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Exhibit 99.1
AGREEMENT AND PLAN OF MERGER
AMONG
GENZYME CORPORATION
AND GELTEX PHARMACEUTICALS, INC.
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Dated as of September 11, 2000
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SECTION 1 - THE MERGER.............................................................................1
1.1 The Merger.....................................................................................1
1.2 Effective Time.................................................................................2
1.3 Effects of the Merger..........................................................................2
1.4 Articles of Organization and By-Laws...........................................................2
1.5 Directors and Officers.........................................................................2
1.6 Conversion of Common Stock.....................................................................2
1.7 Company Options, Warrants and Purchase Rights..................................................6
1.8 Closing of Company Transfer Books..............................................................7
1.9 Exchange of Certificates.......................................................................8
1.10 No Liability...................................................................................8
1.11 Lost Certificates..............................................................................9
1.12 Withholding Rights.............................................................................9
1.13 Distributions with Respect to Unexchanged Shares...............................................9
1.14 Further Assurances.............................................................................9
SECTION 2 - REPRESENTATIONS AND WARRANTIES OF COMPANY...............................................9
2.1 Organization and Qualification................................................................10
2.2 Authority to Execute and Perform Agreements...................................................10
2.3 Capitalization and Title to Shares............................................................10
2.4 Company Subsidiaries..........................................................................12
2.5 SEC Reports...................................................................................12
2.6 Financial Statements..........................................................................13
2.7 Absence of Undisclosed Liabilities............................................................13
2.8 Absence of Adverse Changes....................................................................13
2.9 Compliance with Laws..........................................................................13
2.10 Actions and Proceedings.......................................................................14
2.11 Contracts and Other Agreements................................................................14
2.12 Intellectual Property.........................................................................15
2.13 Insurance.....................................................................................16
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2.14 Commercial Relationships......................................................................16
2.15 Tax Matters...................................................................................16
2.16 Employee Benefit Plans........................................................................18
2.17 Employee Relations............................................................................19
2.18 Environmental Matters.........................................................................20
2.19 No Breach.....................................................................................22
2.20 Board Approvals...............................................................................23
2.21 Financial Advisor.............................................................................23
2.22 Proxy Statement and Registration Statement....................................................23
SECTION 3 - REPRESENTATIONS AND WARRANTIES OF PARENT...............................................24
3.1 Organization and Qualification................................................................24
3.2 Authority to Execute and Perform Agreement....................................................24
3.3 Capitalization................................................................................24
3.4 SEC Reports...................................................................................25
3.5 Financial Statements..........................................................................25
3.6 Absence of Undisclosed Liabilities............................................................25
3.7 Absence of Adverse Changes....................................................................26
3.8 Actions and Proceedings.......................................................................26
3.9 Intellectual Property.........................................................................26
3.10 No Breach.....................................................................................26
3.11 Proxy Statement and Registration Statement....................................................27
3.12 Financing.....................................................................................27
3.13 Merger Sub....................................................................................27
SECTION 4 - COVENANTS AND AGREEMENTS...............................................................28
4.1 Conduct of Business...........................................................................28
4.2 Corporate Examinations and Investigations.....................................................31
4.3 Expenses......................................................................................31
4.4 Authorization from Others.....................................................................31
4.5 Further Assurances............................................................................31
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4.6 Preparation of Disclosure Documents...........................................................32
4.7 Public Announcements..........................................................................33
4.8 Affiliate Letters.............................................................................33
4.9 Nasdaq Listings...............................................................................33
4.10 No Solicitation...............................................................................33
4.11 Regulatory Filings............................................................................34
4.12 Notification of Certain Matters...............................................................34
4.13 Registration of Certain Shares................................................................35
4.14 Employee Matters..............................................................................35
4.15 Indemnification...............................................................................36
4.16 Section 16 Approval...........................................................................36
4.17 Participation in Certain Actions and Proceedings..............................................36
4.18 Guarantee of Merger Sub's Obligations.........................................................37
SECTION 5 - CONDITIONS PRECEDENT TO THE OBLIGATIONS OF EACH PARTY TO CONSUMMATE THE MERGER.........37
5.1 Stockholder Approval..........................................................................37
5.2 Registration Statement........................................................................37
5.3 Absence of Order..............................................................................37
5.4 Regulatory Approvals..........................................................................37
5.5 HSR Act.......................................................................................37
5.6 Nasdaq........................................................................................37
SECTION 6 - CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PARENT AND MERGER SUB TO CONSUMMATE
THE MERGER................................................................................37
6.1 Representations, Warranties and Covenants.....................................................37
6.2 Corporate Certificates........................................................................38
6.3 Secretary's Certificate.......................................................................38
6.4 Affiliate Letters.............................................................................38
6.5 Tax Opinion...................................................................................38
6.6 Consents......................................................................................38
6.7 Dissenting Shares.............................................................................38
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SECTION 7 - CONDITIONS PRECEDENT TO THE OBLIGATION OF COMPANY TO CONSUMMATE THE MERGER..............39
7.1 Representations, Warranties and Covenants......................................................39
7.2 Merger Documents...............................................................................39
7.3 Tax Opinion....................................................................................39
SECTION 8 - TERMINATION, AMENDMENT AND WAIVER.......................................................39
8.1 Termination....................................................................................39
8.2 Effect of Termination..........................................................................41
8.3 Termination Fee................................................................................41
8.4 Amendment......................................................................................42
8.5 Waiver.........................................................................................42
SECTION 9 - MISCELLANEOUS...........................................................................42
9.1 No Survival....................................................................................42
9.2 Notices........................................................................................42
9.3 Entire Agreement...............................................................................43
9.4 Governing Law..................................................................................43
9.5 Binding Effect; No Assignment; No Third-Party Beneficiaries....................................43
9.6 Section Headings, Construction.................................................................44
9.7 Counterparts...................................................................................44
9.8 Severability...................................................................................44
9.9 Submission to Jurisdiction; Waiver.............................................................44
9.10 Enforcement....................................................................................44
9.11 Rules of Construction..........................................................................45
9.12 Waiver of Jury Trial...........................................................................45
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EXHIBITS
Exhibit A Form of Agreement of Joinder
Exhibit B Form of Affiliate Letter
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of
September 11, 2000 is among Genzyme Corporation ("Parent"), a Massachusetts
corporation and GelTex Pharmaceuticals, Inc. ("Company"), a Delaware
corporation. The parties wish to effect a business combination through a merger
(the "Merger") of the Company with and into a wholly-owned subsidiary of Parent
to be formed as a Massachusetts corporation ("Merger Sub") on the terms and
conditions set forth herein.
R E C I T A L S
A. For United States Federal income tax purposes, it is intended that
the Merger will qualify as a reorganization under the provisions of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and that
this Agreement constitutes a plan of reorganization within the meaning of
Section 1.368-2(g) of the income tax regulations promulgated under the Code. For
financial accounting purposes, it is intended that the Merger will be accounted
for using the purchase method of accounting.
B. For purposes of this Agreement, "Parent Common Stock" shall mean
Genzyme General Division Common Stock, $0.01 par value per share, together with
an associated Genzyme General Division Common Stock Purchase Right under
Parent's Amended and Restated Renewed Rights Agreement (the "Genzyme's Rights
Plan").
In consideration of the mutual representations, warranties and
covenants contained herein, the parties hereto agree as follows:
SECTION 1 - THE MERGER
1.1 THE MERGER.
(a) Upon the terms and subject to the conditions hereof, and in
accordance with the Business Corporation Law of the Commonwealth of
Massachusetts (the "MBCL") and the General Corporation Law of the State of
Delaware (the "DGCL"), Company shall be merged with and into Merger Sub. The
Merger shall occur at the Effective Time (as defined herein). Following the
Merger, Merger Sub shall continue as the surviving corporation (sometimes
referred herein as the "Surviving Corporation") and the separate corporate
existence of Company shall cease.
(b) Promptly following execution of this Agreement but in no
event later than the date the Registration Statement (as defined in Section
2.22) is filed with the Securities and Exchange Commission (the "SEC"), Parent
shall cause Merger Sub to be incorporated as a Massachusetts corporation, to
adopt a charter and such other organizational documents as may be necessary or
advisable and which shall be appropriate for effecting the purposes of this
Agreement, and to become a party to this Agreement pursuant to an Agreement of
Joinder substantially in the form attached hereto as EXHIBIT A.
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(c) The name of the Surviving Corporation shall be "GelTex
Pharmaceuticals, Inc." The purpose of the Surviving Corporation shall be to
develop, manufacture and sell human health care products and to engage generally
in any business that may lawfully be carried on by a corporation formed under
Chapter 156B of the General Laws of Massachusetts.
1.2 EFFECTIVE TIME. As soon as practicable after satisfaction or waiver of
all conditions to the Merger, the parties shall cause articles of merger (the
"Articles of Merger") with respect to the Merger to be filed and recorded in
accordance with the MBCL and a certificate of merger (the "Certificate of
Merger") with respect to the Merger to be filed and recorded in accordance with
the DGCL, and shall take all such further actions as may be required by law to
make the Merger effective. The Merger shall be effective at such time as the
Articles of Merger and the Certificate of Merger are duly filed with the
Secretary of State of the Commonwealth of Massachusetts and the Secretary of
State of the State of Delaware, respectively, in accordance with the MBCL and
the DGCL, or at such later time as is specified in the Articles of Merger and
the Certificate of Merger (the "Effective Time"). Immediately prior to the
filing of the Articles of Merger and the Certificate of Merger, a closing (the
"Closing") will be held at the offices of Palmer & Dodge LLP, One Beacon Street,
Boston, Massachusetts (or such other place as the parties may agree) for the
purpose of confirming the foregoing. The date on which the Closing occurs is
referred to herein as the "Closing Date."
1.3 EFFECTS OF THE MERGER. The Merger shall have the effects set forth in
Sections 80 and 81 of the MBCL and Sections 259, 260 and 261 of the DGCL.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers and franchises of
Company and Merger Sub shall vest in the Surviving Corporation, and all debts,
liabilities, obligations and duties of Company and Merger Sub shall become the
debts, liabilities, obligations and duties of the Surviving Corporation.
1.4 ARTICLES OF ORGANIZATION AND BY-LAWS. Subject to Section 4.15, the
Articles of Organization and By-Laws of Merger Sub, in each case as in effect
immediately prior to the Effective Time, shall be the Articles of Organization
and By-Laws of the Surviving Corporation until thereafter changed as provided
therein or by applicable law.
1.5 DIRECTORS AND OFFICERS.
(a) The directors and officers of Merger Sub immediately prior to the
Effective Time shall be the directors and officers of the Surviving Corporation,
in each case, until the earlier of his or her resignation or removal or
otherwise ceasing to be a director or officer, as the case may be, or until his
or her respective successor is duly elected and qualified.
(b) Each current director of Company shall submit his or her
resignation at the Closing to be effective at the Effective Time.
1.6 CONVERSION OF COMMON STOCK
(a) MERGER CONSIDERATION. At the Effective Time, by virtue of the
Merger and without any action on the part of Parent or Company:
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(i) Subject to payment of cash in lieu of fractional shares as
provided below, each share of Company common stock, $0.01 par value per share
(together with the associated rights (as defined in Section 2.20(c)) "Company
Common Stock") outstanding immediately prior to the Effective Time, other than
shares held by Company as treasury stock, shares held by any wholly-owned
Company Subsidiary (as defined in Section 2.4(a)), shares held by Parent, Merger
Sub, or any other wholly-owned subsidiary of Parent and Dissenting Shares (as
defined in Section 1.6(d)), shall be cancelled and extinguished and
automatically converted into and become the right to receive, subject to the
election, allocation and adjustment procedures in this Section 1.6, either:
(A) 0.7272 (the "Exchange Ratio") of a share of Parent
Common Stock (the "Per Share Stock Consideration") or
(B) $47.50 in cash, without interest (the "Per Share Cash
Consideration").
(ii) The number of shares of Company Common Stock to be converted
into the right to receive the Per Share Cash Consideration (the "Cash Election
Number") will, subject to Section 1.6(a)(vii), equal the difference between (A)
fifty percent (50%) of (I) the total number of shares of Company Common Stock
outstanding immediately prior to the Effective Time less (II) the number of
shares held by the Company as treasury stock and shares held by a wholly-owned
Company Subsidiary, shares held by Parent, Merger Sub, or any other wholly-owned
subsidiary of Parent, rounded to the nearest whole number, less (B) the number
of Dissenting Shares. Other than shares held by the Company as treasury stock,
shares held by a wholly-owned Company Subsidiary, shares held by Parent, Merger
Sub, or any other wholly-owned subsidiary of Parent and Dissenting Shares, each
of the remaining shares of Company Common Stock outstanding immediately prior to
the Effective Time (the "Stock Election Number") will be converted into the
right to receive the Per Share Stock Consideration.
(iii) Subject to the allocation and election procedures set forth
in this Section 1.6, each record holder of shares of Company Common Stock will
be entitled (A) to elect to receive the Per Share Cash Consideration for such
shares (a "Cash Election"), (B) to elect to receive the Per Share Stock
Consideration for such shares (a "Stock Election"), or (C) to indicate that such
record holder elects to receive the Per Share Cash Consideration, the Per Share
Stock Consideration, or a combination thereof as determined pursuant to this
Section 1.6 for Combined Election Shares (as defined below) (a "Combined
Election"). All such elections will be made on a form designed for that purpose
(an "Election Form").
(iv) If the aggregate number of shares covered by valid Cash
Elections (the "Cash Election Shares") exceeds the Cash Election Number, all
shares of Company Common Stock covered by valid Stock Elections (the "Stock
Election Shares") and all shares of Company Common Stock covered by Combined
Elections (the "Combined Election Shares") will be converted into the right to
receive the Per Share Stock Consideration, and the Cash Election Shares will be
converted into the right to receive Parent Common Stock and cash in the
following manner:
Each Cash Election Share will be converted into the right to receive (A) an
amount in cash, without interest, equal to the product of (x) the Per Share
Cash
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Consideration and (y) a fraction (the "Cash Fraction"), the numerator of
which will be the Cash Election Number and the denominator of which will be
the total number of Cash Election Shares, and (B) a number of shares of
Parent Common Stock equal to the product of (x) the Exchange Ratio and (y)
a fraction equal to one minus the Cash Fraction.
