EXHIBIT 10.3
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INVESTMENT AGREEMENT
dated as of March 9, 2001
by and between
XXXXXX LABORATORIES
an Illinois corporation
and
MILLENNIUM PHARMACEUTICALS, INC.,
a Delaware corporation
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TABLE OF CONTENTS
ARTICLE I PURCHASE AND SALE OF SHARES...................................... 1
Section 1.1 PURCHASE AND SALE........................................ 1
Section 1.2 CLOSING DATES............................................ 2
Section 1.3 TRANSACTIONS AT EACH CLOSING; PAYMENT DATES.............. 2
ARTICLE II REPRESENTATIONS AND WARRANTIES.................................. 3
Section 2.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY............ 3
Section 2.2 REPRESENTATIONS AND WARRANTIES OF PURCHASER.............. 11
ARTICLE III TRANSFER OF COMMON STOCK....................................... 12
Section 3.1 LIMITATIONS ON TRANSFER.................................. 12
ARTICLE IV COVENANTS AND ADDITIONAL AGREEMENTS............................. 13
Section 4.1 ORDINARY COURSE.......................................... 13
Section 4.2 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934............ 13
Section 4.3 FURTHER ACTIONS.......................................... 14
Section 4.4 FURTHER ASSURANCES....................................... 14
ARTICLE V CONDITIONS PRECEDENT............................................. 14
Section 5.1 EACH PARTY'S OBLIGATIONS................................. 14
Section 5.2 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY............. 15
Section 5.3 CONDITIONS TO THE OBLIGATIONS OF PURCHASER............... 15
ARTICLE VI TERMINATION..................................................... 16
Section 6.1 TERMINATION.............................................. 16
Section 6.2 EFFECT OF TERMINATION.................................... 18
ARTICLE VII INDEMNIFICATION................................................ 18
Section 7.1 INDEMNIFICATION OF PURCHASER............................. 18
Section 7.2 INDEMNIFICATION PROCEDURES............................... 18
Section 7.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES............... 19
ARTICLE VIII INTERPRETATION; DEFINITIONS................................... 19
Section 8.1 INTERPRETATION........................................... 19
Section 8.2 DEFINITIONS.............................................. 19
ARTICLE IX MISCELLANEOUS................................................... 23
Section 9.1 GOVERNING LAW............................................ 23
Section 9.2 ASSIGNMENT............................................... 23
Section 9.3 AMENDMENTS............................................... 24
Section 9.4 NOTICES.................................................. 24
Section 9.5 PUBLIC ANNOUNCEMENTS..................................... 25
Section 9.6 NO STRICT CONSTRUCTION................................... 25
Section 9.7 HEADINGS................................................. 25
Section 9.8 NO IMPLIED WAIVERS; RIGHTS CUMULATIVE.................... 25
Section 9.9 SEVERABILITY............................................. 25
Section 9.10 EXECUTION IN COUNTERPARTS................................ 25
Section 9.11 NO THIRD PARTY BENEFICIARIES............................. 26
Section 9.12 SPECIFIC ENFORCEMENT..................................... 26
Section 9.13 EXPENSES AND REMEDIES.................................... 26
Section 9.14 TRANSFER OF SHARES....................................... 26
Section 9.15 DISPUTE RESOLUTION....................................... 27
EXHIBIT A - Form of Opinion of Company's Counsel
EXHIBIT B - Dispute Resolution
SCHEDULES TO SECTION 2.1
ii
INVESTMENT AGREEMENT
THIS INVESTMENT AGREEMENT (the "Agreement") is made as of March 9, 2001 by
and between MILLENNIUM PHARMACEUTICALS, INC., a Delaware corporation (the
"Company"), and XXXXXX LABORATORIES, an Illinois corporation ("Purchaser").
WHEREAS, the Company and Purchaser are parties to the Collaboration
Agreement (as defined below), executed as of the date set forth above;
WHEREAS, in connection with the execution of the Collaboration Agreement,
Purchaser wishes to purchase from the Company, and the Company wishes to sell to
Purchaser, shares of the Company's Common Stock, $.001 par value per share
("Common Stock"), on the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
set forth herein, the Company and Purchaser agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
Section 1.1 PURCHASE AND SALE.
(a) Subject to the terms and conditions of this Agreement, at
the First Closing (as defined below) the Company agrees to issue and sell to
Purchaser and Purchaser agrees to purchase from the Company, for an aggregate
purchase price of Fifty Million Dollars ($50,000,000) (the "First Closing
Purchase Price"), a number of shares of the Company's Common Stock (the "First
Closing Shares") equal to the First Closing Purchase Price divided by the
average daily intra-day high sale price of a share of the Company's Common
Stock, during regular trading hours as reported in THE WALL STREET JOURNAL (New
York city edition), over the 40 trading day period ending on April 6, 2001.
(b) Subject to the terms and conditions of this Agreement, in
addition to the purchase and sale described in Section 1.1(a), the Company
agrees to issue and sell to Purchaser and Purchaser agrees to purchase from the
Company, for an aggregate purchase price of Two Hundred Million Dollars
($200,000,000), additional shares of the Company's Common Stock, in seven
installments over a two-year period, as further provided in this Section 1.1(b).
At each Subsequent Closing (as defined below) the Company agrees to issue and
sell to Purchaser and Purchaser agrees to purchase from the Company, for an
aggregate purchase price at each Subsequent Closing of Twenty-Eight Million Five
Hundred Seventy-One Thousand Four Hundred Twenty-Eight Dollars and Fifty-Seven
Cents ($28,571,428.57) (with regard to each Subsequent Closing, the "Subsequent
Closing Purchase Price"), a number of shares of the Company's Common Stock (with
regard to each Subsequent Closing, the "Subsequent Closing Shares") equal to the
Subsequent Closing Purchase Price divided by the average daily intra-day high
sale price of a share of the Company's Common Stock, during regular trading
hours as reported in THE WALL STREET JOURNAL (New York city edition), over the
40 trading day period ending 20 trading days after the Payment Date (as defined
below).
(c) Notwithstanding the foregoing, upon mutual written
agreement of the Company and Purchaser, Purchaser may accelerate its obligation
to purchase Subsequent Closing Shares by increasing the amount of any Subsequent
Closing Purchase Price up to the difference between Two Hundred Million Dollars
($200,000,000) and the aggregate Subsequent Closing Purchase Price previously
paid, if any. In the event of such acceleration, the amount of the increase in
the Subsequent Closing Purchase Price shall reduce the Subsequent Closing
Purchase Price for subsequent Subsequent Closings, with such reductions applied
first to the Subsequent Closing Purchase Price for the most chronologically
distant Subsequent Closings.
Section 1.2 CLOSING DATES.
(a) The closing of the purchase and sale of the First Closing
Shares hereunder (the "First Closing") shall be held at the offices of Xxxx and
Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, at 11:00 a.m., Boston time, on
April 11, 2001, or, if all the conditions to Closing set forth in Article VI
have not been satisfied or waived by April 11, 2001, on the third Business Day
following the first date on which all the conditions to Closing set forth in
Article VI have been satisfied or waived, or at such other place, time and date
as the Company and Purchaser shall agree. The Company shall give Purchaser three
(3) Business Days prior notice of the date the First Closing is scheduled to
occur. The date of the First Closing is hereinafter referred to as the "First
Closing Date."
(b) The closing of the purchase and sale of each installment of
Subsequent Closing Shares hereunder (each, a "Subsequent Closing") shall be held
at the offices of Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, at
11:00 a.m., Boston time, on the twenty-third trading day after the respective
Payment Date for such installment, or at such other place, time and date as the
Company and Purchaser shall agree. The date of each Subsequent Closing is
hereinafter referred to as a "Subsequent Closing Date."
Section 1.3 TRANSACTIONS AT EACH CLOSING; PAYMENT DATES.
(a) At the First Closing, subject to the terms and conditions
of this Agreement, (i) the Company shall issue and sell to Purchaser and
Purchaser shall purchase the First Closing Shares; and (ii) the Company shall
deliver to Purchaser a certificate representing the First Closing Shares,
registered in the name of Purchaser against payment of the First Closing
Purchase Price by wire transfer of immediately available funds to an account or
accounts previously designated by the Company on or before the First Closing
Date.
(b) With regard to each subsequent purchase of shares of the
Company's common stock described in Section 1.1(b): (i) the "Payment Date" shall
be the first trading day of the second month of every calendar quarter after the
calendar quarter in which the First Closing Date falls; provided that, if the
Payment Date for the first Subsequent Closing would be less than ninety (90)
days after the First Closing Date, then the Payment Date for the first
Subsequent Closing shall be instead the first trading day of the second month of
the next following calendar quarter; (ii) payment of the Subsequent Closing
Purchase Price shall be made on or before the Payment Date for such Subsequent
Closing, by wire transfer of immediately available funds to an account or
accounts previously designated by the Company; and (iii) the Company shall
provide Purchaser with prompt written confirmation upon receipt of the funds
from Purchaser.
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(c) At each Subsequent Closing, subject to the terms and
conditions of this Agreement, (i) the Company shall issue and sell to Purchaser
and Purchaser shall purchase the respective Subsequent Closing Shares; and (ii)
the Company shall deliver to Purchaser a certificate representing the respective
Subsequent Closing Shares, registered in the name of Purchaser against the prior
payment of the respective Subsequent Closing Purchase Price. The delivery of the
certificate contemplated by clause (ii) above shall be accomplished at each
Subsequent Closing by immediately sending a copy of the certificate by facsimile
transmission to Purchaser (using a telephone number provided by Purchaser prior
to the Subsequent Closing), and then by sending the original certificate to
Purchaser in the manner described in Section 9.4.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to Purchaser as follows:
(a) CORPORATE ORGANIZATION. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Each Subsidiary is duly organized and validly existing and, if
applicable, is in good standing, under the laws of the jurisdiction of its
incorporation or organization. Each of the Company and its Subsidiaries is duly
qualified or licensed and, if applicable, is in good standing as a foreign
corporation, in each jurisdiction in which the properties owned, leased or
operated, or the business conducted, by it require such qualification or
licensing, except for any such failure so to qualify or be in good standing
which, individually or in the aggregate, would not have a Material Adverse
Effect on the Company and its Subsidiaries, taken as a whole. Each of the
Company and its Subsidiaries has the requisite power and authority to carry on
its business as it is now being conducted. The Company has heretofore made
available to Purchaser complete and correct copies of the Certificate of
Incorporation of the Company (the "Company Charter") and the By-laws of the
Company (the "Company By-Laws") and the certificate of incorporation and
by-laws, or the comparable organizational documents, of each of its
Subsidiaries, each as amended to date and currently in full force and effect.
(b) CORPORATE AUTHORITY. The Company has the requisite
corporate power and authority to execute, deliver and perform this Agreement and
to consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement by the Company, the issuance and sale by the
Company of the Shares and the performance by the Company of the other
transactions contemplated hereby have been duly authorized by the Company's
Board of Directors, and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or for the Company to
consummate the transactions so contemplated herein. This Agreement is a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, assuming that this Agreement is a valid and binding
agreement of Purchaser, subject as to enforcement of remedies to applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
generally the
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enforcement of creditors' rights and subject to a court's discretionary
authority with respect to the granting of a decree ordering specific performance
or other equitable remedies.
