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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)*
NEOZYME II CORPORATION
- --------------------------------------------------------------------------------
(Name of Issuer)
CALLABLE COMMON STOCK, $1.00 PAR VALUE
- --------------------------------------------------------------------------------
(Title of Class of Securities)
G6420H11
--------------------------------------
(CUSIP Number)
DAVID J. MCLACHLAN MAUREEN P. MANNING
GENZYME CORPORATION PALMER & DODGE LLP
ONE KENDALL SQUARE ONE BEACON STREET
CAMBRIDGE, MA 02139 BOSTON, MA 02108
(617) 252-7500 (617) 573-0100
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
September 23, 1996
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with the statement / /. (a fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are being
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
SEC 1746(12-91)
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SCHEDULE 13D/A
- ------------------ ------------------
CUSIP No. G6420H11 Page 2 of 33 Pages
- ------------------ ------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
GENZYME CORPORATION
IRS Identification No.: 06-1047163
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF THE GROUP* (a) / /
(b) / /
NOT APPLICABLE
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(D) or 2(E) / /
NOT APPLICABLE
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
MASSACHUSETTS
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 2,415,000
SHARES ------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 0
EACH ------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 2,415,000
WITH ------------------------------------------------------
10. SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,415,000
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
NOT APPLICABLE
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
100%
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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This Amendment No. 1 relates to the Callable Common Stock, $1.00 per share
("Callable Common Stock"), of Neozyme II Corporation ("Neozyme II") and amends
the statement on Schedule 13D initially filed by Genzyme Corporation ("Genzyme")
with the Securities and Exchange Commission (the "Commission") on June 22, 1992
and amended by Amendment No. 1 thereto filed with the Commission on September 6,
1996.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 is hereby amended to add the following as the penultimate
paragraph thereof:
On September 23, 1996, Genzyme and Neozyme II announced that they have
signed a definitive acquisition agreement under which Genzyme will commence a
tender offer for all outstanding units of Neozyme II at $45 per unit in cash.
Under the agreement, if the tender offer is successfully completed, a
second-step transaction will be effected in which the Neozyme II unitholders
who do not tender their units will be entitled to receive $29 in cash for each
share of callable common stock included in the untendered units. The callable
warrants included in the units will remain outstanding. The Purchase Agreement
among Genzyme, Neozyme II and Neozyme II Acquisition Corp. is attached hereto
as Exhibit A and the press release announcing the execution of such agreement
is attached hereto as Exhibit B. Each of these exhibits is incorporated herein
by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A: Purchase Agreement dated September 20, 1996 among Genzyme
Corporation, Neozyme II Acquisition Corp. and Neozyme II
Corporation. Filed herewith.
Exhibit B: Press release of Genzyme Corporation and Neozyme II
Corporation dated September 23, 1996. Filed herewith.
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SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Date: September 24, 1996 GENZYME CORPORATION
By: /s/ David J. McLachlan
-------------------------------------
David J. McLachlan
Senior Vice President, Finance and
Chief Financial Officer
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<PAGE> 5
EXHIBIT INDEX
PAGE
----
Exhibit A: Purchase Agreement dated September 20, 1996 among Genzyme
Corporation, Neozyme II Acquisition Corp. and Neozyme II
Corporation. Filed herewith. 6
Exhibit B: Press release of Genzyme Corporation and Neozyme II
Corporation dated September 23, 1996. Filed herewith. 35
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EXHIBIT A
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement") dated as of September 20, 1996
is among Genzyme Corporation ("Genzyme"), a Massachusetts corporation, Neozyme
II Acquisition Corp. (the "Purchaser"), a British Virgin Islands ("BVI")
international business company and a wholly-owned subsidiary of Genzyme, and
Neozyme II Corporation (the "Company"), a BVI international business company.
BACKGROUND
A. The respective Boards of Directors of Genzyme, the Purchaser and the
Company have duly approved the acquisition of the Company pursuant to the terms
of this Agreement.
B. In furtherance of such acquisition, it is proposed that the Purchaser
will make a tender offer (the "Offer") to purchase all of the outstanding units
(the "Units"), each of which consists of one share of Callable Common Stock, par
value $1.00 per share, of the Company (individually, a "Share" and,
collectively, the "Shares") and Callable Warrants (the "Callable Warrants") to
purchase two shares of General Division Common Stock of Genzyme and .135 shares
of Tissue Repair Division Common Stock of Genzyme. The Shares included in the
Units represent all of the issued and outstanding capital stock of the Company.
The Offer will be at a price of $45.00 per Unit in cash and will be subject to
the Minimum Condition (as defined in ANNEX I hereto), and on the terms and
subject to the other conditions set forth in the Offer Documents (as defined in
Section 1.1(b)).
C. If the Offer is consummated, but not all of the Units are tendered and
accepted, Genzyme has agreed to effect a transaction (as more fully described in
Section 2.1) in which Genzyme will acquire, directly or indirectly, all of the
remaining Shares of the Company in exchange for cash in an amount per Share
equal to $29.00 (the "Second Step Consideration"). The Callable Warrants
associated with each such Share shall remain outstanding following consummation
of the Second Step Transaction (as defined in Section 2.1). In order to effect
the Second Step Transaction as promptly as practicable following completion of
the Offer, the Board of Directors of the Company has duly authorized a merger
(the "Merger") of the Company with a wholly- owned subsidiary of the Purchaser
on the terms and subject to the conditions of this Agreement and pursuant to the
plan of merger set forth as ANNEX II hereto (the "Merger Plan") in accordance
with the applicable provisions of the BVI International Business Companies
Ordinance, 1984 (the "BVI Law"). At the request of Genzyme in accordance with
the terms of this Agreement, the Company will solicit the written consents of
its shareholders for the approval of the Merger Plan. At Genzyme's option and
subject to compliance with applicable laws, such solicitation may occur while
the Offer is pending or following its consummation.
D. If the Offer is terminated because the Minimum Condition has not been
satisfied, upon the election and at the request of Genzyme in accordance with
Section 1.1(b)(ii) of this Agreement, the Company shall take all action
(coordinating the timing thereof with Genzyme and the Purchaser) necessary, in
accordance with applicable law and the Company's
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Memorandum of Association and Articles of Association, to convene a meeting of
its shareholders to consider and vote upon the approval of the Merger Plan, or
to solicit the written consent of its shareholders to approve the Merger Plan.
E. The Board of Directors of the Company, on the recommendation of a
special committee of the Board of Directors consisting of all of the directors
of the Company who are not officers or directors of Genzyme (the "Special
Committee"), has determined that the Offer and the Second Step Transaction are
fair to, and in the best interests of the holders of the Units and has duly
approved the Offer and the Second Step Transaction and resolved to recommend
acceptance of the Offer by the holders of the Units.
Accordingly, in consideration of the mutual representations, warranties and
covenants contained herein, the parties hereto agree as follows:
1. THE OFFER
1.1. The Offer.
---------
(a) Provided that this Agreement shall not have been terminated in
accordance with Section 8.1 hereof and nothing shall have occurred and be
continuing that would result in a failure to satisfy any of the conditions set
forth in ANNEX I hereto, the Purchaser shall, as soon as practicable after the
date hereof, and in any event within five business days of the day on which the
Purchaser's intention to make the Offer is publicly announced, which
announcement will be made promptly following the execution of this Agreement,
commence (within the meaning of Rule 14d-2(a) of the U.S. Securities Exchange
Act of 1934, as amended (the "Exchange Act")), the Offer for all Units, subject
to the Minimum Condition (as defined in ANNEX I hereto), at a price of $45.00
per Unit, net to the seller in cash, without interest thereon. The Purchaser
shall conduct the Offer in compliance in all material respects with applicable
laws and consummate the Offer, on the terms and subject to the conditions
thereof. Genzyme represents that it has, and will provide to the Purchaser on a
timely basis, the funds necessary to purchase the Units pursuant to the Offer
and to consummate the Second Step Transaction.
(b) The Offer shall be made by means of the Offer Documents (as
defined below), which shall not contain any condition not set forth in ANNEX I
hereto and shall be open for a period of 21 business days (such 21st business
day being referred to herein as the "Initial Expiration Date"). Without the
consent of the Company, as approved by the Special Committee, the Purchaser
shall not amend or waive the Minimum Condition (as defined in ANNEX I hereto) or
the Majority Consent Condition (as defined below), extend the Offer, reduce the
maximum number of Units to be purchased, reduce the price to be paid per Unit
pursuant to the Offer or amend any other material term of the Offer in a manner
adverse to the holders of the Units; provided, however, that if, on the Initial
Expiration Date, the Minimum Condition has not been satisfied, the Purchaser
may, not later than 9:00 a.m., eastern time, on the next business day following
the Initial Expiration Date, elect either (x) to amend the Offer and, subject to
compliance with applicable laws, proceed in accordance with subsection (i) below
or (y) to terminate the Offer and, subject to compliance with applicable laws,
proceed in accordance with subsection (ii) below. If, on the Initial Expiration
Date, the Minimum Condition has not been satisfied and the Purchaser does not
elect to proceed pursuant to subsection (i) or (ii) below
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within the time period and as described in the preceding sentence, then the
Company shall have the right to terminate this Agreement in accordance with
Section 8.1(b)(i) and Genzyme and the Purchaser shall have the right to
terminate this Agreement in accordance with Section 8.1(c)(i).
(i) If the Purchaser elects to amend the Offer and proceed under this
subsection 1.1(b)(i), the Purchaser will (a) extend the Offer for
a period not to exceed sixty days, (b) amend the Offer to delete
the Minimum Condition, (c) amend the Offer to add the Majority
Consent Condition (as defined below), and (d) amend the Offer
Documents to reflect the foregoing and cause the dissemination of
such revised documents in accordance with applicable laws. In
such event, the Company shall promptly commence (coordinating the
timing thereof with Genzyme and the Purchaser) to convene a
meeting of its shareholders or solicit the written consent of its
shareholders for approval of the Merger Plan, such solicitation
or meeting to be conducted in accordance with applicable laws and
the terms of this Agreement. The Majority Consent Condition shall
mean that the sum of (a) the Shares included in the Units
tendered and not withdrawn as of the new expiration date of the
Offer (provided such Shares may be voted in favor of the Merger
Plan at the meeting or pursuant to the consent solicitation by
the Purchaser immediately after the purchase of the Units which
include such Shares in the Offer by the Purchaser) plus (b) the
number of Shares held by holders who have voted in favor of the
Merger Plan at the meeting or pursuant to the consent
solicitation as of the new expiration date of the Offer (but
excluding any such Shares that would result in double counting
with (a) above) represents not less than a majority of the Shares
outstanding.