(v) If the aggregate number of Stock Election Shares exceeds the
Stock Election Number, all Cash Election Shares and all Combined Election Shares
will be converted into the right to receive the Per Share Cash Consideration,
and all Stock Election Shares will be converted into the right to receive Parent
Common Stock and cash in the following manner:
Each Stock Election Share will be converted into the right to receive (A) a
number of shares of Parent Common Stock equal to the product of (x) the
Exchange Ratio and (y) a fraction (the "Stock Fraction"), the numerator of
which will be the Stock Election Number and the denominator of which will
be the total number of Stock Election Shares, and (B) an amount in cash,
without interest, equal to the product of (x) the Per Share Cash
Consideration and (y) a fraction equal to one minus the Stock Fraction.
(vi) In the event that neither subparagraph (iv) nor subparagraph
(v) above is applicable, all Cash Election Shares will be converted into the
right to receive the Per Share Cash Consideration, all Stock Election Shares
will be converted into the right to receive the Per Share Stock Consideration,
and all Combined Election Shares will be converted into the right to receive
shares of Parent Common Stock and the right to receive cash on a proportionate
basis so that, in the aggregate, the number of shares of Company Common Stock
outstanding immediately prior to the Effective Time that convert into the Per
Share Cash Consideration is as nearly equal to the Cash Election Number as
practical.
(vii) In the event that the value of the shares of Parent Common
Stock (excluding fractional shares to be paid in cash) to be issued in the
Merger, valued at the last sale price as reported by the Nasdaq National Market
for the date during which the Effective Time occurs, minus the aggregate
discount, if any, due to trading restrictions on the Parent Common Stock to be
issued in the Merger (the "Parent Common Stock Value") is less than 45% of the
total consideration to be paid in exchange for the shares of Company Common
Stock (including without limitation the amount of cash to be paid in lieu of
fractional shares and any other payments required to be considered in
determining whether the continuity of interest requirement applicable to
reorganizations under Section 368 of the Code has been satisfied) (the "Total
Consideration"), then the Per Share Consideration, rather than being $47.50 in
cash, without interest, shall be a combination of a fraction of a share of
Parent Common Stock and cash, without interest, with a combined market value
equal to $47.50, with the Parent Common Stock valued at the last sale price as
reported by the Nasdaq National Market for the date during which the Effective
Time occurs, rounded to the nearest cent, so that the Parent Common Stock Value
is at least 45% of the Total Consideration; provided, however, in no event shall
Parent be obligated to issue in excess of 19,670,586 shares, subject to
equitable adjustment, of Parent Common Stock pursuant to the terms of this
Agreement and the transactions contemplated hereby.
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(viii) If prior to the Effective Time there is a change in the
number of issued and outstanding shares of Parent Common Stock as the result of
reclassification, subdivision, recapitalization, stock split (including reverse
stock split) or stock dividend, the Exchange Ratio and the Per Share Cash
Consideration shall be equitably adjusted to give effect to such event.
(ix) The shares of Parent Common Stock and cash payable pursuant
to this Section 1.6, together with cash payments in lieu of fractional shares
pursuant to Section 1.6(c), are referred to collectively as the "Merger
Consideration."
(b) ELECTION PROCEDURE. At the time of mailing of the Proxy
Statement/Prospectus (as defined in Section 2.22) to holders of record of
Company Common Stock entitled to vote at the Company Stockholders Meeting (as
defined in Section 4.6(b)), Parent will mail, or cause to be mailed, an Election
Form and a letter of transmittal to each such holder. To be effective, an
Election Form must be properly completed, signed and actually received by the
Exchange Agent (as defined in Section 1.9) not later than 5:00 p.m., New York
City time, on the trading day that is three trading days prior to the date of
the Company Stockholders Meeting (the "Election Deadline") and, in the case of
the shares that are not held in book entry form, accompanied by the certificates
(the "Certificates") representing all of the shares of Company Common Stock as
to which such Election Form relates, duly endorsed in blank or otherwise in form
acceptable for transfer (or accompanied by an appropriate guarantee of delivery
by an eligible organization). For shares that are held in book entry form,
Parent shall establish reasonable procedures for the delivery of such shares.
Parent shall have reasonable discretion, which it may delegate in whole or in
part to the Exchange Agent, to determine whether Election Forms have been
properly completed, signed and timely submitted or to disregard defects in
Election Forms. Any such determination of Parent or the Exchange Agent shall be
conclusive and binding. Neither Parent nor the Exchange Agent shall be under any
obligation to notify any person of any defect in an Election Form submitted to
the Exchange Agent. The Exchange Agent shall also make all computations
contemplated by this Section 1.6, and computations will be conclusive and
binding on the former holders of Company Common Stock absent manifest error. Any
shares of Company Common Stock (other than shares held by Company as treasury
shares, shares held by any Company Subsidiary and Dissenting Shares) for which
the record holder has not, as of the Election Deadline, properly submitted to
the Exchange Agent a properly completed Election Form will be deemed Combined
Election Shares. Any Election Form may be revoked, by the stockholder who
submitted such Election Form to the Exchange Agent, only by written notice
received by the Exchange Agent (i) prior to the Election Deadline or (ii) after
such time if (and only to the extent that) the Exchange Agent is legally
required to permit revocations and only if the Effective Time shall not have
occurred prior to such date. In addition, all Election Forms shall automatically
be revoked, and all Certificates returned, if the Exchange Agent is notified in
writing by Parent and Company that this Agreement has been terminated. The
Exchange Agent may make such rules as are consistent with this Section 1.6 for
the election process.
(c) NO FRACTIONAL SHARES. No fractional shares of Parent Common Stock
shall be issued pursuant to this Agreement. In lieu of fractional shares, each
stockholder who would otherwise have been entitled to a fraction of a share of
Parent Common Stock hereunder (after aggregating all fractional shares to be
received by such stockholder), shall receive, without
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interest, an amount in cash (rounded to the nearest whole cent) determined by
multiplying such fraction by the per share last sale price of Parent Common
Stock as reported by the Nasdaq National Market on the trading day immediately
preceding the date during which the Effective Time occurs.
(d) DISSENTING SHARES
(i) Shares of Company Common Stock held by a stockholder who has
properly exercised appraisal rights with respect thereto in accordance with
Section 262 of the DGCL (collectively, the "Dissenting Shares") shall not be
converted into Merger Consideration. From and after the Effective Time, a
stockholder who has properly exercised such appraisal rights shall not have any
rights of a stockholder of Company, Parent or the Surviving Corporation with
respect to such shares, except those provided under Section 262 of the DGCL. If,
after the Effective Time of the Merger, any such stockholder fails to perfect or
loses any such right to appraisal, such shares shall be treated as if they had
been converted as of the Effective Time into the right to receive the Merger
Consideration.
(ii) Company shall give Parent (A) prompt notice of any written
demands under Section 262 of the DGCL with respect to any shares of Company
Common Stock, any withdrawal of any such demand and any other instruments served
pursuant to the DGCL and received by Company and (B) the right to participate in
all negotiations and proceedings with respect to any such demands. Company shall
cooperate with Parent concerning, and shall not, except with the prior written
consent of Parent, voluntarily make any payment with respect to, or offer to
settle or settle, any such demands.
(e) CANCELLED STOCK. All shares of Company Common Stock (and the
associated Rights) held at the Effective Time by Company as treasury stock or by
a Company Subsidiary or by Parent, Merger Sub or another wholly-owned subsidiary
of Parent shall be cancelled and extinguished and no payment shall be made with
respect thereto.
(f) MERGER SUB STOCK. Each issued and outstanding share of the
capital stock of Merger Sub shall continue to be outstanding following, and
shall be unaffected by, the Merger.
1.7 COMPANY OPTIONS, WARRANTS AND PURCHASE RIGHTS
(a) At the Effective Time, each outstanding option to purchase shares
of Company Common Stock (the "Company Options") (i) including those options
granted under the Company's Amended and Restated 1992 Equity Incentive Plan and
the Company's Amended and Restated 1995 Directors Stock Option Plan (the
"Company Stock Option Plans") and those options granted outside of the Company
Stock Option Plans and disclosed on Section 2.3 of the Company Disclosure
Schedule and (ii) including those options assumed by the Company in connection
with the acquisition of SunPharm Corporation, whether or not then exercisable,
shall be assumed by Parent. Each Company Option so assumed by Parent under this
Agreement shall continue to have, and be subject to, the same terms and
conditions set forth in the applicable Company Stock Option Plan or in the
applicable stock option agreement or certificate immediately prior to the
Effective Time (including, without limitation, any repurchase rights), except
that (i) each Company Option shall be exercisable (or shall become exercisable
in
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accordance with its terms) for that number of shares of Parent Common Stock
equal to the product of the number of shares of Company Common Stock that were
issuable upon exercise of such Company Option immediately prior to the Effective
Time multiplied by the Exchange Ratio, rounded down to the nearest whole number
of shares of Parent Common Stock, (ii) the per share exercise price for the
shares of Parent Common Stock issuable upon exercise of such assumed Company
Option shall be equal to the quotient determined by dividing the exercise price
per share of Company Common Stock at which such Company Option was exercisable
immediately prior to the Effective Time by the Exchange Ratio, rounded up to the
nearest whole cent and (iii) the vesting of such options may have been
accelerated as indicated on Section 2.3(b) of the Company Disclosure Schedule.
After the Effective Time, Parent shall issue to each holder of an outstanding
Company Option a notice describing the foregoing assumption of such Company
Options by Parent. The adjustments provided herein with respect to any Company
Options that are "incentive stock options" as defined in Section 422 of the Code
shall be and are intended to be effected in a manner which is consistent with
Section 424(a) of the Code so as to preserve the benefits of such "incentive
stock options."
(b) At the Effective Time, each outstanding warrant to purchase
shares of Company Common Stock (the "Company Warrants"), whether or not then
exercisable, shall be assumed by Parent. Each Company Warrant so assumed by
Parent under this Agreement shall continue to have, and be subject to, the same
terms and conditions set forth in the applicable warrant immediately prior to
the Effective Time (including, without limitation, any repurchase rights),
except that (i) each Company Warrant shall be exercisable (or shall become
exercisable in accordance with its terms) for that number of shares of Parent
Common Stock equal to the product of the number of shares of Company Common
Stock that were issuable upon exercise of such Company Warrant immediately prior
to the Effective Time multiplied by the Exchange Ratio, rounded to the nearest
whole number of shares of Parent Common Stock, and (ii) the per share exercise
price for the shares of Parent Common Stock issuable upon exercise of such
assumed Company Warrant shall be equal to the quotient determined by dividing
the exercise price per share of Company Common Stock at which such Company
Option was exercisable immediately prior to the Effective Time by the Exchange
Ratio, rounded to the nearest whole cent. After the Effective Time, Parent shall
issue to each holder of an outstanding Company Warrant a notice describing the
foregoing assumption of such Company Warrants by Parent.
(c) Company shall amend its 1995 Employee Stock Purchase Plan (the
"Company Purchase Plan") so that as of the Effective Time (i) the Company
Purchase Plan is terminated and (ii) there are no outstanding rights of
participants under the Company Purchase Plan. Prior to the Effective Time,
Company shall take all actions (including, if appropriate, amending the terms of
the Company Purchase Plan) that are necessary to give effect to this Section
1.7(c).
1.8 CLOSING OF COMPANY TRANSFER BOOKS. At the Effective Time, the stock
transfer books of Company shall be closed and no further registration of
transfers of shares of Company Common Stock shall thereafter be made. On or
after the Effective Time, any Certificates presented to the Exchange Agent or
Parent for any reason shall be converted into the right to receive Merger
Consideration with respect to the shares of Company Common Stock formerly
represented thereby and any dividends or other distributions to which the
holders thereof are entitled pursuant to Section 1.13.
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1.9 EXCHANGE OF CERTIFICATES.
(a) Parent shall authorize American Stock Transfer & Trust Company or
one or more other persons reasonably acceptable to Company to act as Exchange
Agent hereunder (the "Exchange Agent"). Promptly after the Effective Time,
Parent shall cause the Exchange Agent to mail, to former record holders of
shares of Company Common Stock who have not previously submitted letters of
transmittal together with Certificates, instructions for surrendering their
Certificates in exchange for the Merger Consideration. The fees and expenses of
the Exchange Agent shall be paid by Parent and Parent shall indemnify the
Exchange Agent and Company against actions taken by the Exchange Agent pursuant
hereto and pursuant to any Exchange Agent agreement other than for acts or
omissions which constitute willful misconduct or gross negligence, pursuant to
the agreement with the Exchange Agent.
(b) Promptly after the Effective Time, Parent shall deliver to the
Exchange Agent sufficient shares of Parent Common Stock and cash to satisfy the
Merger Consideration. After the Effective Time, upon receipt of Certificates for
cancellation, together with a properly completed letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss of, and title
to, the Certificates shall pass, only upon delivery of the Certificates to the
Exchange Agent) and other requested documents and in accordance with the
instructions thereon, the holder of such Certificates shall be entitled to
receive in exchange therefor (i) a certificate representing that number of whole
shares of Parent Common Stock into which the shares of Company Common Stock
theretofore represented by the Certificates so surrendered shall have been
converted pursuant to Section 1 and (ii) a check in the amount of any cash due
pursuant to Section 1. No interest shall be paid or shall accrue on any such
amounts.
(c) Until surrendered in accordance with the provisions of this
Section 1.9, each Certificate shall represent for all purposes only the right to
receive Merger Consideration and, if applicable, amounts under Section 1.13.