(c) NO VIOLATIONS; CONSENTS AND APPROVALS.
(i) Neither the execution, delivery or performance by the
Company of this Agreement or the consummation by the Company of the transactions
contemplated hereby (A) will result in a violation or breach of the Company
Charter or the Company By-Laws or the charter or by-laws of any of the Company's
Subsidiaries or (B) will result in a violation or breach of (or give rise to any
right of termination, revocation, cancellation or acceleration under or
increased payments under), or constitute a default (with or without due notice
or lapse of time or both) under, or result in the creation of any lien,
mortgage, charge, encumbrance or security interest of any kind (a "Lien") upon
any of the properties or assets of the Company or any of its Subsidiaries under,
(1) any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, contract, agreement, obligation, instrument, offer, commitment,
understanding or other arrangement (each a "Contract") or of any license,
waiver, exemption, order, franchise, permit or concession (each a "Permit") to
which the Company or any of its Subsidiaries is a party or by which any of their
properties or assets may be bound, or (2) subject to the governmental filings
and other matters referred to in clause (ii) below, any judgment, order, decree,
statute, law, regulation or rule applicable to the Company or any of its
Subsidiaries, except in the case of clause (B), for violations, breaches,
defaults, rights of cancellation, termination, revocation or acceleration or
Liens that would not, individually or in the aggregate, have a Material Adverse
Effect on the Company and its Subsidiaries, taken as a whole.
(ii) Except for filings as may be required under, and other
applicable requirements of, the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the "HSR Act"), no consent, approval, order or authorization
of, or registration, declaration or filing with, any government or any court,
administrative agency or commission or other governmental authority or agency,
federal, state, local or foreign (a "Governmental Entity"), is required with
respect to the Company in connection with the execution, delivery or performance
by the Company of this Agreement or the consummation by the Company of the
transactions contemplated hereby (except where the failure to obtain such
consents, approvals, orders or authorizations, or to make such filings would
not, individually or in the aggregate, have a Material Adverse Effect on the
Company and its Subsidiaries, taken as a whole).
(d) CAPITAL STOCK. The authorized capital stock of the Company
consists of (i) 500,000,000 shares of Common Stock, of which an aggregate of
215,583,176 shares of Common Stock were issued and outstanding as of the close
of business on February 23, 2001, and (ii) 5,000,000 shares of preferred stock,
$.001 par value per share, of which none were issued and outstanding as of the
close of business on February 23, 2001. As of the close of business on February
23, 2001, there were outstanding under the Company's stock option and incentive
plans (collectively, the "Company Stock Plans"), options to acquire an aggregate
of 28,948,780 shares of Common Stock (subject to adjustment on the terms set
forth therein) at a weighted average exercise price of $25.88 per share. All of
the outstanding shares of Common Stock have been duly authorized and validly
issued, and are fully paid and nonassessable. Except as set forth on Schedule
2.1(d), there are no preemptive or similar rights on the part
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of any holders of any class of securities of the Company or of any of its
Subsidiaries. Except for the Common Stock or as set forth on Schedule 2.1(d),
the Company has outstanding no bonds, debentures, notes or other obligations or
securities the holders of which have the right to vote (or are convertible or
exchangeable into or exercisable for securities having the right to vote) with
the stockholders of the Company on any matter. Except as set forth above or on
Schedule 2.1(d), as of the date of this Agreement, there are no securities
convertible into or exchangeable for, or options, warrants, calls,
subscriptions, rights, contracts, commitments, arrangements or understandings of
any kind to which the Company or any of its Subsidiaries is a party or by which
any of them is bound obligating the Company or any of its Subsidiaries
contingently or otherwise to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other voting securities
of the Company or of any of its Subsidiaries. Except as set forth on Schedule
2.1(d), there are no outstanding agreements of the Company or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital
stock of the Company or any of its Subsidiaries.
(e) SUBSIDIARIES.
(i) Each of the outstanding shares of capital stock of each
of the Company's Subsidiaries has been duly authorized and validly issued, and
is fully paid and nonassessable. Except as set forth on Schedule 2.1(e)(i), all
of the outstanding shares of capital stock of each Subsidiary are owned, either
directly or indirectly, by the Company free and clear of all Liens.
(ii) Schedule 2.1(e)(ii) contains a complete and correct
list of all Subsidiaries of the Company.
(f) SEC FILINGS. The Company has timely filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC under the Securities Act and the Exchange Act since May 1996 (the
"Company SEC Documents"). As of its filing date, each Company SEC Document
filed, as amended or supplemented, if applicable, (i) complied in all material
respects with the applicable requirements of the Securities Act or the Exchange
Act, as applicable, and the rules and regulations thereunder and (ii) did not,
at the time it was filed, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein in light of the circumstances under which they were
made, not misleading.
(g) ABSENCE OF CERTAIN EVENTS AND CHANGES. Except as disclosed
in the Company SEC Documents filed with the SEC and publicly available prior to
the date hereof, or as otherwise contemplated or permitted by this Agreement,
and except for any items referred to in Schedule 2.1(g), since September 30,
2000, the Company and its Subsidiaries have conducted their respective
businesses in the ordinary course consistent with past practice and there has
not been any event, change or development which, individually or in the
aggregate, would have a Material Adverse Effect on the Company and its
Subsidiaries, taken as a whole, other than any state of facts, event, change or
effect attributable to changes in general economic or market conditions
affecting the biotechnology and pharmaceutical industries.
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(h) COMPLIANCE WITH APPLICABLE LAW. Except as disclosed in the
Company SEC Documents filed with the SEC and publicly available prior to the
date hereof, each of the Company and its Subsidiaries is in compliance with all
statutes, laws, regulations, rules, judgments, orders and decrees of all
Governmental Entities applicable to it that relate to its respective business,
and neither the Company nor any of its Subsidiaries has received any notice
alleging noncompliance except, with reference to all the foregoing, where the
failure to be in compliance would not, individually or in the aggregate, have a
Material Adverse Effect on the Company and its Subsidiaries, taken as a whole.
This Section 2.1(h) does not relate to employee benefits matters (for which
Section 2.1(l) is applicable, environmental matters, (for which Section 2.1(m)
is applicable) or tax matters (for which Section 2.1(k) is applicable). Each of
the Company and its Subsidiaries has all Permits that are required in order to
permit it to carry on its business as it is presently conducted, except where
the failure to have such Permits or rights would not, individually or in the
aggregate, have a Material Adverse Effect on the Company and its Subsidiaries,
taken as a whole. All such Permits are in full force and effect and the Company
and its Subsidiaries are in compliance with the terms of such Permits, except
where the failure to be in full force and effect or in compliance would not
individually or in the aggregate, have a Material Adverse Effect on the Company
and its Subsidiaries, taken as a whole.
(i) LITIGATION. Except as disclosed in the Company SEC
Documents filed with the SEC and publicly available prior to the date hereof or
referred to in Schedule 2.1(i), there are no civil, criminal or administrative
actions, suits, or proceedings pending or, to the Knowledge of the Company,
threatened, against the Company or any of its Subsidiaries that, individually or
in the aggregate, are likely to have a Material Adverse Effect on the Company
and its Subsidiaries, taken as a whole. Except as disclosed in the Company SEC
Documents filed with the SEC and publicly available prior to the date hereof,
there are no outstanding judgments, orders, decrees, or injunctions of any
Governmental Entity against the Company or any of its Subsidiaries that, insofar
as can reasonably be foreseen, individually or in the aggregate, in the future
would have a Material Adverse Effect on the Company and its Subsidiaries, taken
as a whole.
(j) CONTRACTS.
(i) The Company has filed as exhibits to the Company SEC
Documents all material agreements required to be filed under the rules and
regulations of the SEC (the "Material Contracts").
(ii) All Material Contracts are legal, valid, binding, in
full force and effect and enforceable against each party thereto, except to the
extent that any failure to be enforceable, individually or in the aggregate,
would not reasonably be expected to have or result in a Material Adverse Effect
on the Company and its Subsidiaries, taken as a whole, provided that no
representation is made as to the enforceability of any non-competition provision
in any employment agreement. There does not exist under any Material Contract
any violation, breach or event of default, or event or condition that, after
notice or lapse of time or both, would constitute a violation, breach or event
of default thereunder, on the part of any of the Company or its Subsidiaries or,
to the Knowledge of the Company or any of its Subsidiaries, any other Person,
other than such violations, breaches or events of default as would not,
individually or in the aggregate, have a Material Adverse Effect on the Company
and its Subsidiaries, taken as a
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whole. The enforceability of all Material Contracts will not be adversely
affected in any manner by the execution, delivery or performance of this
Agreement or the consummation of the transactions contemplated hereby, and no
Material Contract contains any change in control or other terms or conditions
that will become applicable or inapplicable as a result of the consummation of
such transactions.
(k) TAXES.
(i) Except as set forth on Schedule 2.1(k), (A) all Tax
Returns required to be filed by or on behalf of each of the Company and its
Subsidiaries have been filed except to the extent that a failure to file,
individually or in the aggregate, would not have a Material Adverse Effect on
the Company and its Subsidiaries, taken as a whole; (B) all such filed Tax
Returns are complete and accurate in all respects, other than any incompleteness
or any inaccuracy that would not, individually or in the aggregate, have a
Material Adverse Effect on the Company and its Subsidiaries, taken as a whole,
and all Taxes shown to be due on such Tax Returns have been paid; (C) no written
claim (other than a claim that has been finally settled) has been made by a
taxing authority that any of the Company or its Subsidiaries is subject to an
obligation to file Tax Returns or to pay or collect Taxes imposed by any
jurisdiction in which either the Company or its Subsidiaries does not file Tax
Returns or pay or collect Taxes, other than any such claim that would not have a
Material Adverse Effect on the Company and its Subsidiaries, taken as a whole,
or for which adequate reserves have been provided on the balance sheets
contained in the Company SEC Documents filed with the SEC and publicly available
prior to the date hereof; (D) there is no deficiency with respect to any Taxes
which would, individually or in the aggregate, have a Material Adverse Effect on
the Company and its Subsidiaries, taken as a whole, other than any such
deficiency for which adequate reserves have been provided on the balance sheet
contained in the financial statements in the SEC Company Documents filed with
the SEC and publicly available prior to the date hereof; and (E) all material
assessments for Taxes due with respect to completed and settled examinations or
concluded litigation have been paid which, individually or in the aggregate,
exceed $100,000. As used in this Agreement, "Taxes" shall include all federal,
state, local and foreign income, franchise, property, sales, excise and other
taxes, tariffs or governmental charges of any nature whatsoever, including
interest and penalties, and additions thereto; and "Tax Returns" shall mean all
federal state, local and foreign tax returns, declarations, statements, reports,
schedules, forms and information returns relating to Taxes.