(ii) If the Purchaser elects to terminate the Offer and proceed under
this subsection 1.1(b)(ii), the Purchaser will promptly return
all tendered Units. In such event, the Company shall promptly
commence (coordinating the timing thereof with Genzyme and the
Purchaser) to convene a meeting of its shareholders or solicit
the written consent of its shareholders for approval of the
Merger Plan, such solicitation or meeting to be conducted in
accordance with applicable laws and the terms of this Agreement.
(c) As soon as practicable on the date of commencement of the Offer,
the Purchaser shall file with the Securities and Exchange Commission (the
"Commission") with respect to the Offer (i) a Tender Offer Statement on Schedule
14D-1 (together with all amendments and supplements thereto, the "Schedule
14D-1"), (ii) a Rule 13e-3 Transaction Statement on Schedule 13E-3 (together
with all amendments and supplements thereto, the "Schedule 13E-3") and (iii) an
Issuer Tender Offer Statement on Schedule 13e-4 (together with all amendments
and supplements thereto, the "Schedule 13E-4"), which will contain an offer to
purchase and forms of the related letters of transmittal and summary
advertisement (the Schedule 14D-1, the Schedule 13E-3, the Schedule 13E-4, the
offer to purchase and such other documents, together with any supplements or
amendments thereto, are referred to herein collectively as the "Offer
Documents"), all of which Offer Documents will be subject to review
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<PAGE> 4
by the Company prior to filing. Genzyme and the Purchaser shall provide the
Company and its counsel with a copy of any written comments or telephonic
notification of any verbal comments Genzyme or the Purchaser may receive from
the Commission or its staff with respect to the Offer Documents promptly after
the receipt thereof and shall provide the Company and its counsel with a copy of
any written responses thereto and telephonic notification of any verbal
responses thereto of Genzyme or the Purchaser or their counsel.
1.2. Company Action
--------------
(a) In connection with the Offer, the Company will comply with the
requirements of Rule 14d-5(b) of the Exchange Act and will, or will cause its
agent to, mail, via first class mail, postage prepaid the Offer Documents and,
if applicable, the Proxy Statement (as defined in 1.2(c)) to the record holders
of the Units in accordance with Rule 14d-5(b). The Company will cooperate with
the Purchaser to the end that any additional Offer Documents furnished to it (or
its agent) are mailed as soon as practicable. The Purchaser shall pay all costs
and expenses of such mailing.
(b) The Company represents and warrants that the Board of Directors of
the Company (the "Company's Directors"), on the recommendation of the Special
Committee, (i) has duly adopted and approved the Offer, the Second Step
Transaction, this Agreement and the transactions contemplated hereby and
thereby, (ii) has determined that the Offer and the Second Step Transaction are
fair to and in the best interests of the shareholders of the Company and (iii)
after consideration of its fiduciary duties under applicable laws, has resolved
to recommend acceptance of the Offer by holders of Units. The Company agrees to
file with the Commission as soon as reasonably practicable on the date of the
commencement of the Offer a Solicitation/Recommendation Statement on Schedule
14D-9 (together with all amendments and supplements thereto, the "Schedule
14D-9") and to disseminate the Schedule 14D-9 to the extent required by Rule
14d-9 under the Exchange Act and any other applicable U.S. federal securities
laws. Subject to the fiduciary duties of the Company's Directors, as advised by
counsel, the Offer Documents and the Schedule 14D-9 shall contain the
recommendation of the Company's Directors that the holders of Units accept the
Offer, and the Company hereby consents to the inclusion in the Offer Documents
of such recommendation. The Company shall provide Genzyme and its counsel with a
copy of any written comments or telephonic notification of any verbal comments
the Company may receive from the Commission or its staff with respect to the
Schedule 14D-9 promptly after the receipt thereof and shall provide Genzyme and
its counsel with a copy of any written responses thereto and telephonic
notification of any verbal responses thereto of the Company or its counsel.
(c) At the request of Genzyme, the Company shall take all action
(coordinating the timing thereof with Genzyme and the Purchaser) necessary, in
accordance with applicable law and the Company's Memorandum of Association and
Articles of Association, to convene a meeting of its shareholders (the
"Shareholders' Meeting"), as promptly as practicable after the purchase of Units
pursuant to the Offer to consider and vote upon the approval of the Merger Plan,
or to solicit the written consent of its shareholders to approve the Merger Plan
(the "Consent Solicitation") promptly after such purchase or, promptly after the
request of Genzyme, after the commencement of the Offer and while it is pending
or following the termination of the Offer upon the election of Genzyme pursuant
to Section 1.1(b)(ii). If required by applicable
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law, the Company shall promptly prepare and file with the Commission, and use
its reasonable best efforts to have cleared by the Commission, a proxy, consent
solicitation or information statement relating to the Second Step Transaction
(the "Proxy Statement") in compliance with applicable law. Subject to the
fiduciary duties of the Company's Directors, as advised by counsel, the Proxy
Statement shall contain a statement as to the approval of the Merger Plan by the
Company's Board of Directors and the determination by the Company's Board of
Directors that the Second Step Transaction is fair to and in the best interests
of the holders of the Shares, and the Company hereby consents to the inclusion
in the proxy, consent solicitation or information statement of such statement.
(d) The Special Committee and the Company's Directors have received
the written opinion of Hambrecht & Quist LLC (the "Financial Adviser") that, on
the basis of and subject to the matters set forth therein, the cash
consideration of $45.00 per Unit to be received by holders of the Units pursuant
to the Offer is fair to the holders of the Units from a financial point of view
and the Second Step Consideration to be received by the holders of the Shares
pursuant to the Second Step Transaction is fair to the holders of the Shares
from a financial point of view (the "Fairness Opinion"). The Company has
provided Genzyme and the Purchaser with a copy of the Fairness Opinion for
inclusion in the Offer Documents.
1.3. Directors.
---------
(a) Promptly upon the acceptance for payment of and payment by the
Purchaser for any Units pursuant to the Offer, and from time to time thereafter
as Units are accepted for payment and paid for by the Purchaser, subject to
compliance with Section 14(f) of the Exchange Act, the Purchaser shall be
entitled to designate such number of the Company's Class A Directors, rounded to
the nearest whole number, as will give the Purchaser representation on the
Company's Board of Directors equal to at least that number of directors which
equals the product of the total number of the Company's Directors (after giving
effect to the directors elected pursuant to this sentence) multiplied by the
percentage that such number of Units so accepted for payment and paid for by the
Purchaser bears to the number of Units outstanding, and the Company shall,
promptly following any such designation by the Purchaser, take such actions as
are necessary to cause the Purchaser's designees to be so elected, including
increasing the size of the Board of Directors or securing the resignations of
incumbent directors or both; provided, however, that notwithstanding the
Purchaser's right to designate certain of the Company's Directors, until the
Effective Date (as defined in Section 2.3 hereof), the Company's Class A
Directors shall include at least two directors who are directors on the date
hereof and who are not officers or directors of Genzyme or the Purchaser (the
"Independent Directors"); provided further that, if the number of Independent
Directors shall be reduced below two for any reason whatsoever, any remaining
Independent Director shall be entitled to designate a person who is not an
officer or director of Genzyme or the Purchaser to fill such vacancy and such
person shall be deemed to be an Independent Director for purposes of this
Agreement or, if no Independent Directors then remain, the other directors shall
designate two persons to fill such vacancies who shall not be designees,
shareholders, directors, officers or affiliates of Genzyme or the Purchaser, and
such persons shall be deemed to be Independent Directors for purposes of this
Agreement. Subject to applicable law, the Company shall take all action
necessary to effect the election of directors as provided in this Section
1.3(a), including mailing to its shareholders the information required by
Section 14(f) of the Exchange Act and Rule 14f-1
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promulgated thereunder. Genzyme and the Purchaser shall supply to the Company
and be solely responsible for any information with respect to them and their
nominees, officers, directors and affiliates required by Section 14(f) and Rule
14f-1.
(b) Notwithstanding anything in this Agreement to the contrary,
subject to the terms of the Company's Memorandum of Association and Articles of
Association, in the event that the Purchaser's designees are appointed or
elected as Company Directors, after the acceptance for payment of Units pursuant
to the Offer and prior to the Effective Date, the affirmative vote of a majority
(or, if there are only one or two Independent Directors, the single or unanimous
vote, as the case may be) of the Independent Directors (who shall act as an
independent committee of the Board of Directors for this purpose) shall be
required, and alone shall be sufficient, to (i) amend or terminate this
Agreement by the Company, (ii) exercise or waive any of the Company's rights or
remedies hereunder, (iii) extend the time for performance of Genzyme's and the
Purchaser's respective obligations hereunder, or (iv) approve any other action
by the Company that the Independent Directors determine could adversely affect
the interests of the shareholders of the Company (other than Genzyme, the
Purchaser and their affiliates) with respect to the transactions contemplated
hereby.
2. THE SECOND STEP TRANSACTION
2.1. Consummation of the Second Step Transaction.
-------------------------------------------
(a) If the Offer is consummated and 90% or more of the Units are
tendered and accepted, the Purchaser will, as soon as practicable following
satisfaction or waiver of the conditions set forth in Section 7.1 hereof, either
(i) effect a merger of the Company into the Purchaser pursuant to Section 77 of
the BVI Law (the "Short Form Merger") or (ii) cause the Company to redeem all
Shares not held by the Purchaser pursuant to Section 81 of the BVI Law (the
"Redemption").
