agreement, the obtaining of the Requisite
Stockholder Approval or the consummation of the Offer or the Merger or any other
Transaction (whether alone or as a result of any termination of employment on or
following the Effective Time) will, except as expressly contemplated by this
Agreement, (A) entitle any Participant to severance, termination, retention,
change in control or similar compensation or benefits, (B) accelerate the time
of payment or vesting, or trigger any payment or funding (through a grantor
trust or otherwise) of, compensation or benefits under, increase the amount
payable or trigger any other material obligation pursuant to any Benefit Plan or
(C) result in any breach or violation of, or a default under, any Benefit
Plan.
(k) The
Company has properly classified all persons engaged to provide services to the
Company or any Company Subsidiary as employees or non-employees.
(l)
Each Benefit Plan that is a “nonqualified deferred compensation plan”
within the meaning of Section 409A(d)(1) of the Code (a “Nonqualified Deferred
Compensation Plan”) subject to Section 409A of the Code was, as of
January 1, 2009, in documentary and operational compliance with Section 409A of
the Code and the then applicable guidance issued by the Internal Revenue Service
thereunder (together, the “409A Authorities”).
Since January 1, 2009, each Nonqualified Deferred Compensation Plan has remained
in documentary and operational compliance with the 409A
Authorities. No Participant is entitled to any gross-up, make-whole
or other additional payment from the Company or any Company Subsidiary in
respect of any Tax (including Federal, state, local or foreign income, excise or
other Taxes (including taxes imposed under Sections 280G and 409A of the Code))
or interest or penalty related thereto.
(m) The
Compensation Committee of the Company Board of Directors (the “Compensation
Committee”) (each member of which the Company Board of Directors
determined is an “independent director” as defined by Rule 4200(a)(15) of the
Nasdaq Marketplace Rules and is an “independent director” in accordance with the
requirements of Rule 14d-10(d)(2) under the Exchange Act) (A) at a meeting duly
called and held, duly adopted resolutions approving each agreement, arrangement
or understanding entered into by the Company or any of its Subsidiaries on or
before the date hereof with any of its officers, directors or employees as an
“employment compensation, severance or other employee benefit arrangement”
within the meaning of Rule 14d-10(d)(1) under the Exchange Act, and (B) has
taken all other actions necessary to satisfy the requirements of the
non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with
respect to the foregoing arrangements.
(n) Other
than payments or benefits that may be made to the persons listed in Schedule 3.11(n)
(“Primary Company
Executives”), no amount or other entitlement or economic benefit that
could be received (whether in cash or property or the vesting of property) as a
result of the execution and delivery of this Agreement, the obtaining of the
Requisite Stockholder Approval or the consummation of the Offer, the Merger or
any other Transaction (alone or in combination with any other event, including
as a result of termination of employment on or following the Effective Time) by
or for the benefit of any Person who is a “disqualified individual” (as defined
in Treasury Regulation Section 1.280G-1) with respect to the Company under any
Benefit Plan or otherwise would be characterized as an “excess parachute
payment” (as defined in Section 280G(b)(1) of the Code). Schedule
3.11(n) sets forth, calculated as of the date of this Agreement, an estimate of
(i) the “base amount” (as such term is defined in Section 280G(b)(3) of the
Code) for each Primary Company Executive and (ii) the maximum amount of
“parachute payments” (as defined in Section 280G of the Code) that could be paid
or provided to each Primary Company Executive as a result of the execution and
delivery of this Agreement, the obtaining of the Requisite Stockholder Approval
or the consummation of the Offer, the Merger or any other transaction
contemplated by this Agreement (alone or in combination with any other event,
including as a result of any termination of employment on or following the
Effective Time).
(o) No
Benefit Plan is maintained outside the jurisdiction of the United States, is by
its terms governed by the Laws of any jurisdiction other than the United States
or provides compensation or benefits to Participants providing services
primarily outside of the United States.
(a) The
Company has timely filed all Tax Returns required to be filed (taking into
account any extensions of time within which to file such Tax Returns), and all
such Tax Returns were true, complete and correct in all material
respects. The Company has timely paid all Taxes due and owing (other
than Taxes for which adequate reserves, in accordance with GAAP, either (i) have
been established on the most recent financial statements contained in the
Company SEC Documents or (ii) have been established on the Company’s financial
statements after the date of the financial statements described in clause (i)
due to the passage of time and for transactions occurring in the ordinary course
of business consistent with past practice).
(b) There
currently are no audits, examinations or other proceedings pending with regard
to any Taxes of the Company. The Company has not received a written
notice or announcement of any audits or proceedings.
(c) No
issues relating to any material amount of Taxes were raised by the relevant
Taxing authority in any completed audit or examination that would reasonably be
expected to result in a material amount of Taxes in a later taxable period. The
relevant statute of limitations is closed with respect to (i) the Company’s
United States federal income tax returns for all years through the Company’s
taxable year ended December 31, 2004 and (ii) the Company’s California income
tax returns for all years through the Company’s taxable year ended December 31,
2003; provided however,
that all of the Company’s income tax returns remain open to audit to the extent
they relate to the Company’s net operating losses, loss carryforwards and other
tax credits. As of the date hereof, there is no currently effective
agreement or other document extending, or having the effect of extending, the
period of assessment or collection of any Taxes of the Company, nor has any
request been made for any such extension, and no power of attorney (other than
powers of attorney authorizing employees of the Company to act on behalf of the
Company) with respect to Taxes has been executed or filed with any Taxing
authority.
(d) There
are no material Tax Liens upon any property or assets of the Company, except
Liens for Taxes not yet delinquent or Taxes being contested in good faith by
appropriate proceedings.
(e) The
Company is not a party to, is bound by or has any obligation under any Tax
sharing, Tax allocation or Tax indemnity agreement or similar contract or
arrangement.
(f) The
Company has complied in all material respects with all applicable Laws relating
to the payment and withholding of Taxes (including withholding of Taxes pursuant
to Sections 1441, 1442, 3121 and 3402 of the Code or similar provisions under
applicable Law) and has, within the time and the manner prescribed by applicable
Law, withheld from and paid over to the proper Taxing authorities all material
amounts (individually or in the aggregate) required to be so withheld and paid
over under applicable Laws.
(a) Except
as filed as exhibits to the Company SEC Documents filed prior to the date
hereof, Schedule
3.13(a) sets forth a true and complete list of each note, bond, mortgage,
lien, indenture, lease, license, contract or agreement, or other instrument or
obligation to which the Company or any Company Subsidiary is a party or by which
any of their respective properties or assets are bound (the “Company Agreements”)
which is in effect as of the date hereof and which:
(i) is
a “material contract” (as such term is defined in Item 601(b)(10) of Regulation
S-K of the SEC);
(ii) involves
annual expenditures in excess of $500,000 and was not entered into in the
ordinary course of business consistent with past practice;
(iii) (A)
contains any non-compete or exclusivity provisions (or obligates the Company or
any Company Subsidiary to enter into any non-compete or exclusivity
arrangements) with respect to any line of business, geographic area or other
conduct with respect to the Company or any of its Subsidiaries, or after
consummation of the Transactions, Parent or any of its Subsidiaries, (B)
restricts the conduct of any line of business (including the ability to
research, develop, distribute, sell, supply, market or manufacture any product
(including products under development) for any indication in any product market,
therapeutic area or geographic area) by the Company or any of its Subsidiaries,
or after consummation of the Transactions, by Parent or any of its Subsidiaries,
or (C) requires or obligates the Company or any Company Subsidiary to purchase
specified minimum amounts of any product or material or to perform or conduct
research, clinical trials or development for the benefit of any person other
than the Company or any Company Subsidiary;
(iv) relates
to a partnership, joint venture or similar arrangement;
(v)
relates to the borrowing of money or extension of credit
other than accounts receivables and payables incurred or arising in the ordinary
course of business;
(vi) relates
to research, clinical trial, development, distribution, sale, supply, license,
marketing, co promotion or manufacturing by third parties of (x) products
(including products under development) of the Company or any Company Subsidiary
or (y) products (including products under development) licensed by the Company
or any Company Subsidiary, in each case where such contract involves annual
expenditures greater than $300,000 or that is not terminable on notice of 90
days or less without the payment of any penalty or termination fee greater than
$50,000;
(vii) contains
an option (other than a Company Option or Company Warrant) or a right of first
refusal, right of first negotiation or right of first offer in favor of a party
other than the Company or the Company Subsidiaries; or
(viii) constitutes
a lease of Company Property.
(b) Each
contract of the type described above in Section 3.13(a),
whether or not set forth in Schedule 3.13(a), is
referred to herein as a “Company Material
Contract.” Each Company Material Contract is valid and binding
on the Company and each Company Subsidiary party thereto and, to the knowledge
of the Company, each other party thereto, as applicable, and in full force and
effect (except that such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar Laws, now or hereafter
in effect, affecting creditors’ rights generally and general principles of
equity (regardless of whether enforceability is considered in a proceeding in
equity or at Law)). Except as has not had and would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect, there is no event or condition which has occurred or exists, which
constitutes or could constitute (with or without notice, the happening of any
event and/or the passage of time) a violation of, default or breach under any
Company Material Contract by the Company or any Company Subsidiary.
(c) The
Company has delivered or made available to Parent or provided to Parent for
review, prior to the execution of this Agreement, true and complete copies of
all of the Company Material Contracts.
Section 3.14 Title to Properties;
Encumbrances. Neither the Company nor any Company
Subsidiary owns or otherwise has legal title to any real
property. The Company and each of the Company Subsidiaries has valid
leasehold interest in all of its Company Property, subject to no Liens, except
for, (a) Liens consisting of zoning or planning restrictions, easements,
permits and other restrictions or limitations on the use of real property or
irregularities in title thereto, which do not materially impair the value of
such properties or the use of such property by the Company or any of the Company
Subsidiaries in the operation of its respective business, (b) Liens for current
Taxes, assessments or governmental charges or levies on property not yet due and
payable and Liens for Taxes that are being contested in good faith by
appropriate proceedings and for which an adequate reserve has been provided on
the appropriate financial statements, and (c) Liens which would not materially
interfere with the use of such property or assets by the Company (the foregoing
Liens (a)-(c), “Permitted
Liens”). The Company and each of the Company Subsidiaries is
in compliance with the terms of all leases relating to the Company Property to
which they are a party, except such compliance which has not had or would not
reasonable be expect to have, individually or in the aggregate, a Company
Material Adverse Effect. All such leases are in full force and
effect, and the Company and each of the Company Subsidiaries enjoys peaceful and
undisturbed possession under all such leases.
(a) Schedule 3.15(a) sets
forth a listing of the Owned Company IP and the Licensed Company IP,
including: (i) for each patent and patent application, the patent
number or application serial number for each jurisdiction in which the patent
has been granted or application has been filed, the date filed or issued, and
the present status thereof; (ii) for each trademark, tradename or service xxxx
application or registration, the application serial number or registration
number for each jurisdiction in which the application has been filed or
registration granted, country, province and state, and the class of goods
covered; (iii) for any registered URL or domain name, the registration date, any
renewal date and name of registry; and (iv) for each registered copyrighted
work, the number and date of registration for each country, province and state,
in which a copyright application has been registered. True and
complete copies of all applications filed and patents and registrations obtained
(including all documents relating to the prosecution, defense or enforcement of
any applications, patents or registrations) related to the Intellectual Property
Rights listed on Schedule 3.15(a) have
been provided or are available to Parent.
(b) Schedule 3.15(b) sets
forth a true and complete list as of the date hereof of all options, rights,
licenses or interests of any kind relating to Intellectual Property Rights (1)
under which the Company uses or has the right to use any Licensed Company IP or
(2) under which the Company has licensed or otherwise permitted others the right
to use any Company IP (such agreements described in clauses (1) and (2) above,
the “Company IP
Agreements”). Neither the Company nor any Company Subsidiary
is in default or breach in any material respect under the terms of any material
Company IP Agreement. To the knowledge of the Company, none of the other parties
to any material Company IP Agreement is in default or breach thereunder, (1) as
of the date hereof, in any material respect or (2) following the date hereof, as
would reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect. All obligations for payment of
monies currently due and payable by the Company or any Company Subsidiary and,
to the knowledge of the Company, by the other parties thereto, in connection
with the Company IP Agreements have been satisfied in a timely
manner. There are no pending disputes regarding any Company IP
Agreement (1) as of the date hereof, in any material respect or (2) following
the date hereof, as would reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.
(c) To
the knowledge of the Company, the Company owns or is validly licensed or
otherwise has the right to use all Intellectual Property Rights that are
material to the conduct of the business of the Company and the Company
Subsidiaries as conducted on the date hereof, in each case free of Liens, other
than Permitted Liens. Other than as described in the Company IP
Agreements, the Company and the Company Subsidiaries are not subject to any
restriction (whether contractual, legal or otherwise) on the use of any material
Company IP which is owned by or licensed to the Company or any of the Company
Subsidiaries.
(d) The
Company exclusively owns all right, title and interest in the Owned Company IP,
free and clear of all Liens, other than Permitted Liens, and, to the knowledge
of the Company, there are no disputes as to ownership of any Owned Company
IP. Without limiting the foregoing, each Person who is or was an
employee or contractor of the Company or any Company Subsidiary and who is or
was involved in the conception, creation or development of any Owned Company IP
that is material to the Company has executed a valid agreement containing an
assignment of all Intellectual Property Rights in such employee’s or
contractor’s contribution to such Owned Company IP. All of the
registrations and pending applications to governmental or regulatory bodies with
respect to any Owned Company IP that is material to the Company have been timely
and duly filed, prosecution for such applications has been attended to, and each
of the Company and the Company Subsidiaries has taken all other actions required
to maintain their validity and effectiveness.