(ii) Except as set forth on Schedule 2.1(k), each of the
Company and its Subsidiaries has duly and timely withheld all Taxes required to
be withheld in connection with its business and assets, and such withheld Taxes
have been either duly and timely paid to the proper governmental authorities or
properly set aside in accounts for such purpose, except to the extent that any
failure to do so would not have a Material Adverse Effect on the Company and its
Subsidiaries, taken as a whole.
(iii) Except as set forth on Schedule 2.1(k), (A) all
taxable periods of each of the Company and its Subsidiaries ending before
December 31, 1995 are closed or no longer subject to audit; (B) none of the
Company or any of its Subsidiaries is currently under any audit by any taxing
authority as to which such taxing authority has asserted in writing any claim
which, if adversely determined, could have a Material Adverse Effect on the
Company
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and its Subsidiaries, taken as a whole; and (C) no waiver of the statute of
limitations is in effect with respect to any taxable year of the Company or any
of its Subsidiaries.
(iv) Except as set forth on Schedule 2.1(k), (A) none of
the Company or its Subsidiaries is a party to or bound by or has any obligation
under any Tax allocation, sharing, indemnification or similar agreement or
arrangement with any Person which might result in a Material Adverse Effect to
the Company or Subsidiary which entered into such agreement or arrangement; and
(B) none of the Company or its Subsidiaries is or has been at any time a member
of any group of companies filing a consolidated, combined or unitary income tax
return other than any such group the common parent of which is the Company.
(l) EMPLOYEE BENEFIT PLANS AND RELATED MATTERS; ERISA.
(i) EMPLOYEE BENEFIT PLANS. Each Employee Benefit Plan that
provides for equity-based compensation or that has associated costs that are
expected to be material to the Company or its Subsidiaries in the aggregate and
that is expected to provide for contributions to be made by the Company or its
Subsidiaries or their Employees after the date hereof or to permit the accrual
of additional benefits by any Employee of the Company or its Subsidiaries after
the date hereof is listed on Schedule 2.1(1) (collectively, the "Plans").
(ii) QUALIFICATION. Except to the extent that failure to
meet the requirements of Section 401(a) of the Code would not result in any
material liability as to which adequate reserves have not been established, each
Employee Benefit Plan intended to be qualified under section 401(a) of the Code,
and the trust (if any) forming a part thereof, (A) has received a favorable
determination letter from the IRS as to its qualification under the Code and to
the effect that each such trust is exempt from taxation under section 501(a) of
the Code, and nothing has occurred since the date of such determination letter
that could adversely affect such qualification or tax-exempt status or (B) a
timely application for such a favorable determination letter was filed and the
Company has no reason to believe that such a favorable determination letter will
not be granted.
(iii) COMPLIANCE LIABILITY.
(A) No liability has been or is reasonably expected
to be incurred under or pursuant to Title I or IV of ERISA or the penalty,
excise Tax or joint and several liability provisions of the Code relating to
employee benefit plans that is or would be material to the Company and its
Subsidiaries, taken as a whole.
(B) Each of the Employee Benefit Plans has been
operated and administered in all respects in compliance with its terms, all
applicable laws and all applicable collective bargaining agreements, except for
any failure so to comply that, individually and in the aggregate, could not
reasonably be expected to result in a material liability or obligation on the
part of the Company and its Subsidiaries in the aggregate. There are no pending
or threatened claims by or on behalf of any of the Employee Benefit Plans, by
any Employee or otherwise involving any such Employee Benefit Plan or the assets
of any Employee Benefit Plan (other than routine claims for benefits or actions
seeking qualified domestic relations orders or qualified medical child support
orders, all of which have been fully reserved
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for on the regularly prepared balance sheets of the Company or its Subsidiaries,
as applicable) which would reasonably be expected to result in any material
liability to the Company and its Subsidiaries in the aggregate.
(C) Except to the extent that it would not give rise
to a material liability or obligation on the part of the Company and it
Subsidiaries in the aggregate, no Employee is or will become entitled to
post-employment benefits of any kind by reason of employment with the Company or
its Subsidiaries, including, without limitation, death or medical benefits
(whether or not insured), other than (x) coverage mandated by section 4980B of
the Code or other applicable laws, (y) retirement benefits payable under any
Plan qualified under section 401(a) of the Code or (z) accrued deferred
compensation. The consummation of the transactions hereunder will not result in
an increase in the amount of compensation or benefits or the acceleration of the
vesting or timing of payment of any compensation or benefits payable to or in
respect of any Employee by any of the Company or its Subsidiaries.
(iv) EMPLOYEES, LABOR MATTERS, ETC. Neither the Company nor
any of its Subsidiaries is a party to or bound by any collective bargaining
agreement, and there are no labor unions or other organizations representing,
purporting to represent or attempting to represent any employees employed by the
Company or any of its Subsidiaries. Since September 30, 2000, there has not
occurred or been threatened any strike, slowdown, picketing, work stoppage,
concerted refusal to work overtime or other similar labor activity with respect
to any employees of the Company or any of its Subsidiaries. Except as set forth
on Schedule 2.1(1), there are no labor disputes currently subject to any
grievance procedure, arbitration or litigation and there is no petition pending
or threatened with respect to any employee of the Company or its Subsidiaries.
The Company and each of its Subsidiaries has complied with all applicable laws
pertaining to the employment or termination of employment of their respective
employees, including, without limitation, all such laws relating to labor
relations, equal employment opportunities, fair employment practices, prohibited
discrimination or distinction and other similar employment activities, except
for any failure so to comply that, individually and in the aggregate, could not
result in a Material Adverse Effect on the Company and its Subsidiaries, taken
as a whole.
(m) ENVIRONMENTAL MATTERS. Except as disclosed in the Company
SEC Documents filed with the SEC and publicly available prior to the date hereof
and except for such matters that, individually or in the aggregate, would not
have a Material Adverse Effect on the Company and its Subsidiaries, taken as a
whole, (i) the Company and its Subsidiaries are in compliance with all
applicable Environmental Laws (as defined below), (ii) the Company and its
Subsidiaries have all Permits required under Environmental Laws for the
operation of their respective businesses as presently conducted ("Environmental
Permits"), (iii) neither the Company nor its Subsidiaries has received notice
from any Governmental Entity asserting that either the Company or any of its
Subsidiaries may be in violation of, or liable under, any Environmental Law, and
(iv) there are no actions, proceedings or claims pending (or, to the Knowledge
of the Company or any of its Subsidiaries, threatened) seeking to impose any
liability under any Environmental Law or in connection with any Environmental
Permits or Hazardous Substances (as defined below).
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For purposes of this Agreement, "Environmental Law," means any
federal, state, local or foreign law, statute, regulation or decree relating to
(x) the protection or restoration of the environment or natural resources or (y)
the use, storage, presence, treatment, generation, transportation, processing,
handling, release, threatened release or disposal of Hazardous Substances in
each case as in effect on the date hereof. "Hazardous Substance" means any
waste, substance, material, pollutant or contaminant listed, defined, designated
or classified as hazardous, toxic or radioactive, or otherwise regulated, under
any Environmental Law.
(n) DELAWARE LAW. The Company has taken all action necessary to
ensure that the provisions of Section 203 of the Delaware General Corporation
law (the "DGCL") will not be applicable to Purchaser or its Affiliates as a
result of the transactions contemplated by this Agreement.
(o) STATUS OF SHARES. The Shares being issued at each Closing
have been duly authorized by all necessary corporate action on the part of the
Company, and at each Closing (i) such Shares will have been validly issued to
Purchaser, or permitted assigns, and, assuming payment therefor has been made,
will be fully paid and nonassessable and not subject to Liens other than those
imposed (A) by the Company or its Subsidiaries as expressly provided in this
Agreement, or (B) by the Purchaser or claimants against the Purchaser, and (ii)
the issuance of such Shares will not be subject to preemptive rights of any
other person. The Shares will be eligible for listing on the Nasdaq Stock
Market.
(p) INTELLECTUAL PROPERTY. The Intellectual Property that is
owned by the Company or any of its Subsidiaries is owned free from any Liens
(other than Permitted Liens). All material Intellectual Property Licenses are in
full force and effect in accordance with their terms, and are free and clear of
any Liens (other than Permitted Liens). To the Knowledge of the Company, the
conduct of the business of the Company and its Subsidiaries does not infringe or
conflict with the rights of any third party in respect of any Intellectual
Property, except where such conduct would not have a Material Adverse Effect on
the Company and its subsidiaries, taken as a whole, and would not materially
affect the ability of the Company and its Subsidiaries to conduct their business
as presently conducted. To the Knowledge of the Company, none of the Company
Intellectual Property that is owned by the Company or any of its Subsidiaries is
being infringed by any third party except where such infringement would not have
a Material Adverse Effect on Company and its Subsidiaries, taken as a whole.
There is no claim or demand of any Person pertaining to, or any proceeding which
is pending or, to the Knowledge of the Company, threatened, that challenges the
rights of the Company or any of its Subsidiaries in respect of any Company
Intellectual Property, or that claims that any default exists under any
Intellectual Property License, except where such claim, demand or proceeding
would not have a Material Adverse Effect on the Company and its subsidiaries,
taken as a whole, and would not materially affect the ability of the Company and
its Subsidiaries to conduct their business as presently conducted. For purposes
of this Agreement, "Company Intellectual Property" means the Intellectual
Property that is owned by the Company and its Subsidiaries, the Intellectual
Property subject to written or oral licenses, agreements or arrangements
pursuant to which its use by the Company or any of its Subsidiaries is permitted
by any Person, and the Intellectual Property that is used by the Company and its
subsidiaries to conduct their business.
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(q) BROKERS OR FINDERS. No agent, broker, investment banker or
other firm is or will be entitled to any broker's or finder's fee or any other
commission or similar fee in connection with any of the transactions
contemplated by this Agreement.
Section 2.2 REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser hereby represents and warrants to the Company as follows:
(a) ORGANIZATION. Purchaser is a corporation duly organized and
validly existing and in good standing under the laws of Illinois, with all
requisite power and authority to own, lease and operate its properties and to
conduct its business as now being conducted.
(b) AUTHORITY. Purchaser has the requisite corporate power and
authority to execute, deliver and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby. All necessary corporate
action required to have been taken by or on behalf of Purchaser by applicable
law or otherwise to authorize the approval, execution, delivery and performance
by Purchaser of this Agreement and the consummation by it of the transactions
contemplated hereby have been duly authorized, and no other proceedings on its
part are or will be necessary to authorize this Agreement or for it to
consummate such transactions. This Agreement is a valid and binding agreement of
Purchaser, enforceable against Purchaser in accordance with its terms, assuming
that this Agreement is a valid and binding agreement of the Company, subject as
to enforcement of remedies to applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting generally the enforcement of creditors'
rights and subject to a court's discretionary authority with respect to the
granting of a decree ordering specific performance or other equitable remedies.