(b) If the Offer is consummated and less than 90% but more that 50% of
the Units are tendered and accepted, the Purchaser will own a majority of the
Shares and will vote those shares in favor of and will effect, as soon as
practicable following satisfaction or waiver of the conditions set forth in
Section 7.1 hereof, the Merger.
(c) If the Offer is not consummated on the Initial Expiration Date
because the Minimum Condition is not met and the Purchaser elects to proceed as
described in Section 1.1(b)(i), the Company, the Purchaser and Genzyme shall
take the actions set forth in Section 1.1(b)(i). As soon as practicable
following satisfaction of the Majority Consent Condition and satisfaction or
waiver of the conditions set forth in Annex I (other than the Minimum Condition)
and Section 7.1, the Purchaser will purchase all Units validly tendered and not
withdrawn, vote the Shares thus acquired in favor of the Merger Plan and effect
the Merger.
(d) If the Offer is not consummated because the Minimum Condition is
not met and the Purchaser elects to proceed as described in Section 1.1(b)(ii),
the Company, the Purchaser and Genzyme shall take the actions set forth in
Section 1.1(b)(ii). As soon as practicable following satisfaction or waiver of
the conditions set forth in Article 7 hereof, the Purchaser will effect the
Merger.
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(e) The Short Form Merger, the Redemption and the Merger referred to
in subsections (a) - (d) above are referred to herein as the "Second Step
Transaction." The date of consummation of the Second Step Transaction is
referred to herein as the "Effective Date."
2.2. SECOND STEP CONSIDERATION.
(a) On the Effective Date, as a result of the Short Form Merger, if
applicable. the Company will be merged with and into the Purchaser, with the
Purchaser as the surviving corporation and:
(i) The holder of each Share issued and outstanding immediately
prior to the Effective Date (other than Shares owned by Genzyme, the Purchaser,
the Company or any direct or indirect subsidiary of any of them and any
Dissenting Shares (as defined in subsection (d) below)) shall be entitled to
receive an amount in cash per Share equal to the Second Step Consideration.
(ii) Shares owned by Genzyme, the Purchaser or the Company or any
direct or indirect subsidiary of any of them shall be cancelled.
(b) On the Effective Date, as a result of the Redemption, if
applicable, the holder of each Share issued and outstanding immediately prior to
the Effective Date (other than Shares owned by the Purchaser and any Dissenting
Shares) shall be entitled to receive an amount in cash per Share equal to the
Second Step Consideration.
(c) On the Effective Date, as a result of the Merger pursuant to
Sections 2.1(b)-(d), if applicable, a wholly-owned subsidiary of the Purchaser
will be merged with and into the Company, with the Company as the surviving
corporation and:
(i) The holder of each Share issued and outstanding immediately
prior to the Effective Date (other than Shares owned by Genzyme, the Purchaser,
the Company or any direct or indirect subsidiary of any of them and any
Dissenting Shares) shall be entitled to receive an amount in cash per Share
equal to the Second Step Consideration.
(ii) Shares owned by Genzyme, the Purchaser or the Company or any
direct or indirect subsidiary of any of them shall be cancelled.
(iii) Each issued and outstanding share of capital stock of the
subsidiary of the Purchaser that is a party to the Merger Plan shall be
converted into one fully paid and nonassessable share of common stock of the
surviving corporation.
(d) (i) In the case of the Short Form Merger, the Redemption or the
Merger, shares of capital stock of the Company held by a shareholder who has
properly exercised dissenters rights with respect thereto in accordance with
Section 83 of the BVI Law (collectively, the "Dissenting Shares") shall not be
converted into the Second Step Consideration. From and after the Effective Date,
a shareholder who has properly exercised such dissenters' rights shall no longer
retain any rights of a shareholder of the Company, except those provided under
the BVI Law. If after the Effective Date such holder withdraws or loses his
right to demand
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payment for his Shares, such Shares shall be treated as if they had been
converted as of the Effective Date into the right to receive the Second Step
Consideration payable in respect of such Shares pursuant to Section 2.2(a)(i).
(ii) The Company shall give Genzyme (i) prompt notice of any demands
for payment, or notices of intent to demand payment, with respect to any shares
of capital stock of the Company, any withdrawal of any such demands and any
other instruments served pursuant to the BVI Law and received by the Company and
(ii) the right to participate in all negotiations and proceedings with respect
to any such demands. The Company shall cooperate with Genzyme concerning, and
shall not, except with the prior written consent of Genzyme, voluntarily make
any payment with respect to, or offer to settle or settle, any such demands.
2.3. Exchange of Certificates.
-------------------------
(a) Genzyme shall authorize one or more persons to act as Payment
Agent for the Second Step Consideration (the "Payment Agent"). Genzyme shall
deposit with the Payment Agent in trust for the benefit of the holders of
certificates representing Shares converted pursuant to Section 2.2(a)(i), on or
prior to the Effective Time, immediately available funds in an amount equal to
the product of the Second Step Consideration multiplied by the number of Shares
entitled to payment pursuant to Section 2.2(a)(i). As soon as practicable after
the Effective Time, Genzyme shall cause the Payment Agent to mail to all former
holders of record of Shares instructions for surrendering their certificates
representing Shares in exchange for the Second Step Consideration. Upon
surrender of a Share certificate for cancellation to the Payment Agent, the
Payment Agent shall pay to the holder of such certificate the Second Step
Consideration multiplied by the number of Shares represented by such
certificate, and the certificate so surrendered shall forthwith be canceled.
Notwithstanding the foregoing, if delivery of the Second Step Consideration is
to be made to any person other than the person in whose name the certificate
surrendered is registered, it shall be a condition of such delivery that the
certificate so surrendered shall be properly endorsed or otherwise in proper
form for transfer and that the person requesting such delivery shall pay any
transfer or other taxes required by reason of such delivery or establish to the
satisfaction of Genzyme that such tax has been paid or is not applicable.
Furthermore, neither Genzyme nor any affiliate of Genzyme shall be liable to a
holder of Shares for any Second Step Consideration delivered to a public
official pursuant to applicable abandoned property, escheat and similar laws.
After the Effective Time, there shall be no transfers of the Shares on the stock
transfer books of the Company.
(b) The Payment Agent shall make the payments referred to in Section
2.2(a)(i) out of the funds supplied by Genzyme. Promptly following the date that
is six months after the Effective Date, the Payment Agent shall, upon request by
Genzyme, deliver to Genzyme all cash, certificates and other documents in its
possession relating to the transactions described in this Agreement, and the
Payment Agent's duties shall terminate. Thereafter, each holder of a certificate
formerly representing a Share may surrender such certificate to Genzyme and
(subject to applicable abandoned property, escheat and similar laws) receive in
exchange therefor the Second Step Consideration, without any interest thereon
but shall have no greater rights against Genzyme than may be accorded to general
creditors of Genzyme under applicable law.
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(c) From and after the Effective Date, holders of certificates
theretofore evidencing Shares shall cease to have any rights as shareholders of
the Company, except as provided herein or by law. Until surrendered in
accordance with the provisions of this Section, each Share certificate (other
than for Dissenting Shares) shall represent for all purposes only the right to
receive the Second Step Consideration multiplied by the number of Shares
represented by such certificate.
2.4. CALLABLE WARRANTS. On the Effective Date, the Callable Warrants
associated with the Shares converted into the right to receive the Second Step
Consideration will become exercisable in accordance with its terms and at the
exercise price computed as stated therein. On the day following the Effective
Date, such Callable Warrants will separate and be transferable separately from
the right to receive the Second Step Consideration on account of the Shares.
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND GENZYME
The Purchaser and Genzyme represent and warrant to the Company as follows:
3.1. ORGANIZATION. Each of Genzyme and the Purchaser (i) is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization; and (ii) has the requisite corporate power and
authority to enter into, execute and deliver this Agreement and to perform fully
its respective obligations hereunder.
3.2. AUTHORITY. The execution and delivery of this Agreement have been duly
authorized by the Board of Directors of each of Genzyme and the Purchaser. No
other corporate action on the part of Genzyme or the Purchaser is necessary to
consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by each of Genzyme and the Purchaser and constitutes a
valid and binding obligation of each, enforceable in accordance with its terms.
3.3. Compliance.
-----------
(a) Neither the execution, delivery and performance by Genzyme and the
Purchaser of this Agreement, nor the consummation by Genzyme and the Purchaser
of the transactions contemplated hereby, will (a) violate, conflict with, or
result in a breach of, any provision of the charter or bylaws of Genzyme or the
Purchaser, (b) violate, conflict with or result in a default (or give rise to
any right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
franchise, permit, lease, agreement or other instrument or obligation to which
Genzyme or the Purchaser is a party, or by which its properties or assets may be
bound or (c) subject to compliance with the laws referred to in the next
paragraph, violate any law or any order, judgment, injunction, decree or
requirement of any court, arbitrator or governmental or regulatory body
applicable to Genzyme or the Purchaser or by which any of their assets or
properties is bound, except, in each case, for such violations, breaches or
defaults that, in the aggregate, would not materially impair the ability of the
Purchaser or Genzyme to perform its obligations hereunder.
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(b) Other than in connection with or in compliance with the provisions
of the BVI Law, the U.S. Securities Act of 1933, as amended (the "Securities
Act"), the Exchange Act, the "takeover" or "blue sky" laws of various states of
the United States, (and assuming that the Company will, prior to consummation of
the Offer, have total assets of less than $10 million as shown on its last
regularly prepared balance sheet prior to such date) no notice to, filing with
or authorization, consent or approval of, any domestic or foreign public body or
authority is necessary for the consummation by the Purchaser and Genzyme of the
transactions contemplated by this Agreement, except for such notices, filings,
authorizations, consents or approvals the absence of which would not, in the
aggregate, materially impair the ability of the Purchaser or Genzyme to perform
its obligations hereunder.