(e) Neither
the Company, any of the Company Subsidiaries, nor the operation of their
respective businesses, has infringed upon or misappropriated, or is infringing
upon or misappropriating, the Intellectual Property Rights of any third party,
except for any such infringement that has not had or would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect. To the knowledge of the Company, no Person or any of such Person’s
products or services or other operation of such Person’s business is infringing
upon or otherwise violating any Company IP in any material respect.
(f) No
claim, action or proceeding alleging infringement, misappropriation, or other
violation of any Intellectual Property Right of another Person is pending or, to
the knowledge of the Company, threatened, against the Company or any Company
Subsidiary, and the Company has not received any written notice relating to any
actual, alleged, or suspected infringement, misappropriation, or violation of
any Intellectual Property Right of another Person by the Company or any Company
Subsidiary.
(g) As
of the date hereof, there are no proceedings or actions pending before any court
or Governmental Entity (including the United States Patent and Trademark Office
or any equivalent authority anywhere else in the world) challenging the
ownership, validity or enforceability of any material Company IP and, to the
knowledge of the Company, as of the date hereof no such proceedings or actions
have been threatened against the Company. Following the date hereof,
no such proceedings or actions are pending or, to the knowledge of the Company,
threatened against the Company, except such proceedings or actions that, if
resolved against the Company, would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse
Effect.
(h) The
Company and the Company Subsidiaries have taken commercially necessary steps and
efforts to maintain the value of their trade secrets and other proprietary
information by keeping it confidential in all material respects, including by:
developing a policy for the protection of intellectual property; requiring all
employees of the Company and the Company Subsidiaries to execute assignment and
confidentiality agreements with respect to intellectual property developed for
or obtained from the Company or any Company Subsidiary; and entering into
licenses and contracts that generally require licensees, contractors and other
third Persons with access to such trade secrets and proprietary information to
keep it confidential and to use it only for permitted purposes.
(i) The
execution and delivery of this Agreement by the Company do not, and the
consummation of the Offer, the Merger and the other Transactions and compliance
by the Company with the provisions of this Agreement will not, materially
conflict with, or result in any material violation or breach of, or material
default (with or without notice or lapse of time, or both) under, or give rise
to a right of, or result in, termination, cancellation or acceleration of any
material obligation or to the loss of a material benefit under or interest in,
or result in the creation of any Lien in or upon, any material Intellectual
Property Rights that is used in the conduct of the business of the Company and
the Company Subsidiaries, as presently conducted.
Section 3.16 Labor
Matters. None of the Company and the Company Subsidiaries
is a party to any collective bargaining or other labor union contract as of the
date of this Agreement. As of the date of this Agreement, none of the
employees of the Company or any of the Company’s Subsidiaries is represented by
any labor union or similar organization with respect to their employment by the
Company or such Subsidiary. As of the date of this Agreement, there
is no pending or, to the knowledge of the Company, threatened labor dispute,
strike or work stoppage against the Company that may interfere with the business
activities of the Company and from April 1, 2006 to the date hereof, no such
labor dispute, strike or work stoppage has occurred.
(a) Each
of the Company and each Company Subsidiary has complied and is in compliance
with all Laws which affect the business, properties or assets of the Company and
each Company Subsidiary (except such non-compliance that has not had and would
not reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect), and no notice, charge or assertion has been received
by the Company or any Company Subsidiary or, to the Company’s knowledge,
threatened against the Company or any Company Subsidiary alleging any material
violation of any such Laws. Notwithstanding anything to the contrary
in this Section
3.17(a), the provisions of this Section 3.17(a) shall
not apply to matters discussed in Sections 3.11 and
3.12.
(b) The
Company and each Company Subsidiary is in possession of all material
authorizations, licenses, permits, certificates, approvals and clearances of any
Governmental Entity necessary for the Company and each Company Subsidiary to
own, lease and operate their respective properties or to carry on their
respective businesses substantially in the manner described in the Company SEC
Documents filed prior to the date hereof and substantially as is being conducted
as of the date hereof (the “Company Permits”),
all such Company Permits are valid and in full force and effect, and (i) as of
the date hereof, the Company has not received any notice that any Governmental
Entity has commenced, or threatened to initiate, any action to revoke any such
Company Permit and (ii) following the date hereof, the Company has not received
any such notice, except, in the case of this clause (ii), as would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
(c) Each
of the product candidates that are currently being developed by the Company or
any Company Subsidiary are being, and at all times have been, developed, tested,
manufactured and stored, as applicable, in compliance with the Federal Food,
Drug and Cosmetic Act, as well as applicable Laws of the FDA, the EMEA and its
Committee for Medicinal Products for Human Use, the European Union member states
and the national health authorities (comparable to the FDA) of all countries in
which product candidates are being studied, except for such instances of
non-compliance that have not had and would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse
Effect.
(d) The
Company has provided or made available to Parent, as of the date hereof,
complete and correct copies of each Investigational New Drug Application filed
with respect to any product candidate of the Company currently being developed
by the Company, including any supplements and amendments thereto.
(e) The
clinical trials conducted by the Company were, and if still pending, are, being
conducted in all material respects in accordance with clinical protocols,
informed consents and applicable requirements of the FDA and the
EMEA. As of the date hereof, no investigational new drug application
filed by or on behalf of the Company with the FDA has been terminated or
suspended by the FDA, and neither the FDA nor the EMEA has commenced, or, to the
knowledge of the Company, threatened to initiate, any action (A) to place a
clinical hold order on, or otherwise terminate, delay or suspend, any proposed
or ongoing clinical investigation conducted or proposed to be conducted by the
Company or (B) alleging any material violation of the Federal Food, Drug and
Cosmetic Act, as well as applicable Laws of the FDA, the EMEA and its Committee
for Medicinal Products for Human Use, the European Union member states and the
national health authorities (comparable to the FDA) of all countries in which
product candidates are being studied or proposed for
marketing. Following the date hereof, no such termination or
suspension has occurred and no such action has been commenced or, to the
knowledge of the Company, threatened, except as would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse
Effect.
(f) None
of the Company, or any officer, employee or, to the knowledge of the Company,
agent of the Company, has with respect to any product candidate of the Company
made any untrue statement or a material fact or fraudulent statement to the FDA
or any other Governmental Entity or failed to disclose a material fact required
to be disclosed to the FDA or any other Governmental Entity. Neither
the Company nor any of the Company Subsidiaries, nor, to the knowledge of the
Company, any director, officer, employee or agent of the Company or any of the
Company Subsidiaries, has been convicted of any crime or engaged in any conduct
for which debarment is mandated by 21 U.S.C. § 335a(a) or any similar Law or
authorized by 21 U.S.C. § 335a(b) or any similar Law.
Section 3.18 Environmental
Matters. Except for any matters, individually or in the
aggregate, that have not had and would not reasonably be expected to have a
Company Material Adverse Effect, (1) neither the Company nor any Company
Subsidiary is subject to any pending claims, costs or liabilities under
Environmental Laws (“Environmental
Claims”), and (2) to the knowledge of the Company, there are no facts,
circumstances or conditions that would result in such an Environmental
Claim. “Environmental Laws”
means any applicable Law relating to pollution, the protection of the
environment (including ambient air, surface water, groundwater, soils, land
surface or subsurface strata), the preservation or reclamation of natural
resources or releases of, or exposure to, hazardous or toxic
substances.
Section 3.19 Information in the Proxy
Statement or the Information Statement. The Proxy
Statement or Information Statement, as applicable, if any (and any amendment
thereof or supplement thereto), at the date mailed to the Company’s stockholders
and at the time of any meeting of Company stockholders to be held in connection
with the Merger, will 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, in light of the circumstances under which
they are made, not misleading, except that no representation or warranty is made
by the Company with respect to statements made therein based on information
supplied by Parent or Purchaser expressly for inclusion therein. The
Proxy Statement or Information Statement, as applicable, will comply as to form
in all material respects with the provisions of the Exchange Act and the rules
and regulations thereunder.
Section 3.20 Information in the Offer
Documents and the Schedule 14D-9. The information supplied
by the Company expressly for inclusion in the Offer Documents (and any amendment
or supplement thereto) will 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 made therein, in the light of the circumstances
under which they were made, not misleading. The Schedule 14D-9 will
comply as to form in all material respects with the provisions of Rule 14d-9 of
the Exchange Act and any other applicable federal securities Laws and will not,
when filed with the SEC or distributed or disseminated to the Company’s
stockholders, 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 made therein, in the light of the circumstances under which they
were made, not misleading, except that the Company makes no representation or
warranty with respect to statements made in the Schedule 14D-9 based on
information furnished by Parent or Purchaser expressly for inclusion
therein.
Section 3.21 Opinion of Financial
Advisor. The Company has received an opinion of each of
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (“Xxxxxxx Xxxxx”) and
Leerink Swan LLC (“Leerink Swan,” and
together with Xxxxxxx Xxxxx, the “Company Financial
Advisors”) to the effect that, as of the date of each such opinion, the
consideration to be received in the Offer and the Merger by the holders of the
Shares is fair to the Company’s stockholders (other than Parent or Purchaser)
from a financial point of view.
Section 3.22 Insurance. Schedule 3.22
contains a complete and accurate list of all material policies of fire,
liability, workers compensation, title and other forms of insurance owned or
held by the Company or any Company Subsidiary (or their respective assets or
business) with policy periods in effect as of the date hereof, and the Company
has heretofore provided or made available to Parent a complete and accurate copy
of all such policies. All such insurance policies are in full effect,
no written notice of cancellation has been received by the Company under such
policies, and there is no existing default or event which, with the giving of
notice of lapse or time or both, has not had and would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect.
Section 3.23 Related Party
Transactions. Except as set forth in the Company SEC
Documents filed prior to the date hereof, there are no transactions, agreements,
arrangement or understandings in effect between the Company, on the one hand,
and any affiliate (including any officer or director) thereof, on the other hand
(other than any Benefit Plan).
Section 3.24 Brokers;
Expenses. No broker, investment banker, financial advisor
or other Person, other than the Company Financial Advisors, is entitled to any
broker’s, finder’s, financial advisor’s or other similar fee or commission in
connection with the Offer, the Merger or any of the other Transactions based
upon arrangements made by or on behalf of the Company or any Company
Subsidiary. The Company has delivered to Parent complete and accurate
copies of all contracts or other agreements under which any such fees or
expenses are payable and all indemnification and other agreements related to the
engagement of the persons to whom such fees are payable. The fees and
expenses of all accountants, brokers, financial advisors (including the Company
Financial Advisors), legal counsel, financial printers and other persons
retained by or on behalf of the Company or any Company Subsidiary incurred or to
be incurred by the Company or any of the Company Subsidiaries in connection with
this Agreement or the Transactions will not exceed the amount set forth on Schedule
3.24.
Section 3.25 Takeover
Statutes. Assuming the accuracy of the representation and
warranty contained in Section 4.7, the
Company Board of Directors and the Company have taken all action necessary to
exempt the Merger, this Agreement and the Transactions from the provisions of
Section 203 of the DGCL. No other “moratorium,” “control share,”
“fair price,” “takeover” or “interested stockholder” or similar Law applies to
this Agreement, the Offer, the Merger and the other Transactions.
Section 3.26 No Other Representations or
Warranties. Except for the representations and warranties
set forth in this Article III, neither
the Company nor any other Person makes any express or implied representation or
warranty with respect to the Company or with respect to any other information
provided to Parent or Purchaser in connection with the Transactions, including
any information, documents, projections, forecasts of other material made
available to Parent or Purchaser in certain “data rooms” or management
presentations in expectation of the Transactions, unless any such information is
expressly included in a representation or warranty contained in this Article
III.
REPRESENTATIONS AND
WARRANTIES
OF PARENT AND PURCHASER
Parent and Purchaser represent and
warrant to the Company, jointly and severally, as set forth in this Article
IV.
(a) Each
of Parent and Purchaser is a corporation duly organized, validly existing and in
good standing (with respect to jurisdictions which recognize such concept) under
the Laws of the jurisdiction in which it is organized and has all requisite
corporate power and authority to conduct its business as now being conducted,
except for those jurisdictions where the failure to be so organized, existing or
in good standing, individually or in the aggregate, would not impair in any
material respect the ability of each of Parent and Purchaser, as the case may
be, to perform its obligations under this Agreement or prevent or materially
delay the consummation of the Transactions.
Section 4.2 Authorization; Validity of
Agreement; Necessary Action. Each of Parent and Purchaser
has all necessary corporate power and authority to execute and deliver this
Agreement and to consummate the Transactions. The execution, delivery
and performance by Parent and Purchaser of this Agreement and the consummation
by each of them of the Transactions have been duly authorized by all necessary
corporate action on the part of Parent and Purchaser and shall be adopted by the
sole stockholder of Purchaser immediately following execution of this Agreement,
and no other corporate action on the part of either Parent or Purchaser is
necessary to authorize the execution and delivery by Parent and Purchaser of
this Agreement and the consummation of the Transactions. This
Agreement has been duly executed and delivered by Parent and Purchaser and,
assuming due and valid authorization, execution and delivery hereof by the
Company, is the valid and binding obligation of each of Parent and Purchaser
enforceable against each of them in accordance with its terms, except that the
enforcement hereof may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar Laws, now or hereafter in effect,
affecting creditors’ rights generally and (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at Law).