(c) CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the
execution and delivery of this Agreement nor the performance by Purchaser of its
obligations hereunder will (i) conflict with, result in a breach of the terms,
conditions or provisions of, constitute a default under, result in the creation
of any Lien upon any of the properties or assets of Purchaser pursuant to, or
(ii) require any consent, approval or other action by or any notice to or filing
with any Government Entity pursuant to, the organizational documents or
agreements of Purchaser or any agreement, instrument, order, judgment, decree,
statute, law, rule or regulation by which Purchaser is bound (assuming that the
Company shall have made or obtained all consents, approvals, orders,
authorizations or filings referred to in Section 2.1(c)(ii)), except, in the
case of each of clauses (i) and (ii), as where the failure to obtain such
consents, approvals, orders or authorizations, or to make such filings would
not, individually or in the aggregate, have a Material Adverse Effect on the
Purchaser and its Subsidiaries, taken as a whole, or for filings after each
Closing under Section 13(d) of the Exchange Act and filings under the HSR Act.
(d) ACQUISITION FOR INVESTMENT. (i) Purchaser is acquiring the
Shares for its own account for the purpose of investment and not with a view to
or for sale in connection with any distribution thereof, and Purchaser has no
present intention to effect, or any present or contemplated plan, agreement,
undertaking, arrangement, obligation, indebtedness, or commitment providing for,
any distribution of Shares, (ii) Purchaser is an "accredited investor"
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as defined in Rule 501(a) under the Securities Act, (iii) Purchaser has
carefully reviewed the representations concerning the Company contained in this
Agreement and has made detailed inquiry concerning the Company, its business and
its personnel, and (iv) Purchaser has sufficient knowledge and experience in
finance and business that it is capable of evaluating the risks and merits of
its investment in the Company and is able financially to bear the risks thereof.
(e) BROKERS OR FINDERS. No agent, broker, investment banker or
other firm is or will be entitled to any broker's or finder's fee or any other
commission or similar fee from Purchaser in connection with any of the
transactions contemplated by this Agreement.
ARTICLE III
TRANSFER OF COMMON STOCK
Section 3.1 LIMITATIONS ON TRANSFER.
(a) Prior to the first anniversary of the First Closing,
Purchaser will not, directly or indirectly, sell, transfer, or otherwise dispose
of any Shares (except to any Affiliate of Purchaser). It is the intent of the
parties that this prohibition be construed broadly to limit all forms of
disposition of Shares including, without limitation, the pledge or other
encumbrance of the Shares and the issuance by the Purchaser (or any Affiliate of
the Purchaser) or any securities, options, warrants or debt instruments
convertible or exchangeable for Shares.
(b) After the first anniversary of the First Closing and prior
to the earlier of (i) the expiration of the Research Program Term or (ii) the
termination of this Agreement pursuant to Section 6.1(a), (b) or (c), Purchaser
will not, directly or indirectly, sell, transfer or otherwise dispose of, in any
one calendar week, more than 500,000 Shares and in any three calendar month
period, more than 2,000,000 Shares (both limits as adjusted to reflect any stock
splits, stock dividends and similar recapitalizations and both limits applicable
to Shares regardless of when acquired) (except to an Affiliate of Purchaser).
(c) The limitation on share transfer set forth in this Section
3.1 shall terminate and Purchaser and its Affiliates shall have the right,
directly or indirectly, to sell, transfer or otherwise dispose of any Shares
without regard to any limitation on share transfer set forth in Section 3.1 in
the event that:
(i) the Company has entered into (A) a merger agreement in
which the holders of the Voting Securities would cease to hold a majority of the
voting securities of the surviving corporation, (B) an agreement to sell all or
substantially all its assets, or (C) an agreement to be acquired, business
combination, consolidation or any such similar transaction, in each case with
any Person other than a wholly-owned subsidiary of the Company; PROVIDED,
HOWEVER, the limitation shall be reinstated if such merger agreement or other
agreements referred to in sections (A), (B) or (C) is subsequently terminated or
the transactions contemplated thereunder are not consummated;
(ii) a tender or exchange offer (other than a tender or
exchange offer that the Company's Board of Directors has recommended be
rejected) is made by any Person or 13D Group (other than an Affiliate of, or any
Person acting in concert with, Purchaser)
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to acquire Voting Securities which, if added to the Voting Securities (if any)
already owned by such Person or 13D Group, would result, if consummated in
accordance with its terms, in the Beneficial Ownership by such Person or 13D
Group of more than 50% of the Total Voting Power of all Voting Securities of the
Company then outstanding, PROVIDED THAT the limitation shall be reinstated if
such tender or exchange offer is withdrawn or terminated without such Person or
13D Group acquiring such 50% ownership level; or
(iii) a tender or exchange offer, which the Company's Board
of Directors has not approved or recommended, is made by any Person or 13D Group
(other than an Affiliate of, or any Person acting in concert with, Purchaser) to
acquire Voting Securities which, if added to the Voting Securities (if any)
already owned by such Person or 13D Group, would result, if consummated in
accordance with its terms, in the Beneficial Ownership by such Person or 13D
Group of more than 50% of the Total Voting Power of all Voting Securities of the
Company then outstanding and the Purchaser, upon the advice of legal counsel and
financial advisors, reasonably believes in good faith, taking into account the
conditions of the offer, that such tender or exchange offer will result in
Voting Securities being purchased, PROVIDED THAT the limitation shall be
reinstated if such tender or exchange offer is withdrawn or terminated without
such Person or 13D Group acquiring such 50% ownership level.
ARTICLE IV
COVENANTS AND ADDITIONAL AGREEMENTS
Section 4.1 ORDINARY COURSE. During the period from the date of this
Agreement and continuing until the First Closing, the Company agrees as to
itself and its Subsidiaries that, except as set forth in Schedule 4.1, or to the
extent that Purchaser otherwise consents in writing, the Company and its
Subsidiaries shall conduct their respective businesses in the ordinary course in
substantially the same manner as presently conducted.
Section 4.2 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view to
making available to the Purchaser the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the SEC that may at any time
permit the Purchaser to sell First Closing Shares and Subsequent Closing Shares
to the public without registration, the Company agrees to use its reasonable
best efforts to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act;
(b) file with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act; and
(c) furnish to the Purchaser, so long as the Purchaser owns any
First Closing Shares or Subsequent Closing Shares, forthwith upon request (i) a
written statement by the Company that it has complied with the reporting
requirements of Rule 144 under the Securities Act, any other such applicable
reporting requirements under the Securities Act and all applicable reporting
requirements under the Exchange Act, (ii) a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so filed
by the
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Company, and (iii) such other information as may be reasonably requested in
availing the Purchaser of any rule or regulation of the Commission which permits
the selling of any such securities without registration or pursuant to such
form.
Section 4.3 FURTHER ACTIONS.
(a) Each of the Company and Purchaser shall use reasonable best
efforts to take or cause to be taken all actions, and to do or cause to be done
all other things, necessary, proper or advisable in order to fulfill and perform
its obligations in respect of this Agreement, or otherwise to consummate and
make effective the transactions contemplated hereby.
(b) Each of the Company and Purchaser shall, as promptly as
practicable, (i) make, or cause to be made, all filings and submissions
(including but not limited to under the HSR Act and foreign antitrust filings)
required under any law applicable to it or any of its Subsidiaries, and give
such reasonable undertakings as may be required in connection therewith, and
(ii) use all reasonable efforts to obtain or make, or cause to be obtained or
made, all consents, approvals or waivers under any Contracts or Permits
necessary to be obtained or made by it or any of its Subsidiaries, in each case
in connection with this Agreement, the sale and transfer of the Shares pursuant
hereto and the consummation of the other transactions contemplated hereby.
(c) Each of the Company and Purchaser shall coordinate and
cooperate with the other party in exchanging such information and supplying such
reasonable assistance as may be reasonably requested by such other party in
connection with the filings and other actions contemplated by this Agreement.
(d) At all times prior to the seventh Subsequent Closing Date,
the Company and Purchaser shall promptly notify each other in writing of any
fact, condition, event or occurrence that could reasonably be expected to result
in the failure of any of the conditions contained in Article V to be satisfied,
promptly upon becoming aware of the same.
Section 4.4 FURTHER ASSURANCES. Following the First Closing Date, the
Company shall, from time to time, execute and deliver such additional
instruments, documents, conveyances or assurances and take such other actions as
shall be necessary, or otherwise reasonably be requested by Purchaser, to
confirm and assure the rights and obligations provided for in this Agreement and
render effective the consummation of the transactions contemplated hereby, or
otherwise to carry out the intent and purposes of this Agreement.
ARTICLE V
CONDITIONS PRECEDENT
Section 5.1 EACH PARTY'S OBLIGATIONS. The obligations of the Company and
Purchaser to consummate the transactions contemplated to occur at each Closing
shall be subject to the satisfaction prior to each Closing of each of the
following conditions, each of which may be waived only if it is legally
permissible to do so:
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(a) HSR AND OTHER APPROVALS. Any applicable waiting period
under the HSR Act relating to the transactions contemplated hereby shall have
expired or been terminated, and all other material authorizations, consents,
orders or approvals of, or regulations, declarations or filings with, or
expirations of applicable waiting periods imposed by, any Governmental Entity
(including, without limitation, any foreign antitrust filing) necessary for the
consummation of the transactions contemplated hereby, shall have been obtained
or filed or shall have occurred.
(b) NO LITIGATION, INJUNCTIONS OR RESTRAINTS. No statute, rule,
regulation, executive order, decree, temporary restraining order, preliminary or
permanent injunction or other order enacted, entered, promulgated, enforced or
issued by any Governmental Entity preventing the consummation of the
transactions contemplated by this Agreement shall be in effect.
(c) COLLABORATION AGREEMENT. The Collaboration Agreement shall
have become effective in accordance with the terms and conditions thereof and
neither party has delivered a Breach Notice as defined in the Collaboration
Agreement thereunder, PROVIDED, HOWEVER, that the Company and Purchaser shall be
obligated to consummate the transactions contemplated to occur at each Closing
promptly following the cure or waiver of the material breach specified in the
Breach Notice pursuant to the terms of the Collaboration Agreement.
(d) NASDAQ LISTING. The Shares shall have been approved for
listing on the Nasdaq Stock Market, subject only to official notice of issuance.
(e) STOCKHOLDER APPROVAL. If required by Nasdaq Marketplace
Rule 4350(i)(D), the Company's stockholders shall have approved the sale and
issuance of the First Closing Shares or any Subsequent Closing Shares.
Section 5.2 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The obligations
of the Company to consummate the transactions contemplated to occur at each
Closing shall be subject to the satisfaction or waiver thereof prior to each
Closing of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Purchaser that are qualified as to materiality shall be true and
correct, and those that are not so qualified shall be true and correct in all
material respects, as of the date of this Agreement and as of the time of each
Closing as though made at and as of such time, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties that are qualified as to materiality
shall be true and correct, and those that are not so qualified shall be true and
correct in all material respects, on and as of such earlier date) and the
Company shall have received a certificate signed by an authorized officer of
Purchaser to such effect.