Shares of Parent Common Stock into which shares of Company Common Stock shall be
converted in the Merger at the Effective Time shall be deemed to have been
issued at the Effective Time. If any certificates representing shares of Parent
Common Stock are to be issued in a name other than that in which the Certificate
surrendered is registered, it shall be a condition of such exchange that the
person requesting such exchange deliver to the Exchange Agent all documents
necessary to evidence and effect such transfer and pay to the Exchange Agent any
transfer or other taxes required by reason of the issuance of a certificate
representing shares of Parent Common Stock in a name other than that of the
registered holder of the Certificate surrendered, or establish to the
satisfaction of the Exchange Agent that such tax has been paid or is not
applicable. Beginning the date which is twelve months following the Closing
Date, Parent shall act as the Exchange Agent and thereafter any holder of an
unsurrendered Certificate shall look solely to Parent for any amounts to which
such holder may be due, subject to applicable law. Notwithstanding any other
provisions of this Agreement, any portion of the Merger Consideration remaining
unclaimed five years after the Effective Time (or such earlier date immediately
prior to such time as such amounts would otherwise escheat to, or become
property of, any governmental entity) shall, to the extent permitted by law,
become the property of Parent free and clear of any claims or interest of any
person previously entitled thereto.
1.10 NO LIABILITY. None of Parent, the Surviving Corporation or the
Exchange Agent shall be liable to any person in respect of any shares (or
dividends or distributions with respect
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thereto) or cash payments delivered to a public official pursuant to any
applicable escheat, abandoned property or similar law.
1.11 LOST CERTIFICATES. If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed and, if reasonably required by
Parent, the posting by such person of a bond in such reasonable amount as Parent
may direct as indemnity against any claim that may be made against it with
respect to such Certificate, the Exchange Agent shall deliver in exchange for
such lost, stolen or destroyed Certificate, the Merger Consideration and any
amounts due pursuant to Section 1.13.
1.12 WITHHOLDING RIGHTS. Parent shall be entitled to deduct and withhold
from the consideration otherwise payable pursuant to this Agreement to any
holder of shares of Company Common Stock such amounts as it is required to
deduct and withhold with respect to the making of such payment under the Code,
or any provision of state, local or foreign tax law. To the extent that amounts
are so withheld by Parent, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the shares of
Company Common Stock in respect of which such deduction and withholding was
made.
1.13 DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No dividend or other
distribution declared with respect to Parent Common Stock with a record date
after the date during which the Effective Time occurs shall be paid to holders
of unsurrendered Certificates or holders who comply with the provisions of
Section 1.11 (with regard to lost certificates) until such holders surrender
such Certificates or submit an affidavit (and any reasonably required bond) in
accordance with Section 1.11. Upon the surrender of such Certificates in
accordance with Section 1.9 or submission of an affidavit (and any reasonably
required bond) in accordance with Section 1.11, there shall be paid to such
holders, promptly after such surrender or submission, as the case may be, the
amount of dividends or other distributions, without interest, declared with a
record date after the date during which the Effective Time occurs and not paid
because of the failure to surrender such Certificates for exchange.
1.14 FURTHER ASSURANCES. At and after the Effective Time, the officers and
directors of the Surviving Corporation shall be authorized to execute and
deliver, in the name and on behalf of Company, any deeds, bills of sale,
assignments or assurances and to take and do, in the name and on behalf of
Company, any other actions and things to vest, perfect or confirm of record or
otherwise in the Surviving Corporation any and all right, title and interest in,
to and under any of the rights, properties or assets acquired or to be acquired
by the Surviving Corporation as a result of, or in connection with, the Merger.
SECTION 2 - REPRESENTATIONS AND WARRANTIES OF COMPANY
Except as set forth on the disclosure schedule delivered by Company to
Parent on the date hereof (the "Company Disclosure Schedule"), the section
numbers of which are numbered to correspond to the section numbers of this
Agreement to which they refer, Company hereby makes the following
representations and warranties to Parent and Merger Sub:
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2.1 ORGANIZATION AND QUALIFICATION.
(a) Each of Company and each Company Subsidiary (as defined in
Section 2.4(a)) is a corporation or other legal entity duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
and has corporate or similar power and authority to own, lease and operate its
assets and to carry on its business as now being and as heretofore conducted.
Each of Company and each Company Subsidiary is qualified or otherwise authorized
to transact business as a foreign corporation or other organization in all
jurisdictions in which such qualification or authorization is required by law,
except for jurisdictions in which the failure to be so qualified or authorized
could not reasonably be expected to have a Company Material Adverse Effect.
"Company Material Adverse Effect" shall mean a material adverse effect on the
assets, properties, business, results of operations or financial condition of
Company and the Company Subsidiaries, taken as a whole; provided that "Company
Material Adverse Effect" shall not include any such adverse effect primarily
related to (i) the economy or securities markets of the United States or any
other region in general or (ii) conditions affecting the biotechnology and
biopharmaceutical industries generally, in each case, without a disproportionate
impact on Company and the Company's Subsidiaries.
(b) Company has previously provided or made available to Parent true
and complete copies of the charter and bylaws or other organizational documents
of Company and each Company Subsidiary as presently in effect, and none of
Company or any Company Subsidiary is in default in the performance, observation
or fulfillment of such documents, except, in the case of Company Subsidiaries,
such defaults that, in the aggregate, could not reasonably be expected to have a
Company Material Adverse Effect.
2.2 AUTHORITY TO EXECUTE AND PERFORM AGREEMENTS. Company has the corporate
power and authority to enter into, execute and deliver this Agreement and,
subject, in the case of consummation of the Merger, to the adoption of this
Agreement by the holders of Company Common Stock, to perform fully its
obligations hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by the Board of Directors of Company. No other action on the part of Company is
necessary to consummate the transactions contemplated hereby (other than
adoption of this Agreement by the holders of Company Common Stock and execution
of the Rights Amendment (as defined in Section 2.20(c)), which the Company will
execute promptly after execution of this Agreement). This Agreement has been
duly executed and delivered by Company and constitutes a valid and binding
obligation of Company, enforceable in accordance with its terms.
2.3 CAPITALIZATION AND TITLE TO SHARES
(a) Company is authorized to issue 50,000,000 shares of Company
Common Stock, of which 21,144,432 shares were issued and outstanding as of
September 7, 2000. All of the issued and outstanding shares of Company Common
Stock are duly authorized, validly issued, fully paid, nonassessable and free of
pre-emptive rights.
(b) Company has reserved 4,476,033 shares of Company Common Stock for
issuance pursuant to all of the Company Options. Company Options to purchase
2,323,718 shares of Company Common Stock were outstanding as of September 8,
2000. SECTION 2.3(b) of the Company Disclosure Schedule includes a true and
complete list of all Company Options
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outstanding as of September 8, 2000 with vesting schedules and exercise prices.
True and complete copies of all instruments (or the forms of such instruments)
referred to in this section have been furnished or made available to Parent.
Except as indicated in SECTION 2.3(b) of the Company Disclosure Schedule, the
Company is not obligated to accelerate the vesting of any Company Options as a
result of the Merger.
(c) Company has reserved 160,147 shares of Company Common Stock for
issuance pursuant to all of the Company Warrants. Company Warrants to purchase
117,269 shares of Company Common Stock were outstanding as of September 8, 2000.
SECTION 2.3(c) of the Company Disclosure Schedule includes a true and complete
list of all outstanding warrants outstanding as of September 8, 2000 with
vesting schedules and exercise prices. True and complete copies of all
instruments (or the forms of such instruments) referred to in this section have
been furnished or made available to Parent.
(d) Company has reserved 37,034 shares of Company Common Stock for
future issuance under the Company Purchase Plan.
(e) Company is authorized to issue 5,000,000 shares of Preferred
Stock ("Company Preferred Stock"), none of which are issued and outstanding.
(f) Except for (i) shares indicated as issued and outstanding on
September 7, 2000 in Section 2.3(a), (ii) 291,073 shares to be issued to Acqua
Wellington North American Equities Fund, Ltd. ("AW") on or about the date of
this Agreement and (iii) shares issued after September 7, 2000, upon (A) the
exercise of outstanding Company Options listed in SECTION 2.3(b) of the Company
Disclosure Schedule or granted after the date of this Agreement in the ordinary
course of business consistent with past practice, (B) the exercise of
outstanding Company Warrants listed in SECTION 2.3(c) of the Company Disclosure
Schedule, or (C) the exercise of purchase rights in accordance with the Company
Purchase Plan and in an amount not in excess of the number indicated as reserved
for such purpose in Section 2.3(d), there are not as of the date hereof, and at
the Effective Time there will not be, any shares of Company Common Stock issued
and outstanding.
(g) Company's authorized capital stock consists solely of the Company
Common Stock described in Section 2.3(a) and the Company Preferred Stock
described in Section 2.3(e). There are not as of the date hereof, and at the
Effective Time there will not be, authorized or outstanding any subscriptions,
options, conversion or exchange rights, warrants, repurchase or redemption
agreements, or other agreements, claims or commitments of any nature whatsoever
obligating Company to issue, transfer, deliver or sell, or cause to be issued,
transferred, delivered, sold, repurchased or redeemed, additional shares of the
capital stock or other securities of Company or obligating Company to grant,
extend or enter into any such agreement, other than Company Options listed in
SECTION 2.3(b) of the Company Disclosure Schedule or granted after the date of
this Agreement in the ordinary course of business consistent with past practice,
Company Warrants listed in SECTION 2.3(c) of the Company Disclosure Schedule,
and rights to purchase shares of Company Common Stock pursuant to the Company
Purchase Plan. To the best knowledge of Company, there are no stockholder
agreements, voting trusts, proxies or other agreements, instruments or
understandings with respect to the voting of the capital stock of Company.
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(h) Neither Company nor any Company Subsidiary beneficially owns any
shares of capital stock of Parent.
(i) Company has no outstanding bonds, debentures, notes or other
indebtedness which have the right to vote on any matters on which stockholders
may vote.
2.4 COMPANY SUBSIDIARIES.
(a) SECTION 2.4(a) of the Company Disclosure Schedule sets forth all
of the Company Subsidiaries and the jurisdiction in which each is incorporated
or organized. All issued and outstanding shares or other equity interests of
each Company Subsidiary are owned directly by Company free and clear of any
charges, liens, encumbrances, security interests or adverse claims. As used in
this Agreement, "Company Subsidiary" means any corporation, partnership or other
organization, whether incorporated or unincorporated, (i) of which Company or
any Company Subsidiary is a general partner or (ii) at least 50% of the
securities or other interests having voting power to elect a majority of the
board of directors or others performing similar functions with respect to such
corporation, partnership or other organization are directly or indirectly owned
or controlled by Company or by any Company Subsidiary, or by Company and one or
more Company Subsidiaries; provided, however, RenaGel LLC shall not be
considered a Company Subsidiary for purposes of Section 2 of this Agreement.
(b) There are not as of the date hereof, and at the Effective Time
there will not be, any subscriptions, options, conversion or exchange rights,
warrants, repurchase or redemption agreements, or other agreements, claims or
commitments of any nature whatsoever obligating any Company Subsidiary to issue,
transfer, deliver or sell, or cause to be issued, transferred, delivered, sold,
repurchased or redeemed, shares of the capital stock or other securities of
Company or any Company Subsidiary or obligating Company or any Company
Subsidiary to grant, extend or enter into any such agreement. To the best
knowledge of Company, there are no stockholder agreements, voting trusts,
proxies or other agreements, instruments or understandings with respect to the
voting of the capital stock of any Company Subsidiary.
2.5 SEC REPORTS. Company previously has made available to Parent (i) its
Annual Report on Form 10-K for the year ended December 31, 1999 (the "Company
10-K"), as filed with the Securities and Exchange Commission (the "SEC"), (ii)
all proxy statements relating to Company's meetings of stockholders held or to
be held after December 31, 1999 and (iii) all other documents filed by Company
with the SEC under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") since January 1, 1999 and, prior to the date of this Agreement
(the "Company SEC Reports"). As of their respective dates, such documents
complied, and all documents filed by Company with the SEC under the Exchange Act
between the date of this Agreement and the Closing Date will comply, in all
material respects, with applicable SEC requirements and did not, or in the case
of documents filed on or after the date hereof will not, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Since August 31, 1999,
Company has timely filed, and between the date of this Agreement and the Closing
Date will timely file, with the SEC all documents required to be filed by it
under the Exchange Act. No Company Subsidiary is required to file any form,
report or other document with the SEC.
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2.6 FINANCIAL STATEMENTS. The consolidated financial statements contained
in the Company 10-K and in Company's quarterly report on Form 10-Q for the
quarter ended June 30, 2000 (the "Company 10-Q") have been prepared from, and
are in accordance with, the books and records of Company and present fairly, in
all material respects, the consolidated financial condition and results of
operations of Company and the Company Subsidiaries as of and for the periods
presented therein, all in conformity with generally accepted accounting
principles applied on a consistent basis, except as otherwise indicated therein
and subject in the case of the unaudited financial statements included in the
Company 10-Q to normal year-end adjustments, which in the aggregate are not
material, and the absence of notes in the unaudited financial statements.
2.7 ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in the Company
SEC Reports, as at December 31, 1999, Company and the Company Subsidiaries had
no material liabilities of any nature, whether accrued, absolute, contingent or
otherwise (including without limitation, liabilities as guarantor or otherwise
with respect to obligations of others or liabilities for taxes due or then
accrued or to become due), required to be reflected or disclosed in the balance
sheet dated December 31, 1999 (or the notes thereto) included in the Company
10-K (the "Company Balance Sheet") that were not adequately reflected or
reserved against on the Company Balance Sheet. Company has no material
liabilities of any nature, whether accrued, absolute, contingent or otherwise,
other than liabilities (i) adequately reflected or reserved against on the
Company Balance Sheet, (ii) reflected in Company's unaudited balance sheet dated
June 30, 2000, included in the Company 10-Q, (iii) included in SECTION 2.7 of
the Company Disclosure Schedule, (iv) incurred since June 30, 2000 in the
ordinary course of business, (v) disclosed in the Company SEC Reports or (vi)
that could not, individually or in the aggregate, reasonably be expected to have
a Company Material Adverse Effect.