Section 4.3 Consents and Approvals; No
Violations. None of the execution, delivery or performance
of this Agreement by Parent and Purchaser, the consummation by Parent and
Purchaser of the Transactions or compliance by Parent or Purchaser with any of
the provisions of this Agreement will (a) conflict with or result in any breach
of any provision of the organizational documents of Parent or Purchaser, (b)
require any filing by Parent or Purchaser with, or the permit, authorization,
consent or approval of, any Governmental Entity (except for (i) compliance with
any applicable requirements of the Exchange Act, (ii) any filings as may be
required under the DGCL, (iii) filings, permits, authorizations, consents and
approvals as may be required under the HSR Act and any other Required
Governmental Approvals, or (iv) such filings with the SEC as may be required on
behalf of Purchaser and Parent, in each case in connection with this Agreement
and the Offer and the Merger), or (c) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to Parent or Purchaser, any of
their Subsidiaries, or any of their properties or assets, except in the case of
clause (b) or (c), such violations, breaches or defaults which would not,
individually or in the aggregate, impair in any material respect the ability of
each Parent or Purchaser to perform its obligations under this Agreement, as the
case may be, or prevent the consummation of the Transactions.
Section 4.4 Litigation. As
of the date hereof, there is no Legal Proceeding pending against (or, to the
knowledge of Parent, threatened against or naming as a party thereto) Parent or
any of its Subsidiaries, nor, to the knowledge of Parent, is there any
investigation of a Governmental Entity pending or threatened against Parent or
any of its Subsidiaries, and none of Parent or any of its Subsidiaries is
subject to any outstanding order, writ, injunction or decree, in each case,
which would, individually or in the aggregate, impair in any material respect
the ability of each of Parent and Purchaser to perform its obligations under
this Agreement, as the case may be, or prevent the consummation of any of the
Transactions.
Section 4.5 Information in the Proxy
Statement or Information Statement. None of the
information supplied by Parent or Purchaser expressly for inclusion or
incorporation by reference in the Proxy Statement or Information Statement, as
applicable (or any amendment thereof or supplement thereto), will, at the date
mailed to the Company’s stockholders or at the time of the meeting of the
Company’s stockholders to be held in connection with the Merger, 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 made therein,
in light of the circumstances under which they are made, not
misleading.
Section 4.6 Information in the Offer
Documents. The Offer Documents (and any amendment thereof
or supplement thereto) will not, when filed with the SEC or at the time of
distribution or dissemination thereof to the Company’s stockholders of the
Company, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading, except that no representation or warranty is made by Parent or
Purchaser with respect to statements made therein based on information supplied
by the Company expressly for inclusion in the Offer Documents. The
Offer Documents will comply as to form in all material respects with applicable
federal securities Laws and the rules and regulations thereunder.
Section 4.7 Ownership of Company Capital
Stock. None of Parent, Purchaser or any of the
“affiliates” or “associates” is, nor at any time during the last three (3) years
has been, an “interested stockholder” of the Company as those terms are defined
in Section 203 of the DGCL (other than as contemplated by this
Agreement).
Section 4.8 Sufficient
Funds. Parent has, and Parent will have upon the
Acceptance Time, at the Expiration Time (as the same may be extended from time
to time pursuant to this Agreement) and at the Effective Time, the funds
necessary to consummate the Offer and the Merger, as the case may be, and to pay
all fees and expenses incurred by Parent, Purchaser and the Company in
connection with this Agreement and the Transactions.
Section 4.9 Ownership and Operations of
Purchaser. Parent owns beneficially and of record,
directly or indirectly, all of the outstanding capital stock of
Purchaser. Purchaser was formed solely for the purpose of engaging in
the Transactions, has engaged in no other business activities and has conducted
its operations only as contemplated hereby.
Section 4.10 Disclaimer of Other
Representations and Warranties. Parent and Purchaser each
acknowledges and agrees that, except for the representations and warranties
expressly set forth in this Agreement (a) the Company does not make, or has not
made, any representations or warranties relating to itself or its business or
otherwise in connection with the Merger and Parent and Purchaser are not relying
on any representation or warranty except for those expressly set forth in this
Agreement, (b) no Person has been authorized by the Company to make any
representation or warranty relating to itself or its business or otherwise in
connection with the Merger, and if made, such representation or warranty must
not be relied upon by Parent or Purchaser as having been authorized by such
party and (c) any estimates, projections, predictions, data, financial
information, memoranda, presentations or any other materials or information
provided or addressed to Parent, Purchaser or any of their representatives are
not and shall not be deemed to be or include representations or warranties
unless any such materials or information is the subject of any express
representation or warranty set forth in Article III of this
Agreement.
CONDUCT
OF BUSINESS PENDING THE MERGER
Section 5.1 Interim Operations of the
Company. The Company covenants and agrees that between the
date of this Agreement and the Effective Time or the date, if any, on which this
Agreement is terminated pursuant to Section 8.1, except
(a) as set forth in Schedule 5.1, (b) as
specifically required pursuant to this Agreement, (c) as may be required by Law
or (d) as consented to in writing by Parent (which consent shall not be
unreasonably withheld or delayed), the Company shall, and shall cause each
Company Subsidiary to, conduct its businesses in all material respects in the
ordinary course of business consistent with past practice. Without
limiting the generality of the foregoing, except (a) as set forth in Schedule 5.1, (b) as
specifically required pursuant to this Agreement, (c) as may be required by Law
or (d) as consented to in writing by Parent (which consent shall not be
unreasonably withheld or delayed), the Company covenants and agrees that between
the date of this Agreement and the Effective Time or the date, if any, on which
this Agreement is terminated pursuant to Section 8.1, the
Company shall not, and shall not permit any Company Subsidiary to:
(a) amend
the Company Governing Documents, or the comparable organizational documents of
any Company Subsidiary;
(b) split,
combine, subdivide or reclassify any shares of its capital stock or authorize
the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock;
(c) declare,
set aside or pay any dividend or make any other distribution payable in cash,
stock or property (or any combination thereof) in respect of the capital stock
of the Company or any Company Subsidiary, other than dividends or distributions
by a direct or indirect wholly-owned Subsidiary of the Company to its
stockholders;
(d) redeem,
purchase or otherwise acquire, or offer to redeem, purchase or otherwise
acquire, any Equity Interests, except from holders of Company Options in full or
partial payment of the exercise price and any applicable Taxes payable by such
holder upon exercise of Company Options to the extent required under the terms
of such Company Options;
(e) issue,
sell, pledge, deliver, grant, transfer, dispose of or otherwise encumber or
subject to any Lien any shares of, or securities convertible into or
exchangeable for, or grant any Company Options or warrants, calls, commitments
or rights of any kind to acquire, any shares of capital stock of any class or
any other Equity Interests, or grant to any Person any right the value of which
is based on the value of Shares or other capital stock or any other Equity
Interests, other than (i) the issuance of Shares reserved for issuance on the
date hereof pursuant to the exercise of the Company Options and Company Warrants
outstanding on the date hereof in accordance with their terms on the date hereof
and (ii) the issuance of shares upon the exercise of the Top-Up
Option;
(f) directly
or indirectly acquire (whether pursuant to merger, stock or asset purchase or
otherwise) in one transaction or any series of related transactions any Equity
Interests in any Person or any business or division of any Person or all or
substantially all of the assets of any Person (or business or division
thereof);
(g) transfer,
lease, license, sell, mortgage, pledge, dispose of, or otherwise encumber or
subject to any Lien any of its assets, other than dispositions of immaterial
tangible assets of the Company, including the disposition of obsolete or worn
out equipment, in the ordinary course of business consistent with past
practice;
(h) (i)
incur or assume any long-term or short-term indebtedness, except short-term
accounts payable made in the ordinary course of business consistent with past
practice, or issue any debt securities; (ii) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other Person; (iii) make any loans,
advances or capital contributions to, or investments in, any other Person (other
than investments by the Company in any of its wholly-owned Subsidiaries in the
ordinary course of business consistent with past practice); or (iv) cancel any
indebtedness or waive or assign any claims or rights of substantial
value;
(i) except
as required by the terms of any Benefit Plan or other contract in effect on the
date hereof, (A) increase the compensation or benefits of, or pay any bonus to,
any Participant, other than, in the case of employees below the level of Vice
President, normal increases in cash compensation in the ordinary course of
business consistent with past practice, (B) grant any Participant change of
control, severance, retention or termination compensation or benefits, or any
increase therein, (C) establish, adopt, enter into, amend or terminate any
collective bargaining agreement or Benefit Plan (including any Company Option or
other award thereunder), (D) accelerate the time of payment or vesting of any
rights or benefits, or make any material determinations, under any Benefit Plan,
(E) grant any awards under any bonus, incentive, performance or other
compensation plan or arrangement or Benefit Plan (including the grant of Company
Options or other equity or equity-based awards), or (F) take any action to fund
or in any other way secure the payment of compensation or benefits under any
employee plan, agreement, contract or arrangement or Benefit Plan; provided, however, the
foregoing clauses shall not restrict the Company from entering into or making
available to newly hired employees or to employees in the context of promotions,
in each case in the ordinary course of business consistent with past practice,
plans, agreements, benefits and compensation arrangements (including grants
under the Company Stock Plan);
(j) incur
any capital expenditures or otherwise acquire any asset, or any obligations or
liabilities in respect thereof, in excess of $250,000, in the
aggregate;
(k) enter
into any agreement or arrangement that materially limits or otherwise materially
restricts the Company, or upon completion of the Transactions, Parent or its
Subsidiaries or any successor thereto, from engaging or competing in any line of
business in which it is currently engaged or in any geographic
area;
(l) change
in any material respect any of the accounting methods used by it, except for
such changes required by GAAP, applicable Laws or any Governmental
Entity;
(m) make
any material Tax election, settle any Tax dispute involving material amounts,
file any amended Tax Return with respect to any material Tax or change any
annual Tax accounting period;
(n) (x)
pay, discharge, settle or satisfy any claim, liability, obligation or litigation
(absolute, accrued, asserted or unasserted, contingent or otherwise), in each
case made or pending against the Company, any Company Subsidiary, or any of
their respective officers and directors, other than (1) the payment of
short-term accounts payable in the ordinary course of business consistent with
past practice, (2) the performance of payment obligations of the Company
pursuant to the terms of any Company Agreement in effect as of the date of this
Agreement or entered into in compliance with this Section 5.1, and (3) the
payment, discharge, settlement or satisfaction of claims, liabilities,
obligations or litigation in the ordinary course of business consistent with
past practice, (y) waive any material benefits of, or agree to modify in any
material respect, or, subject to the terms hereof, fail to enforce, or consent
to any material matter with respect to which consent is required under, any
standstill or similar contract or agreement to which the Company or any Company
Subsidiary is a party or (z) waive any material benefits of, or agree to modify
in any material respect, or, subject to the terms hereof, fail to enforce in any
material respect, or consent to any material matter with respect to which
consent is required under, any material confidentiality or similar contract or
agreement to which the Company or any Company Subsidiary is a
party;
(o) (i)
enter into any contract or agreement that would be a Company Material Contract
if it had been entered into prior to the date of this Agreement or any Company
IP Agreement or (ii) terminate, amend, modify, renew or waive any material
rights under any Company Material Contract;
(p) adopt
a plan of complete or partial liquidation, dissolution, restructuring,
recapitalization or other reorganization of the Company (other than the
Merger);
(q) enter
into any contract to the extent consummation of the Transactions or compliance
by the Company with the provisions of this Agreement would conflict with, or
result in a modification, violation or breach of, or constitute a default under
(with or without notice or lapse of time or both), or give rise to any right,
including any right of termination, amendment, cancellation or acceleration
under, or result in the creation of any Lien in or upon any of the properties or
other assets of the Company or any of the Company Subsidiaries under, or require
Parent to license or transfer any of its Intellectual Property Rights or other
material assets under, or give rise to any increased, additional, accelerated,
or guaranteed right or entitlements of any third party under, or result in any
material alteration of, any material provision of such contract;
(r) enter
into, terminate, amend, modify, renew or waive any material rights under any
Company IP Agreement, or sell, transfer or license to any Person or otherwise
adversely amend or modify any rights to any Intellectual Property Rights of the
Company or any Company Subsidiary; or
(s) enter
into any written agreement, contract, commitment or arrangement to do any of the
foregoing, or authorize in writing any of the foregoing.
(a) From
and after the date of this Agreement until the earlier of the Acceptance Time or
the date, if any, on which this Agreement is terminated pursuant to Section 8.1, and
except as otherwise provided for in this Agreement, the Company shall not, nor
shall it authorize or permit any Company Subsidiary or any of their respective
Representatives retained by it or any of its affiliates to, directly or
indirectly (and it shall instruct, and cause each Company Subsidiary to
instruct, each such Representative not to): (i) solicit, initiate or
knowingly facilitate or encourage the submission of any Competing Proposal, (ii)
enter into, continue or otherwise participate in any negotiations regarding, or
furnish to any Person any information with respect to, any Competing Proposal,
(iii) enter into, continue, engage or otherwise participate in discussions with
any Person with respect to any Competing Proposal, (iv) adopt, approve or
recommend, or propose publicly to adopt, approve or recommend, any Competing
Proposal, or resolve or agree to take any such action, (v) withdraw (or change,
amend, modify or qualify in a manner adverse to Parent and Purchaser), or
propose publicly to withdraw (or change, amend, modify or qualify in a manner
adverse to Parent or Purchaser), or otherwise make any statement or proposal
inconsistent with, the Company Recommendation, (vi) adopt, approve or recommend,
or propose to adopt, approve or recommend, or enter into any letter of intent,
memorandum of understanding, agreement in principle, merger agreement,
acquisition agreement, option agreement, joint venture agreement, partnership
agreement or other similar document or any agreement or commitment constituting
or related to, or that is intended to or would reasonably be expected to lead
to, any Competing Proposal (other than a confidentiality agreement referred to
in Section 5.2(b)), or (vii) resolve, propose or agree to do any of the
foregoing (any act set forth in clauses (iv) and (v) above, a “Change of
Recommendation”). Without limiting the foregoing, it is agreed
that any violation of the restrictions set forth in the preceding sentence by
any Representative of the Company or any Company Subsidiary shall be a breach of
this Section
5.2(a) by the Company. The Company shall, and shall cause the
Company Subsidiaries and direct its and the Company Subsidiaries’
Representatives to, (A) immediately cease and cause to be terminated all
existing discussions or negotiations with any Person conducted heretofore with
respect to any Competing Proposal and (B) promptly after the date hereof request
the prompt return or destruction of all confidential information previously
furnished to such Person(s) within the last 12 months for the purpose of
evaluating a possible Competing Proposal.