Section 5.3 CONDITIONS TO THE OBLIGATIONS OF PURCHASER. The obligations of
Purchaser to consummate the transactions contemplated to occur at each Closing
shall be subject to the satisfaction or waiver thereof prior to each Closing of
each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company set forth in this Agreement that are qualified as to
materiality shall be
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true and correct, and those that are not so qualified shall be true and correct
in all material respects, as of the date of this Agreement and as of the time of
each Closing as though made at and as of such time, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties that are qualified as to materiality
shall be true and correct, and those that are not so qualified shall be true and
correct in all material respects, on and as of such earlier date) and except to
the extent such representations and warranties are supplemented by information
disclosed in Company SEC Documents filed after the date of this Agreement and/or
updated Schedules to Section 2.1 of this Agreement provided to the Purchaser by
the Company prior to the date of each Closing, PROVIDED, HOWEVER, that the
representations and warranties of the Company set forth in Sections 2.1(a), (b),
(c), (n), (o) and (q) shall be true and correct as of the date of each Closing
without giving effect to Company SEC Documents filed after the date of this
Agreement and/or updated Schedules to Section 2.1. Purchaser shall have received
a certificate signed by the chief executive officer and chief financial officer
of the Company to such effect.
(b) OPINION OF THE COMPANY'S COUNSEL. Purchaser shall have
received the opinion dated as of each Closing of Xxxx and Xxxx LLP, counsel to
the Company, in the form attached to this Agreement as Exhibit A.
(c) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company
shall have performed or complied in all material respects with all obligations
and covenants required to be performed or complied with by the Company under
this Agreement and Purchaser shall have received a certificate signed by the
chief executive officer and chief financial officer of the Company to such
effect.
(d) CORPORATE PROCEEDINGS. All corporate proceedings of the
Company in connection with the transactions contemplated by this Agreement, and
all documents and instruments incident thereto, shall be satisfactory in form
and substance to Purchaser and its counsel, and Purchaser and its counsel shall
have received all such documents and instruments, or copies thereof, certified
or requested, as may be reasonably requested.
ARTICLE VI
TERMINATION
Section 6.1 TERMINATION. This Agreement may be terminated at any time prior
to the seventh Subsequent Closing:
(a) by mutual written consent of Purchaser and the Company;
(b) by Purchaser or the Company:
(i) if the First Closing shall not have occurred prior to
[JUNE 30], 2001, PROVIDED, that the right to terminate this Agreement pursuant
to this clause (i) shall not be available to any party whose failure to fulfill
any obligation under this Agreement results in the failure of the First Closing
to occur;
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(ii) if there shall be any statute, law, regulation or rule
that makes consummating the transactions contemplated hereby illegal or if any
court or other Governmental Entity of competent jurisdiction shall have issued a
judgment, order, decree or ruling, or shall have taken such other action
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby and such judgment, order, decree or ruling
shall have become final and non-appealable;
(iii) if the Collaboration Agreement shall have terminated;
or
(iv) in the event that the United States Federal Trade
Commission ("FTC") and/or the United States Department of Justice shall seek a
preliminary injunction under the HSR Act against the Company and the Purchaser
to enjoin the transactions contemplated by this Agreement and/or the
Collaboration Agreement; or
(c) by Purchaser
(i) if the Company shall have failed to perform in any
material respect any of its obligations hereunder or shall have breached in any
respect any representation or warranty contained herein qualified by materiality
or shall have breached in any material respect any representation or warranty
not so qualified, and the Company has failed to perform such obligation or cure
such breach, within 30 days of its receipt of written notice thereof from
Purchaser, and such failure to perform shall not have been waived in accordance
with the terms of this Agreement;
(ii) if any of the conditions set forth in Section 5.1 or
5.3 shall become impossible to fulfill (other than as a result of any breach by
Purchaser of the terms of this Agreement) and shall not have been waived in
accordance with the terms of this Agreement; or
(iii) if the Common Stock shall no longer be listed for
trading on the Nasdaq National Market or other national securities exchange or
automated quotation system;
(d) by the Company:
(i) if Purchaser shall have failed to perform in any
material respect any of its obligations hereunder or shall have breached in any
respect any representation or warranty contained herein qualified by materiality
or shall have breached any material respect any representation or warranty not
so qualified, and Purchaser has failed to perform such obligation or cure such
breach, within 30 days of its receipt of written notice thereof from the
Company, and such failure to perform shall not have been waived in accordance
with the terms of this Agreement; or
(ii) if any of the conditions set forth in Section 5.1 or
5.2 shall become impossible to fulfill (other than as a result of any breach by
the Company of the terms of this Agreement) and shall not have been waived in
accordance with the terms of this Agreement;
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Section 6.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement by either the Company or Purchaser as provided in Section 6.1, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Purchaser or the Company, other than the provisions
of this Section 6.2, Section 9.9 and Article VII and except to the extent that
such termination results from the willful and material breach by a party of any
of its representations, warranties, covenants or agreements set forth in this
Agreement.
ARTICLE VII
INDEMNIFICATION
Section 7.1 INDEMNIFICATION OF PURCHASER. The Company covenants and agrees
to defend, indemnify and hold harmless each of Purchaser, its Affiliates (other
than the Company and any of its Subsidiaries), and their respective officers,
directors, partners, employees, agents, advisers and representatives
(collectively, the "Purchaser Indemnitees") from and against, and pay or
reimburse the Purchaser Indemnitees for, any and all claims, demands,
liabilities, obligations, losses, costs, expenses, fines or damages (whether
absolute, accrued, conditional or otherwise and whether or not resulting from
third party claims), including interest and penalties with respect thereto and
all expenses incurred in the investigation or defense of any of the same or in
asserting, preserving or enforcing any of their respective rights hereunder
(collectively, "Losses"), resulting from or based on (or allegedly resulting
from or based on) any breach by the Company of any representation, warranty,
covenant or obligation of the Company hereunder. The Losses described in this
Section 7.1 are herein referred to as "Purchaser Indemnifiable Losses". The
Company shall reimburse the Purchaser Indemnitees for any legal or other
expenses incurred by such Purchaser Indemnitees in connection with investigating
or defending any such Purchaser Indemnifiable Losses as such expenses are
incurred.
Section 7.2 INDEMNIFICATION PROCEDURES. Promptly after receipt by a
Purchaser Indemnitee of notice of the commencement of any action or the written
assertion of any claim, such Purchaser Indemnitee shall, if a claim in respect
thereof is to be made against the Company, as the case may be (the "Indemnifying
Person"), notify the Indemnifying Person in writing of the commencement or the
written assertion thereof. Failure by a Purchaser Indemnitee to so notify the
Indemnifying Person shall relieve the Indemnifying Person from the obligation to
indemnify such Purchaser Indemnitee only to the extent that the Indemnifying
Person suffers actual and material prejudice as a result of such failure but in
no event shall such failure to notify the Indemnifying Person (i) constitute
prejudice suffered by the Indemnifying Person if it has otherwise received
notice of the actions giving rise to such obligation to indemnify or (ii)
relieve it from any liability or obligation that it may otherwise have to such
Purchaser Indemnitee. In case any such action or claim shall be brought or
asserted against any Purchaser Indemnitee and it shall notify the Indemnifying
Person of the commencement or assertion thereof, the Indemnifying Person shall
be entitled to participate therein but the defense of such action or claim shall
be conducted by counsel to the Purchaser Indemnitee, PROVIDED, HOWEVER, that the
Indemnifying Person shall not, in connection with any one such action or
proceeding or separate but substantially similar actions or proceedings arising
out of the same general allegations, be liable for the fees and expenses of more
than one separate firm of attorneys at any time for all Purchaser Indemnitees,
except to the extent that local counsel, in addition to regular counsel, is
required in order to effectively defend against such action or proceeding, and
PROVIDED FURTHER,
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that a Purchaser Indemnitee shall not enter into any settlement of any such
claim without the prior consent of the Company, such consent not to be
unreasonably withheld or delayed. In no event shall the Company be liable under
this Article VII, and the Company's obligation to defend, indemnify and hold
harmless the Purchaser Indemnitee shall not apply to: (a) any special,
incidental or consequential damages resulting from or based upon any breach by
the Company of any representation, warranty, covenant or obligation of the
Company hereunder, (b) any Purchaser Indemnifiable Losses until the aggregate
amount of such Losses exceeds $5,000,000, and (c) any Purchaser Indemnifiable
Losses in excess of $50,000,000; PROVIDED HOWEVER, that the threshold set forth
in clause (b) and the limitation set forth in clause (c) shall not apply to
Purchaser Indemnifiable Losses resulting from a breach by the Company of a
representation or warranty set forth in Section 2.1(b) or 2.1(o). The remedies
set forth in this Article VII are cumulative and shall not be construed to
restrict or otherwise affect any other remedies that may be available to a
Purchaser Indemnitee or a Party under any other agreement, pursuant to statutory
or common law or equity. Notwithstanding anything to the contrary in this
Agreement, any claim for indemnification under this Article VII must be brought
prior to the third anniversary of the First Closing Date, except for claims
relating to the representations and warranties in Sections 2.1(b), 2.1(d),
2.1(k), 2.1(m) and 2.1(o) which can be brought any time prior to the expiration
of the applicable statute of limitations.
Section 7.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of the Company contained in this Agreement shall expire for all
purposes on the third anniversary of the First Closing Date, except for the
representations and warranties contained in Sections 2.1(b), 2.1(d), 2.1(k),
2.1(m) and 2.1(o) which shall expire for all purposes upon expiration of the
applicable statute of limitations.
ARTICLE VIII
INTERPRETATION; DEFINITIONS
Section 8.1 INTERPRETATION. As used in this Agreement, unless the context
otherwise requires:
(a) any reference to the Company and its Subsidiaries means the
Company and each of its Subsidiaries;
(b) words of any gender include all genders;
(c) words using the singular or plural number also include the
plural or singular number, respectively; and
(d) the terms "hereof", "herein", and "hereby" and derivative
or similar words refer to this entire Agreement.
Section 8.2 DEFINITIONS. For purposes of this Agreement, the following
terms shall have the following meanings:
"AFFILIATE" shall have the meaning set forth in the Collaboration
Agreement.
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"AGREEMENT" is defined in the recitals to this agreement.
"BENEFICIALLY OWNED," "BENEFICIAL OWNERSHIP" or any like expression with
respect to any securities means having "beneficial ownership" of such securities
(as determined pursuant to Rule l3d-3 under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not in
writing.
"BUSINESS DAY" means any day on which banking institutions are open in
Boston, Massachusetts.
"CLOSING" is defined in Section 1.2(c).
"CODE" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder, as amended.
"COLLABORATION AGREEMENT" is defined in the recitals to this Agreement.
"COMMON STOCK" is defined in the recitals to this Agreement.
"COMPANY" is defined in the recitals to this Agreement.
"COMPANY INTELLECTUAL PROPERTY" is defined in Section 2.1(p).
"COMPANY STOCK PLANS" is defined in Section 2.1(d).