2.8 ABSENCE OF ADVERSE CHANGES.
(a) Since June 30, 2000, there has not been any change, event or
circumstance that has had, or is reasonably likely to have, a Company Material
Adverse Effect.
(b) Since June 30, 2000, there has not been any action taken by
Company or any Company Subsidiary during the period from June 30, 2000 through
the date of this Agreement that, if taken during the period from the date of
this Agreement through the Effective Time, would constitute a breach of Section
4.1.
2.9 COMPLIANCE WITH LAWS.
(a) Company and the Company Subsidiaries have all licenses, permits,
franchises, orders or approvals of any federal, state, local or foreign
governmental or regulatory body material to the conduct of their businesses
(collectively, "Permits"), other than such Permits the absence of which,
individually or in the aggregate, could not reasonably be expected to have a
Company Material Adverse Effect; such Permits are in full force and effect; and
no proceeding is pending or, to the best knowledge of Company, threatened to
revoke or limit any Permit.
(b) Company and the Company Subsidiaries are not in violation of and
have no liabilities, whether accrued, absolute, contingent or otherwise, under
any federal, state, local
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or foreign law, ordinance or regulation or any order, judgment, injunction,
decree or other requirement of any court, arbitrator or governmental or
regulatory body, relating to the operation of clinical testing laboratories,
labor and employment practices, health and safety, zoning, pollution or
protection of the environment, except for violations of or liabilities under any
of the foregoing which could not, in the aggregate, reasonably be expected to
have a Company Material Adverse Effect.
(c) Each product or product candidate subject to the United States
Food and Drug Administration (the "FDA") jurisdiction under the Federal Food,
Drug and Cosmetic Act ("FDCA") that is manufactured, tested, distributed, held,
and/or marketed by Company or any Company Subsidiary is being manufactured,
tested, distributed, held and marketed in compliance in all material respects
with all applicable requirements under the FDCA including, but not limited to,
those relating to investigational use, premarket clearance, good manufacturing
practices, labeling, advertising, record keeping, filing of reports and
security.
(d) Company has, prior to the execution of this Agreement, provided
or made available to Parent copies of all documents in its or any Company
Subsidiary's possession material to assessing compliance with the FDCA and its
implementing regulations, including, but not limited to, copies of (i) all
warning letters, notices of adverse findings and similar correspondence received
in the last three years, (ii) all audit reports performed during the last three
years, and (iii) any document concerning any significant oral or written
communication received from the FDA in the last three years.
2.10 ACTIONS AND PROCEEDINGS. There are no outstanding orders, judgments,
injunctions, decrees or other requirements of any court, arbitrator or
governmental or regulatory body against Company, any Company Subsidiary or any
of their assets or properties. Except as disclosed in the Company SEC Reports,
there are no actions, suits or claims or legal, administrative or arbitration
proceedings pending or, to the best knowledge of Company, threatened against
Company, any Company Subsidiary, or any of their securities, assets or
properties. To the best knowledge of Company, there is no fact, event or
circumstance now in existence that reasonably could be expected to give rise to
any action, suit, claim, proceeding or investigation that, individually or in
the aggregate, could be reasonably expected to have a Company Material Adverse
Effect or interfere with Company's ability to consummate the transactions
contemplated hereby.
2.11 CONTRACTS AND OTHER AGREEMENTS.
(a) Neither Company nor any Company Subsidiary is a party to or bound
by, and neither they nor their properties are subject to, any contract or other
agreement required to be disclosed in a Form 10-K, Form 10-Q or Form 8-K of the
SEC which is not disclosed in the Company 10-K, the Company 10-Q or as an
exhibit to a registration statement filed under the Securities Act of 1933, as
amended (the "Securities Act") within the last 12 months. All of such contracts
and other agreements are valid, subsisting, in full force and effect, binding
upon Company or the applicable Company Subsidiary, and, to the best knowledge of
Company, binding upon the other parties thereto in accordance with their terms,
and Company and the Company Subsidiaries have paid in full or accrued all
amounts now due from them thereunder, and have satisfied in full or provided for
all of their liabilities and obligations thereunder which are presently required
to be satisfied or provided for and are not in default under any of them,
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except for defaults which individually or in the aggregate could not reasonably
be expected to result in a Company Material Adverse Effect, nor, to the best
knowledge of Company, is any other party to any such contract or other agreement
in default thereunder, except for defaults which individually or in the
aggregate could not reasonably be expected to result in a Company Material
Adverse Effect, nor does any condition exist that with notice or lapse of time
or both would constitute a default thereunder, except for defaults which
individually or in the aggregate could not reasonably be expected to result in a
Company Material Adverse Effect. True and complete copies of all of the
contracts and other agreements referred to in this Section 2.11 have been
provided or made available to Parent.
(b) Other than those contracts disclosed in the Company 10-K, the
Company 10-Q or as exhibits to a registration statement filed under the
Securities Act, neither the Company nor any Company Subsidiary is a party to any
agreement that limits or restricts Company, any Company Subsidiary or any of
their affiliates or successors in competing or engaging in any line of business,
in any therapeutic area, in any geographic area or with any person.
(c) Neither the Company nor any Company Subsidiary is a party to any
agreement obligating Company to file a registration statement under the
Securities Act which filing has not yet been made.
(d) To the best knowledge of Company, no executive officer or
director of Company has (whether directly or indirectly through another entity
in which such person has a material interest, other than as the holder of less
than 2% of a class of securities of a publicly traded company) any material
interest in any property or assets of Company (except as a stockholder) or a
Company Subsidiary, any competitor, customer, supplier or agent of Company or a
Company Subsidiary or any person that is currently a party to any material
contract or agreement with Company or a Company Subsidiary.
(e) SECTION 2.11(e) of the Company Disclosure Schedule lists all real
property owned by Company or a Company Subsidiary. The Company or Company
Subsidiary, as the case may be, owns good and marketable title to such property.
2.12 INTELLECTUAL PROPERTY. Company and the Company Subsidiaries own, or
are licensed to use, or otherwise have the right to use all patents, trademarks,
service marks, trade names, trade secrets, franchises, inventions, copyrights,
and all other technology and intellectual property (including, without
limitation, biological materials), all registrations of any of the foregoing, or
applications therefor, and all grants and licenses or other rights running to or
from Company or Company Subsidiary relating to any of the foregoing that are
material to their businesses as presently conducted or as contemplated to be
conducted (collectively, the "Proprietary Rights"). All patents, registered
trademarks and copyrights referred to above are valid and subsisting and the
Company will provide Parent with a schedule of any taxes, maintenance fees or
actions falling due within 90 days of the Closing Date. Company is not aware of
any basis for any claim by any third party that the businesses of Company or the
Company Subsidiaries infringe upon the proprietary rights of others, nor has
Company or any Company Subsidiary received any notice or claim of infringement
from any third party. Company is not aware of any existing or threatened
infringement by any third party on, or any competing claim of right to use or
own any of, the Proprietary Rights. Except as disclosed in
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SECTION 2.12 of the Company Disclosure Schedule, Company and the Company
Subsidiaries have the right to sell their products and services (whether now
offered for sale or under development) free from any royalty or other
obligations to third parties. To the best knowledge of Company, none of the
activities of the employees of Company or any Company Subsidiary on behalf of
such entity violates any agreement or arrangement which any such employees have
with former employers. All employees and consultants who contributed to the
discovery or development of any of the Proprietary Rights did so either (a)
within the scope of his or her employment such that, in accordance with
applicable law, all Proprietary Rights arising therefrom became the exclusive
property of the Company or the Company Subsidiary or (b) pursuant to written
agreements assigning all Proprietary Rights arising therefrom to the Company or
the Company Subsidiary.
2.13 INSURANCE. All policies or binders of material fire, liability,
product liability, workmen's compensation, vehicular, directors' and officers'
and other material insurance held by or on behalf of Company and the Company
Subsidiaries are in full force and effect, are reasonably believed to be
adequate for the businesses engaged in by Company and the Company Subsidiaries
and are in conformity with the requirements of all leases or other agreements to
which Company or the relevant Company Subsidiary is a party and, to the best
knowledge of Company, are valid and enforceable in accordance with their terms.
Neither Company nor any Company Subsidiary is in default with respect to any
provision contained in such policy or binder nor has any of the Company or a
Company Subsidiary failed to give any notice or present any claim under any such
policy or binder in due and timely fashion. There are no outstanding unpaid
claims under any such policy or binder. Neither Company nor any Company
Subsidiary has received notice of cancellation or non-renewal of any such policy
or binder.
2.14 COMMERCIAL RELATIONSHIPS. None of the Company's or the Company
Subsidiaries' material suppliers, collaborators, licensors and licensees has
canceled or otherwise terminated its relationship with Company or a Company
Subsidiary or has, during the last twelve months, materially altered its
relationship with Company or a Company Subsidiary. Company does not know of any
plan or intention of any such entity, and has not received any written threat or
notice from any such entity, to terminate, cancel or otherwise materially modify
its relationship with Company or a Company Subsidiary.
2.15 TAX MATTERS
(a) For purposes of this Agreement, the term "Tax" (and, with
correlative meaning, "Taxes" and "Taxable") means all United States federal,
state, and local, and all foreign, income, profits, franchise, gross receipts,
payroll, transfer, sales, employment, use, property, excise, value added, ad
valorem, estimated, stamp, alternative or add-on minimum, recapture,
environmental, withholding and any other taxes, charges, duties, impositions or
assessments, together with all interest, penalties, and additions imposed on or
with respect to such amounts, including any liability for taxes of a predecessor
entity. "Tax Return" means any return, declaration, report, claim for refund, or
information return or statement filed or required to be filed with any taxing
authority in connection with the determination, assessment, collection or
imposition of any Taxes.
(b) All Tax Returns required to be filed on or before the date hereof
by or with respect to Company and the Company Subsidiaries have been filed
within the time and in
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The manner prescribed by law. All such Tax Returns are true, correct and
complete in all material respects, and all Taxes owed by Company or the Company
Subsidiaries, whether or not shown on any Tax Return, have been paid. Company
and the Company Subsidiaries file Tax Returns in all jurisdictions where they
are required to so file, and no claim has ever been made by any taxing authority
in any other jurisdiction that Company or the Company Subsidiaries are or may be
subject to taxation by that jurisdiction.
(c) There are no liens or other encumbrances with respect to Taxes
upon any of the assets or properties of Company or the Company Subsidiaries,
other than with respect to Taxes not yet due and payable.
(d) No audit is currently pending with respect to any Tax Return of
Company or the Company Subsidiaries, nor is Company aware of any information
which has caused or should cause them to believe that an audit by any tax
authority may be forthcoming. No deficiency for any Taxes has been proposed in
writing against Company or the Company Subsidiaries, which deficiency has not
been paid in full. No issue relating to Company or the Company Subsidiaries or
involving any Tax for which Company or the Company Subsidiaries might be liable
has been resolved in favor of any taxing authority in any audit or examination
which, by application of the same principles, could reasonably be expected to
result in a deficiency for Taxes of Company or the Company Subsidiaries for any
subsequent period, and Company knows of no other basis for the assertion of such
a deficiency.
(e) There are no outstanding agreements, waivers or arrangements
extending the statutory period of limitation applicable to any claim for, or the
period for the collection or assessment of, Taxes due from or with respect to
Company or the Company Subsidiaries for any taxable period, no power of attorney
granted by or with respect to Company or the Company Subsidiaries relating to
Taxes is currently in force, and no extension of time for filing any Tax Return
required to be filed by or on behalf of Company or any Company Subsidiary is in
force. Company has delivered or made available to Parent a complete and correct
copy of a substantially final version of its 1999 federal income Tax Return.
(f) With respect to any period for which Tax Returns have not yet
been filed, or for which Taxes are not yet due or owing, Company has, in
accordance with generally accepted accounting principles, made due and
sufficient accruals for such Taxes in the Company's books and records.
(g) No consent to the application of Section 341(f)(2) of the Code
(or any predecessor provision) has been made or filed by or with respect to
Company or any Company Subsidiary or any of their assets or properties.
(h) Company and the Company Subsidiaries have not been and are not
currently in violation (or, with or without notice or lapse of time or both,
would be in violation) of any applicable law or regulation relating to the
payment or withholding of Taxes, and all withholding and payroll Tax
requirements required to be complied with by Company and the Company
Subsidiaries up to and including the date hereof have been satisfied.
(i) Company and the Company Subsidiaries are not and have never been
a party to or bound by, nor do they have or have they ever had any obligation
under, any Tax
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sharing agreement or similar contract or arrangement. Neither Company nor any
Company Subsidiary has any liability for the Taxes of any other person under
Treasury Regulation 1.1502-6 (or any similar provision of state, local or
foreign law), as a transferee or successor, by contract, or otherwise.
(j) There is no contract or agreement, plan or arrangement obligating
Company or the Company Subsidiaries to make any payment that would not be
deductible by reason of Section 162(m) or 280G of the Code. Neither Company nor
any Company Subsidiary has agreed to, or is required to, make any adjustments
under Section 481(a) of the Code by reason of a change in accounting method or
otherwise.
(k) Neither Company nor the Company Subsidiaries are, or were during
the applicable period specified in Section 897(c)(1)(A)(ii) of the Code, a
United States real property holding corporation within the meaning of Section
897(c)(2) of the Code.