3.4. COMMISSION FILINGS. The Offer Documents, and any information provided
in writing by or on behalf of the Purchaser or Genzyme which is included in the
Schedule 14D-9, on the date the Offer Documents or Schedule 14D-9, as the case
may be, are filed with the Commission or first published, sent or given to
security holders, as the case may be, will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided that no
representation or warranty is made with respect to any information provided in
writing by or on behalf of the Company and included in the Offer Documents. The
information supplied by the Purchaser or Genzyme for inclusion in the Proxy
Statement will not, on the date the Proxy Statement (or any amendment or
supplement thereto) is first mailed to shareholders of the Company, at the time
of the Shareholders' Meeting, if any, and on the Effective Date, contain any
statement which at such time and in light of the circumstances under which it is
made, is false or misleading with respect to any material fact, or omit to state
any material fact required to be stated therein or necessary in order to make
the statements made therein in the light of the circumstances under which they
are made, not false or misleading or necessary to correct any statement in any
earlier communication with respect to the solicitation of consents or proxies
for the Shareholders' Meeting which shall have become false or misleading. The
Offer Documents shall comply in all material respects as to form with the
requirements of the Exchange Act and the rules and regulations thereunder.
Genzyme and the Purchaser agree to correct the Offer Documents promptly if and
to the extent that any of them shall have become false or misleading (provided
that, with respect to any false or misleading information provided by or on
behalf of the Company and included in the Offer Documents, the Company shall
have provided Genzyme and the Purchaser with correct information) and Genzyme
and the Purchaser shall take all steps necessary to cause the Offer Documents as
so corrected to be filed with the Commission and to be disseminated to the
holders of the Units, in each case as and to the extent required by applicable
U.S. federal securities laws.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchaser and Genzyme as
follows:
4.1. ORGANIZATION. The Company is an international business company duly
organized, validly existing and in good standing under the laws of the BVI and
has the requisite corporate power and authority to enter into, execute and
deliver this Agreement and, subject to the
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approval of the Second Step Transaction by the Company's shareholders (if
required under the BVI law), to perform fully its obligations hereunder.
4.2. AUTHORITY. The execution and delivery of this Agreement have been duly
authorized by the Board of Directors of the Company. No other corporate action
on the part of the Company is necessary to consummate the transactions
contemplated hereby (other than approval of the Merger Plan by the shareholders
of the Company to the extent required by the BVI law). This Agreement has been
duly executed and delivered by the Company and, subject to the foregoing,
constitutes a valid and binding obligation of the Company, enforceable in
accordance with its terms.
4.3. Compliance.
-----------
(a) Neither the execution, delivery and performance by the Company of
this Agreement, nor the consummation by the Company of the transactions
contemplated hereby, will (a) violate, conflict with, or result in a breach of,
any provision of the Memorandum of Association or Articles of Association of the
Company, (b) violate, conflict with or result in a default (or give rise to any
right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
franchise, permit, lease, agreement or other instrument or obligation to which
the Company is a party, or by which its properties or assets may be bound or (c)
subject to compliance with the laws referred to in the next paragraph, violate
any law or any order, judgment, injunction, decree or requirement of any court,
arbitrator or governmental or regulatory body applicable to the Company or by
which any of its assets or properties is bound, except, in each case, for such
violations, breaches or defaults that, in the aggregate, would not have a
material adverse effect on the financial condition, business or operations of
the Company (a "Material Adverse Effect"), or materially impair the ability of
the Company to perform its obligations hereunder.
(b) Other than in connection with or in compliance with the provisions
of the BVI Law, the Securities Act, the Exchange Act, the "takeover" or "blue
sky" laws of various states of the United States, (and assuming that the Company
will, prior to consummation of the Offer, have total assets of less than $10
million as shown on its last regularly prepared balance sheet prior to such
date) no notice to, filing with or authorization, consent or approval of, any
domestic or foreign public body or authority is necessary for the consummation
by the Company of the transactions contemplated by this Agreement, except for
such notices, filings, authorizations, consents or approvals the absence of
which would not, in the aggregate materially impair the ability of the Company
to perform its obligations hereunder.
4.4. CAPITALIZATION. The authorized capital stock of the Company consists
of 9,000,000 shares of Callable Common Stock, par value $1.00 per share. As of
the date of this Agreement, 2,415,000 Shares were validly issued and
outstanding, fully paid and nonassessable (all of which are included in the
Units); and no Shares were held in the treasury of the Company. Except as set
forth above in this Section 4.4 and the Purchase Option Agreement, there are no
other shares of capital stock or other securities of the Company outstanding and
no other outstanding options, warrants, rights to subscribe to (including any
preemptive rights), calls or commitments of any character whatsoever to which
the Company is a party or may be bound requiring the issuance, transfer or sale
of any shares of capital stock or other securities of the Company or any
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securities or rights convertible into or exchangeable or exercisable for any
such shares or securities, and there are no contracts, commitments,
understandings or arrangements by which the Company is or may become bound to
issue additional shares of its capital stock or options, warrants or rights to
purchase or acquire any additional shares of its capital stock or securities
convertible into or exchangeable or exercisable for any such shares.
4.5. COMMISSION FILINGS. The Schedule 14D-9 and any information provided in
writing by or on behalf of the Company which is included in the Offer Documents,
on the date the Schedule 14D-9 or the Offer Documents, as the case may be, are
filed with the Commission or first published, sent or given to security holders,
as the case may be, will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading; provided that no representation or warranty is
made with respect to any information provided in writing by or on behalf of
Genzyme or the Purchaser and included in the Schedule 14D-9. The Proxy Statement
will not, on the date it (or any amendment or supplement thereto) is first
mailed to shareholders of the Company, at the time of the Shareholders' Meeting,
if any, and on the Effective Date, contain any statement which at such time and
in light of the circumstances under which it is made, is false or misleading
with respect to any material fact, or omit to state any material fact required
to be stated therein or necessary in order to make the statements made therein
in the light of the circumstances under which they are made, not false or
misleading or necessary to correct any statement in any earlier communication
with respect to the solicitation of consents or proxies for the Shareholders'
Meeting which shall have become false or misleading; provided that no
representation or warranty is made with respect to any information provided in
writing by or on behalf of Genzyme or the Purchaser and included in the Proxy
Statement. The Schedule 14D-9 and the Proxy Statement shall comply in all
material respects as to form with the requirements of the Exchange Act and the
rules and regulations thereunder. The Company agrees promptly to correct the
Schedule 14D-9 and the Proxy Statement if and to the extent that either shall
have become false or misleading (provided that, with respect to any false or
misleading information provided by or on behalf of Genzyme or the Purchaser and
included in the Schedule 14D-9 or the Proxy Statement, Genzyme or the Purchaser
shall have provided the Company with correct information) and the Company shall
take all steps necessary to cause the Schedule 14D-9 or the Proxy Statement as
so corrected to be filed with the Commission and to be disseminated to the
holders of the Units and to the Company's shareholders, as the case may be, as
and to the extent required by applicable U.S. federal securities laws.
5. CONDUCT OF BUSINESS
5.1. CONDUCT PRIOR TO EFFECTIVE DATE. Except as otherwise expressly
contemplated hereby, the Company covenants and agrees that, unless Genzyme shall
otherwise agree in writing, prior to the Effective Date or such earlier time as
designees of the Purchaser constitute a majority of the Company's Directors
(determined on the basis of combined voting power of the Company's Class A and
Class B directors):
(a) The business of the Company shall in all material respects be conducted
only in, and the Company shall not take any material action except in, the
ordinary course of business and consistent with past practice, and the Company
shall use all reasonable efforts, consistent
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with past practice or the annual workplan currently in effect, to maintain and
preserve its business organization, assets and advantageous business
relationships;
(b) The Company shall not make any tax election or, except in the ordinary
course of business and consistent with past practice, settle or compromise any
federal, state, local or foreign tax liability; and
(c) The Company shall not agree in writing or otherwise, to take any of the
foregoing actions or any action that would make any representation or warranty
in Article 1 or Article 4 hereof untrue or incorrect in any material respect or
that would materially impair or prevent the occurrence of any condition in ANNEX
I prior to consummation of the Offer and, thereafter, Article 7 hereof.
5.2. COMMISSION FILINGS AND OTHER MATTERS. The Company shall promptly
provide Genzyme (or its counsel) with copies of all filings made by the Company
with the Commission or any other state or federal governmental entity in
connection with this Agreement and the transactions contemplated hereby.
5.3. CONDUCT OF BUSINESS AFTER THE INITIAL EXPIRATION DATE. Notwithstanding
any other provision contained herein, if the Minimum Condition has not been
satisfied on the Initial Expiration Date and the Purchaser elects to amend the
Offer in accordance with Section 1.1(b)(i) or to terminate the Offer in
accordance with Section 1.1(b)(ii), then until the earlier of the Effective Date
or the termination of this Agreement, the Special Committee shall be authorized
to take such actions as it may deem appropriate to reduce or eliminate any
discretionary spending by the Company or by Genzyme on behalf of the Company not
contractually committed to with a person or entity that is not a party to this
Agreement; provided that, Genzyme may elect to continue such spending on its own
account and to the extent it elects to do so, the Company will, if the Merger is
effected, reimburse Genzyme for such expenditures immediately prior to the
Effective Date.
6. ADDITIONAL AGREEMENTS
6.1. PREPARATION OF PROXY STATEMENT. Genzyme, the Purchaser and the Company
shall cooperate with each other in the preparation of the Proxy Statement (if
required), and the Company shall notify Genzyme of the receipt of any comments
of the Commission with respect to the Proxy Statement and of any requests by the
Commission for any amendment or supplement thereto or for additional information
and shall provide to Genzyme promptly copies of all correspondence between the
Company or any representative of the Company and the Commission. The Company
shall give Genzyme and its counsel the opportunity to review the Proxy Statement
prior to its being filed with the Commission and shall give Genzyme and its
counsel the opportunity to review all amendments and supplements to the Proxy
Statement and all responses to requests for additional information and replies
to comments prior to their being filed with, or sent to, the Commission. Each of
the Company, Genzyme and the Purchaser agrees to use its reasonable best
efforts, after consultation with the others, to respond promptly to all such
comments of and requests by the Commission and to cause the Proxy Statement and
all required amendments and supplements thereto to be mailed to the holders of
Shares entitled to vote upon the approval of the Second Step Transaction at the
earliest practicable time.