"COMPANY SEC DOCUMENTS" is defined in Section 2.1(f).
"CONTRACT" is defined in Section 2.1(c).
"EMPLOYEE" means any employee or former employee of the Company or any of
its Subsidiaries or any beneficiary or dependent of any such employee or former
employee.
"EMPLOYEE BENEFIT PLANS" means all defined contribution, defined benefit,
welfare benefit, bonus, incentive compensation, stock option, stock purchase,
stock appreciation right, stock bonus, incentive, deferred compensation,
insurance, medical, dental, vision, life, death benefit, fringe benefit or other
employee benefit plans, programs, policies or arrangements, including without
limitation, any employment, consulting, offer, secondment, severance or other
termination agreement, whether or not an employee benefit plan within the
meaning of section 3(3) of ERISA, maintained by the Company or any of its
Subsidiaries.
"ENVIRONMENTAL LAWS" is defined in Section 2.1(m).
"ENVIRONMENTAL PERMIT" is defined in Section 2.1(m).
"EQUITY SECURITY" means (i) any Common Stock or other Voting Securities,
(ii) any securities of the Company convertible into or exchangeable for Common
Stock or other Voting Securities or (iii) any options, rights or warrants (or
any similar securities) issued by the Company to acquire Common Stock or other
Voting Securities.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, or
any successor federal statute and the rules and regulations of the SEC
promulgated thereunder, all as the same shall be in effect from time to time.
"FIRST CLOSING" is defined in Section 1.1(a).
"FIRST CLOSING DATE" is defined in Section 1.2(a).
"FIRST CLOSING PURCHASE PRICE" is defined in Section 1.1(a).
"FIRST CLOSING SHARES" is defined in Section 1.1(a).
"FTC" is defined in Section 6.1(b).
"GAAP" means United States generally accepted accounting principles.
"GOVERNMENTAL ENTITY" is defined in Section 2.1(c).
"HAZARDOUS SUBSTANCES" is defined in Section 2.1(m).
"HSR ACT" is defined in Section 2.1(c).
"INDEMNIFYING PERSON" is defined in Section 7.2.
"INTELLECTUAL PROPERTY" means trademarks, trade names, trade dress, service
marks, copyrights, domain names, and similar rights (including registrations and
applications to register or renew the registration of any of the foregoing),
patents and patent applications, trade secrets, ideas, inventions, improvements,
practices, processes, formulas, designs, know-how, confidential business and
technical information, computer software, firmware, data and documentation,
licenses of or agreements relating to any of the foregoing, rights of privacy
and publicity, moral rights, and any other similar intellectual property rights
and tangible embodiments of any of the foregoing (in any medium including
electronic media.)
"INTELLECTUAL PROPERTY LICENSE" means any license, permit, authorization,
approval, Contract or consent granted, issued by or with any Person relating to
the use of Intellectual Property.
"IRS" means the Internal Revenue Service.
"KNOWLEDGE OF THE COMPANY", "KNOWLEDGE OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES" or any like expression means to the actual knowledge of the
persons listed on Schedule 8.2.
"LIEN" is defined in Section 2.1(c).
"LOSSES" is defined in Section 7.1.
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"MATERIAL ADVERSE EFFECT" on or with respect to an entity (or group of
entities taken as a whole) means any state of facts, event, change or effect
that has had, or would reasonably be expected to have, a material adverse effect
on (a) the business, properties, assets and liabilities (taken as a whole),
results of operations or financial condition of such entity (or, if with respect
thereto, of such group of entities taken as a whole), or (b) the ability of such
entity (or group of entities) to consummate the transactions contemplated under
this Agreement.
"MATERIAL CONTRACT" is defined in Section 2.1(j).
"PAYMENT DATE" is defined in Section 1.3(c).
"PERMIT" is defined in Section 2.1(c).
"PERMITTED LIENS" means those Liens (A) securing debt that is reflected on
the balance sheets or the notes thereto contained in the Company SEC Documents
filed with the SEC and publicly available prior to the date hereof, (B) referred
to in Schedule 2.1(j), (C) for Taxes not yet due or payable or being contested
in good faith and for which adequate reserves have been established in
accordance with GAAP, (D) that constitute mechanics', carriers', workmens' or
like liens, liens arising under original purchase price conditional sales
contracts and equipment leases with third parties entered into in the ordinary
course, (E) Liens incurred or deposits made in the ordinary course of business
consistent with past practice in connection with workers' compensation,
unemployment insurance and social security, retirement and other legislation and
(F) easements, covenants, declarations, rights or way, encumbrances, or similar
restrictions in connection with real property owned by the Company or any of its
Subsidiaries that do not materially impair the use of such real property by the
Company and any of its Subsidiaries, and in the case of Liens described in
clauses (B), (C), (D), (E) or (F) that individually or in the aggregate, would
not have a Material Adverse Effect on the Company and its Subsidiaries, taken as
a whole.
"PERSON" means any individual, partnership, joint venture, corporation,
limited liability company, trust, unincorporated organization, government or
department or agency of a government or other entity.
"PLANS" is defined in Section 2.1(1).
"PURCHASER" is defined in the recitals to this Agreement.
"PURCHASER INDEMNIFIABLE LOSSES" is defined in Section 7.1.
"PURCHASER INDEMNITEES" is defined in Section 7.1.
"REPRESENTATIVE" means an agent or employee of Purchaser, or of an
independent public accounting firm, law firm, or other consulting company or
advisor of Purchaser.
"RESEARCH PROGRAM" shall have the meaning set forth in the Collaboration
Agreement.
"RESEARCH PROGRAM TERM" shall have the meaning set forth in the
Collaboration Agreement.
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"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the SEC promulgated
thereunder, all as the same shall be in effect from time to time.
"SHARES," means, collectively, the First Closing Shares and the Subsequent
Closing Shares.
"SUBSEQUENT CLOSING" is defined in Section 1.1(b).
"SUBSEQUENT CLOSING DATE" is defined in Section 1.2(b).
"SUBSEQUENT CLOSING PURCHASE PRICE" is defined in Section 1.1(b).
"SUBSEQUENT CLOSING SHARES" is defined in Section 1.1(b).
"SUBSIDIARY" means, as to any Person, any corporation at least a majority
of the shares of stock of which having general voting power under ordinary
circumstances to elect a majority of the Board of Directors of such corporation
(irrespective of whether or not at the time stock of any other class or classes
shall have or might have voting power by reason of the happening of any
contingency) is, at the time as of which the determination is being made, owned
by such Person, or one or more of its Subsidiaries or by such Person and one or
more of its Subsidiaries.
"TAXES" is defined in Section 2.1(k).
"TAX RETURNS" is defined in Section 2.1(k).
"TOTAL VOTING POWER" means at any time the total combined voting power in
the general election of directors of all the Voting Securities then outstanding.
"VOTING SECURITIES" means at any time shares of any class of capital stock
of the Company which are then entitled to vote generally in the election of
directors.
ARTICLE IX
MISCELLANEOUS
Section 9.1 GOVERNING LAW. This Agreement shall be construed and the
respective rights of the parties determined according to the substantive laws of
the State of Delaware notwithstanding the provisions governing conflict of laws
under such Delaware law to the contrary, except matters of intellectual property
law which shall be determined in accordance with the intellectual property laws
relevant to the intellectual property in question.
Section 9.2 ASSIGNMENT. Neither the Company nor the Purchaser may assign
this Agreement in whole or in part without the consent of the other, except if
such assignment occurs in connection with the sale or transfer (by merger or
otherwise) of all or substantially all of the business and assets of the Company
or Purchaser to which the subject matter of this Agreement
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pertains, provided that the acquirer or surviving entity confirms to the other
party in writing its agreement to be bound by all of the terms and conditions of
this Agreement. Notwithstanding the foregoing, either party may assign this
Agreement to an Affiliate, provided that such party shall guarantee the
performance of such Affiliate, and provided further that either party may assign
its rights (but not its obligations) pursuant to this Agreement in whole or in
part to an Affiliate of such party that is controlled by such party.
Section 9.3 AMENDMENTS. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof, and supersedes
all previous arrangements with respect to the subject matter hereof, whether
written or oral. The parties also acknowledge the simultaneous execution and
delivery of the Collaboration Agreement, none of which shall be superseded by
this Agreement. Any amendment or modification to this Agreement shall be made in
writing signed by both parties.
Section 9.4 NOTICES.
Notices to the Company shall be addressed to:
Millennium Pharmaceuticals, Inc.
00 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000-0000
Attn: General Counsel
Telephone: (000) 000-0000
and to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Notices to the Purchaser shall be addressed to:
Xxxxxx Laboratories
000 Xxxxxx Xxxx Xxxx
Xxxxxxxx XX0X, Department 364
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Attn: Senior Vice President, Secretary and General
Counsel
Telephone: (000) 000-0000
With copies to:
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
Telephone: (000) 000-0000
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Either Party may change its address to which notices shall be sent by giving
notice to the other Party in the manner herein provided. Any notice required or
provided for by the terms of this Agreement shall be in writing and shall be
sent via a reputable overnight courier service, properly addressed in accordance
with the paragraph above. The effective date of notice shall be the date notice
is sent; provided however that if the effective date so determined if not a
Business Day, then the effective date of notice shall be the next following
Business Day.
Section 9.5 PUBLIC ANNOUNCEMENTS. The provisions of Section 15.9 of the
Collaboration Agreement shall govern any and all public statements with respect
to the transactions contemplated by this Agreement.
Section 9.6 NO STRICT CONSTRUCTION. This Agreement has been prepared
jointly and shall not be strictly construed against either Party.
Section 9.7 HEADINGS. The captions or headings of the sections or other
subdivisions hereof are inserted only as a matter of convenience or for
reference and shall have no effect on the meaning of the provisions hereof.
Section 9.8 NO IMPLIED WAIVERS; RIGHTS CUMULATIVE. No failure on the part
of the Company or the Purchaser to exercise, and no delay in exercising, any
right, power, remedy or privilege under this Agreement, or provided by statute
or at law or in equity or otherwise, shall impair, prejudice or constitute a
waiver of any such right, power, remedy or privilege or be construed as a waiver
of any breach of this Agreement or as an acquiescence therein, nor shall any
single or partial exercise of any such right, power, remedy or privilege
preclude any other or further exercise thereof or the exercise of any other
right, power, remedy or privilege.
Section 9.9 SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the Purchaser and the Company agree that the body making the
determination of invalidity or unenforceability shall have the power to reduce
the scope, duration, or area of the term or provision, to delete specific words
or phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement shall be enforceable as so modified after the expiration of the
time within which the judgment may be appealed.
Section 9.10 EXECUTION IN COUNTERPARTS. This Agreement may be executed in
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original, and all of which counterparts, taken together,
shall constitute one and the same instrument.
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Section 9.11 NO THIRD PARTY BENEFICIARIES. No person or entity other than
the Purchaser, the Company and their respective Affiliates and permitted
assignees hereunder shall be deemed an intended beneficiary hereunder or have
any right to enforce any obligation of this Agreement.