(b) Notwithstanding
the limitations set forth in Section 5.2(a), if
the Company receives, prior to the Acceptance Time, a bona fide written
Competing Proposal that the Company Board of Directors determines in good faith
(after consultation with the Company’s outside legal and financial advisors)
constitutes or would reasonably be expected to result in a Superior Proposal by
such party, and which Competing Proposal did not otherwise result from a breach
of Section
5.2(a), the Company may, subject to compliance with Section 5.2(d), take
the following actions: (x) furnish nonpublic information with respect
to the Company and the Company Subsidiaries to the third party making such
Competing Proposal, if, and only if, prior to so furnishing such information,
the Company receives from the third party a customary executed confidentiality
agreement (which need not restrict such Person from making an unsolicited
Competing Proposal) not less restrictive of such Person than the Confidentiality
Agreement and (y) engage in discussions or negotiations with the third
party making such Competing Proposal with respect to the Competing Proposal;
provided, however, that the Company
shall (A) as promptly as reasonably practicable following the Company taking
such actions as described in clauses (x) and (y) above, provide written notice
to Parent of such Competing Proposal or the determination of the Company Board
of Directors as provided above, as applicable, and (B) provide to Parent any
information concerning the Company provided to such third party which was not
previously provided to Parent prior to or substantially concurrently with the
time it is provided to such Person.
(c) Notwithstanding
the limitations set forth in Section 5.2(a), the
Company Board of Directors may effect a Change of Recommendation prior to the
Acceptance Time if the Company Board of Directors has concluded in good faith
after consultation with the Company’s outside legal and financial advisors that
the failure of the Company Board of Directors to effect a Change of
Recommendation would be reasonably likely to be inconsistent with the exercise
of the fiduciary duties of the Company Board of Directors to the Company’s
stockholders under applicable Law; provided, however, that no Change of
Recommendation (and no termination of this Agreement pursuant to Section 8.1(e)) may
be made until after the fourth (4th) business day following Parent’s receipt of
written notice (a “Notice of Change of
Recommendation/Superior Proposal”) from the Company advising Parent that
the Company Board of Directors intends to take such action and specifying the
reasons therefor, including the terms and conditions of any Superior Proposal
that is the basis of the proposed action by the Company Board of Directors (it
being understood and agreed that any amendment to the financial terms or any
other material term of such Superior Proposal shall require a new Notice of
Change of Recommendation/Superior Proposal and a new four (4) business day
period). In determining whether to make a Change of Recommendation,
(i) the Company Board of Directors shall take into account any changes to the
terms of this Agreement proposed by Parent in response to a Notice of Change of
Recommendation/Superior Proposal or otherwise and (ii) the Company and its
Representatives shall negotiate in good faith with Parent and its
Representatives regarding any revisions to the terms of this Agreement proposed
by Parent.
(d) In
addition to the obligations of the Company set forth in paragraphs (a), (b) and
(c) of this Section
5.2, the Company shall promptly (within 48 hours) advise Parent orally
and in writing of any Competing Proposal, the material terms and conditions of
any such Competing Proposal or inquiry (including any changes thereto) and the
identity of the Person making any such Competing Proposal or
inquiry. The Company shall (i) keep Parent reasonably informed of the
status and details (including any change to the terms thereof) of any such
Competing Proposal and (ii) provide to Parent, as soon as practicable (within 48
hours) after receipt or delivery thereof, with copies of all draft agreements
(and any other written material to the extent such material contains terms and
conditions relating to any Competing Proposal) sent by or provided to the
Company or any Company Subsidiary (or their Representatives) in connection with
any such Competing Proposal.
(e) Nothing
contained in this Agreement shall prohibit the Company or the Company Board of
Directors from (i) taking and disclosing to the Company’s stockholders a
position contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange
Act or (ii) making any disclosure to its stockholders if the Company Board of
Directors has reasonably determined in good faith, after consultation with
outside legal counsel, that the failure to do so would be inconsistent with any
applicable Law; provided,
that in no event shall the Company or the Company Board of Directors or
any committee thereof take, or agree to take, any other action prohibited by
Section 5.2(a)
(it being understood that any accurate disclosure of factual information
required to be made under applicable Law shall not be considered a modification
prohibited by Section
5.2(a)).
(a) During
the period from the date of this Agreement to the Closing, the Company shall:
(i) prepare and timely file all Tax Returns that are due on or before the
Closing in accordance with past practice, (ii) pay all Taxes due and
payable in respect of such Tax Returns, (iii) accrue a reserve in its books
and financial statements at such times and in such amounts as are in accordance
with past practice for all Taxes payable by the Company for which no Tax Return
is due prior to the Closing, and (iv) promptly notify Parent of any suit,
claim, action, investigation, proceeding, or audit (collectively, “Tax Actions”) that is
or becomes pending against or with respect to the Company.
(b) For
purposes of satisfying the requirements of Section 1445 of the Code, the Company
shall deliver to Parent at or prior to the Closing a properly executed statement
that the Company is not a “United States real property holding company” (within
the meaning of Section 897(c) of the Code).
(c) The
Company shall promptly notify Parent about any material Tax matter involving any
Company Subsidiary, and the Company shall not take any action in respect of such
Tax matter without Parent’s consent (which will not be unreasonably
withheld).
ADDITIONAL
AGREEMENTS
Section 6.1 Notification of Certain
Matters. The Company shall give prompt notice to Parent
and Purchaser and Parent and Purchaser shall give prompt notice to the Company,
of (i) the occurrence or non-occurrence of any event whose occurrence or
non-occurrence, as the case may be, would be likely to cause any representation
or warranty contained in this Agreement to be untrue or inaccurate as if made as
of any time prior to the Effective Time, such that the conditions set forth in
paragraph (iii) of Annex I would not be
satisfied or that would give rise to a right of termination set forth in Section 8.1(b),
as the case may be, and (ii) any failure of the Company, Purchaser or Parent, as
the case may be, or any Representative thereof, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided,
however, that the
delivery of any notice pursuant to this Section 6.1 shall not
limit or otherwise affect the remedies available hereunder to the party
receiving such notice or the representations or warranties of the parties, or
the conditions to the obligations of the parties hereto. Furthermore,
the Company shall give prompt notice to Parent and Purchaser, and Parent and
Purchaser shall give prompt notice to the Company, of (and in each case promptly
furnish copies to the other party of) (i) any notice or other communication
received by such party from any Governmental Entity in connection with this
Agreement, the Offer, the Merger or the other Transactions, or from any Person
alleging that the consent of such Person is or may be required in connection
with the Offer, the Merger or the other Transactions, other than, in the case of
copies, the portions of such notices or communications that include confidential
information not directly related to the Transactions, and (ii) any actions,
suits, claims, investigations or proceedings commenced or, to such party’s
knowledge, threatened against, relating to or involving or otherwise affecting
such party which relate to this Agreement, the Offer, the Merger or the other
Transactions.
Section 6.2 Access;
Confidentiality. From the date of this Agreement until the
Effective Time or the date, if any, on which this Agreement is terminated
pursuant to Section
8.1, the Company shall and shall cause the Company Subsidiaries to, upon
reasonable prior notice, give Parent and Purchaser, their officers and their
employees and their authorized Representatives, reasonable access during normal
business hours to the Company Agreements, contracts, books, records, analysis,
projections, plans, systems, personnel, commitments, offices and other
facilities and properties of the Company and the Company
Subsidiaries. The terms of the Confidentiality Agreement shall apply
to any information provided to Parent or Purchaser pursuant to this Section
6.2. Notwithstanding anything to the contrary set forth
herein, the Company shall not be required to provide access to, or to disclose
information, where such access or disclosure would (a) jeopardize the
attorney-client privilege of the Company (provided that the Company shall use
its commercially reasonable efforts to allow for such access or disclosure in a
manner that does not result in a loss of attorney-client privilege) or (b)
contravene any applicable Law or contractual restriction.
(a) Each
of the Company, Parent and Purchaser shall use its commercially reasonable
efforts to (i) take, or cause to be taken, all appropriate action, and do, or
cause to be done, all things necessary, proper or advisable under any applicable
Law or otherwise to consummate and make effective the Transactions as promptly
as practicable, (ii) obtain from any Governmental Entities any consents,
licenses, permits, waivers, clearances, approvals, authorizations or orders
required to be obtained or made by Parent, Purchaser or the Company or any of
their respective Subsidiaries, or avoid any action or proceeding by any
Governmental Entity (including those in connection with the HSR Act and any
other antitrust or competition Law or regulation (the “Required Governmental
Approvals”)), in connection with the authorization, execution and
delivery of this Agreement and the consummation of the Transactions, (iii) make
or cause to be made the applications or filings required to be made by Parent,
Purchaser or the Company or any of their respective Subsidiaries under or with
respect to the HSR Act, any other applicable Required Governmental Approvals or
any other applicable Laws in connection with the authorization, execution and
delivery of this Agreement and the consummation of the Transactions, (iv) comply
at the earliest reasonably practicable date with any request under or with
respect to the HSR Act, any other Required Governmental Approvals and any such
other applicable Laws for additional information, documents or other materials
received by Parent or the Company or any of their respective Subsidiaries from
the Federal Trade Commission or the Department of Justice or any other
Governmental Entity in connection with such applications or filings or the
Transactions, and (v) coordinate and cooperate with the other party in
connection with making (A) any filing under or with respect to the HSR Act, any
other Required Governmental Approvals or any such other applicable Laws and (B)
any filings, conferences or other submissions related to resolving any
investigation or other inquiry by any such Governmental
Entity. Nothing in this Agreement shall be deemed to require Parent
to agree to, or proffer to, divest or hold separate any assets or any portion of
any business of Parent, the Company or any of their respective
affiliates.
(b) Each
of the Company and Parent shall, and shall cause their respective Subsidiaries
to, furnish to the other party all information necessary for any application or
other filing to be made in connection with the Transactions. Each of
the Company and Parent shall promptly inform the other of any material
communication with, and any proposed understanding, undertaking or agreement
with, any Governmental Entity regarding any such application or
filing. If a party hereto intends to independently participate in any
meeting with any Governmental Entity in respect of any such filings,
investigation or other inquiry, then such party shall give the other party
reasonable prior notice of such meeting. The
parties shall coordinate and cooperate with one another in connection with any
analyses, appearances, presentations, memoranda, briefs, arguments, opinions and
proposals made or submitted by or on behalf of any party in connection with all
meetings, actions and proceedings under or relating to any such application or
filing.
(c) The
Company and Parent shall give (and the Company and Parent shall cause their
respective Subsidiaries to give) any notices (including notices required to be
provided in advance of the consummation of the Transactions) to third parties,
and use (and the Company and Parent shall cause their respective Subsidiaries to
use) commercially reasonable efforts to obtain any third-party consents
necessary, proper or advisable to consummate the Transactions, or required to be
disclosed in the Company Disclosure Schedule.
(d) If
any administrative or judicial action or proceeding is instituted (or threatened
to be instituted) by a Governmental Entity challenging the Transactions as
violative of any applicable Law, each of the Company and Purchaser shall, and
shall cause their respective affiliates to, cooperate and contest and resist any
such action or proceeding, including any action or proceeding that seeks a
temporary restraining order or preliminary injunction that would prohibit,
prevent or restrict consummation of the Transactions.
(e) Notwithstanding
anything set forth in this Agreement, nothing contained in this Agreement shall
give Parent or Purchaser, directly or indirectly, the right to control or direct
the operations of the Company prior to the consummation of the
Offer. Prior to the consummation of the Offer, the Company shall
exercise, consistent with the terms and conditions of this Agreement, control
and supervision over its business operations.
(f) Parent
shall cause to be present and vote (or shall give written consent, as
applicable, with respect to) all of the shares of capital stock of Purchaser
beneficially owned by it in favor of the adoption of this Agreement in
accordance with applicable Law.
Section 6.4 Publicity. So
long as this Agreement is in effect, neither the Company nor Parent, nor any of
their respective affiliates, shall issue or cause the publication of any press
release or other announcement with respect to the Offer, the Merger or this
Agreement without the prior consent of the other party, unless such party
determines, after consultation with outside counsel, that it is required by
applicable Law or by any listing agreement with or the listing rules of a
national securities exchange or trading market to issue or cause the publication
of any press release or other announcement with respect to the Offer, the Merger
or this Agreement, in which event such party shall endeavor, on a basis
reasonable under the circumstances, to provide a meaningful opportunity to the
other parties to review and comment upon such press release or other
announcement and shall give due consideration to all reasonable additions,
deletions or changes suggested thereto; provided, however, that the Company
shall not be required to provide any such review or comment to Parent in
connection with the receipt and existence of a Competing Proposal and matters
related thereto or a Change of Recommendation; provided, further, each party hereto
and their respective controlled affiliates may make statements that are not
inconsistent with previous press releases, public disclosures or public
statements made by Parent and the Company in compliance with this Section
6.4. The Company shall provide a meaningful opportunity to
Parent to review and comment upon all formal Company employee communication
programs or announcements with respect to the Offer, the Merger and the other
Transactions. The parties agree that the initial press release to be
issued with respect to the Offer, the Merger and the other Transactions shall be
in the form heretofore agreed to by the parties.