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6.2. FEES AND EXPENSES. Each party shall bear all fees and expenses
incurred by it in connection with the negotiation and performance of this
Agreement and no party may recover any such fees and expenses from any other
party upon any termination of this Agreement except as provided in Article 8.
6.3. ADDITIONAL AGREEMENTS. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use all reasonable efforts to
consummate and make effective as promptly as practicable the transactions
contemplated by the Offer and this Agreement, and to cooperate with each of the
other parties hereto in connection with the foregoing, including using all
reasonable efforts (which shall not be construed to require the payment of any
money to a third party or the divestiture of any business or assets): (A) to
obtain all necessary waivers, consents and approvals from other parties to
agreements; (B) to obtain all necessary consents, approvals and authorizations
as are required by law; (C) to lift or rescind any injunction or restraining
order or other order adversely affecting the ability of the parties to
consummate the transactions contemplated hereby; (D) to effect all necessary
registrations and filings and submissions of information requested by
governmental authorities; and (E) to fulfill all conditions to this Agreement.
Each of the Company, Genzyme and the Purchaser further covenants and agrees
that, prior to the exercise by Genzyme or the Purchaser of its right to
terminate the Offer under paragraphs (b) or (c) of ANNEX I hereto, each of the
Company, Genzyme and the Purchaser shall use their respective reasonable best
efforts (which shall not be construed to require the payment of any money to a
third party or the divestiture of any business or assets) to prevent the entry
of an injunction or other order adversely affecting the ability of the parties
to consummate the transactions contemplated hereby .
6.4. NO SOLICITATION.
(a) The Company shall not, directly or indirectly, through any
officer, director, employee, financial advisor, representative or agent of the
Company, (i) solicit or initiate any inquiries or proposals regarding a merger,
consolidation, business combination, sale of substantial assets, sale of shares
of capital stock (including without limitation by way of a tender offer) or
similar transactions involving the Company, other than the transactions
contemplated by this Agreement (any of the foregoing inquiries or proposals
being referred to in this Agreement as an "Acquisition Proposal"), (ii) engage
in negotiations or discussions concerning, or provide any non-public information
to any person or entity relating to, any Acquisition Proposal, or (iii) agree
to, approve or recommend any Acquisition Proposal; provided, however, that
nothing contained in this Agreement shall prevent the Company, the Company's
Directors or the Special Committee (through any officer, director, employee,
financial advisor, representative or agent) from (A) engaging in negotiations or
discussions in response to an inquiry that was not solicited after the date
hereof; (B) furnishing non-public information to any person or entity in
connection with an unsolicited written Acquisition Proposal by such person or
entity or recommending an unsolicited written Acquisition Proposal to the
shareholders of the Company, if and only to the extent that (1) the Company's
Directors or the Special Committee, as the case may be, believe in good faith
after consultation with its financial advisor that the party requesting such
non-public information or making such Acquisition Proposal is capable of
financing a transaction more favorable to the Company's shareholders from a
financial point of view than the transaction contemplated by this Agreement and
the Company's Directors or the Special Committee, as the case may be, determine
in good
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faith after consultation with outside legal counsel that such action is
necessary to comply with their fiduciary duties to shareholders under applicable
law and (2) prior to furnishing such non-public information to such person or
entity, the Company's Directors or the Special Committee, as the case may be,
receive from such person or entity an executed confidentiality agreement on
customary terms; or (C) complying with Rule 14e-2 promulgated under the Exchange
Act with regard to an Acquisition Proposal.
(b) The Company shall notify Genzyme in writing in reasonable detail
within 24 hours after receipt by the Company (or its advisors) of any written
Acquisition Proposal or any written request for non-public information to which
the Company intends to affirmatively respond.
(c) Genzyme and the Company acknowledge and confirm that neither (x)
Section 2.3 ("Restrictions Upon Use of Licensed Technology") of the Technology
License Agreement dated April 28, 1992 between them, nor (y) Section 12 of the
Company's Memorandum of Association, is intended or shall be deemed, to prohibit
or restrict any discussions, negotiations or other activity by the Company
permitted by subsection (a) above.
6.5. NOTIFICATION OF BREACH. The Company shall give prompt notice to
Genzyme, and Genzyme and the Purchaser shall give prompt notice to the Company,
of the occurrence or failure to occur of any event which occurrence or failure
to occur causes (x) any representation or warranty made by it in this Agreement
to be untrue or inaccurate in any material respect at any time from the date
hereof to the date of purchase of, and payment for, Units pursuant to the Offer,
or (y) any material failure to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement; provided,
however, that no such notification shall be deemed to cure any breach or
otherwise affect the representations or warranties of such party or the
conditions to the obligations of the parties hereunder.
6.6. ACCESS TO INFORMATION. Except as prohibited by BVI law, the Company
shall afford to Genzyme and to the officers, employees and agents of Genzyme
reasonable access during regular business hours, from the date hereof to the
Effective Date, to the Company's officers, employees, agents, properties, books,
records and contracts, and shall furnish Genzyme all financial, operating and
other data and information as Genzyme, through its officers, employees or
agents, may reasonably request; provided, however, that such access shall not
unreasonably interfere with any of the operations of the Company.
6.7. DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE.
(a) As of the Effective Date, proper provision will be made so that
any affiliate of Genzyme that succeeds to the assets and liabilities of the
Company, or at Genzyme's option, Genzyme, shall assume all of the obligations of
the Company under the indemnification agreements between the Company and the
Independent Directors as in effect on the date of this Agreement and, if amended
prior to the Effective Date, on the Effective Date. In the event of a transfer
by such successor entity of all or substantially all of its assets or a merger
or consolidation in which such entity is not the surviving entity, proper
provision will also be made so that the successors and assigns of such entity,
or at Genzyme's option, Genzyme, shall assume the obligations of the Company
under such agreements. In addition, the Company and,
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from and after consummation of the Offer or, if the Purchaser elects to proceed
under Section 1.1(b)(ii), the Merger, Genzyme shall, to the fullest extent
permitted by applicable law, indemnify and hold harmless each present and former
director or officer of the Company (collectively, "Indemnified Parties") against
all costs and expenses (including attorneys' fees) judgments, fines, losses,
claims, damages, liabilities and settlement amounts paid in connection with any
claim, action, suit, proceeding or investigation (whether arising before or
after the consummation of the Offer) arising out of any act or omission in their
capacity as officer, director or employee of the Company (and shall pay any
expenses in advance of the final disposition of such action or proceeding to
each Indemnified Party to the fullest extent permitted by law). If
indemnification is sought hereunder by any Indemnified Party, then such
Indemnified Party shall promptly notify Genzyme in writing of the claim for
which indemnification is sought; provided, however, that the failure to so
notify Genzyme shall not relieve Genzyme from any liability unless and to the
extent that such failure results in a forfeiture by the Indemnified Party of
substantive rights or defenses. Following such notification, Genzyme may elect
to assume the defense of such claim, and, upon such election, Genzyme shall not
be liable for any legal costs subsequently incurred by such Indemnified Party
(other than reasonable costs of investigation) in connection therewith, unless
Genzyme has failed to provide counsel reasonably satisfactory to such
Indemnified Party in a timely manner or counsel that has been provided by
Genzyme reasonably determines that its representation of such Indemnified Party
would present it with a conflict of interest. The Indemnified Party will
cooperate with Genzyme in the investigation and defense of any claim and shall
not settle any claim without Genzyme's prior written consent.
(b) Genzyme shall maintain in effect for three years from the
Effective Date, if available, directors' and officers' liability insurance
policies covering the directors and officers of the Company, with coverages and
other terms at least as favorable as is currently in effect; provided, however,
that Genzyme shall not be required to spend more than an amount per year equal
to 150% of the current annual premium paid by the Company for such insurance.
Following such three year period, and until the sixth anniversary of the
Effective Date, Genzyme will assume the indemnification obligations of the
Company under the indemnification agreements referred to in subsection (a) above
to the extent it has not already done so.
6.8. GENZYME'S GUARANTY. Genzyme unconditionally guarantees the Purchaser's
obligations (and the obligations of any other affiliate of Genzyme that is a
party to the Merger Plan) under this Agreement and agrees to be primarily liable
for any breach of this Agreement by the Purchaser (or such other affiliate of
Genzyme).
7. CONDITIONS
7.1. CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE SECOND STEP
TRANSACTION. The respective obligations of each party to effect the Second Step
Transaction shall be subject to the fulfillment at or prior to the Effective
Date of each of the following conditions:
(a) the Purchaser shall have made the Offer on the terms and
conditions set forth therein and shall have purchased, or caused to be
purchased, all Units validly tendered and not withdrawn pursuant to the Offer;
provided, however, this condition shall not be applicable to the obligations of
Genzyme or the Purchaser if, in breach of this Agreement or the terms of the
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Offer, the Purchaser fails to purchase any Units validly tendered and not
withdrawn pursuant to the Offer and provided further than this condition shall
not be applicable if the Purchaser has exercised its option described in Section
1.1(b)(ii);
(b) the Merger Plan shall have been approved and adopted by the
requisite vote or consent, if any, of the shareholders of the Company required
by the BVI Law and the Company's Memorandum of Association and Articles of
Association; and
(c) no preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a governmental or
regulatory body nor any statute, rule, regulation or order promulgated or
enacted by any governmental body shall be in effect, which would make the
acquisition by Genzyme or the Purchaser of the Shares illegal or otherwise
prevent the consummation of the Second Step Transaction.