Section 9.12 SPECIFIC ENFORCEMENT. Purchaser, on the one hand, and the
Company, on the other, acknowledge and 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 or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of the provisions hereof in any court of the
United States or any state thereof having jurisdiction, this being in addition
to any other remedy to which they may be entitled at law or equity.
Section 9.13 EXPENSES AND REMEDIES. Whether or not the Closing takes place,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be borne by the party incurring such
expense.
Section 9.14 TRANSFER OF SHARES. Purchaser understands and agrees that the
Shares have not been registered under the Securities Act or the securities laws
of any state and that they may be sold or otherwise disposed of only in one or
more transactions registered under the Securities Act and, where applicable,
such laws or as to which an exemption from the registration requirements of the
Securities Act and, where applicable, such laws is available. Purchaser
acknowledges that Purchaser has no right to require the Company to register the
Shares and understands and agrees that each certificate representing the Shares
(other than, with respect to the first legend, Shares that are no longer subject
to the provisions of Article III and other than, with respect to the second
legend, Shares which have been transferred in a transaction registered under the
Securities Act or exempt from the registration requirements of the Securities
Act pursuant to Rule 144 thereunder or any similar rule or regulation) shall
bear the following legends:
"THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED BY AN AGREEMENT ON FILE AT THE
OFFICE OF THE CORPORATION."
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS
OR AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF
SUCH ACT OR SUCH LAWS."
and Purchaser agrees to transfer the Shares only in accordance with the
provisions of such legends.
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Section 9.15 DISPUTE RESOLUTION. All claims, controversies and disputes
between the parties arising out of or relating to this Agreement shall be
resolved in accordance with the binding Alternative Dispute Resolution procedure
set forth on Exhibit B.
[The remainder of this page has intentionally been left blank.]
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IN WITNESS WHEREOF, PURCHASER and the COMPANY have caused this
Agreement to be executed as of the day and year first above written.
MILLENNIUM PHARMACEUTICALS, INC.
By: /s/ Xxxx X. Xxxxx
---------------------------------------------
Title: Chairman of the Board and CEO
------------------------------------------
XXXXXX LABORATORIES
By: /s/ Miles X. Xxxxx
---------------------------------------------
Title: CEO
------------------------------------------
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EXHIBIT A
FORM OF OPINION OF COMPANY'S COUNSEL
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EXHIBIT A
Xxxxxx Laboratories
000 Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, XX 00000
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 5.3(b) of the
Investment Agreement (including all exhibits and schedules thereto), dated
_____, 2001 (the "Investment Agreement"), between Millennium Pharmaceuticals,
Inc., a Delaware corporation (the "Company"), and Xxxxxx Laboratories, an
Illinois corporation (the "Investor"), in connection with the purchase by the
Investor of _________ shares (the "Shares") of the Common Stock, $.001 par value
per share ("Common Stock"), of the Company. Capitalized terms used herein and
not otherwise defined shall have the respective meanings ascribed to such terms
in the Investment Agreement.
We have acted as counsel to the Company in connection with the
preparation, execution and delivery of the Investment Agreement. We have also
acted as counsel to the Company in connection with the preparation, execution
and delivery of the Collaboration and License Agreement and Technology Transfer
Agreement, each dated _______, 2001, between the Company and the Investor (the
"Collaboration Agreements").
In connection with this opinion, we have examined and relied upon the
following:
(i) a copy of the Certificate of Incorporation, as amended, of
the Company (the "Certificate");
(ii) a copy of the Bylaws, as amended, of the Company (the
"Bylaws");
(iii) a certificate, dated ________, 2001, from the Secretary of
State of the State of Delaware certifying as to the valid
existence and corporate good standing of the Company in
Delaware (the "Delaware Certificate");
(iv) a certificate, dated _____, 2001, from the Secretary of
State of the Commonwealth of Massachusetts certifying as to
the foreign corporation qualification of the Company in
Massachusetts (the "Massachusetts Certificate");
(v) the Investment Agreement, including the Schedules thereto;
(vi) the Collaboration Agreements;
(vii) resolutions adopted by the Board of Directors of the
Company on _____, 2001;
(viii) a certificate, dated as of the date hereof, of the Chief
Executive Officer and Chief Financial Officer of the Company
as to certain representations and warranties and compliance
with covenants and obligations of the Company set forth in
the Investment Agreement;
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(ix) a certificate, dated as of the date hereof, of the Secretary
of the Company certifying as to (i) the Certificate; (ii)
the Bylaws; and (iii) certain resolutions of the Board of
Directors;
(x) a certificate, dated as of the date hereof, of the Chief
Financial Officer of the Company concerning certain matters
referred to in this opinion (the "Officer's Certificate");
(xi) a certificate of Equiserve dated as of _________, 2001 as to
the issued and outstanding shares of the Company's Common
Stock (the "Transfer Agent Certificate");
(xii) the corporate minute books and stock transfer records of
the Company;
(xiii) the certificate representing the Shares;
(xiv) copies of contracts and documents the Company has filed as
an exhibit to its Annual Report on Form 10-K for the year
ended December 31, 200_, or any report, schedule, form or
other document thereafter filed by the Company with the
Securities and Exchange Commission under the Securities Act
of 1933, as amended (the "Securities Act"), or the
Securities Exchange Act of 1934, as amended (the `Exchange
Act"); and
(xv) such other agreements, documents, corporate records,
certificates and materials as we have deemed necessary for
the purposes of the opinions rendered herein.
In our examination of such documents, we have assumed the completeness
of the corporate minute and stock record books of the Company, the genuineness
of all signatures, the authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents submitted to us
as certified, photostatic or facsimile copies, the authenticity of the originals
of such latter documents and the legal competence of each individual executing
any document.
For the purposes of this opinion, we have relied as to all questions of
fact material to this opinion upon certificates of public officials and officers
of the Company and upon the representations and warranties of the Investor and
the Company contained or referred to in the Investment Agreement. Although we
have not made any independent checks or verification of such factual matters,
nothing has come to our attention that has caused us to question the accuracy of
such certificates or representations or warranties.
Any reference to "our knowledge," "knowledge," "known to us," "to our
attention" or any variation of any of the foregoing shall mean the conscious
awareness of the attorneys in this firm who have rendered substantive attention
to this matter of the existence or absence of any facts which would contradict
our opinions set forth below. We have not undertaken any independent
investigation to determine the existence or absence of such facts, and no
inference as to our knowledge of the existence or absence of such facts should
be drawn from the fact of our representation of the Company. Without limiting
the foregoing, we have not, for purposes of our opinions below, searched any
electronic databases, nor have we conducted a search of the dockets of any
court, administrative or regulatory body or agency or other filing office in any
jurisdiction.
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The opinions expressed herein are qualified to the extent that they may
be subject to or affected by (i) applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other laws affecting the
rights and remedies of creditors generally, (ii) statutory or decisional law
concerning recourse by creditors to security in the absence of notice and
hearing, and (iii) duties and standards imposed on creditors and parties to
contracts including, without limitation, requirements of good faith,
reasonableness and fair dealing. Furthermore, we express no opinion herein with
respect to (A) the availability of any equitable or specific remedy or the
assertion of any equitable defense upon any breach of any of the agreements as
to which we are opining herein, or any of the agreements, documents or
obligations referred to therein, in as much as the availability of such remedies
or such equitable defenses may be subject to the discretion of a court, (B)
indemnification and contribution and (C) venue or choice of law.
Our opinions expressed in paragraph 1 below (insofar as they relate to
the Company's valid existence, good standing and qualification to do business)
are based solely on the Delaware Certificate and the Massachusetts Certificate
and are limited accordingly, and, as to such matters, our opinions are rendered
as of the respective dates of such certificates.
Our opinions expressed in paragraph 2 below are based solely upon our
review of the Certificate, the corporate minute books, stock record and transfer
books of the Company and the agreements referred to in such paragraph and upon
the Transfer Agent Certificate and the Officer's Certificate and are limited
accordingly.
For purposes of our opinions expressed below, we express no opinion as
to compliance by the Company with any foreign or state securities or "blue sky"
laws of any jurisdiction. In addition, our opinions below are limited in that we
express no opinion with respect to any securities anti-fraud laws.
For purposes of our opinions expressed in paragraph 7 below with
respect to the Shares, we have relied upon representations made by the Investor
in the Investment Agreement and have assumed (without any independent
investigation) the accuracy of such representations.
For purposes of our opinions expressed in paragraph 6 below with
respect to the Shares, insofar as such opinions relate to filings required or
permitted to be made under applicable Federal and state securities laws), we
have relied upon representations made by the Investor in the Investment
Agreement and have assumed (without any independent investigation) the accuracy
of such representations.
Our opinion expressed in paragraph 8 below is based solely on the
Officer's Certificate and is limited accordingly, and, as to such matters, our
opinion is rendered as of the date of such certificate.
We express no opinion as to the existence of any liens, pledges or
encumbrances on the assets of the Company.
We have assumed that the Investment Agreement has been duly authorized,
executed and delivered by the Investor and that the Investor has all requisite
power and authority to effect the transactions contemplated by the Investment
Agreement. We have also assumed that the Investment Agreement is a valid and
binding obligation of the Investor, enforceable against the Investor in
accordance with its terms. We do not render any opinion as to the application of
any law or regulation to the power, authority or competence of the Investor.
We are opining herein solely as to the Federal securities laws of the
United States, the state laws of the Commonwealth of Massachusetts, and the
General Corporation Law statute of
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the State of Delaware. To the extent that the laws of any jurisdiction other
than the Federal securities laws of the United States, the state laws of the
Commonwealth of Massachusetts, and the General Corporation Law statute of the
State of Delaware are applicable to any instrument, agreement or matter referred
to below, we have assumed, without independent investigation and with your
permission, that such laws are identical to the state laws of the Commonwealth
of Massachusetts and we express no opinion as to whether such assumption is
reasonable or correct. For purposes of our opinions rendered below, we have
assumed that the facts and law governing the performance by the parties of their
respective obligations under the Investment Agreement will be identical to the
facts and law governing such performance on the date of this opinion:
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, and has full corporate
power and authority to conduct its business as it is, to our knowledge,
currently conducted and to enter into and perform the transactions contemplated
by the Investment Agreement and the Collaboration Agreements. The Company is
duly qualified to do business and is in good standing in the Commonwealth of
Massachusetts.