2.16 EMPLOYEE BENEFIT PLANS.
(a) Within five (5) business days of the execution of this Agreement,
the Company will provide Parent with a complete list of all pension, savings,
profit sharing, retirement, deferred compensation, employment, welfare, fringe
benefit, insurance, short and long term disability, incentive, bonus, stock,
vacation pay, severance pay and similar plans, programs or arrangements other
than oral employment agreements that, individually or in the aggregate, could
not reasonably be expected to have a Company Material Adverse Effect (the
"Plans"), including without limitation all employee benefit plans as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") maintained by Company or the Company Subsidiaries or to which Company
or any of the Company Subsidiaries are parties or required to contribute.
(b) Company has delivered or made available to Parent (or will do so
within five business days of execution of this Agreement) current, accurate and
complete copies of (i) each Plan that has been reduced to writing and all
amendments thereto, (ii) a summary of the material terms of each Plan that has
not been reduced to writing, including all amendments thereto, (iii) the summary
plan description for each Plan subject to Title I of ERISA, and in the case of
each other Plan, any similar employee summary (including but not limited to any
employee handbook description), (iv) for each Plan intended to be qualified
under Section 401(a) of the Code, the most recent determination or opinion
letter issued by the Internal Revenue Service ("IRS"), (v) for each Plan with
respect to which a Form 5500 series annual report/return is required to be
filed, the most recently filed such annual report/return and annual
report/return for the two preceding years, together with all schedules and
exhibits, (vi) all insurance contracts, administrative services contracts, trust
agreements, investment management agreements or similar agreements maintained in
connections with any Plan, and (vii) for each Plan that is intended to be
qualified under Code Section 401(a), copies of compliance testing results
(nondiscrimination testing (401(a)(4), ADP, ACP, multiple use), 402(g), 415 and
top-heavy tests) for the 1999 plan year.
(c) There is no entity (other than Company or any Company Subsidiary)
that together with Company or any Company Subsidiary would be treated as a
single-employer within the meaning of Section 414(b), (c), (m) or (o) of the
Code or Section 4001(b) of ERISA.
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Neither Company nor any Company Subsidiary has ever maintained, contributed to
or incurred any liability under any "multiemployer plan" as defined in Section
4001(a)(3) of ERISA or a "multiple employer plan" as defined in Section 413(c)
of the Code or a defined benefit plan (within the meaning of Section 3(35) of
ERISA) or other plan subject to Section 302 of ERISA or a plan intended to be
qualified under Section 501(c)(9) of the Code.
(d) Each Plan maintained by Company or a Company Subsidiary which is
intended to be qualified under Section 401(a) of the Code ("Qualified Plans") is
so qualified, each Plan has been administered in all material respects in
accordance with the terms of such Plan and the provisions of any and all
statutes, orders or governmental rules or regulations, including without
limitation ERISA and the Code, and to the knowledge of Company, nothing has been
done or not done with respect to any Plan that could result in any liability on
the part of Company or any Company Subsidiary under Title I of ERISA or Chapter
43 of the Code, and none of the Plans is currently under examination by the IRS,
Department of Labor or other U.S. government agency or department, except in
each case for matters that, individually or in the aggregate, could not
reasonably be expected to have a Company Material Adverse Effect. All
contributions, premiums and other amounts due to or in connection with each Plan
under the terms of the Plan or applicable law have been timely made, and
provision has been made on the balance sheet included in the Company 10-Q for
such contributions, premiums and other amounts that were not yet due as of the
date of the balance sheet but were attributable to service before such date.
(e) Except for continuation of health coverage to the extent required
under Section 4980B of the Code or Section 601 et seq. of ERISA, other
applicable law or as otherwise set forth in this Agreement, and except for
health coverage for certain former employees of an acquired entity (which
coverage will end not later than December 31, 2000), there are no obligations
under any Plan providing welfare benefits after termination of employment.
(f) Except for individual employment agreements, each Plan can be
amended, modified or terminated without advanced notice to or consent by any
employee, former employee or beneficiary, except as required by law.
2.17 EMPLOYEE RELATIONS.
(a) Upon termination of the employment of any employees, none of
Company, the Company Subsidiaries nor Parent shall be liable, by reason of the
Merger or anything done in connection with the Merger, to any of such employees
for severance pay or any other similar payments (other than accrued salary,
vacation or sick pay in accordance with normal policies). True and complete
information as to the name, current job title and compensation for each of the
last three years of all current directors and executive officers of Company has
been made available previously to Parent.
(b) Company and each Company Subsidiary (i) is in compliance in all
material respects with all applicable foreign, federal, state and local laws,
rules and regulations respecting employment, employment practices, terms and
conditions of employment and wages and hours, in each case, with respect to
employees, (ii) has withheld all amounts required by law or by agreement to be
withheld from the wages, salaries and other payments to employees, (iii) is not
liable for any arrears of wages, salaries, commissions, bonuses or other direct
compensation
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for any services performed or amounts required to be reimbursed to any employees
or consultants or any taxes or any penalty for failure to comply with any of the
foregoing, and (iv) is not liable for any payment to any trust or other fund or
to any governmental entity, with respect to unemployment compensation benefits,
social security or other benefits or obligations for employees (other than
routine payments to be made in the ordinary course of business and consistent
with past practice), except in each case for matters that, individually or in
the aggregate, could not reasonably be expected to result in a Company Material
Adverse Effect.
(c) No work stoppage or labor strike against Company or any Company
Subsidiary is pending or, to the knowledge of Company, threatened. Neither
Company nor any Company Subsidiary is involved in or, to the knowledge of
Company, threatened with, any labor dispute, grievance, or litigation relating
to labor, safety or discrimination matters involving any employee, including
without limitation charges of unfair labor practices or discrimination
complaints, that, if adversely determined, could reasonably be expected to
result in material liability to Company. Neither Company nor any Company
Subsidiary has engaged in any unfair labor practices within the meaning of the
National Labor Relations Act that could reasonably be expected to result in
material liability to Company. Neither Company nor any Company Subsidiary is
presently, nor has it been in the past, a party to or bound by any collective
bargaining agreement or union contract with respect to employees other than as
set forth in SECTION 2.17 of the Company Disclosure Schedule and no collective
bargaining agreement is being negotiated by Company or any Company Subsidiary.
No union organizing campaign or activity with respect to non-union employees of
Company or any Company Subsidiary is ongoing, pending or, to the best knowledge
of Company, threatened.
2.18 ENVIRONMENTAL MATTERS.
(a) Neither Company nor any of the Company Subsidiaries has violated,
is in violation of, or has been notified that it is in violation of,
Environmental Law, and except in full compliance with Environmental Laws,
neither Company nor any of the Company Subsidiaries has generated, used,
handled, transported or stored any Hazardous Materials or shipped any Hazardous
Materials for treatment, storage or disposal at any other site or facility. To
the best of Company's knowledge, there has been no generation, use, handling,
storage or disposal of any Hazardous Materials in violation of any Environmental
Law at any site owned or operated by, or premises leased by, Company or any of
the Company Subsidiaries during the period of Company's or such Company
Subsidiary's ownership, operation or lease or, prior thereto, nor has there been
or is there threatened any Release of any Environmental Contaminants into, on,
at or from any such site or premises, including without limitation into the
ambient air, groundwater, surface water, soils or subsurface strata, during such
period or, to the best of Company's knowledge, prior thereto in violation of any
Environmental Law or which created or will create an obligation to report or
respond in any way to such Release. There is no underground storage tank or
other container at any site owned or operated by, or premises leased by Company
or any Company Subsidiary or, to the best of Company's knowledge, on any site
formerly owned or operated by, or premises formerly leased by, Company or any
Company Subsidiary.
(b) Neither Company nor any Company Subsidiary has received
notification in any form that, and Company has no knowledge that, any site
currently or formerly owned or operated by, or premises currently or formerly
leased by, Company or any Company Subsidiary is the subject of any federal,
state or local civil, criminal or administrative investigation
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evaluating whether, or alleging that, any action is necessary to respond to a
Release or a threatened Release of any Environmental Contaminant. No such site
or premises is listed, or to Company's knowledge, proposed for listing, on the
National Priorities List or the Comprehensive Environmental Response,
Compensation, and Liability Information System, both as provided under the
federal Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), or any comparable state or local governmental lists. Neither Company
nor any Company Subsidiary has received written notification of, and Company has
no knowledge of, any potential responsibility of Company or any Company
Subsidiary pursuant to the provisions of (i) CERCLA, (ii) any similar federal,
state, local or other Environmental Law, or (iii) any order issued pursuant to
the provisions of any such Environmental Law with respect to Environmental
Contaminants used, manufactured, generated, stored, or treated at, transported
from, or disposed of on, any site currently or formerly owned or operated by, or
premises currently or formerly leased by, Company or any Company Subsidiary.
(c) Company and the Company Subsidiaries have obtained all permits
required by Environmental Law necessary to enable them to conduct their
respective businesses and are in compliance in all material respects with the
permits.
(d) There is no environmental or health and safety matter that
reasonably could be expected to have a Company Material Adverse Effect. Company
previously has furnished or made available to Parent copies of any and all
environmental audits or risk assessments, site assessments, documentation
regarding off-site disposal of Hazardous Materials or Release of Environmental
Contaminant, spill control plans and all other material correspondence,
documents or communications with any governmental agency or other entity
regarding the foregoing.
(e) For purposes of this Agreement:
(i) "Environmental Laws" means any Federal, state, local or
foreign laws (including common law), regulations, codes, rules, orders,
ordinances, permits, requirements and final governmental determinations, in each
case as in effect on the date of this Agreement, pertaining to the environment,
pollution or protection of human health, safety or the environment, as adopted
or in effect in the jurisdictions in which the applicable site or premises are
located, including without limitation, the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 U.S.C. Section 9601 et seq.; the Emergency
Planning and Community Right-to-Know Act, 42 U.S.C. Section 11001 et seq.; the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.; the
Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq.; the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Section 136 et seq.; the
Toxic Substance Control Act, 15 U.S.C. Section 2601 et seq.; the Oil Pollution
Act of 1990, 33 U.S.C. Section 1001 et seq.; the Hazardous Materials
Transportation Act, as amended, 49 U.S.C. Section 1801 et seq.; the Atomic
Energy Act, as amended 42 U.S.C. Section 2011 et seq.; the Occupational Safety
and Health Act, as amended, 29 U.S.C. Section 651 et seq.; the Federal Food,
Drug and Cosmetic Act, as amended 21 U.S.C. Section 301 et seq. (insofar as it
regulates employee exposure to Hazardous Substances), and any state or local
statute of similar effect; and including without limitation any laws relating to
protection of safety, health or the environment which regulate the use of
biological agents or substances including medical or infectious wastes;
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(ii) "Environmental Contaminant" means Hazardous Materials, or
any other pollutants, contaminants, toxic or constituent substances or waste
radioactive substances, materials or special wastes, polychlorinated bi-phenals,
or any other substance or material, in each case regulated by applicable
Environmental Laws;
(iii) "Hazardous Materials" means (A) any chemicals, materials or
substances defined as or included in the definition of "hazardous substances,"
"hazardous wastes," "hazardous materials," "extremely hazardous wastes,"
"restricted hazardous wastes," "toxic substances," "toxic pollutants,"
"hazardous air pollutants," "contaminants," "toxic chemicals," "toxins,"
"hazardous chemicals," "extremely hazardous substances," "pesticides," "oil" or
related materials as defined in any applicable Environmental Law, or (B) any
petroleum or petroleum products, oil, natural or synthetic gas, radioactive
materials, asbestos-containing materials, urea formaldehyde foam insulation,
radon, and any other substance defined or designated as hazardous, toxic or
harmful to human health, safety or the environment under any Environmental Law;
and
(iv) "Release" has the meaning specified in CERCLA.
2.19 NO BREACH. Except for (a) filings with the SEC under the Exchange Act,
(b) filing the Certificate of Merger with the Secretary of State of Delaware,
(c) the filing of a Notification and Report Form under the Hart-Scott-Rodino
Antitrust Improvements Act, as amended (the "HSR Act") and (d) matters listed in
SECTION 2.19 of the Company Disclosure Schedule, the execution, delivery and
performance of this Agreement by Company and the consummation by Company of the
transactions contemplated hereby will not (i) violate any provision of the
Certificate of Incorporation or By-Laws of Company, (ii) violate, conflict with
or result in the breach of any of the terms or conditions of, result in
modification of, or otherwise give any other contracting party the right to
terminate, accelerate obligations under or receive payment under or constitute
(or with notice or lapse of time or both constitute) a default under, any
instrument, contract or other agreement to which Company or any Company
Subsidiary is a party or to which any of them or any of their assets or
properties is bound or subject, (iii) violate any law, ordinance or regulation
or any order, judgment, injunction, decree or other requirement of any court,
arbitrator or governmental or regulatory body applicable to Company or the
Company Subsidiaries or by which any of Company's or the Company Subsidiaries'
assets or properties is bound, (iv) violate any Permit, (v) require any filing
with, notice to, or permit, consent or approval of, any governmental or
regulatory body, (vi) result in the creation of any lien or other encumbrance on
the assets or properties of Company or a Company Subsidiary, or (vii) cause any
of the assets owned by the Company or any Company Subsidiary to be reassessed or
revalued by any taxing authority or other governmental entity, excluding from
the foregoing clauses (ii), (iii), (iv), (v), (vi) and (vii) violations,
breaches and defaults which, and filings, notices, permits, consents and
approvals the absence of which, in the aggregate, could not reasonably be
expected to have a Company Material Adverse Effect and will not materially
interfere with the ability of Company to consummate the transactions
contemplated hereby. Except as set forth in SECTION 2.19 of the Company
Disclosure Schedule, neither Company nor any Company Subsidiary is or will be
required to give any notice to or obtain any consent or waiver from any
individual or entity in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby other than
consents or
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waivers which, individually or in the aggregate, could not
reasonably be expected to have a Company Material Adverse Effect.
2.20 BOARD APPROVALS.
(a) The Board of Directors, as of the date of this Agreement, has
determined (i) that the Merger is fair to, and in the best interests of, Company
and its stockholders, (ii) to propose this Agreement for adoption by the
Company's stockholders and to declare the advisability of this Agreement, and
(iii) to recommend that the stockholders of Company adopt this Agreement.