7.2. CONDITIONS TO OBLIGATION OF THE PURCHASER TO EFFECT A MERGER PURSUANT
TO SECTION 1.1(b)(ii). In addition to the fulfillment of the condition set forth
in subsection 7.1(b), the Purchaser shall not be obligated to effect a Merger
pursuant to Section 1.1(b)(ii) if on or before the Effective Date any of the
following shall occur or shall be determined by the Purchaser to have occurred
and remain in effect:
(a) except for matters which affect generally the economy or the
industry in which the Company is engaged and except for continued losses
incurred by the Company as a result of its operations and continued depletion of
its cash resources in the ordinary course of business or consistent with the
annual workplan currently in effect, any change shall have occurred in the
business, properties, assets, liabilities, capitalization, stockholders equity,
financial condition, operations, licenses or franchises or results of operations
of the Company which has a Material Adverse Effect; or
(b) there shall have been instituted or be pending any action,
proceeding, application or counterclaim before any court or governmental or
regulatory body which (i) challenges the validity of or seeks to restrain the
consummation of or to impose any material limitation, on any transaction
contemplated by this Agreement or seeks (ii) to obtain any material amount of
damages in connection with such transactions; or
(c) any statute, regulation, order or injunction shall have been
enacted, entered, enforced or deemed applicable to the Merger that is reasonably
likely to, directly or indirectly, result in any of the consequences referred to
in subsection 7.2(b); or
(d) the representations and warranties of the Company set forth in the
Purchase Agreement shall not be true in any material respect as though made on
such date, or the Company shall have failed in any material respect to perform
any material obligation or covenant required in the Purchase Agreement to be
performed or complied with by it; or
(e) the Company shall have entered into, or shall have publicly
announced its intention to enter into, an agreement or agreement in principle
with respect to any Acquisition Proposal.
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8. TERMINATION, AMENDMENT AND WAIVER
8.1. TERMINATION. This Agreement may be terminated at any time prior to the
Effective Date, as follows:
(a) Subject to Section 1.3(b), by mutual written consent of the Boards
of Directors of the Purchaser, Genzyme and the Company (upon the approval of the
Special Committee); or
(b) By the Company upon approval of the Special Committee:
(i) if (A) the Purchaser shall have terminated the Offer without
the purchase of any Units thereunder; or (B) the Purchaser shall not have paid
for all Units validly tendered pursuant to the Offer and not withdrawn within 90
days after the commencement of the Offer, unless such termination of the Offer
or failure to pay for Units shall have been caused by or resulted from (a) the
failure of the Company to perform in any material respect any of its covenants
or agreements contained in this Agreement, (b) the material breach by the
Company of any of its representations or warranties contained in this Agreement,
or (c) an election by the Purchaser pursuant to Section 1.1(b)(ii) of this
Agreement to terminate the Offer; or
(ii) if the Effective Date shall not have occurred on or before
the six-month anniversary of the date of this Agreement due to a failure of any
of the conditions to the obligation of the Company to effect the Second Step
Transaction set forth in Section 7.1 or if the Purchaser has elected to proceed
under Section 1.1(b)(i), if the Effective Date shall not have occurred on or
before the six-month anniversary of the date of this Agreement; or
(iii) prior to the purchase of any Units pursuant to the Offer,
or the Effective Date if the Purchaser has elected to proceed under Section
1.1(b)(ii), if the Purchaser or Genzyme has materially failed to perform any of
its obligations under this Agreement and such nonperformance has a material
adverse effect on the Purchaser's or Genzyme's ability to consummate the Offer
or the Second Step Transaction; or
(iv) if, in the event that the Minimum Condition shall not have
been satisfied on the Initial Expiration Date and the Purchaser shall have
amended the Offer or terminated the Offer pursuant to the proviso in the second
sentence of Section 1.1(b), the Purchaser has materially failed to perform any
of its obligations under Section 1.1(b); or
(v) if, prior to the purchase of Shares pursuant to the Offer, or the
Effective Date if the Purchaser has elected to proceed under Section 1.1(b)(ii),
the Special Committee shall have withdrawn or modified its approval or
recommendation of the Offer or this Agreement in order to approve the execution
by the Company of a definitive agreement providing for the acquisition of the
Company or substantially all of its assets or a merger or other business
combination or in order to approve a tender offer for all of the Shares or Units
by a third party, in any case, as determined by the Special Committee, on terms
more favorable to the Company's stockholders than the Offer (a "Superior
Transaction"), provided, that (i) the Company shall have provided Genzyme with
at least five business days' written notice of such Superior
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Transaction, including a copy of the proposed agreement and (ii) the Company
shall not have violated Section 6.4 in connection with such Superior
Transaction.
(c) By Genzyme or the Purchaser:
(i) if, due to an occurrence that would result in a failure to
satisfy any condition set forth in Annex I or the Majority Consent Condition if
the Purchaser has elected to proceed pursuant to Section 1.1(b)(i), the
Purchaser shall have (A) failed to commence the Offer within 5 business days of
the date on which the Purchaser's intention to make the Offer is publicly
announced; (B) terminated the Offer without the purchase of any Units
thereunder; or (C) failed to pay for all Units validly tendered pursuant to the
Offer and not withdrawn within 90 days after commencement of the Offer, unless
such failure or termination shall have been caused by or results from (x) the
failure of Genzyme or the Purchaser to perform in any material respect any of
its covenants or agreements contained in this Agreement, (y) the material breach
by Genzyme or the Purchaser of any of its representations or warranties
contained in this Agreement, or (z) the Purchaser's election to proceed pursuant
to Section 1.1(b)(ii); or
(ii) if the Effective Date shall not have occurred on or before
the six-month anniversary of the date of this Agreement due to (i) a failure of
any of the conditions to the obligations of Genzyme or the Purchaser to effect
the Second Step Transaction set forth in Section 7.1, or (ii) in the event that
the Purchaser has elected to proceed under Section 1.1(b)(ii), a failure of any
of the conditions to the obligations of Genzyme or the Purchaser to effect the
Second Step Transaction set forth in Section 7.2; or
(iii) if, prior to the purchase of Units pursuant to the Offer,
or the Effective Date if the Purchaser has elected to proceed under Section
1.1(b)(ii), the Company's Directors shall have publicly withdrawn or modified in
a manner adverse to the Purchaser their approval or recommendation of the Offer
or this Agreement or recommended acceptance of a Superior Transaction or shall
have resolved to do any of the foregoing.
8.2. EFFECT OF TERMINATION. In the event of the termination of this
Agreement as provided in Section 8.1, all obligations and agreements of the
parties set forth in this Agreement shall forthwith terminate and be of no
further force or effect, and there shall be no liability on the part of Genzyme,
the Purchaser or the Company hereunder except (a) as provided in Sections 8.3
and 8.4 and (b) that the foregoing shall not relieve any party for liability for
any breach of this Agreement occurring prior to such termination.
8.3. ANCILLARY AGREEMENTS. In the event of any termination of this
Agreement (x) by the Company pursuant to Section 8.1(b)(v) or by Genzyme or the
Purchaser pursuant to Section 8.1(c)(iii), in either case as a result of a
Superior Transaction in connection with which the Company shall not have
violated Section 6.4, or (y) by Genzyme or the Purchaser pursuant to Section
8.1(c)(i), unless such termination is based upon the failure of the Company to
perform in any material respect of its covenants or agreements contained in this
Agreement, Genzyme agrees that, effective upon consummation of a Superior
Transaction, it shall, at the Company's request:
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(a) consent to the Superior Transaction in its capacity as holder of
the Company's Series 1992 Note dated April 28, 1992 and pursuant to all
applicable provisions of the Company's Memorandum of Association;
(b) terminate the Purchase Option Agreement dated as of April 28, 1992
among Genzyme and the underwriters named therein, in which event the Series 1992
Note will become due and payable in accordance with its terms;
(c) consent to the assignment by the Company of the Technology License
Agreement dated as of April 28, 1992 between Genzyme and the Company;
(d) at the option of Genzyme, terminate or consent to the assignment
by the Company of each of the following agreements, each of which are dated as
of April 28, 1992:
(i) the Research and Development Agreement between Genzyme and
the Company;
(ii) the Services Agreement between Genzyme Limited (a subsidiary
of Genzyme) and the Company; and
(iii) the Administrative Agreement between Genzyme and the
Company.
The termination of any of the foregoing agreements pursuant to this Section 8.3
shall not terminate any provision of such agreement which, by its terms,
survives termination of such agreement.
8.4. TERMINATION FEE. In consideration of Genzyme's agreement set forth in
Section 8.3 and its expenses incurred in connection with the transactions
contemplated by this Agreement, in the event of the termination of this
Agreement (A) by the Company pursuant to Section 8.1(b)(v) or (B) by Genzyme or
the Purchaser pursuant to (x) Section 8.1(c)(iii) or (y) Section 8.1(c)(i) or
(ii) if such termination is based upon the failure of the Company to perform in
any material respect any of its covenants or agreements contained in this
Agreement, the Company shall pay Genzyme a termination fee of $500,000 upon
consummation of any Superior Transaction.
8.5. AMENDMENT. This Agreement may not be amended except, subject to
Section 1.3, by action of the Board of Directors of each of the parties hereto
set forth in an instrument in writing signed on behalf of each of the parties
hereto; provided, however, that the Board of Directors of the Company shall not
act to amend this Agreement without the approval of the Special Committee.
8.6. WAIVER. At any time prior to the Effective Date, whether before or
after any special meeting or written action of the shareholders of the Company
to approve the Second Step Transaction, any party hereto, subject to Section
1.3(b), by action taken by its Board of Directors (and, in the case of the
Company, subject to the approval of the Special Committee), may (i) extend the
time for the performance of any of the obligations or other acts of any other
party hereto or (ii) subject to the second sentence of Section 1.1(b) and the
proviso contained
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in Section 8.5, waive compliance with any of the agreements of any other party
or with any conditions to its own obligations. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such party by a duly authorized
officer.
9. GENERAL PROVISIONS
9.1. CLOSING. Unless this Agreement shall have been terminated pursuant to
the provisions of Article 8, and subject to the provisions of Article 7 hereof,
the closing of the Second Step Transaction pursuant to this Agreement (the
"Closing") shall take place at the offices of Palmer & Dodge LLP, One Beacon
Street, Boston, Massachusetts 02108, as soon as practicable following
consummation of the Offer or at such other place, time and date as the parties
may mutually agree. The date and time of such Closing are hereinafter referred
to as the "Closing Date."