2. On ________, 2001, the authorized capital stock of the Company
consisted of: (i) 500,000,000 shares of Common Stock, $0.001 par value,
_________ of which, to our knowledge, were of record issued and outstanding; and
(ii) 5,000,000 shares of Preferred Stock, $0.001 par value, none of which, to
our knowledge, were of record issued and outstanding. All of the issued and
outstanding shares of Common Stock have been duly authorized and validly issued
and are fully paid and nonassessable. Except as set forth in or disclosed in the
Certificate or the Investment Agreement (including the Schedules thereto), to
our knowledge (i) no agreement, subscription, warrant, option, convertible
security or other right (contingent or otherwise) to purchase or acquire any
shares of capital stock of the Company is authorized or outstanding, (ii) there
is not any commitment of the Company to issue any subscription, warrant, option,
convertible security or other such right or to issue or distribute to holders of
any shares of its capital stock any evidences of indebtedness or assets of the
Company, (iii) the Company has no obligation (contingent or otherwise) to
purchase, redeem or otherwise acquire any shares of its capital stock or any
interest therein or to pay any dividend or make any other distribution in
respect thereof, and (iv) there are no restrictions on the transfer of any
shares of the Company's capital stock, except as imposed by Federal or state
securities or "blue sky" laws.
3. To our knowledge, except as provided or disclosed in the Investment
Agreement (including the Schedules thereto), no person or entity is entitled to
(i) any preemptive, right of first refusal, contractual or similar rights with
respect to the issuance of the Shares, which rights have not been waived, or
(ii) any rights with respect to the registration of any capital stock of the
Company under the Securities Act.
4. The issuance, sale and delivery of the Shares by the Company in
accordance with the Investment Agreement have been duly authorized by all
necessary corporate action on the part of the Company and the Shares when
issued, sold and delivered against payment therefor in accordance with the
provisions of the Investment Agreement will be duly authorized, validly issued,
fully paid and nonassessable. The Common Stock has the respective powers,
preferences and rights stated in the Certificate.
5. The execution, delivery and performance by the Company of the
Investment Agreement has been duly authorized by all necessary corporate action
on the part of the Company. The Investment Agreement constitutes the valid and
binding obligation of the
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Company, enforceable against the Company in accordance with its terms. Neither
the execution, delivery by the Company of the Investment Agreement, nor the
consummation by the Company of the transactions contemplated thereby, nor the
offer, issuance and sale of the Shares pursuant to the Investment Agreement will
conflict with, or result in any breach of any of the terms, conditions or
provisions of, or constitute a default under, the Certificate or Bylaws of the
Company, any contract or document the Company has filed as an exhibit to its
Annual Report on Form 10-K for the year ended December 31, 200_, or any report,
schedule, form or other document thereafter filed by the Company with the
Securities and Exchange Commission under the Securities Act or the Exchange Act
or any decree, judgment or order specifically naming the Company and known to
us.
6. Except as obtained and in effect as of the date hereof, no consent,
approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any U.S. Federal or Massachusetts state
governmental authority (other than filings required or permitted to be made
after the date hereof under applicable Federal and state securities laws) is
required on the part of the Company in connection with the execution and
delivery of the Investment Agreement, or the offer, issuance, sale and delivery
of the Shares or the other transactions to be consummated at the Closing
pursuant to the Investment Agreement.
7. Based in part on the representations of the Investor in Section
2.2(d) of the Investment Agreement, the offer, issuance and sale of the Shares
pursuant to the Investment Agreement will be exempt from registration under the
Securities Act.
8. To our knowledge there is no action, suit or proceeding, or
governmental inquiry or investigation, pending or threatened against the
Company.
This opinion is provided to the Investor as a legal opinion only and
not as a guaranty or warranty of the matters discussed herein. This opinion is
based upon currently existing statutes, rules, regulations and judicial
decisions and is rendered as of the date hereof, and we disclaim any obligation
to advise you of any changes in any of the foregoing sources of law or
subsequent developments in law or changes in facts or circumstances which might
affect any matters or opinions set forth herein.
This opinion is rendered only to the Investor and is solely for the
benefit of the Investor in connection with the transactions contemplated by the
Investment Agreement. This opinion may not be relied upon by the Investor for
any other purpose, nor may this opinion be provided to, quoted to or relied upon
by any other person or entity for any purpose without our prior written consent.
Very truly yours,
XXXX AND XXXX LLP
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EXHIBIT B
DISPUTE RESOLUTION
The parties recognize that a bona fide dispute as to certain matters may arise
from time to time during the term of this Agreement which relates to either
party's rights and/or obligations. To have such a dispute resolved by this
Alternative Dispute Resolution (ADR) provision, a party must send written notice
of the dispute to the other party for attempted resolution by good faith
negotiations between their respective presidents (or their equivalents) of the
affected subsidiaries, divisions, or business units within twenty-eight (28)
days after such notice is received (all references to "days" in this ADR
provision are to calendar days). If the matter has not been resolved within
twenty-eight (28) days of the notice of the dispute, or if the parties fail to
meet within such twenty-eight (28) days, either party may initiate an ADR
proceeding as provided herein. The parties shall have the right to be
represented by counsel in such a proceeding.
1. To begin an ADR proceeding, a party shall provide written notice to the other
party of the issues to be resolved by ADR. Within fourteen (14) days after
receipt of such notice, the other party may, by written notice to the party
initiating the ADR, add additional issues to be resolved within the same ADR.
2. Within twenty-one (21) days following receipt of the original ADR notice, the
parties shall select a mutually acceptable neutral to preside in the resolution
of any disputes in this ADR proceeding. If the parties are unable to agree on a
mutually acceptable neutral within such period, either party may request the
President of the CPR Institute for Dispute Resolution (CPR), 000 Xxxxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, to select a neutral pursuant to the
following procedures:
(a) The CPR shall submit to the parties a list of not less
than five (5) candidates within fourteen (14) days after receipt of the request,
along with a CURRICULUM VITAE for each candidate. No candidate shall be an
employee, director, or shareholder of either party or any of their subsidiaries
or affiliates.
(b) Such list shall include a statement of disclosure by each
candidate of any circumstance likely to affect his or her impartiality.
(c) Each party shall number the candidates in order of
preference (with the number one (1) signifying the greatest preference) and
shall deliver the list to the CPR within seven (7) days following receipt of the
list of candidates. If a party believes a conflict of interest exists regarding
any of the candidates, the party shall provide a written explanation of the
conflict to the CPR along with its list showing its order of preference for the
candidates. Any party failing to return a list of preferences on time shall be
deemed to have no order of preference.
(d) If the parties collectively have identified fewer than
three (3) candidates deemed to have conflicts, the CPR shall designate as
neutral the candidate for whom the parties collectively have indicated the
greatest preference. If a tie shall result between two candidates,
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the CPR may designate either candidate. If the parties collectively have
identified three (3) or more candidates deemed to have conflicts, the CPR shall
review the explanations regarding conflicts, and, in its sole discretion, may
either (i) immediately designate as the neutral the candidate for whom the
parties collectively have indicated the greatest preference, or (ii) issue a new
list of not less than five (5) candidates, in which case the procedures set
forth in subparagraphs 2(a) - 2(d) shall be repeated.
3. No earlier than twenty-eight (28) days or later than fifty-six (56) days
after the selection, the neutral shall hold a hearing to resolve each of the
issues identified by the parties. The ADR proceeding shall take place at a
location agreed upon by the parties. If the parties cannot agree, the neutral
shall designate a location other than the principle place of business of either
party or any of their subsidiaries or affiliates.
4. At least seven (7) days prior to the hearing, each party shall submit the
following to the other party and the neutral:
(a) a copy of all exhibits on which such party intends to rely
in any oral or written presentation to the neutral;
(b) a list of any witnesses such party intends to call at the
hearing, and a short summary of the anticipated testimony of each witness;
(c) a proposed ruling on each issue to be resolved, together
with a request for a specific damage award or other remedy for each issue. The
proposed rulings and remedies shall not contain any recitation of the facts or
any legal arguments and shall not exceed one (1) page per issue.
(d) a brief in support of each party's proposed rulings and
remedies provided that the brief shall not exceed twenty (20) pages. This page
limitation shall apply regardless of the number of issues raised in the ADR
proceeding.
Except as expressly set forth in subparagraphs 4(a) - 4(d), no discovery shall
be required or permitted by any means, including depositions, interrogatories,
requests for admissions, or production of documents.
5. The hearing shall be conducted on two (2) consecutive days and shall be
governed by the following rules:
(a) Each party shall be entitled to five (5) hours of hearing
time to present its case. The neutral shall determine whether each party has had
the five (5) hours to which it is entitled.
(b) Each party shall be entitled, but not required, to make an
opening statement, to present regular and rebuttal testimony, documents or other
evidence, to cross-examine witnesses, and to make a closing argument.
Cross-examination of witnesses shall occur immediately after their direct
testimony, and cross examination shall be charged against the party conducting
the cross-examination.
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(c) The party initiating the ADR shall begin the hearing and,
if it chooses to make an opening statement, shall address not only issues it
raised but also any issues raised by the responding party. The responding party,
if it chooses to make an opening statement, also shall address all issues raised
in the ADR. Thereafter, the presentation of regular and rebuttal testimony and
documents, other evidence, and closing arguments shall proceed in the same
sequence.
(d) Except when testifying, witnesses shall be excluded from
the hearing until closing arguments.
(e) Settlement negotiations, including any statements made
therein, shall not be admissible under any circumstances. Affidavits prepared
for purposes of the ADR hearing also shall not be admissible. As to all other
matters, the neutral shall have sole discretion regarding the admissibility of
any evidence.
6. Within seven (7) days following completion of the hearing, each party may
submit to the other party and the neutral a post-hearing brief in support of its
proposed rulings and remedies, provided that such brief shall not contain or
discuss any new evidence and shall not exceed ten (10) pages. This page
limitation shall apply regardless of the number of issues raised in the ADR
proceeding.
7. The neutral shall rule on each disputed issue within fourteen (14) days
following completion of the hearing. Such ruling shall adopt in its entirety the
proposed ruling and remedy of one of the parties on each disputed issue but may
adopt one party's proposed rulings and remedies on some issues and the other
party's proposed rulings and remedies on other issues. The neutral shall not
issue any written opinion or otherwise explain the basis of the ruling.
8. The neutral shall be paid a reasonable fee plus expenses. These fees and
expenses, along with the reasonable legal fees and expenses of the prevailing
party (including all expert witness fees and expenses), the fees and expenses of
a court recorder, and any expenses for a hearing room, shall be paid as follows:
(a) If the neutral rules in favor of one party on all disputed
issues in the ADR, the losing party shall pay 100% of such fees and expenses.
(b) If the neutral rules in favor of one party on some issues,
and the other party on other issues, the neutral shall issue with the rulings a
written determination as to how such fees and expenses shall be allocated
between the parties. The neutral shall allocate the fees and expenses in a way
that bears a reasonable relationship to the outcome of the ADR, with the party
prevailing on more issues, or on issues of greater value or gravity, recovering
a relatively larger share of its legal fees and expenses.
9. The rulings of the neutral and the allocation of fees and expenses shall be
binding, non-reviewable, and non-appealable, and may be entered as a final
judgment in any court having jurisdiction.
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10. Except as provided in paragraph 9 or as required by law, the existence of
the dispute, any settlement negotiations, the ADR hearing, any submissions
(including exhibits, testimony, proposed rulings, and briefs), and the rulings
shall be deemed Confidential Information. The neutral shall have the authority
to impose sanctions for unauthorized disclosure of Confidential Information.
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