(a) Parent
shall cause the Surviving Corporation to assume the obligations of the Company
to the fullest extent permissible under applicable provisions of the DGCL and
under the Company Governing Documents in effect on the date hereof and under any
indemnification or other similar agreements in effect on the date hereof (the
“Indemnification
Agreements”) between the Company and the individuals who serve as
directors, officers and employees of the Company entitled to be indemnified
under the Indemnification Agreements (the “Covered Persons”)
arising out of or relating to actions or omissions in their capacity as officers
or directors of the Company occurring at or prior to the Effective Time,
including in connection with the approval of this Agreement and the
Transactions.
(b) For
a period of six (6) years after the Effective Time, the certificate of
incorporation and bylaws of the Surviving Corporation shall contain provisions
no less favorable with respect to indemnification, advancement of expenses and
exculpation of Covered Persons for periods prior to and including the Effective
Time than are currently set forth in the Company Governing
Documents. The Indemnification Agreements with Covered Persons that
survive the Merger shall continue in full force and effect in accordance with
their terms.
(c) Parent
shall obtain, at the Effective Time, a prepaid (or “tail”) directors’ and
officers’ liability insurance policy from a reputable (including financially
reputable) carrier in respect of acts or omissions occurring at or prior to the
Effective Time for six years from the Effective Time, covering each Person
currently covered by the Company’s directors’ and officers’ liability insurance
policies on terms with respect to such coverage and amounts no less favorable
than those of such policies, taken together, as in effect on the date of this
Agreement; provided
that unless the Company makes available to Parent a complete and accurate copy
of such policies in effect on the date of this Agreement no later than the date
that is ten (10) business days after the date of this Agreement, Parent’s
obligation under this Section 6.5(c) shall
be to use its commercially reasonable efforts to obtain such “tail” policy at
the Effective Time or as promptly thereafter as practicable; provided, further, however, that in
satisfying its obligation under this Section 6.5(c),
Parent shall in no event be obligated to pay more than $750,000 in the aggregate
to obtain such coverage. It is understood and agreed that in the
event such coverage cannot be obtained for $750,000 or less in the aggregate,
Parent shall be obligated to obtain a prepaid policy providing such coverage as
may be obtained for such $750,000 aggregate amount.
(d) In
the event the Surviving Corporation or any of its successors or assigns
(i) consolidates with or merges into any other Person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfers all or substantially all of its properties and assets to any
Person, then and in each such case, proper provision shall be made so that such
continuing or surviving corporation or entity or transferee of such assets, as
the case may be, shall assume all of the applicable obligations set forth in
this Section
6.5.
(e) The
Covered Persons (and their successors and heirs) are intended third party
beneficiaries of this Section 6.5, and this
Section 6.5
shall not be amended in a manner that is adverse to the Covered Persons
(including their successors and heirs) or terminated without the consent of the
Covered Persons (including their successors and heirs) affected
thereby.
Section 6.6 State Takeover
Laws. If any “control share acquisition,” “fair price” or
other anti-takeover Laws enacted under state or federal Laws becomes or is
deemed to become applicable to the Company, the Offer, the acquisition of Shares
pursuant to the Offer, the Merger or any other Transaction, then the Company
Board of Directors shall take all action necessary to render such statute
inapplicable to the foregoing.
Section 6.7 Obligations of
Purchaser. Parent shall take all action necessary to cause
Purchaser and the Surviving Corporation to perform their respective obligations
under this Agreement and to consummate the transactions contemplated by this
Agreement, including the Offer and the Merger, upon the terms and subject to the
conditions set forth in this Agreement.
Section 6.8 Employee Benefits
Matters. Effective as of the Effective Time and for a
period of twelve (12) months thereafter, Parent shall provide, or shall cause
the Surviving Corporation to provide, to each employee of the Company who
continues to be employed by the Company or the Surviving Corporation after the
Effective Time (the “Affected Employees”),
(a) a base salary or regular hourly wage, whichever is applicable, that is
not less than the base salary or regular hourly wage provided to such Affected
Employee by the Company immediately prior to the Effective Time, and
(b) employee benefits that are, in the aggregate, substantially comparable
to those provided to such Affected Employee (including all dependents) by the
Company immediately prior to the Effective Time; provided, that neither Parent
nor the Surviving Corporation nor any of their Subsidiaries shall have any
obligation to issue, or adopt any plans or arrangements providing for the
issuance of, shares of capital stock, warrants, options, stock appreciation
rights or other rights in respect of any shares of capital stock of any entity
or any securities convertible or exchangeable into such shares pursuant to any
such plans or arrangements; provided, further, that no plans or
arrangements of the Company or any Company Subsidiary providing for such
issuance shall be taken into account in determining whether employee benefits
are substantially comparable in the aggregate. Effective as of the
Effective Time and thereafter, Parent shall provide, or shall cause the
Surviving Corporation to provide, that periods of employment with the Company
(including any current or former affiliate of the Company or any predecessor of
the Company) shall be taken into account (i) for purposes of vesting (but
not benefit accrual) under Parent’s defined benefit pension plan, (ii) for
purposes of eligibility for vacation under Parent’s vacation program,
(iii) for purposes of eligibility and participation under any health or
welfare plan maintained by Parent (other than any post-employment health or
post-employment welfare plan) and Parent’s 401(k) plan and (iv) unless
covered under another arrangement with or of the Company, for benefit accrual
purposes under Parent’s severance plan (in the case of each of clauses (i),
(ii), (iii) and (iv), solely to the extent that Parent makes such plan or
program available to employees of the Surviving Corporation and not in any case
where credit would result in duplication of benefits), but not for purposes of
any other employee benefit plan of Parent. Effective as of the
Effective Time and thereafter, Parent shall, and shall cause the Surviving
Corporation to, (i) reduce any period of limitation on health benefits coverage
of Affected Employees due to pre-existing conditions (or actively at work or
similar) under the applicable health benefits plan of Parent or an affiliate of
Parent by the number of days of an individual’s “creditable coverage,” to the
extent required by Section 701 of ERISA, (ii) waive any and all eligibility
waiting periods and evidence of insurability requirements with respect to such
Affected Employees to the extent such eligibility waiting periods or evidence of
insurability requirements were waived with respect to the Affected Employees
under the Benefits Plans and (iii) credit each Affected Employee with all
deductible payments, out-of-pocket or other co-payments paid by such employee
under the health benefit plans of the Company or its affiliates prior to the
Closing Date during the year in which the Closing occurs for the purpose of
determining the extent to which any such employee has satisfied his or her
deductible and whether he or she has reached the out-of-pocket maximum under any
health benefit plan of Parent or an affiliate of Parent for such
year. The Offer shall not affect any Affected Employee’s accrual of,
or right to take, any accrued but unused personal, sick or vacation policies
applicable to such Affected Employee immediately prior to the Effective
Time. Nothing in this Agreement shall confer upon any Affected
Employee any right to continue in the employ or service of Parent, the Surviving
Corporation or any affiliate of Parent, or shall interfere with or restrict in
any way the rights of Parent, the Surviving Corporation or any affiliate of
Parent, which rights are hereby expressly reserved, to discharge or terminate
the services of any Affected Employee at any time for any reason whatsoever,
with or without cause, except to the extent expressly provided otherwise in a
written agreement between Parent, the Surviving Corporation, the Company or any
affiliate of Parent and the Affected Employee.
Nothing contained herein shall be
construed as requiring, and the Company shall take no action that would have the
effect of requiring, Parent or the Surviving Corporation to continue any
specific plans, programs, policies, arrangements, agreements or
understandings. Furthermore, no provision of this Agreement shall be
construed as prohibiting or limiting the ability of Parent or the Surviving
Corporation to amend, modify or terminate any plans, programs, policies,
arrangements, agreements or understandings of Parent, the Company or the
Surviving Corporation and nothing therein shall be construed as an amendment to
any such plan, program, policy, arrangement, agreement or understanding for any
purpose.
Section 6.9 Rule
16b-3. Prior to the Effective Time, the Company shall take
such steps as may be reasonably necessary or advisable hereto to cause
dispositions of Company equity securities (including derivative securities)
pursuant to the Transactions by each individual who is a director or officer of
the Company to be exempt under Rule 16b-3 promulgated under the Exchange
Act.
Section 6.10 Rule 14d-10(d)
Matters. Prior to the Acceptance Time, the Company (acting
through the compensation committee of the Company Board of Directors) shall take
all such steps as may be required to cause each agreement, arrangement or
understanding entered into by the Company or the Company Subsidiaries on or
after the date hereof with any of its officers, directors or employees pursuant
to which consideration is paid to such officer, director or employee to be
approved as an “employment compensation, severance or other employee benefit
arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act and
to satisfy the requirements of the non-exclusive safe harbor set forth in Rule
14d-10(d) under the Exchange Act.
Section 6.11 Stockholder
Litigation. The Company shall give Parent the opportunity
to participate in the defense or settlement of any stockholder litigation
against the Company and/or its directors or officers relating to the
transactions contemplated by this Agreement, and no such settlement shall be
agreed to without Parent’s prior written consent.
Section 6.12 Tender and Support
Agreement. The Company has delivered to Purchaser,
simultaneously with the execution of this Agreement, Tender and Support
Agreements in substantially the form attached hereto as Exhibit A whereby
Xxxx X. Xxxxxxxx, Xxxx X. Xxxxxxxxxx and Horizon BioMedical Ventures, LLC agree
to tender each of their Shares in the Offer. Such Tender and Support
Agreements shall terminate upon termination of this Agreement in accordance with
the terms of this Agreement.
CONDITIONS
Section 7.1 Conditions to Each Party’s
Obligations to Effect the Merger. The respective
obligations of each party to effect the Merger shall be subject to the
satisfaction on or prior to the Closing Date of each of the following
conditions, any and all of which may be waived in whole or in part by Parent,
Purchaser and the Company, as the case may be, to the extent permitted by
applicable Law:
(a) Stockholder
Approval. To the extent required by the DGCL and the Nasdaq
Marketplace Rules, this Agreement shall have been adopted and the Merger
approved by the Requisite Stockholder Approval;
(b) Statutes; Court
Orders. No Law shall have been enacted or promulgated by any
Governmental Entity of competent jurisdiction which prohibits the consummation
of the Merger, and there shall be no temporary restraining order, preliminary or
permanent injunction or other judgment or order of a court of competent
jurisdiction (collectively, “Restraints”) in
effect preventing the consummation of the Merger;
(c) Purchase of Shares in
Offer. Purchaser shall have accepted for payment, or caused to
be accepted for payment, all Shares validly tendered and not validly withdrawn
pursuant to the Offer (including pursuant to any “subsequent offering period”
provided by Purchaser pursuant to this Agreement); and
(d) Termination of the
Agreement. This Agreement shall not have been terminated in
accordance with its terms.
TERMINATION
Section 8.1 Termination. This
Agreement may be terminated and the Offer, the Merger and the other Transactions
may be abandoned only as follows:
(a) by
mutual consent of Parent, Purchaser and the Company at any time;
(b) by
either Parent or the Company, prior to the Acceptance Time, if there has been a
breach or failure to perform by the other party of any representation, warranty,
covenant or agreement set forth in this Agreement, which breach or failure to
perform (i) in the case of the Company shall result in any of the conditions in
Annex I not
being satisfied and (ii) in the case of a breach by Parent or Purchaser, that
would reasonably be expected to prevent, or materially impair or delay, the
ability of either Parent or Purchaser to perform its obligations under this
Agreement, or to consummate the Offer, the Merger and the other Transactions
(and in each case such breach is not curable, or if curable, has not been cured
within twenty (20) business days after the receipt of notice thereof by the
defaulting party from the non-defaulting party); provided, however, this Agreement may
not be terminated pursuant to this Section 8.1(b) by any
party if such party is then in material breach of any representation, warranty,
covenant or agreement set forth in this Agreement;
(c) by
either Parent or the Company, if the Acceptance Time shall not have occurred by
midnight, New York City time on the Outside Date; provided, however, that the right to
terminate this Agreement pursuant to this Section 8.1(c) shall
not be available to any party whose breach of any representation, warranty,
covenant or agreement set forth in this Agreement has been the principal cause
of, or resulted in, Purchaser’s failure to accept for payment all such Shares
tendered pursuant to the Offer prior to the Outside Date;
(d) by
Parent, in the event that prior to the Acceptance Time, (i) the Company Board of
Directors shall have effected a Change of Recommendation or (ii) the Company
Board of Directors fails publicly to reaffirm its recommendation of this
Agreement or the Transactions, including the Offer and the Merger, (x) within
ten (10) business days of receipt of a written request by Parent to provide such
reaffirmation following a Competing Proposal (which reaffirmation request may be
made by Parent only once with respect to each Competing Proposal or any
amendment to the financial terms or any other material term of such Competing
Proposal) or (y) if the Outside Date is less then ten (10) business days from
the receipt of such request by Parent, by the close of business on the business
day immediately preceding the Outside Date;
(e) by
the Company, at any time prior to the Acceptance Time, if the Company Board of
Directors determines to accept a Superior Proposal, but only if the Company has
complied in all material respects with the provisions of Section 5.2(c)
and Section
5.2(d); provided,
however, that the Company shall not terminate this Agreement pursuant to
this Section 8.1(e),
and any purported termination pursuant to this Section 8.1(e) shall
be void and of no force or effect, unless (A) concurrently with such
termination, the Company enters into a definitive agreement with respect to such
Superior Proposal and (B) the Company pays the Termination Fee to Parent
pursuant to Section
8.2(b)(i);
(f) by
either the Company or Parent if any Restraint having the effect of preventing
the consummation of the Offer, the Merger or the other Transactions shall be in
effect and shall have become final and non-appealable; provided, however, that the party
seeking to terminate this Agreement pursuant to this Section 8.1(g) shall
have complied with its obligations under Section 6.3 to
prevent the entry of and to remove such order, decree or ruling.