9.2. BROKERS.
(a) The Company represents and warrants that no broker, finder or
investment banker other than the Financial Adviser is entitled to any brokerage,
finder's or other fee or commission in connection with the Offer or the Second
Step Transaction based upon arrangements made by or on behalf of the Company.
The Company has provided to Genzyme a true and complete copy of its agreement
with the Financial Adviser.
(b) Genzyme and the Purchaser represent and warrant that no broker,
finder or investment banker other than Robertson, Stephens & Company LLC is
entitled to any brokerage, finder's or other fee or commission in connection
with the Offer or the Second Step Transaction based upon arrangements made by or
on behalf of Genzyme, the Purchaser or any of their respective subsidiaries or
affiliates.
9.3. PUBLICITY. So long as this Agreement is in effect, except as such
party reasonably believes is required by applicable law or applicable
requirements of the Commission or The Nasdaq Stock Market, Inc., neither the
Company nor Genzyme shall, nor shall either permit any of its subsidiaries to,
issue or cause the publication of any press release or other public announcement
with respect to the transactions contemplated by this Agreement without the
consent of the other party. The parties shall cooperate as to the timing and
contents of any such announcement.
9.4. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been fully given if (i) delivered
personally, (ii) sent by certified or registered mail, return receipt requested,
(iii) sent by overnight courier for delivery on the next business day or (iv)
sent by confirmed telecopy, provided that a hard copy of all such telecopied
materials is thereafter sent within 24 hours in the manner described in clauses
(i), (ii) or (iii), to the parties at the following addresses or at such other
addresses as shall be specified by the parties by like notice:
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(a) If to the Purchaser or Genzyme:
Genzyme Corporation
One Kendall Square
Cambridge, MA 02139
Attention: Peter Wirth
Telecopy No.: (617) 252-7600
with a copy to:
Palmer & Dodge LLP
One Beacon Street
Boston, MA 02108
Attention: Maureen P. Manning
Telecopy No.: (617) 227-4420
(b) If to the Company:
Neozyme II Corporation
One Kendall Square
Cambridge, MA 02139
Attention: President
Telecopy No.: (617) 252-7600
with copies to:
The Special Committee of the Board of Directors
of Neozyme II Corporation
c/o Hambrecht & Quist LLC
230 Park Avenue
New York, NY 10169
Attention: Dennis J. Purcell
Telecopy No.: (212) 207-1519
and
Hale and Dorr
60 State Street
Boston, MA 02109
Attention: Steven D. Singer
Telecopy No.: (617) 526-5000
Notices provided in accordance with this Section 9.4 shall be deemed
delivered (i) on the date of personal delivery, (ii) four business days after
deposit in the mail, (iii) one business day after delivery to an overnight
courier, or (iv) on the date of confirmation of the telecopy transmission, as
the case may be.
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9.5. INTERPRETATION. When a reference is made in this Agreement to
subsidiaries of Genzyme, the Purchaser or the Company, the word "subsidiaries"
means any corporation more than 50 percent of whose outstanding voting
securities, or any partnership, joint venture or other entity more than 50
percent of whose total equity interest, is directly or indirectly owned by
Genzyme, the Purchaser or the Company, as the case may be; and the word
"affiliates" shall have the meaning assigned to such term under Rule 405 of the
Securities Act. For purposes of this Agreement, the Company shall not be deemed
to be an affiliate or subsidiary of Genzyme or the Purchaser.
9.6. REPRESENTATIONS AND WARRANTIES, ETC. The respective representations
and warranties of the Company, Genzyme and the Purchaser contained herein shall
expire upon consummation of the Offer. This Section 9.6 shall have no effect
upon any other obligation of the parties hereto, whether to be performed before
or after the consummation of the Offer.
9.7. MISCELLANEOUS. This Agreement (i) constitutes the entire agreement and
supersedes all other prior agreements and undertakings, both written and oral,
among the parties, or any of them, with respect to the subject matter hereof;
(ii) is not intended to confer upon any other person any rights or remedies
hereunder, create any agreement of employment with any person or otherwise
create any third-party beneficiary hereto, except for the provisions of Section
6.7 (which provisions are intended to be for the benefit of the persons referred
to therein and may be enforced by such persons); (iii) shall not be assigned
except that the Purchaser may assign its rights and obligations to Genzyme or to
one or more direct or indirect wholly-owned subsidiaries of Genzyme which in a
written instrument shall make all the representations and warranties of the
Purchaser set forth herein and shall agree to assume all of the Purchaser's
obligations hereunder and be bound by all of the terms and conditions of this
Agreement; provided, however, that no such assignment shall relieve Genzyme or
the Purchaser of its obligations hereunder; and (iv) shall be governed in all
respects, including validity, interpretation and effect, by the internal laws of
the Commonwealth of Massachusetts, without giving effect to the principles of
conflict of laws thereof. Only the Purchaser (or Genzyme or a direct or indirect
wholly-owned subsidiary of Genzyme to which the Purchaser assigns such rights
and obligations) may commence the Offer or the purchase of Shares thereunder.
9.8. VALIDITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
9.9. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
9.10. SECTION HEADINGS. The section headings in this Agreement are for
convenience of reference only and are not intended to affect the meaning or
interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first written above.
GENZYME CORPORATION
By /s/ David J. McLachlan
------------------------------------
Senior Vice President, Finance
NEOZYME II ACQUISITION CORP.
By /s/ David J. McLachlan
------------------------------------
President
NEOZYME II CORPORATION
By /s/ Paul M. Edwards
------------------------------------
President
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<PAGE> 25
ANNEX I
CONDITIONS OF THE OFFER
Capitalized terms used in this Annex I have the meanings set forth in the
attached Purchase Agreement.
The Purchaser shall not be required to accept for payment and pay for any
Units tendered pursuant to the Offer, may postpone the purchase of, and payment
for, Units tendered, and may terminate or amend the Offer unless Units that
would constitute not less than a majority of the Units outstanding are validly
tendered prior to expiration of the Offer and not withdrawn (the "Minimum
Condition") and if at or before the time of acceptance for payment of any such
Units (whether or not any Units have theretofore been accepted for payment and
paid for pursuant to the Offer) any of the following shall occur or shall be
determined by the Purchaser to have occurred and remain in effect:
(a) except for matters which affect generally the economy or the industry
in which the Company is engaged and except for continued losses incurred by the
Company as a result of its operations and continued depletion of its cash
resources in the ordinary course of business or consistent with the annual
workplan currently in effect, any change shall have occurred in the business,
properties, assets, liabilities, capitalization, stockholders equity, financial
condition, operations, licenses or franchises or results of operations of the
Company which has a Material Adverse Effect; or
(b) there shall have been instituted or be pending any action, proceeding,
application or counterclaim before any court or governmental or regulatory body
which (i) challenges the validity of or seeks to restrain the consummation of or
to impose any material limitation, on any transaction contemplated by the
Purchase Agreement or seeks (ii) to obtain any material amount of damages in
connection with such transactions; or
(c) any statute, regulation, order or injunction shall have been enacted,
entered, enforced or deemed applicable to the Offer or the Second Step
Transaction that is reasonably likely to, directly or indirectly, result in any
of the consequences referred to in paragraph (b) above; or
(d) the Board of Directors of the Company shall have publicly (including by
amendment of its Schedule 14D-9 relating to the Offer) withdrawn or modified in
a manner adverse to the Purchaser its approval or recommendation of the Offer or
shall have resolved to do so; or
(e) the representations and warranties of the Company set forth in the
Purchase Agreement shall not be true in any material respect as though made on
such date, or the Company shall have failed in any material respect to perform
any material obligation or covenant required in the Purchase Agreement to be
performed or complied with by it; or
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(f) the Company shall have entered into, or shall have publicly announced
its intention to enter into, an agreement or agreement in principle with respect
to any Acquisition Proposal.
The foregoing conditions are for the sole benefit of Genzyme and the Purchaser
and may be waived by Genzyme or the Purchaser, in whole or in part, at any time
in their sole discretion, subject to the limitations set forth in the Purchase
Agreement.
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<PAGE> 27
ANNEX II
PLAN OF MERGER
This Plan of Merger (the "Merger Agreement"), dated as of __________,
1996, is between Neozyme II Merger Corp. ("Merger Corp."), a BVI international
business company and wholly-owned subsidiary of Neozyme II Acquisition Corp.,
and Neozyme II Corporation ("Neozyme"), a BVI international business company.
PRELIMINARY STATEMENT
The Board of Directors of Merger Corp. and Neozyme have determined that
it is advisable for Merger Corp. to merge with and into Neozyme pursuant to
this Merger Agreement.
Accordingly, Merger Corp. and Neozyme hereby agree as follows:
ARTICLE 1
THE MERGER
SECTION 1.1 THE MERGER
In accordance with the provisions of this Merger Agreement and the BVI
International Business Companies Ordinance, 1984 (the "BVI Law"), Merger Corp.
shall be merged with and into Neozyme (the "Merger"). Following the Merger, the
separate existence of Merger Corp. shall cease, and Neozyme shall continue as
the surviving corporation (the "Surviving Corporation").
SECTION 1.2 EFFECTIVENESS
Following approval of this Merger Agreement and the Merger by the
members of Merger Corp. and Neozyme in accordance with the requirements of the
BVI Law, the Merger shall become effective at 11:59 p.m. on _____________, 1996
or at such other time and date that this Merger Agreement is made effective in
accordance with applicable law (the date of the effectiveness of the Merger
being referred to herein as the "Effective Date").
ARTICLE 2
THE SURVIVING CORPORATION
SECTION 2.1 NAME
The name of the Surviving Corporation upon the effectiveness of the
Merger shall be Neozyme II Corporation.