(b) Company has taken all action necessary such that no restrictions
contained in any "fair price," "control share acquisition," "business
combination" or similar statute (including Section 203 of the DGCL) will apply
to the execution, delivery or performance of this Agreement.
(c) The Board of Directors has approved an amendment (the "Rights
Amendment") to the Shareholder Rights Agreement dated as of March 1, 1996
between Company and American Stock Transfer & Trust Company (the "Company Rights
Plan") so as to provide that (i) (A) Parent will not become an "Acquiring
Person" and (B) no "Stock Acquisition Date" or "Distribution Date" (as such
terms are defined in the Company Rights Plan) will occur, in each case, as a
result of the approval, execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and (ii) the Company Rights
Plan will terminate immediately prior to the Effective Time. Promptly following
the execution and delivery of this Agreement, Company shall take all action
necessary to make the Rights Amendment effective.
2.21 FINANCIAL ADVISOR.
(a) The Board of Directors has received the oral opinion of SG Cowen
Securities Corporation to the effect that, as of the date of this Agreement, the
Merger Consideration is fair, from a financial point of view, to the holders of
Company Common Stock other than Parent and its affiliates. The Company will
forward a copy of the written version of such opinion promptly following
receipt.
(b) Other than SG Cowen Securities Corporation, no broker, finder,
agent or similar intermediary has acted on behalf of Company in connection with
this Agreement or the transactions contemplated hereby, and there are no
brokerage commissions, finders' fees or similar fees or commissions payable in
connection herewith based on any agreement, arrangement or understanding with
Company, or any action taken by Company. Company previously has provided Parent
with a copy of SG Cowen Securities Corporation's engagement letter.
2.22 PROXY STATEMENT AND REGISTRATION STATEMENT. None of the information
supplied or to be supplied by Company for inclusion or incorporation by
reference in the registration statement on Form S-4 to be filed with the SEC in
connection with the issuance of shares of Parent Common Stock in the Merger (the
"Registration Statement") will, at the time the Registration Statement is filed
with the SEC, at any time it is amended or supplemented or at the
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time it becomes effective under the Securities Act, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading. None of the
information supplied or to be supplied by Company for inclusion or incorporation
by reference in the proxy statement/prospectus included in the Registration
Statement (the "Proxy Statement/Prospectus"), on the date it is first mailed to
holders of Company Common Stock or at the time of the Company Stockholders
Meeting (as defined in Section 4.6(b)), will 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. The Proxy
Statement/Prospectus will comply as to form in all material respects with the
requirements of the Exchange Act and the Securities Act and the rules and
regulations of the SEC thereunder.
SECTION 3 - REPRESENTATIONS AND WARRANTIES OF PARENT
Except as set forth on the disclosure schedule delivered by Parent to
Company on the date hereof (the "Parent Disclosure Schedule"), the section
numbers of which are numbered to correspond to the section numbers of this
Agreement to which they refer, Parent hereby makes the following representations
and warranties to Company:
3.1 ORGANIZATION AND QUALIFICATION. Parent is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and has corporate power and authority to own,
lease and operate its assets and to carry on its business as now being and as
heretofore conducted. Parent is qualified to transact business as a foreign
corporation in all jurisdictions in which such qualification or authorization is
required by law, except for jurisdictions in which the failure to be so
qualified or authorized could not reasonably be expected to have a Parent
Material Adverse Effect. "Parent Material Adverse Effect" shall mean a material
adverse effect on the assets, properties, business, results of operations or
financial condition of Parent and its subsidiaries, taken as a whole (a "Parent
Material Adverse Effect"); provided, however, a "Parent Material Adverse Effect"
shall not include (i) a decline in the price of Parent Common Stock as a result
of the announcement of this Agreement and the transactions contemplated hereby
or (ii) any adverse effect primarily related to (A) the economy or securities
markets of the United States or any other region in general or (B) conditions
affecting the biotechnology and biopharmaceutical industries general, in the
case of (A) or (B) of this clause (ii), without a disproportionate impact on
Parent and its subsidiaries.
3.2 AUTHORITY TO EXECUTE AND PERFORM AGREEMENT. Parent has the corporate
power and authority to enter into, execute and deliver this Agreement and to
perform fully its obligations hereunder and the transactions contemplated
hereby. The Parent's Board of Directors has approved this Agreement. No approval
by Parent's stockholders is required to consummate the transactions contemplated
hereby. This Agreement has been duly executed and delivered by Parent and
constitutes its valid and binding obligations, enforceable against it in
accordance with its terms.
3.3 CAPITALIZATION. The authorized capital stock of Parent consists of
390,000,000 shares of common stock ("Genzyme Common Stock") and 10,000,000
shares of preferred stock, $0.01 par value per share ("Genzyme Preferred
Stock"). Of the Genzyme Common Stock, as of the date of this Agreement,
200,000,000 shares have been designated Genzyme General Division
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Common Stock ("GGD Common Stock"), 40,000,000 shares have been designated
Genzyme Tissue Repair Division Common Stock ("GTR Common Stock"), 40,000,000
shares have been designated Molecular Oncology Division Common Stock, $0.01 par
value per share ("GMO Common Stock"), 60,000,000 shares have been designated
Genzyme Surgical Products Division Common Stock ("GSP Common Stock") and
50,000,000 shares have been undesignated as to series. As of July 31, 2000,
86,328,455 shares of GGD Common Stock were issued and outstanding, 28,785,846
shares of GTR Common Stock were issued and outstanding, 15,281,405 shares of GMO
Common Stock were issued and outstanding, and 14,957,403 shares of GSP Common
Stock were issued and outstanding. As of the date of this Agreement, no shares
of Genzyme's Preferred Stock are outstanding. Of the Genzyme Preferred Stock, as
of the date of this Agreement, 2,000,000, 400,000, 400,000 and 600,000 shares
have been designated as Series A Junior Participating Preferred Stock, Series B
Junior Participating Preferred Stock, Series C Junior Participating Preferred
Stock and Series D Junior Participating Preferred Stock, respectively, and
reserved for issuance under Genzyme's Rights Plan. All issued and outstanding
shares of GGD Common Stock, GTR Common Stock, GMO Common Stock and GSP Common
Stock are validly issued, fully paid, non-assessable and free of any preemptive
rights.
3.4 SEC REPORTS. Parent previously has made available to Company (i) its
Annual Report on Form 10-K for the year ended December 31, 1999 ("Parent 10-K"),
(ii) all proxy statements relating to Parent's meetings of stockholders held
since January 1, 2000 and (iii) all other documents filed by Parent with the SEC
under the Exchange Act since January 1, 1999 (together with the documents filed
by Parent with the SEC under the Exchange Act prior to the Effective Time, the
"Parent SEC Reports"). As of their respective dates, such documents complied,
and all documents filed by Parent with the SEC under the Exchange Act between
the date of this Agreement and the Closing Date will comply, in all material
respects with applicable SEC requirements and did not, and in the case of
documents filed on or after the date hereof will not, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Since August 31, 1999,
Parent has timely filed, and between the date of this Agreement and the Closing
Date will timely file, with the SEC all periodic reports required to be filed by
it under the Exchange Act.
3.5 FINANCIAL STATEMENTS. The consolidated financial statements contained
in the Parent's 10-K and Parent's Quarterly Report on Form 10-Q for the quarter
ending June 30, 2000 have been prepared from, and are in accordance with, the
books and records of Parent and fairly present the consolidated financial
condition, results of operations and cash flows of Parent and its consolidated
subsidiaries as of and for the periods presented therein, all in accordance with
generally accepted accounting principles applied on a consistent basis, except
as otherwise indicated therein and subject, in the case of the unaudited
financial statements, to normal year-end and audit adjustments, which in the
aggregate are not material, and the absence of footnote disclosures.
3.6 ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in the Parent
SEC Reports, as at December 31, 1999, Parent had no material liabilities of any
nature, whether accrued, absolute, contingent or otherwise (including, without
limitation, liabilities as guarantor or otherwise with respect to obligations of
others or liabilities for taxes due or then accrued or to
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become due), required to be reflected or disclosed in the balance sheet dated
December 31, 1999 (or the notes thereto) in the Parent 10-K that were not
adequately reflected or reserved against on such balance sheet. Except as
disclosed in the Parent SEC Reports, Parent has no such liabilities, other than
liabilities (i) adequately reflected or reserved against on such balance sheet,
(ii) reflected in Parent's unaudited consolidated balance sheet (or the notes
thereto) dated June 30, 2000, (iii) incurred since June 30, 2000 in the ordinary
course of business or (iv) that could not, in the aggregate, reasonably be
expected to have a Parent Material Adverse Effect.
3.7 ABSENCE OF ADVERSE CHANGES. Since June 30, 2000, except as disclosed
in Parent SEC Reports, there has not been any event, change or circumstance
which has had a Parent Material Adverse Effect.
3.8 ACTIONS AND PROCEEDINGS. Except as set forth in the Parent SEC
Reports, there are no actions, suits or claims or legal, administrative or
arbitration proceedings pending or, to the best knowledge of Parent, threatened
against Parent that individually or in the aggregate could reasonably be
expected to have a Parent Material Adverse Effect or materially interfere with
Parent's ability to consummate the transactions contemplated hereby. To the best
knowledge of Parent, except as disclosed in the Parent SEC Reports there is no
fact, event or circumstance now in existence that reasonably could be expected
to give rise to any suit, action, claim, investigation or proceeding that,
individually or in the aggregate, could reasonably be expected to have a Parent
Material Adverse Effect or materially interfere with Parent's ability to
consummate the transactions contemplated hereby.
3.9 INTELLECTUAL PROPERTY. Parent owns or is licensed to use, or otherwise
has the right to use, all patents, trademarks, servicemarks, tradenames, trade
secrets, franchises and copyrights, and all applications for any of the
foregoing, and all technology, know-how and processes necessary for the conduct
of Parent's business except (a) to the extent failure to have such ownership or
licenses could not reasonably be expected to have a Parent Material Adverse
Effect or (b) as disclosed in the Parent SEC Reports.
3.10 NO BREACH. Except for (a) filings under the Securities Act, (b)
filings under the Exchange Act, (c) filings with the Secretary of State of
Delaware and the Secretary of the Commonwealth of Massachusetts, (d) the filing
of a Notification and Report Form under the HSR Act, (e) consents and waivers
under Parent's credit agreements and debt instruments and (f) the matters listed
in SECTION 3.10 of the Parent Disclosure Schedule, the delivery and performance
of this Agreement by Parent and consummation by it of the transactions
contemplated hereby will not (i) violate any provision of the charter or by-laws
of Parent, (ii) violate, conflict with or result in the breach of any of the
terms or conditions of, result in modification of, or otherwise give any other
contracting party the right to terminate or accelerate obligations under, or
constitute (or with notice or lapse of time or both constitute) a default under,
any material instrument, contract or other agreement to which Parent is party or
to which it or any of its assets or properties is bound or subject, (iii)
violate any law, ordinance or regulation or any order, judgment, injunction,
decree or requirement of any court, arbitrator or governmental or regulatory
body applicable to Parent or by which any of its assets or properties is bound,
(iv) require any filing with, notice to, or permit, consent or approval of, any
governmental or regulatory body or (v) result in the creation of any lien or
other encumbrance on the assets or properties of Parent, excluding from the
foregoing clauses (ii), (iii), (iv) and (v) violations, breaches and defaults
which, and filings, notices, permits, consents and approvals the
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absence of which, in the aggregate, could not have a Parent Material Adverse
Effect and will not materially interfere with Parent's ability to consummate the
transactions contemplated hereby.
3.11 PROXY STATEMENT AND REGISTRATION STATEMENT. None of the information
supplied or to be supplied by Parent for inclusion in the Registration Statement
will, at the time the Registration Statement is filed with the SEC, at any time
it is amended or supplemented or at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading. None of the information supplied or to be
supplied by Parent for inclusion or incorporation by reference in the Proxy
Statement/Prospectus will, at the date it is first mailed to holders of Company
Common Stock or at the time of the Company Stockholders Meeting, 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.
3.12 FINANCING. Parent has sufficient funds on hand or available to it
under bank lines of credit to satisfy all of Parent's and Merger Sub's
obligations under this Agreement, including, without limitation, the obligation
to pay the cash portion of the Merger Consideration and to pay all fees and
expenses it incurs in connection with the Merger.
3.13 MERGER SUB
(a) Merger Sub will, when it is incorporated, be duly organized,
validly existing and in good standing as a Massachusetts corporation.
(b) All of the capital stock of Merger Sub prior to and at the
Effective Time will be duly authorized, validly issued, fully paid and
nonassessable and owned of record and beneficially by Parent.
(c) Merger Sub shall be formed solely for the purpose of engaging in
the transactions contemplated by this Agreement and, prior to the Effective
Time, will not have engaged in any other business activities.
(d) Merger Sub will have the corporate power and authority to enter
into the Agreement of Joinder and to consummate the transactions contemplated
hereby. The execution and delivery of the Agreement of Joinder and the
consummation of the transactions contemplated hereby and thereby will be duly
authorized by all necessary corporate action on the part of Merger Sub.