(a) In
the event of the termination of this Agreement as provided in Section 8.1, written
notice thereof shall forthwith be given to the other party or parties specifying
the provision hereof pursuant to which such termination is made, and this
Agreement shall forthwith become null and void and there shall be no liability
on the part of Parent, Purchaser or the Company, except that the Confidentiality
Agreement, Section
3.24, Section
8.2 and Section
9.3 through Section 9.14
shall survive such termination; provided, however, that subject to
Section 8.2(d),
nothing herein shall relieve any party hereto from liability for a deliberate
and material breach of its representations, warranties, covenants or agreements
set forth in this Agreement prior to such termination.
(b) Termination
Fee.
(i) In
the event that (A) this Agreement is terminated by (1) Parent pursuant to
Section 8.1(d)
or (2) the Company pursuant to Section 8.1(e)
or (B)(1) prior to the Acceptance Time, a Competing Proposal shall have been
made directly to the stockholders of the Company generally or shall have
otherwise become publicly known or any Person shall have publicly announced an
intention (whether or not conditional and whether or not withdrawn) to make a
Competing Proposal, (2) thereafter this Agreement is terminated by either Parent
or the Company pursuant to Section 8.1(c) and
(3) on or prior to the twelve (12) month anniversary of such termination, the
Company enters into a definitive agreement with respect to a Competing Proposal
or the transactions contemplated thereby are actually consummated, then the
Company shall pay to Parent a fee of Thirty Five Million One Hundred Fifty
Thousand Dollars ($35,150,000.00) (the “Termination Fee”) on
the first business day following (x) in the case of a payment required by clause
(A) above, the date of termination of this Agreement and (y) in the case of a
payment required by clause (B) above, the date of the first to occur of the
events referred to in clause (B)(3) (unless the events referred to in clause
(B)(3) occurred prior to any termination referred to in clause (B)(2), in which
case, the Termination Fee shall be payable on the date of such termination) and,
in each case, upon the payment of the Termination Fee, the Company shall have no
further liability with respect to this Agreement or the Transactions
contemplated hereby to Parent or Purchaser.
(ii) For
purposes of Section
8.2(b)(i)(B)(3) only, the term “Competing Proposal” shall have the
meaning assigned to such term in Section 9.5, except
that the reference to “20%” in the definition of “Competing Proposal” shall be
deemed to be a reference to “40%”.
(c) The
Termination Fee shall be paid by wire transfer of immediately available funds to
an account designated in writing by Parent. For the avoidance of
doubt, in no event shall the Company be obligated to pay any termination fee on
more than one occasion.
(d) Each
of the parties hereto acknowledges that (i) the agreements contained in this
Section 8.2 are
an integral part of the transactions contemplated by this Agreement, and that,
without these agreements, Parent would not enter into this Agreement;
accordingly, if the Company fails promptly to pay the amount due pursuant to
Section 8.2,
and, in order to obtain such payment, Parent commences a suit that results in a
judgment against the Company for the Termination Fee, the Company shall pay to
Parent interest on the amount of the Termination Fee from the date such payment
was required to be made until the date of payment at the prime rate of Citibank,
N.A. in effect on the date such payment was required to be made, and (ii) the
Termination Fee is not a penalty, but rather is liquidated damages in a
reasonable amount that will compensate Parent and the Purchaser, as the case may
be, in the circumstances in which such Termination Fee is payable for the
efforts and resources expended and opportunities foregone while negotiating this
Agreement and in reliance on this Agreement and on the expectation of the
consummation of the transactions contemplated hereby, which amount would
otherwise be impossible to calculate with precision. Notwithstanding
anything to the contrary in this Agreement, Parent’s right to receive payment of
the Termination Fee from the Company shall be the sole and exclusive remedy of
Parent and the Purchaser against the Company and the Company Subsidiaries and
any of their respective former, current or future officers, directors, partners,
stockholders, managers, members, affiliates or agents for the loss suffered as a
result of the failure of the Merger to be consummated, and upon payment of such
amount, none of the Company, any of the Company Subsidiaries or any of their
respective former, current or future officers, directors, partners,
stockholders, managers, members, affiliates or agents shall have any further
liability or obligation relating to or arising out of this Agreement or the
transactions contemplated hereby.
MISCELLANEOUS
(a) Subject
to applicable Law and except as otherwise provided in this Agreement including
pursuant to Section
1.3, this Agreement may be amended, modified and supplemented, whether
before or after the Acceptance Time or any vote or consent of stockholders of
the Company contemplated hereby, by written agreement of the parties hereto (by
action taken by their respective Boards of Directors, if required); provided, however, that after the
Acceptance Time, no amendment shall be made which decreases the Merger
Consideration and, after adoption of this Agreement by the stockholders of the
Company, no amendment shall be made which by Law requires further approval by
such stockholders without obtaining such further approval. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.
(b) At
any time and from time to time prior to the Effective Time, any party or parties
hereto may, subject to Section 1.3 and to
the extent legally allowed and except as otherwise set forth herein, (i) extend
the time for the performance of any of the obligations or other acts of the
other party or parties hereto, as applicable, (ii) waive any inaccuracies in the
representations and warranties made to such party or parties hereto contained
herein or in any document delivered pursuant hereto, and (iii) waive compliance
with any of the agreements or conditions for the benefit of such party or
parties hereto contained herein; provided, however, that after the
adoption of this Agreement by the stockholders of the Company, no waiver shall
be made which by Law requires further approval by such stockholders without
obtaining such further approval. Any agreement on the part of a party
or parties hereto to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party or parties, as
applicable. Any delay in exercising any right under this Agreement
shall not constitute a waiver of such right.
Section 9.2 Non-Survival of
Representations and Warranties. None of the
representations and warranties in this Agreement or in any schedule, instrument
or other document delivered pursuant to this Agreement shall survive the
Effective Time. This Section 9.2 shall not
limit any covenant or agreement of the parties which by its terms contemplates
performance after the Effective Time.
Section 9.3 Expenses. All
Expenses incurred in connection with this Agreement and the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses, except that Parent shall pay, whether or not the Merger or any other
transaction is consummated, all Expenses of the Paying
Agent. Notwithstanding anything to the contrary herein, the Company
shall pay the amount of any documentary, sales, use, real property transfer,
real property gains, registration, value added, transfer, stamp, recording and
other similar Taxes, fees, and costs together with any interest thereon,
penalties, fines, costs, fees, additions to tax or additional amounts with
respect thereto incurred in connection with this Agreement and the Transactions
contemplated hereby (other than Taxes imposed on a holder of
Shares).
Section 9.4 Notices. All
notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally (notice deemed given upon receipt),
telecopied (notice deemed given upon confirmation of receipt) or sent by a
nationally recognized overnight courier service, such as Federal Express (notice
deemed given upon receipt of proof of delivery), to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
|
(a)
|
if
to Parent or Purchaser, to:
|
|
|
Xxxxxxx
& Xxxxxxx
|
||
|
Xxx
Xxxxxxx & Xxxxxxx Xxxxx
|
||
|
Xxx
Xxxxxxxxx, Xxx Xxxxxx 00000
|
||
|
Attention:
|
Office
of the General Counsel
|
|
|
Xxxxxxxx
Xxxxx
|
||
|
Facsimile:
|
(000)
000-0000
|
|
|
with
a copy to:
|
||
|
Cravath,
Swaine & Xxxxx LLP Worldwide Plaza
|
||
|
000
Xxxxxx Xxxxxx
|
||
|
Xxx
Xxxx, Xxx Xxxx 00000
|
||
|
Attention:
|
Xxxxxx
X. Xxxxxxxx III, Esq.
|
|
|
Xxxxxx
X. Xxxxxx, Esq.
|
||
|
Telecopy:
|
(000)
000-0000
|
|
|
(b)
|
if
to the Company, to:
|
|
|
Cougar
Biotechnology, Inc.
|
||
|
00000
Xxxxxxxx Xxxx., Xxxxx 0000
|
||
|
Attention:
|
Xxxx
X. Xxxxxxxx
|
|
|
Xxxxxxx
X. Xxxx
|
||
|
Facsimile:
|
(000)
000-0000
|
|
|
with
a copy to:
|
||
|
Xxxxxx
& Xxxxxxx LLP
|
||
|
000
Xxxx Xxxxxx Xxxxx, 00xx Xxxxx
|
||
|
Xxxxx
Xxxx, Xxxxxxxxxx 00000
|
||
|
Attention:
|
Xxxxxxx
X. Xxxx
|
|
|
B.
Xxxxxx Xxxxxxx
|
||
|
Facsimile:
|
(000)
000-0000
|
|
Section 9.5 Certain
Definitions. For the purposes of this Agreement, the
term:
“Benefit Plan” means any
individual employment or consulting agreements, employee benefit plans,
programs, agreements or arrangements, including pension, retirement, profit
sharing, retirement, deferred compensation, stock option, change in control,
retention, equity or equity-based compensation, stock purchase, employee stock
ownership, severance pay, termination, indemnification, loan, vacation, paid
time off, bonus or other incentive plans, all medical (including retiree
medical), vision, dental or other health plans, all disability, death benefit or
life insurance plans, and all other employee benefit plans or perquisite or
fringe benefit plans, including “employee benefit plans” as that term is defined
in Section 3(3) of ERISA, in each case, whether oral or written, funded or
unfunded, or insured or self-insured, sponsored or maintained by the Company or
any ERISA Affiliate, or to which the Company or any ERISA Affiliate contributes
or is obligated to contribute thereunder, or with respect to which the Company
has or may have any liability (contingent or otherwise), for the benefit of any
Participant.
“business days” has the
meaning set forth in Rule 14d-1(g)(3) of the Exchange Act.
“Company Bylaws” means the
bylaws of the Company, as amended.
“Company Certificate” means
the certificate of incorporation of the Company filed with the Secretary of
State of the State of Delaware, as amended.
“Company Governing Documents”
means the Company Bylaws and the Company Certificate.
“Company IP” means Owned
Company IP and Licensed Company IP.
“Company Material Adverse
Effect” means any change, effect, development, circumstance, condition or
occurrence (an “Effect”) that, individually
or in the aggregate, has or would reasonably be expected to result in any change
or effect, that is materially adverse to the properties, assets, liabilities,
condition (financial or otherwise), business, results of operations or prospects
of the Company and the Company Subsidiaries, taken as a whole; provided,
however, that no Effects resulting from the following shall be deemed to
constitute a Company Material Adverse Effect or shall be taken into account when
determining whether a Company Material Adverse Effect has occurred or would
reasonably be expected to occur: (i) conditions (or changes therein)
in any industry or industries in which the Company operates (including the
medical and pharmaceutical industries) so long as such Effects do not
disproportionately have a greater adverse impact on the Company relative to
other companies operating in such industry or industries, (ii) general legal,
tax, economic, political and/or regulatory conditions (or changes therein) so
long as such Effects do not disproportionately have a greater adverse impact on
the Company relative to other companies operating in such industry or
industries, (iii) any generally applicable change in Law, including the rules,
regulations and administrative policies of the FDA or GAAP or interpretation of
any of the foregoing, in each case occurring after the date hereof so long as
such Effects do not disproportionately have a greater adverse impact on the
Company relative to other companies operating in such industry or industries,
(iv) any actions taken pursuant to the express terms of this Agreement or at the
written request of Parent, (v) changes in the Common Stock price or the trading
volume of the Common Stock, in and of itself (it being understood that the facts
or occurrences giving rise or contributing to such changes that are not
otherwise excluded from the definition of a “Company Material Adverse Effect”
may be taken into account), (vi) any failure by the Company to meet any
published analyst estimates or expectations of the Company’s revenue, earnings
or other financial performance or results of operations for any period, in and
of itself, or any failure by the Company to meet its internal budgets, plans or
forecasts of its revenues, earnings or other financial performance or results of
operations, in and of itself (it being understood that the facts or occurrences
giving rise or contributing to such failure that are not otherwise excluded from
the definition of a “Company Material Adverse Effect” may be taken into
account), (vii) the determination by, or the delay of a determination by, the
FDA or EMEA, or any panel or advisory committee empowered or appointed thereby,
with respect to the approval, non-approval or disapproval of any of the
Company’s products or product candidates, (viii) the results of any clinical
trials related to any of the Company’s products or product candidates and (ix)
conditions arising out of acts of terrorism, war, weather conditions or other
force majeure events, unless such Effects have a greater adverse impact on the
Company relative to other companies operating in the pharmaceutical
industry. Without limiting the generality of the foregoing, and
notwithstanding clauses (vii) and (viii) above, any of the following Effects
shall be deemed to constitute a Company Material Adverse Effect:
(A) the withdrawal or termination of an
investigational new drug application for the Key Product for the treatment of
chemo-refractory or chemo-naïve castrate resistant prostate cancer prior to
submission of a new drug application for the Key Product, and/or an equivalent
action under the Laws of the European Union with respect to the Key Product,
based on matters relating to the efficacy or safety of the Key Product in the
treatment of castrate resistant prostate cancer in the United States or European
Union;
(B) the failure of a Phase III clinical
trial for the Key Product to achieve one or more of its primary
endpoints;
(C) (i) the termination of any Phase
III clinical trial for the Key Product prior to completion based on matters
relating to the efficacy or safety of the Key Product in the treatment of
chemo-refractory or chemo-naïve castrate resistant prostate cancer in the United
States or European Union or (ii) the suspension of any Phase III clinical trial
for the Key Product prior to completion based on matters relating to the
efficacy or safety of the Key Product in the treatment of chemo-refractory or
chemo-naïve castrate resistant prostate cancer, which suspension would
reasonably be expected to prevent the Company from obtaining approval from the
FDA or EMEA to market the Key Product for the treatment of chemo-refractory or
chemo-naïve castrate resistant prostate cancer in the United States or European
Union;
(D) any unexpected drug-related,
serious adverse event or events in patients who received the Key Product in a
clinical trial or other patient usage setting, if such adverse event or events
would reasonably be expected to prevent the Company from obtaining approval from
the FDA or EMEA to market the Key Product for the treatment of chemo-refractory
or chemo-naïve castrate resistant prostate cancer in the United States or
European Union; or
(E) any failure to adhere to the
requirements under the Federal Food, Drug and Cosmetic Act, the regulations and
guidance documents of the FDA promulgated thereunder, the equivalent Laws of the
EMEA and its Committee for Medicinal Products for Human Use, or the European
Union member states, or any Company Permit (including the failure to possess or
maintain the validity of any Company Permit), relating to the investigational
use and clinical trials of the Key Product or with respect to the making of
untrue or fraudulent statements or the disclosure of information, or any failure
to adhere to clinical protocols or informed consent requirements, in any such
case which, individually or in the aggregate, (x) would reasonably be
expected to prevent the Company from obtaining approval from the FDA or EMEA to
market the Key Product for the treatment of chemo-refractory or chemo-naïve
castrate resistant prostate cancer in the United States or European Union or (y)
would be reasonably likely to delay such approval to such an extent that the
delay (taking into account the expected length of such delay and the basis or
reasons therefor) would have a material adverse effect on the aggregate
financial value to be derived by the Company from the Key Product.