SECTION 2.2 MEMORANDUM OF ASSOCIATION; ARTICLES OF ASSOCIATION
The Memorandum of Association and Articles of Association of Merger
Corp. as in effect immediately prior to the Merger shall be the Memorandum of
Association and Articles of Association of the Surviving Corporation, without
amendment except that Article 1 of the Memorandum of Association of the
Surviving Corporation shall be amended to read as follows: "The name of the
Corporation is: Neozyme II Corporation."
SECTION 2.3 DIRECTORS AND OFFICERS
The directors, committees of directors and officers of Merger Corp.
immediately prior to the effectiveness of the Merger shall be the directors,
committees and officers of the Surviving Corporation each to hold office and be
constituted, as appropriate, in accordance with the Articles and Memorandum of
Association of the Surviving Corporation.
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ARTICLE 3
MANNER OF CONVERSION OF STOCK
SECTION 3.1 CONVERSION OF MERGER CORP. COMMON STOCK
(a) Immediately prior to the Effective Date, Merger Corp. has
outstanding __________ shares of Common Stock, $1.00 par value per share, which
is its only class of capital stock and all of which shares are entitled to vote
on the Merger as a single class.
(b) On the Effective Date, each share of Common Stock, $1.00 par
value, of Merger Corp. issued and outstanding immediately prior thereto shall,
by virtue of the Merger and without the surrender of stock certificates or any
other action by the holder of such shares or any other person, be converted into
and exchanged for one fully paid and nonassessable share of Common Stock,
$1.00 par value, of the Surviving Corporation.
SECTION 3.2 CONVERSION OF NEOZYME CALLABLE COMMON STOCK
(a) Immediately prior to the Effective Date, Neozyme has outstanding
2,415,000 shares of Callable Common Stock (the "Shares"), $1.00 par value per
share, which is its only class of capital stock and all of which shares are
entitled to vote on the Merger as a single class.
(b) On the Effective Date, by virtue of the Merger and without any
action on the part of Merger Corp. and Neozyme or the holder of any of the
following securities:
(i) Each Share issued and outstanding immediately prior to the
Effective Date (other than Shares to be cancelled pursuant to clause (ii) below
and any Dissenting Shares (as herein defined)) shall be converted into and
become the right to receive an amount in cash per Share equal to $29.00 (the
"Merger Consideration").
(ii) Each Share issued and outstanding immediately prior to the
Effective Date and owned by Genzyme Corporation ("Genzyme"), a Massachusetts
corporation, Neozyme Acquisition Corp., a BVI international business company
and the sole member of Merger Corp. or Neozyme or any direct or indirect
subsidiary of such corporations, shall be canceled, and no payment shall be
made with respect thereto.
(iii) All Dissenting Shares shall be handled in accordance with
Section 3.2(c).
(c) Shares of capital stock of Neozyme held by a shareholder who has
properly exercised dissenters rights with respect thereto in accordance with
Section 83 of the BVI Law (collectively, the "Dissenting Shares") shall not be
converted into Merger Consideration. From and after the Effective Date, a
shareholder who has properly exercised such dissenters' rights shall no longer
retain any rights of a shareholder of Neozyme or the Surviving Corporation,
except those provided under the BVI Law. If after the Effective Date such
holder withdraws or loses his right to demand payment for his Shares, such
Shares shall be treated as if they had been converted as of the Effective Date
into the right to receive the Merger Consideration payable in respect of such
Shares pursuant to Section 3.2(b)(i).
(d) Neozyme shall give Genzyme (i) prompt notice of any demands for
payment, or notices of intent to demand payment, with respect to any shares of
capital stock of Neozyme, any withdrawal of any such demands and any other
instruments served pursuant to the BVI Law and received by Neozyme and (ii)
the right to participate in all negotiations and proceedings with respect to
any such demands. Neozyme shall cooperate with Genzyme concerning, and shall
not, except with the prior written consent of Genzyme, voluntarily make any
payment with respect to, or offer to settle or settle, any such demands.
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SECTION 3.3 EXCHANGE OF CERTIFICATES
(a) Upon surrender of the Share certificate for cancellation to the
Payment Agent selected by Genzyme, the Payment Agent shall pay to the holder of
such certificate the Merger Consideration multiplied by the number of Shares
represented by such certificate, and the certificate so surrendered shall
forthwith be canceled. Notwithstanding the foregoing, if delivery of the Merger
Consideration is to be made to any person other than the person in whose name
the certificate surrendered is registered, it shall be a condition of such
delivery that the certificate so surrendered shall be properly endorsed or
otherwise in proper form for transfer and that the person requesting such
delivery shall pay any transfer or other taxes required by reason of such
delivery or establish to the satisfaction of Genzyme that such tax has been
paid or is not applicable. Furthermore, neither Genzyme nor any affiliate of
Genzyme shall be liable to a holder of Shares for any Merger Consideration
delivered to a public official pursuant to applicable abandoned property,
escheat and similar laws. After the Effective Date, there shall be no transfers
of the Shares on the stock transfer books of the Company.
(b) Promptly following the date that is six months after the Effective
Date, the Payment Agent shall, upon request by Genzyme, deliver to Genzyme all
cash, certificates and other documents in its possession relating to the
transactions described in this Merger Agreement, and the Payment Agent's duties
shall terminate. Thereafter, each holder of a certificate formerly representing
a Share may surrender such certificate to Genzyme and (subject to applicable
abandoned property, escheat and similar laws) receive in exchange therefor the
Merger Consideration, without any interest thereon but shall have no greater
rights against Genzyme than may be accorded to general creditors of Genzyme
under applicable law.
ARTICLE 4
GENERAL
SECTION 4.1 TERMINATION OR ABANDONMENT
Prior to the approval of the members of Merger Corp. or of Neozyme, this
Merger Agreement and the Merger may be terminated or abandoned by action of the
Board of Directors of either Neozyme or Merger Corp., or both if, in the
opinion of the Boards of Directors of Merger Corp. and Neozyme, such action
would be in the best interests of such corporations. In the event of the
termination or abandonment of this Agreement, this Agreement shall become void
and have no effect, without any liability on the part of any party or its
members or directors or officers with respect thereto.
SECTION 4.2 WAIVER, MODIFICATION, OR AMENDMENT
Any of the terms or conditions of this Merger Agreement may be waived
before action thereon by the members of Merger Corp. or of Neozyme, by the
party that is entitled to the benefits thereof. This Merger Agreement may be
modified or amended by the Board of Directors of Merger Corp. and Neozyme
before action thereon by the members of Merger Corp. or Neozyme, except as
required by law. Any waiver, modification, or amendment shall be in writing.
SECTION 4.3 MISCELLANEOUS
This Merger Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The headings contained in this Agreement are
solely for convenience of reference and shall not be deemed to affect the
meaning or interpretation of any provision contained herein. This Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns.
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<PAGE> 1
EXHIBIT B
FOR IMMEDIATE RELEASE Genzyme Contact: Neozyme II Contact:
September 23, 1996 --------------- ------------------
Cheryl Greenhouse Dennis J. Purcell
617-252-7570 Hambrecht & Quist LLC
212-207-1552
GENZYME SIGNS DEFINITIVE AGREEMENT FOR ACQUISITION OF NEOZYME II Cambridge,
Mass. - Genzyme Corporation announced today that it has signed a definitive
acquisition agreement with Neozyme II Corporation (Nasdaq: NIIUF) under which
Genzyme will commence a tender offer for all outstanding units of Neozyme II at
$45 per unit in cash.
Each Neozyme II unit consists of one share of Neozyme II callable common
stock and one callable warrant to purchase two shares of Genzyme General
Division common stock (Nasdaq:GENZ) and .135 share of Genzyme Tissue Repair
Division common stock (Nasdaq:GENZL).
Under the agreement, if the tender offer is successfully completed, a
second-step transaction will be effected in which the Neozyme II unitholders
who had not tendered their units will be entitled to receive $29 in cash for
each share of callable common stock included in the untendered units. The
callable warrants that had been included in the units acquired in the
second-step transaction will remain outstanding.
Genzyme's obligation to purchase units in the tender offer will be
subject to the satisfaction of certain conditions, including the minimum
condition of the tender of at least a majority of the outstanding units. If
less than a majority of the outstanding units is tendered, Genzyme has the
right under certain circumstances to terminate the tender offer and seek the
approval of the holders of the units for the second-step transaction.
Alternatively, Genzyme has the right under certain circumstances, if a majority
approves the second-step transaction through a combination of shares of
callable common stock included in the units tendered and untendered shares
voting in favor of the transaction, to waive the minimum condition and accept
the tendered units.
The transaction is expected to close later this year. All assets acquired
by Genzyme from Neozyme II will be allocated to the General Division.
The Board of Directors of Neozyme II, on the recommendation of a special
committee of the Board consisting of the directors of Neozyme II who are not
officers or directors of Genzyme, has approved the tender offer and the
second-step transaction and has determined that the tender offer and the
second-step transaction are fair to and in the best interests of the unitholders
of Neozyme II. The Board has recommended that unitholders
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<PAGE> 2
of Neozyme II accept the tender offer and tender their units pursuant to the
offer.
The Special Committee was advised by independent advisors, including
Hambrecht & Quist LLC as financial advisors. Robertson, Stephens & Company LLC
has acted as the exclusive financial advisor to Genzyme in connection with the
transaction and will act as manager in connection with the tender offer.
Neozyme II was formed in 1992 to conduct research, development, and
clinical testing of products for the treatment of cystic fibrosis under contract
with Genzyme.
One of the world's top five biotechnology companies, Genzyme focuses on
developing innovative products and services for major unmet medical needs. The
company's General Division develops and markets pharmaceuticals, genetic
diagnostic services, and therapeutic, diagnostic, and surgical products. Its
Tissue Repair Division is a leading developer of biological products for the
treatment of cartilage damage, severe burns, and chronic skin ulcers.
# # #
Genzyme's releases are on the World Wide Web at http://www.prnewswire.com and PR
Newswire's fax-on-demand service at 1-800-436-1443 within the United States or
1-201-521-1080 outside of the United States.
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