(e) Except for (i) filings with the Secretary of the Commonwealth of
Massachusetts and filings with the Secretary of the State of Delaware, (ii) the
filing of a Notification and Report form under the HSR Act, (iii) consents and
waivers under Parent's credit agreements and debt instruments and (iv) the
matters listed in SCHEDULE 3.10 of the Parent Disclosure Schedule, the
performance of this Agreement and the Agreement of Joinder by Merger Sub and
consummation by it of the transactions contemplated hereby and thereby will not
(A) violate any provision of the charter or by-laws of Merger Sub, (B) violate,
conflict with or result in the breach of any of the terms or conditions of,
result in modification of the effect of, or otherwise give any other contracting
party the right to terminate or accelerate obligations
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under, or constitute (or with notice or lapse of time or both constitute) a
default under, any material instrument, contract or other agreement to which
Merger Sub is a party or to which it or its assets or properties is bound or
subject, (C) violate any law, ordinance or regulation or any order, judgment,
injunction, decree or requirement of any court, arbitrator or governmental or
regulatory body applicable to Merger Sub or by which any of its assets or
properties is bound, (D) require any filing with, notice to, or permit, consent
or approval of, any governmental or regulatory body or (E) result in the
creation of any lien or other encumbrance on its assets or properties, excluding
from the foregoing violations, breaches and defaults which, and filings,
notices, permits, consents and approvals the absence of which, in the aggregate,
could not reasonably be expected to have a material adverse effect on Merger Sub
or materially interfere with Merger Sub's ability to consummate the transactions
contemplated hereby and the Agreement of Joinder.
(f) Merger Sub will comply with Section 252(d) of the DGCL.
SECTION 4 - COVENANTS AND AGREEMENTS
4.1 CONDUCT OF BUSINESS. Except with the prior written consent of Parent
and except as otherwise contemplated herein or referred to in SECTION 4.1 of the
Company Disclosure Schedule, during the period from the date hereof to the
Closing Date, Company shall observe the following covenants:
(a) AFFIRMATIVE COVENANTS PENDING CLOSING. Company shall:
(i) PRESERVATION OF PERSONNEL. Use its reasonable
commercial efforts to preserve intact and keep available the services of
present employees of Company and the Company Subsidiaries;
(ii) INSURANCE. Use reasonable commercial efforts to keep
in effect casualty, public liability, worker's compensation and other
insurance policies in coverage amounts substantially similar to those in
effect at the date of this Agreement;
(iii) PRESERVATION OF THE BUSINESS; MAINTENANCE OF
PROPERTIES, CONTRACTS. Use reasonable commercial efforts to preserve the
business of Company, advertise, promote and market Company's business
activities in accordance with past practices over the last twelve months,
keep Company's properties substantially intact, preserve its goodwill and
business, maintain all physical properties in such operating condition as
will permit the conduct of Company's business on a basis consistent with past
practice, and perform and comply in all material respects with the terms of
the contracts referred to in Section 2.11.
(iv) INTELLECTUAL PROPERTY RIGHTS. Use its reasonable best
efforts to preserve and protect the Proprietary Rights;
(v) ORDINARY COURSE OF BUSINESS. Operate Company's
business in the ordinary course consistent with past practices;
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(vi) COMPANY OPTIONS AND WARRANTS. Take all reasonable
actions necessary with respect to Company Options and Company Warrants to
effectuate the terms of this Agreement, provided, however, that Parent shall
have the right to approve any agreements to modify material terms of the
underlying instruments; and
(vii) FDA MATTERS. Notify and consult with Parent promptly
(A) after receipt of any material communication from the FDA and before
giving any material submission to the FDA, and (B) prior to making any
material change to a study protocol, the addition of new trials, or a
material change to the development timeline for any of its product candidates
or programs.
(b) NEGATIVE COVENANTS PENDING CLOSING. Company shall not:
(i) DISPOSITION OF ASSETS. Sell or transfer, or mortgage,
pledge, lease or otherwise encumber any of its assets, including its
Proprietary Rights, other than sales or transfers in the ordinary course of
business and in amounts not exceeding, in the aggregate, $250,000;
(ii) LIABILITIES. Incur any indebtedness for borrowed money
in excess of $500,000, or incur any obligation or liability or enter into any
contract or commitment involving potential payments to or by Company or any
Company Subsidiary other than in the ordinary course of business consistent
with past practice in an amount, in any one case, not exceeding $500,000;
(iii) COMPENSATION. Change the compensation payable to any
officer, director, employee, agent or consultant; or enter into any
employment, severance or other agreement with any officer, director,
employee, agent or consultant of Company or a Company Subsidiary, or adopt,
or increase the benefits under, any employee benefit plan, except, in each
case, as required by law, in accordance with existing agreements or in the
ordinary course of business consistent with past practice;
(iv) CAPITAL STOCK. Make any change in the number of shares
of its capital stock authorized, issued or outstanding or grant or accelerate
the exercisability of, any option, warrant or other right to purchase, or
convert any obligation into, shares of its capital stock, or declare or pay
any dividend or other distribution with respect to any shares of its capital
stock, or sell or transfer any shares of its capital stock, or redeem or
otherwise repurchase any shares of its capital stock, except upon (A) the
exercise of convertible securities outstanding on the date of this Agreement
and disclosed herein or granted after the date of this Agreement in the
ordinary course of business consistent with past practice and (B) the
issuance of 291,073 shares to AW;
(v) CHARTER AND BY-LAWS. Cause, permit or propose any
amendments to the Certificate of Incorporation or By-laws of Company;
(vi) ACQUISITIONS. Make, or permit to be made, any material
acquisition of property or assets outside the ordinary course of business;
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(vii) CAPITAL EXPENDITURES. Authorize any single capital
expenditure in excess of $250,000 or capital expenditures which in the
aggregate exceed $500,000;
(viii) ACCOUNTING POLICIES. Except as may be required as a
result of a change in law or in generally accepted accounting principles,
change any of the accounting practices or principles used by it or restate,
or become obligated to restate, the financial statements included in the
Company 10-K or Company 10-Q;
(ix) TAX TREATMENT. Take, or permit any of the Company
Subsidiaries to take, any action that would prevent the Merger from
qualifying as a reorganization within the meaning of Section 368(a) of the
Code.
(x) TAXES. Make any Tax election or settle or compromise
any material federal, state, local or foreign Tax liability, change annual
tax accounting period, change any method of Tax accounting, enter into any
closing agreement relating to any Tax, surrender any right to claim a Tax
refund, or consent to any extension or waiver of the limitations period
applicable to any Tax claim or assessment;
(xi) LEGAL. Settle or compromise any pending or threatened
suit, action or claim which is material to the Company or which relates to
the transactions contemplated hereby;
(xii) EXTRAORDINARY TRANSACTIONS. Adopt a plan of complete
or partial liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of Company or any of the Company
Subsidiaries (other than the Merger);
(xiii) PAYMENT OF INDEBTEDNESS. Pay, discharge or satisfy any
material claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge or
satisfaction, in the ordinary course of business and consistent with past
practice, of liabilities reflected or reserved against in the balance sheet
included in the Company 10-Q or incurred in the ordinary course of business;
(xiv) WARN ACT. Effectuate a "plant closing" or "mass
layoff," as those terms are defined in the Worker Adjustment and Retraining
Notification Act of 1988;
(xv) RIGHTS PLAN. Amend, modify or waive any provisions of
the Company Rights Plan, or take any action to redeem the Rights or render
the Rights inapplicable to any transaction other than the Merger;
(xvi) NEW AGREEMENTS/AMENDMENTS. Enter into or modify, or
permit a Company Subsidiary to enter into or modify, any material license,
development, research or collaboration agreement with any other person or
entity;
(xvii) CONFIDENTIALITY AGREEMENTS. Modify, amend or
terminate, or waive, release or assign any material rights or claims with
respect to any confidentiality agreement to which Company is a party;
(xviii) OBLIGATIONS. Obligate itself to do any of the foregoing;
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(c) CONTROL OF COMPANY'S BUSINESS. Nothing contained in this
Agreement shall give Parent, directly or indirectly, the right to control or
direct Company's operations prior to the Effective Time. Prior to the Effective
Time, Company shall exercise, consistent with the terms and conditions of this
Agreement, complete control and supervision over its operations.
4.2 CORPORATE EXAMINATIONS AND INVESTIGATIONS. Prior to the Effective
Time, Parent shall be entitled, through its employees and representatives, to
have such access to the assets, properties, business and operations of Company,
as is reasonably necessary or appropriate in connection with Parent's
investigation of Company with respect to the transactions contemplated hereby.
Any such investigation and examination shall be conducted at reasonable times
during business hours upon reasonable advance notice and under reasonable
circumstances so as to minimize any disruption to or impairment of Company's
business and Company shall cooperate fully therein. No investigation by Parent
shall diminish or obviate any of the representations, warranties, covenants or
agreements of Company contained in this Agreement. In order that Parent may have
full opportunity to make such investigation, Company shall furnish the
representatives of Parent during such period with all such information and
copies of such documents concerning the affairs of Company as such
representatives may reasonably request and cause its officers, employees,
consultants, agents, accountants and attorneys to cooperate fully with such
representatives in connection with such investigation. The information and
documents so provided shall be subject to the terms of the Confidentiality
Agreement (as defined in Section 4.10).
4.3 EXPENSES. Company and Parent shall bear their respective expenses
incurred in connection with the preparation, execution and performance of this
Agreement and the transactions contemplated hereby, including without
limitation, all fees and expenses of agents, representatives, counsel and
accountants.
4.4 AUTHORIZATION FROM OTHERS. Prior to the Closing Date, the parties
shall use reasonable commercial efforts to obtain all authorizations, consents
and Permits of others, necessary or desirable to permit the consummation of the
Merger on the terms contemplated by this Agreement.
4.5 FURTHER ASSURANCES. Each of the parties shall execute such documents,
further instruments of transfer and assignment and other papers and take such
further actions as may be reasonably required or desirable to carry out the
provisions hereof and the transactions contemplated hereby. Each party shall use
its respective reasonable commercial efforts to take other such actions to
ensure that, to the extent within its control or capable of influence by it, the
transactions contemplated by this Agreement shall be fully carried out in a
timely fashion, including preparing and filing any documents required to be
prepared and filed under the Exchange Act. Nothing in this Agreement shall
require Parent or Merger Sub to sell, hold separate, license or otherwise
dispose of or conduct their business in a specified manner, or agree to sell,
hold separate, license or otherwise dispose of or conduct their business in a
specified manner, or permit the sale, holding separate, licensing or other
disposition of, any assets of Parent or Merger Sub, whether as a condition to
obtaining any approval from a governmental entity or any other person or for any
other reason.
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4.6 PREPARATION OF DISCLOSURE DOCUMENTS
(a) As soon as practicable following the date of this Agreement,
Company and Parent shall prepare the Proxy Statement/Prospectus. Company shall,
in cooperation with Parent, file the Proxy Statement/Prospectus with the SEC as
its preliminary proxy statement and Parent shall, in cooperation with Company,
prepare and file with the SEC the Registration Statement, in which the Proxy
Statement/Prospectus will be included. Each of Company and Parent shall use
reasonable commercial efforts to have the Registration Statement declared
effective under the Securities Act as promptly as practicable after such filing
and to keep the Registration Statement effective as long as is necessary to
consummate the Merger. Company shall mail the Proxy Statement/Prospectus to its
stockholders as promptly as practicable after the Registration Statement is
declared effective under the Securities Act and, if necessary, after the Proxy
Statement/Prospectus shall have been so mailed, promptly circulate supplemental
or amended proxy material, and, if required in connection therewith, resolicit
proxies.
(b) (i) Company shall, as soon as practicable following the date the
Registration Statement is declared effective, duly call, give notice of, convene
and hold a meeting of its stockholders (the "Company Stockholders Meeting") for
the purpose of obtaining the required stockholder votes with respect to this
Agreement, (ii) the Board of Directors of the Company, unless otherwise required
pursuant to the applicable fiduciary duties of the Board of Directors of Company
to the stockholders of Company (as determined in good faith by the Board of
Directors of the Company after consulting with outside counsel), shall give its
unqualified recommendation that its stockholders adopt this Agreement and (iii)
Company shall take all lawful action to solicit such adoption. No withdrawal,
modification, change or qualification in the recommendation of the Board of
Directors of the Company (or any committee of the Board of Directors of the
Company) shall change the approval of the Board of Directors of the Company for
purposes of causing any state takeover statute or other state law to be
inapplicable to the transactions contemplated hereby, or change the obligation
of Company to present the Merger Agreement for adoption at the Company
Stockholders Meeting. Company agrees to give Parent written notice at least 48
hours prior to publicly indicating any withdrawal, modification, change or
qualification in the recommendation of the Board of Directors of the Company;
provided, however, that no such advance notice shall be required prior to such a
public indication within 10 days of the date scheduled for the Company
Stockholders Meeting in the Proxy Statement/Prospectus.
(c) Except as required by law, no amendment or supplement to the
Proxy Statement/Prospectus or the Registration Statement shall be made by Parent
or Company without the approval of the other party (which shall not be
unreasonably withheld or delayed). Each party shall advise the other party,
promptly after it receives notice thereof, of the time when the Registration
Statement has become effective or any supplement or amendment has been filed, of
the issuance of any stop order by the SEC, or of any request by the SEC for
amendment of the Proxy Statement/Prospectus or the Registration Statement or
comments thereon and responses thereto or requests by the SEC for additional
information.
(d) Company shall use reasonable efforts to cause to be delivered to
Parent a letter from Company's independent public accountants, dated the date on
which the Registration Statement shall become effective, addressed to Company
and Parent, in form and substance reasonably satisfactory to Parent and
customary in scope and substance for comfort letters
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delivered by independent public accountants in connection with registration
statements similar to the Registration Statement.
4.7 PUBLIC ANNOUNCEMENTS. Company shall consult with Parent, and Parent
shall consult with the Company, and each will get the approval of the other
(which will not be unreasonably withheld or delayed), before issuing any press
release or otherwise making any public statement with respect to the Merger or
this Agreement and shall not issue any such press release or make any such
public statement prior to such consultation and approval, except as may be
required by law. Notwithstanding the foregoing, without prior consultation, each
party (a) may communicate with financial analysts and media representatives in a
manner consistent with its past practice and (b) may disseminate material
substantially similar to material included in a press release or other document
previously approved for external distribution by the other party. Each party
agrees to promptly make available to the other party copies of any written
communications made without prior consultation.