“Company Options” shall mean
all options to purchase shares of Common Stock granted or awarded under the
Company Stock Plan.
“Company Property” means any
real property and improvements, now or heretofore, leased or operated by the
Company.
“Company Stock Plan” means the
Company’s 2003 Stock Option Plan, as amended.
“Company Subsidiary” means
each Person which is a Subsidiary of the Company.
“Company Warrants” shall mean
all warrants to purchase shares of Common Stock issued by the
Company.
“Competing Proposal” shall
mean any proposal or offer from any Person relating to, or that would reasonably
be expected to lead to, any direct or indirect acquisition or purchase, in one
transaction or a series of transactions, of assets or businesses that constitute
20% or more of the revenues, net income or the assets of the Company and the
Company Subsidiaries, taken as a whole, or 20% or more of any class of equity
securities of the Company, any tender offer or exchange offer that if
consummated would result in any Person or group beneficially owning 20% or more
of any class of equity securities of the Company, or any merger, consolidation,
business combination, recapitalization, liquidation, dissolution, joint venture,
binding share exchange or similar transaction involving the Company or any of
the Company Subsidiaries pursuant to which any Person or group or the
stockholders of any Person or group would own 20% or more of any class of equity
securities of the Company or of any resulting parent company of the Company or
businesses or assets that constitute 20% or more of the revenues, net income or
the assets of the Company and the Company Subsidiaries, taken as a whole, other
than the transactions contemplated by this Agreement.
“Confidentiality Agreement”
means the Confidentiality Agreement, dated November 14, 2008 between Parent and
the Company.
“EMEA” means the European
Medicines Agency.
“ERISA” means the Employee
Retirement Income Security Act of 1974, as amended, and the regulations
promulgated and rulings issued thereunder.
“Expenses” means all
reasonable out-of-pocket expenses (including all fees and expenses of counsel,
accountants, investment bankers, experts and consultants to a party hereto and
its affiliates) incurred by a party or on its behalf in connection with or
related to the authorization, preparation, negotiation, execution and
performance of this Agreement, the preparation, printing, filing and mailing of
the Proxy Statement or Information Statement, as applicable, the solicitation of
stockholder tenders and stockholder approvals, the filing of any required
notices under the HSR Act or other similar regulations, any filings with the SEC
and all other matters related to the closing of the Transactions.
“FDA” means the United States
Food and Drug Administration.
“Intellectual Property Rights”
shall mean any or all of the following and all rights and interests in, arising
out of, or associated therewith: (a) inventions and improvements
thereto, whether or not patentable, and patent applications filed anywhere in
the world, including provisional and nonprovisional applications, and
disclosures relating thereto, and any patents that issue as a result of those
patent applications, as well as renewals, reissues, reexaminations, extensions
(including supplementary protection certificates and the like), restorations,
continuations, continuations-in-part, divisions, certificates of invention, and
substitutions relating to any of the patents and patent applications, including
all related international, multijurisdictional and United States and foreign
patent and patent applications that are counterparts to such patents and patent
applications, and any other governmental grant for the protection of inventions
or industrial designs anywhere in the world; (b) trademarks, service marks,
trade dress, logos, brand names, trade names, corporate names and other
identifiers of source, whether registered or unregistered in the United States
or any other country or jurisdiction, and the goodwill associated therewith,
together with any registrations and applications for registration thereof; (c)
original works, copyrights and rights under copyrights, whether registered or
unregistered, including moral rights, and any registrations and applications for
registration thereof or any other right corresponding thereto throughout the
world; (d) trade secrets (as defined in the Uniform Trade Secrets Act and under
corresponding foreign statutory and common law) and/or nonpublic know-how,
including, for example, inventions, discoveries, improvements, concepts, ideas,
methods, processes, protocols, designs, schematics, drawings, formulae, computer
code, technical data, specifications, research and development information,
technology, databases, business plans and other technical information, and other
rights in know-how and confidential or proprietary information; (e) rights in
databases and data collections (including clinical trial data, knowledge
databases, customer lists and customer databases) under the Laws of the United
States or any other jurisdiction, whether registered or unregistered, and any
applications for registration therefor; (f) URLs and domain names, and
registrations and applications for registration therefor; (g) all past, present
and future claims and causes of action arising out of or related to infringement
or misappropriation of any of the foregoing, including all rights to seek and
receive damages; (h) other proprietary or intellectual property and associated
rights now known or hereafter recognized in any jurisdiction; and (i) similar,
corresponding, or equivalent rights to any of the foregoing anywhere in the
world, including moral rights.
“Key Product” means CB7630
(abiraterone acetate).
“knowledge” shall be deemed to
be the actual knowledge after reasonable inquiry of any executive officer of
Parent, Purchaser or the Company, as the case may be.
“Law” means any statute, code,
rule, regulation, order, ordinance, judgment or decree or other pronouncement of
any Governmental Entity having the effect of law.
“Licensed Company IP” means
all Intellectual Property Rights that are licensed to the Company or any Company
Subsidiary by third parties.
“Lien” means any lien, pledge,
hypothecation, mortgage, security interest, encumbrance, claim, infringement,
interference, option, right of first refusal, preemptive right, community
property interest or restriction of any nature (including any restriction on the
voting of any security, any restriction on the transfer of any security or other
asset, any restriction on the possession, exercise or transfer of any other
attribute of ownership of any asset).
“Nasdaq” means the Nasdaq
Global Market.
“NASDAQ Marketplace Rules”
means the rules concerning NASDAQ-listed companies promulgated by Nasdaq from
time to time and published in the NASDAQ Manual Online located at xxx.xxxxxx.xxx.
“on a fully diluted basis”
means, as of the relevant date, (i) all Shares and other Equity Interests of the
Company entitled to vote in the election of directors or upon the adoption of
this Agreement and approval of the Merger plus (ii) all Shares and other Equity
Interests of the Company that the Company may be required to issue or deliver
pursuant to Company Options, Company Warrants or other Equity Interests,
regardless of the conversion or exercise price, the vesting schedule or other
terms and conditions thereof.
“Owned Company IP” means all
Intellectual Property Rights that are owned by the Company or any Company
Subsidiary.
“Person” means a natural
person, partnership, corporation, limited liability company, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Entity or other entity or organization.
“Representatives” means, when
used with respect to Parent, Purchaser or the Company, the directors, officers,
employees, consultants, financial advisors, accountants, legal counsel,
investment bankers, and other agents, advisors and representatives of Parent,
Purchaser or the Company, as applicable, and their respective
Subsidiaries.
“Requisite Stockholder
Approval” means the affirmative vote (or, to the extent permitted by
applicable Law, the written consent) of the holders of outstanding Company
Common Stock, voting (or consenting) together as a single class, representing at
least a majority of all votes entitled to be cast thereupon by holders of the
Company Common Stock.
“Subsidiary” or “Subsidiaries” means with
respect to any Person, any corporation, limited liability company, partnership
or other organization, whether incorporated or unincorporated, of which (i) at
least a majority of the outstanding shares of capital stock of, or other equity
interests, having by their terms ordinary voting power to elect a majority of
the board of directors or others performing similar functions with respect to
such corporation or other organization is directly or indirectly owned or
controlled by such Person or by any one or more of its Subsidiaries, or by such
Person and one or more of its Subsidiaries or (ii) with respect to a
partnership, such Person or any other Subsidiary of such Person is a general
partner of such partnership.
“Superior Proposal” means any
bona fide offer made by a third party that if consummated would result in such
Person (or its stockholders) owning, directly or indirectly, all or
substantially all of the Shares then outstanding (or of the surviving entity in
a merger or the direct or indirect parent of the surviving entity in a merger)
or all or substantially all the assets of the Company, which the Company Board
of Directors determines in good faith (after consultation with outside counsel
and a financial advisor of nationally recognized reputation) to be (i) more
favorable to the stockholders of the Company from a financial point of view than
the Merger (taking into account all the terms and conditions of such proposal
and this Agreement (including any changes to the terms of this Agreement
proposed by Parent in response to such offer or otherwise)) and (ii) reasonably
capable of being completed, taking into account all financial, legal, regulatory
and other aspects of such proposal.
“Tax” or “Taxes” means any and all
taxes, levies, duties, tariffs, imposts and other similar charges and fees
(together with any and all interest, penalties, additions to tax and additional
amounts imposed with respect thereto) imposed by any Governmental Entity or
domestic or foreign taxing authority, including income, franchise, windfall or
other profits, gross receipts, premiums, property, sales, use, net worth,
capital stock, payroll, employment, social security, workers’ compensation,
unemployment compensation, excise, withholding, ad valorem, stamp, transfer,
value-added, gains tax and license, registration and documentation fees,
severance, occupation, environmental, customs duties, disability, real property,
personal property, registration, alternative or add-on minimum, estimated, or
other tax of any kind whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not.
“Tax Return” means any report,
return, certificate, claim for refund, election, estimated tax filing or
declaration required to be filed with any Governmental Entity or domestic or
foreign taxing authority with respect to Taxes, including any schedule or
attachment thereto, and including any amendments thereof.
Section 9.6 Terms Defined
Elsewhere. The following terms are defined elsewhere in
this Agreement, as indicated below:
|
“409A
Authorities”
|
Section
3.11(l)
|
|
“Affected
Employees”
|
Section
6.8
|
|
“Agreement”
|
Preamble
|
|
“Acceptance
Time”
|
Section
1.3(a)
|
|
“Appraisal
Rights”
|
Section
2.3(a)
|
|
“Book-Entry
Shares”
|
Section
2.2(b)
|
|
“Certificate
of Merger”
|
Section
1.6
|
|
“Certificates”
|
Section
2.2(b)
|
|
“Change
of Recommendation”
|
Section
5.2(a)
|
|
“Closing”
|
Section
1.5
|
|
“Closing
Date”
|
Section
1.5
|
|
“Code”
|
Section
1.10
|
|
“Common
Stock”
|
Section
3.2(a)
|
|
“Company”
|
Preamble
|
|
“Company
Agreements”
|
Section
3.13(a)
|
|
“Company
Board of Directors”
|
Recitals
|
|
“Company
Disclosure Schedule”
|
Article
III
|
|
“Company
Financial Advisors”
|
Section
3.21
|
|
“Company
IP Agreements”
|
Section
3.15(b)
|
|
“Company
Material Contract”
|
Section
3.13(b)
|
|
“Company
Permits”
|
Section
3.17(b)
|
|
“Company
Recommendation”
|
Section
1.2(a)
|
|
“Company
SEC Documents”
|
Section
3.6
|
|
“Compensation
Committee”
|
Section
3.11(m)
|
|
“Continuing
Directors”
|
Section
1.3(b)
|
|
“Covered
Persons”
|
Section
6.5(a)
|
|
“DGCL”
|
Recitals
|
|
“Dissenting
Shares”
|
Section
2.3(a)
|
|
“Effect”
|
Section
9.5
|
|
“Effective
Time”
|
Section
1.6
|
|
“Environmental
Claims”
|
Section
3.18
|
|
“Environmental
Laws”
|
Section
3.18
|
|
“Equity
Interests”
|
Section
3.2(a)
|
|
“Exchange
Act”
|
Section
1.1(a)
|
|
“Exchange
Fund”
|
Section
2.2(a)
|
|
“Expiration
Time”
|
Section
1.1(d)
|
|
“Financial
Statements”
|
Section
3.6
|
|
“GAAP”
|
Section
3.6
|
|
“Grant
Date”
|
Section
3.2(b)
|
|
“Governmental
Entity”
|
Section
3.5
|
|
“HSR
Act”
|
Section
3.5
|
|
“HSR
Condition”
|
Annex
I
|
|
“Indemnification
Agreements”
|
Section
6.5(a)
|
|
“Information
Statement”
|
Section
1.8(a)
|
|
“Initial
Expiration Time”
|
Section
1.1(d)
|
|
“Legal
Proceeding”
|
Section
3.10
|
|
“Merger”
|
Recitals
|
|
“Merger
Consideration”
|
Section
2.1(c)
|
|
“Minimum
Condition”
|
Section
1.1(b)
|
|
“Non-Affiliate
Plan Fiduciary”
|
Section
3.11(h)
|
|
“Nonqualified
Deferred Compensation Plan”
|
Section
3.11(l)
|
|
“Notice
of Change of Recommendation/Superior Proposal”
|
Section
5.2(c)
|
|
“Offer”
|
Recitals
|
|
“Offer
Documents”
|
Section
1.1(i)
|
|
“Offer
Conditions”
|
Section
1.1(b)
|
|
“Offer
Price”
|
Recitals
|
|
“Offer
to Purchase”
|
Section
1.1(c)
|
|
“Option
Consideration”
|
Section
2.5(a)
|
|
“Outside
Date”
|
Section
1.1(e)
|
|
“Parent”
|
Preamble
|
|
“Participant”
|
Section
3.8(b)
|
|
“Paying
Agent”
|
Section
2.2(a)
|
|
“Permitted
Liens”
|
Section
3.14
|
|
“Preferred
Stock”
|
Section
3.2(a)
|
|
“Primary
Company Executives”
|
Section
3.11(n)
|
|
“Promissory
Note”
|
Section
2.4(a)
|
|
“Proxy
Statement”
|
Section
1.8(a)
|
|
“Purchaser”
|
Preamble
|
|
“Purchaser
Common Stock”
|
Section
2.1
|
|
“Regulation
M-A”
|
Section
1.1(i)
|
|
“Required
Governmental Approvals”
|
Section
6.3(a)
|
|
“Restraints”
|
Section
7.1(b)
|
|
“Xxxxxxxx-Xxxxx
Act”
|
Section
3.6
|
|
“Schedule
14D-9”
|
Section
1.2(a)
|
|
“Schedule
TO”
|
Section
1.1(i)
|
|
“SEC”
|
Section
1.1(i)
|
|
“Securities
Act”
|
Section
3.6
|
|
“Shares”
|
Recitals
|
|
“Short
Form Threshold”
|
Section
1.9
|
|
“Special
Meeting”
|
Section
1.8(b)(i)
|
|
“Surviving
Corporation”
|
Section
1.4(a)
|
|
“Tax
Actions”
|
Section
5.3(a)
|
|
“Termination
Fee”
|
Section
8.2(b)(i)
|
|
“Top-Up
Closing”
|
Section
2.4(c)
|
|
“Top-Up
Exercise Notice”
|
Section
2.4(c)
|
|
“Top-Up
Notice Receipt”
|
Section
2.4(c)
|
|
“Top-Up
Option”
|
Section
2.4(a)
|
|
“Top-Up
Option Shares”
|
Section
2.4(a)
|
|
“Transactions”
|
Recitals
|
|
“Voting
Debt”
|
Section
3.2(a)
|
|
“Warrant
Consideration”
|
Section
2.5(b)
|
Section 9.7 Interpretation. When
a reference is made in this Agreement to Sections, such reference shall be to a
Section of this Agreement unless otherwise indicated. Whenever the
words “include”, “includes” or “including” are used in this Agreement they shall
be deemed to be followed by the words “without limitation.” As used
in this Agreement, the term “affiliates” shall have the meaning set forth in
Rule 12b 2 of the Exchange Act. All references to this Agreement
shall be deemed to include references to the “plan of merger” contained herein
(as such term is used in the DGCL). The table of contents and headings set forth
in this Agreement are for convenience of reference purposes only and shall not
affect or be deemed to affect in any way the meaning or interpretation of this
Agreement or any term or provision hereof. When reference is made
herein to a Person, such reference shall be deemed to include all direct and
indirect Subsidiaries of such Person unless otherwise indicated or the context
otherwise requires. Unless otherwise indicated, all references herein
to the Subsidiaries of a Person shall be deemed to include all direct and
indirect Subsidiaries of such Person unless otherwise indicated or the context
otherwise requires. The parties hereto agree that they have been represented by
counsel during the negotiation and execution of this Agreement and, therefore,
waive the application of any Law, regulation, holding or rule of construction
providing that ambiguities in an agreement or other document will be construed
against the party drafting such agreement or document. Whenever the
words “made available to Parent”, “made available to Purchaser” or similar words
are used in this Agreement with respect to any documents or other information,
such words shall mean that such documents or information are available to Parent
prior to and through the date of this Agreement in the electronic data room
maintained by Xxxxxxx Corporation.
Section 9.8 Counterparts. This
Agreement may be executed manually or by facsimile by the parties hereto, in any
number of counterparts, each of which shall be considered one and the same
agreement and shall become effective when a counterpart hereof shall have been
signed by each of the parties and delivered to the other parties.
Section 9.9 Entire Agreement; No
Third-Party Beneficiaries. This Agreement (including the
Company Disclosure Schedule and any agreements set forth therein) and the
Confidentiality Agreement constitute the entire agreement among the parties with
respect to the subject matter hereof and thereof and supersede all other prior
agreements (except that the Confidentiality Agreement shall be amended so that
until the termination of this Agreement in accordance with Section 8.1 hereof,
Parent and Purchaser shall be permitted to take the actions contemplated by this
Agreement) and understandings, both written and oral, among the parties or any
of them with respect to the subject matter hereof and thereof; and except as
provided in Section
6.5 are not intended to confer upon any Person other than the parties
hereto any rights or remedies hereunder.
Section 9.10 Severability. If
any term or other provision of this Agreement is invalid, illegal or incapable
of being enforced by rule of Law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the Offer or the Merger is not
affected in any manner adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the Offer and the Merger are
fulfilled to the extent possible.
(a) This
Agreement shall be governed by, and construed in accordance with, the Laws of
the State of Delaware, without giving effect to conflicts of laws principles
that would result in the application of the Law of any other state.
(b) Each
of the parties hereto hereby irrevocably and unconditionally submits, for itself
and its property, to the exclusive jurisdiction of the Delaware Court of
Chancery, or, if no such state court has proper jurisdiction, the Federal court
of the United States of America, sitting in Delaware, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the agreements delivered in connection herewith or the transactions
contemplated hereby or thereby or for recognition or enforcement of any judgment
relating thereto, and each of the parties hereby irrevocably and unconditionally
(i) agrees not to commence any such action or proceeding except in such courts,
(ii) agrees that any claim in respect of any such action or proceeding may be
heard and determined in such Delaware Court of Chancery or, if no such state
court has proper jurisdiction, in such Federal court, (iii) waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any such action or proceeding in
any such Delaware Court of Chancery or Federal court and (iv) waives, to the
fullest extent permitted by Law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such Delaware Court of Chancery
or Federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by Law. Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section
9.4. Nothing in this Agreement will affect the right of any
party to this Agreement to serve process in any other manner permitted by
Law.
Section 9.12 Waiver of Jury
Trial. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF
THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE OFFER AND MERGER
CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES
THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS
AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS
VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 9.12.
Section 9.13 Assignment. This
Agreement shall not be assigned by any of the parties hereto (whether by
operation of Law or otherwise) without the prior written consent of the other
parties, except that Purchaser may assign, in its sole discretion and without
the consent of any other party, any or all of its rights, interests and
obligations hereunder to (a) Parent, (b) Parent and one or more direct or
indirect wholly-owned Subsidiaries of Parent, or (c) one or more direct or
indirect wholly-owned Subsidiaries of Parent. Subject to the
preceding sentence, but without relieving any party hereto of any obligation
hereunder, this Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and
assigns.
Section 9.14 Enforcement;
Remedies. The parties hereto agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms. It is accordingly
agreed that the parties hereto shall be entitled to seek an injunction or
injunctions to prevent breaches of this Agreement and to seek to specifically
enforce the terms hereof, this being in addition to any other remedy to which
they are entitled at Law or in equity. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party shall be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by Law or equity upon such party, and the exercise by a party of any one
remedy shall not preclude the exercise of any other remedy.
[Remainder
of Page Intentionally Left Blank]
IN WITNESS WHEREOF, Parent, Purchaser
and the Company have caused this Agreement to be signed by their respective
officers thereunto duly authorized as of the date first written
above.
| XXXXXXX & XXXXXXX | |||
|
|
By:
|
/s/ Xxxxxxxx X. XxXxx | |
| Name: Xxxxxxxx X. XxXxx | |||
| Title: Worldwide Chairman, Pharmaceuticals Group | |||
| KITE MERGER SUB, INC. | |||
|
|
By:
|
/s/ Xxxxxxx Xxxx | |
| Name: Xxxxxxx Xxxx | |||
| Title: President | |||
| COUGAR BIOTECHNOLOGY, INC. | |||
|
|
By:
|
/s/ Xxxx X. Xxxxxxxx | |
| Name: Xxxx X. Xxxxxxxx | |||
| Title: Chief Executive Officer and President | |||
ANNEX I
Conditions to Offer
Notwithstanding any other provisions of
the Offer, but subject to the terms and conditions set forth in the Agreement
and any applicable rules and regulations of the SEC, including Rule 14e-l(c)
under the Exchange Act, Purchaser shall not be required to, and Parent shall not
be required to cause Purchaser to, accept for payment, and shall not be
obligated to pay for any validly tendered Shares if (a) the Minimum Condition
shall not have been satisfied at any then scheduled Expiration Time, (b) any
waiting period (and any extension thereof) under the HSR Act applicable to the
transactions contemplated by the Agreement has not expired or terminated prior
to the termination or expiration of the Offer at or prior to any then scheduled
Expiration Time (the “HSR Condition”), or
(c) any of the following conditions exist or has occurred and is continuing at
the scheduled Expiration Time:
(i) there
shall be pending any suit, action or proceeding by any Governmental Entity that
is reasonably likely to prevail in a manner that would (a) prohibit the
acquisition by Parent or Purchaser of any Shares under the Offer, restrain or
prohibit the consummation of the Transactions, or place limitations on the
ownership of Shares (or shares of common stock of the Surviving Corporation) by
Parent, Purchaser or any other affiliate of Parent or obtain from the Company,
Parent, Purchaser or any other affiliate of Parent any damages that are material
in relation to the Company, (b) prohibit or materially limit the ownership or
operation by the Company, Parent or any of their respective Subsidiaries of any
portion of any business or of any assets of the Company, Parent or any of their
respective Subsidiaries, or compel the Company, Parent or any of their
respective Subsidiaries to divest or hold separate any portion of any business
or of any assets of the Company, Parent or any of their respective Subsidiaries
or (c) prohibit Parent or any of its affiliates from effectively controlling in
any material respect the business or operations of the Company or any of the
Company Subsidiaries in the case of each of clauses (a) through (c) above, as a
result of the Offer or the Merger;
(ii) there
shall be in effect any Restraint, which prevents the making of the Offer, the
acceptance for payment of any Shares by Parent, Purchaser or any other affiliate
of Parent, or the consummation of the Merger or which would reasonably be
expected to result, directly or indirectly, in any of the effects referred to in
clauses (a) through (c) of paragraph (i) of this Annex I;
(iii) any
of the representations and warranties of the Company contained in the Agreement
that are qualified as to materiality or Company Material Adverse Effect shall
fail to be true and correct, or any of the representations and warranties of the
Company contained in the Agreement that are not so qualified shall fail to be
true and correct in all material respects, in any such case as of the date of
the Agreement or as of the date of acceptance for payment of Shares pursuant to
the Offer as though made at such time, except to the extent such representations
and warranties expressly relate to an earlier date, in which case as of such
earlier date;
(iv) any
Company Material Adverse Effect shall have occurred or exist following the
execution and delivery of this Agreement and be continuing;
(v) the
Company shall have breached or failed, in any material respect, to perform or to
comply with any agreement, obligation or covenant to be performed or complied
with by it under the Agreement at or prior to the Acceptance Time;
(vi) as
of the Expiration Time, Parent shall not have received a certificate signed on
behalf of the Company by the chief executive officer and the chief financial
officer of the Company to the effect that none of the conditions in clause (iii)
and (v) have occurred; or
(vii) this
Agreement shall have been terminated in accordance with its terms.
The conditions contained in clauses (a)
through (c) above: (A) are for the benefit of Parent and Purchaser and may be
asserted by Parent or Purchaser regardless of the circumstances giving rise to
such condition, (B) other than the Minimum Condition, may be waived by Parent
and Purchaser, in whole or in part, at any time and from time to time, in their
sole discretion, subject to the terms of the Agreement and the applicable rules
and regulations of the SEC and (C) other than the Minimum Condition, shall be
deemed met if such condition or requirement is so waived. The failure
by Parent or Purchaser at any time to exercise any of the foregoing rights shall
not be deemed a waiver of any such rights and each such right shall be deemed an
ongoing right which may be asserted at any time and from time to
time.
Annex
I-ii