4.8 AFFILIATE LETTERS. Prior to the Closing Date, Company shall identify
to Parent all persons who, at the time of the Company Stockholders Meeting,
Company believes may be "affiliates" of Company within the meaning of Rule 145
under the Securities Act. Company shall use reasonable commercial efforts to
provide Parent with such information as Parent shall reasonably request for
purposes of making its own determination of persons who may be deemed to be
affiliates of Company. Company shall use reasonable commercial efforts to
deliver to Parent prior to the Closing Date a letter from each of such
affiliates identified by Company and Parent in substantially the form attached
hereto as EXHIBIT B (the "Affiliate Letters").
4.9 NASDAQ LISTINGS. Prior to the Closing Date, Parent shall timely file
with Nasdaq a Notification for Listing of Additional Shares covering the shares
of Parent Common Stock Parent reasonably expects, at the time of such filing, to
be issued in the Merger. Prior to the Closing Date, Company shall take such
actions as are necessary so that trading of Company Common Stock on the Nasdaq
National Market ceases immediately prior to the Effective Time.
4.10 NO SOLICITATION. Company shall not, and shall cause each Company
Subsidiary and each director, officer, employee, agent or other representative
(including each financial advisor and attorney) of Company and each Company
Subsidiary not to, (a) solicit, initiate, facilitate, assist or encourage action
by, or discussions with, any person, other than Parent, relating to the possible
acquisition of Company or any Company Subsidiary or of all or a material portion
of the assets or capital stock of Company or any Company Subsidiary or any
merger, reorganization, consolidation, business combination, share exchange,
tender offer, recapitalization, dissolution, liquidation or similar transaction
involving Company or any Company Subsidiary (an "Alternative Transaction"), (b)
participate in any negotiations regarding, or furnish information with respect
to, any effort or attempt by any person to do or to seek any Alternative
Transaction or (c) grant any waiver or release under any standstill or similar
agreement. Notwithstanding the foregoing, Company and the Board of Directors of
Company shall be permitted (i) to comply with Rule 14e-2(a) under the Exchange
Act with regard to an Alternative Transaction (to the extent applicable) and
(ii) prior to the date on which the stockholders of Company adopt the Merger
Agreement, to engage in discussions or negotiations with, or provide information
to, a person who makes an unsolicited BONA FIDE written proposal for an
Alternative Transaction if (and only if) (A) Company is not in breach of its
obligations under this Section 4.10, (B) the Board of Directors of the Company
concludes in good faith (after
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consultation with its financial advisor) that the proposal is reasonably likely
to lead to an Alternative Transaction more favorable for Company's stockholders
than the Merger (including adjustment to the terms and conditions proposed by
Parent in response to the proposal for the Alternative Transaction), (C) the
Board of Directors of the Company concludes in good faith (after consultation
with its outside legal counsel, who may be Company's regularly engaged legal
counsel) that engaging in such negotiations or discussions or providing such
information is required by the directors' fiduciary duties under Delaware law
and (D) prior to providing any information or data, the recipient delivers to
Company an executed confidentiality agreement with terms substantially similar
to those contained in that certain confidentiality agreement (the
"Confidentiality Agreement") between Parent and Company related to a potential
business combination transaction. Company shall notify Parent promptly (and, in
any case, within 24 hours) of any inquiries, proposals or offers received by,
any information requested from, or any discussions or negotiations sought to be
initiated or continued with, it, any Company Subsidiary or any of their
directors, officers, employees, agents or other representatives concerning an
Alternative Transaction, indicating, in connection with such notice, the names
of the parties and the material terms and conditions of any proposals or offers
and, in the case of written materials, providing copies of such materials unless
such written materials constitute confidential information of such other party
under an effective confidentiality agreement. Company agrees that it will keep
Parent informed, on a reasonably prompt basis (and, in any case, within 36 hours
of any significant development), of the status and terms of any such proposals
or offers and the status of any such discussions or negotiations. Company agrees
that it will cease and cause to be terminated any existing activities,
discussions or negotiations with respect to any potential Alternative
Transaction or similar transaction or arrangement and request the return or
destruction of all confidential information regarding the Company previously
provided in connection with such activities, discussions or negotiations.
Company agrees that it will take the necessary steps to promptly inform the
individuals or entities referred to in the first sentence of this Section 4.10
of the obligations undertaken in this Section 4.10.
4.11 REGULATORY FILINGS. As soon as is reasonably practicable, Company and
Parent each shall file with the United States Federal Trade Commission (the
"FTC") and the Antitrust Division of the United States Department of Justice
("DOJ") any Notification and Report Forms relating to the Merger required by the
HSR Act, as well as comparable pre-merger notification forms required by the
merger notification and control laws and regulations of any other applicable
jurisdiction, as agreed to by the parties. Company and Parent each shall
promptly (a) supply the other with any information which may be reasonably
required in order to make such filings and (b) supply any additional information
which may be requested by the FTC, the DOJ or the competition or merger control
authorities of any other jurisdiction and which the parties reasonably deem
appropriate.
4.12 NOTIFICATION OF CERTAIN MATTERS. Between the date hereof and the
Closing Date, Company shall give prompt notice to Parent, and Parent and Merger
Sub shall give prompt notice to Company, of (a) the occurrence or non-occurrence
of any event or circumstance the occurrence or non-occurrence of which would be
likely to cause any representation or warranty contained in this Agreement to be
untrue or inaccurate if made at such time and (b) any failure of Company, Parent
and Merger Sub, as the case may be, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder.
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4.13 REGISTRATION OF CERTAIN SHARES. Promptly after the Effective Time,
Parent shall file registration statements on Form S-8 and Form S-3 (or any
successor or other appropriate forms), with respect to the shares of Parent
Common Stock subject to Company Stock Options and Company Warrants. Parent shall
use reasonable commercial efforts to have such registration statements declared
effective promptly after filing (to the extent such registration statements are
not automatically effective upon filing). Parent shall use reasonable commercial
efforts to maintain the effectiveness of such registration statements for so
long as such options or warrants remain outstanding.
4.14 EMPLOYEE MATTERS.
(a) Parent shall give individuals who are employed by Company or any
Company Subsidiaries immediately prior to the Effective Time and become
employees of the Surviving Corporation or Parent ("Affected Employees") full
credit for purposes of eligibility, vesting, benefit accrual (except for
purposes of benefit accrual under any defined benefit pension plans and except
as would result in duplication of benefits) and determination of the level of
benefits under any employee benefit plans or arrangements (including vacation)
maintained by Parent for each such Affected Employee's service with Company or
any Company Subsidiary to the same extent recognized by Company immediately
prior to the Effective Time.
(b) Parent shall waive all requirements for physical examinations,
limitations as to preexisting conditions exclusions and waiting periods with
respect to participation and coverage requirements applicable to the Affected
Employees under any medical or dental benefit plans that such employees may be
eligible to participate in after the Effective Time, other than limitations or
waiting periods that are already in effect with respect to such employees and
that have not been satisfied as of the Effective Time under any plan maintained
for the Affected Employees immediately prior to the Effective Time. With respect
to any waiting period that is not waived, service with the Company or any
Company Subsidiary will be credited in accordance with Section 4.14(a). Parent
shall credit under any medical or dental plan amounts previously paid by an
Affected Employee (or dependent) during the plan year or calendar year (as
applicable) that includes the Effective Time toward any applicable deductible,
co-payment, out-of-pocket maximum or similar provisions of such Parent medical
or dental plan.
(c) As of the Effective Time, Parent shall assume and honor in
accordance with their terms all employment, severance and other compensation
agreements and arrangements existing prior to the execution of this Agreement
which are between Company and any director, officer or employee thereof except
as otherwise expressly agreed between Parent and such person.
(d) Except with the prior written consent of Parent, during the
period from the date hereof to the Effective Time, Company shall not and shall
not permit any Company Subsidiary (i) to make any discretionary contribution to
the Company 401(k) plan (the "401(k) Plan") or (ii) to make any required
contribution to the 401(k) Plan in Company Common Stock. If requested by Parent,
Company shall terminate the 401(k) Plan on the Closing Date immediately prior to
the Effective Time.
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4.15 INDEMNIFICATION
(a) Subject to the occurrence of the Effective Time, until the six
year anniversary date on which the Effective Time occurs, the Parent and the
Surviving Corporation agree that all rights to indemnification or exculpation
now existing in favor of each present and former employee (including any
employee who serves or served in a fiduciary capacity of any Plans), agent,
director or officer of Company and Company Subsidiaries (the "Indemnified
Parties") as provided in the respective charters or by-laws or otherwise in
effect as of the date hereof shall survive and remain in full force and effect.
(b) Parent understands and agrees that, prior to the Effective Time,
Company intends to obtain a six-year "tail" insurance policy that provides
coverage substantially similar to the coverage provided under the Company's
directors and officers insurance policy in effect on the date of this Agreement
for the individuals who are directors and officers of Company on the date of
this Agreement for events occurring prior to the Effective Time; provided,
however, without Parent's prior written consent (which consent shall not be
unreasonably withheld or delayed), Company shall not pay more than $1,000,000 to
purchase such policy.
(c) Parent agrees to be jointly and severally liable with the
Surviving Corporation for its indemnification obligations to the Indemnified
Parties.
(d) In the event Parent or any of its successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger,
or (ii) transfers or conveys all or substantially all of its properties and
assets to any person, then, and in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns of Parent
assume the obligations set forth in this Section 4.15.
(e) The provisions of this Section 4.15 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party and his or her
heirs and representatives.
4.16 SECTION 16 APPROVAL. Prior to the Effective Time, the Board of
Directors of Parent or an appropriate committee of non-employee directors
thereof, shall adopt a resolution consistent with the interpretive guidance of
the SEC so that the acquisition by any officer or director of Company who may
become an officer or director of Parent for purposes of Section 16 of the
Exchange Act and the rules and regulations thereunder ("Section 16") of Parent
Common Stock or options to acquire Parent Common Shares pursuant to this
Agreement and the Merger shall be an exempt transaction for purposes of Section
16. Parent shall, prior to the Effective Time, provide to counsel for Company
copies of the resolutions adopted by the Board of Directors of Parent or a
committee thereof to implement the foregoing.
4.17 PARTICIPATION IN CERTAIN ACTIONS AND PROCEEDINGS. Until this Agreement
is terminated in accordance with Section 8.1, Parent shall have the right to
participate in the defense of any action, suit or proceeding instituted against
Company (or any of its directors or officers) before any court or governmental
or regulatory body or threatened by any governmental or regulatory body, to
restrain, modify or prevent the consummation of the transactions contemplated by
this Agreement, or to seek damages or a discovery order in connection with such
transactions.
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4.18 GUARANTEE OF MERGER SUB'S OBLIGATIONS. Parent hereby unconditionally
and irrevocably guarantees to Company, until the termination of this Agreement
or the Effective Time, the due and timely performance and observance by Merger
Sub of all of its representations, warranties and covenants under this
Agreement.
SECTION 5 - CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF EACH PARTY TO CONSUMMATE THE MERGER
The respective obligations of each party to consummate the Merger shall be
subject to the satisfaction or waiver by consent of the other party, at or
before the Effective Time, of each of the following conditions:
5.1 STOCKHOLDER APPROVAL. Company shall have obtained the vote of holders
of Company Common Stock required to adopt this Agreement in accordance with the
provisions of the DGCL and the Certificate of Incorporation and By-laws of
Company.
5.2 REGISTRATION STATEMENT. The Registration Statement shall have been
declared effective; no stop order suspending the effectiveness of the
Registration Statement shall have been issued, and not withdrawn, by the SEC and
no proceedings for that purpose shall be underway at the SEC; and no similar
proceeding in respect of the Proxy Statement shall be underway at the SEC or, to
the knowledge of Parent or Company, threatened by the SEC.
5.3 ABSENCE OF ORDER. No temporary restraining order, preliminary or
permanent injunction or other order issued by a court or other governmental
entity of competent jurisdiction shall be in effect and have the effect of
making the Merger illegal or otherwise prohibiting consummation of the Merger.
Parent and Company each agrees to use reasonable commercial efforts to have any
such order or injunction lifted or stayed.
5.4 REGULATORY APPROVALS. All material approvals from governmental
entities shall have been obtained; provided, however, that the conditions of
this Section 5.4 shall not apply to any party whose failure to fulfill its
obligations under this Agreement shall have been the cause of, or shall have
resulted in, such failure to obtain such approval.
5.5 HSR ACT. The waiting period (and any extension thereof) applicable to
the Merger under the HSR Act shall have been terminated or shall have expired.
5.6 NASDAQ. Parent Common Stock shall continue to be quoted on Nasdaq.
SECTION 6 - CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
PARENT AND MERGER SUB TO CONSUMMATE THE MERGER
The obligations of Parent and Merger Sub to consummate the Merger are
subject, to the fulfillment of the following conditions, any one or more of
which may be waived by Parent:
6.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations and
warranties made by Company in this Agreement shall have been accurate as of the
date of this Agreement and, other than representations and warranties made as of
a particular date, shall be accurate as of
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the Closing Date as if made on and as of the Closing Date (without giving effect
to any materiality or knowledge qualifiers) except (other than representations
and warranties set forth in Section 2.3) to the extent failure to be accurate,
in the aggregate, could not reasonably be expected to have a Company Material
Adverse Effect. The representations and warranties set forth in Section 2.3
shall be true and correct in all respects (other than DE MINIMIS variations) as
of the Closing Date as if made on and as of the Closing Date. Company shall have
performed and complied in all material respects with all covenants and
agreements required by this Agreement to be performed or complied with by it on
or prior to the Effective Time. Company shall have delivered to Parent a
certificate from its chief executive officer or chief financial officer, dated
the Closing Date, to the foregoing effect.
6.2 CORPORATE CERTIFICATES. Company shall have delivered a copy of the
Certificate of Incorporation of Company, as in effect immediately prior to the
Closing Date, certified by the Delaware Secretary of State and a certificate, as
of the most recent practicable date, of the Delaware Secretary of State as to
Company's corporate good standing.
6.3 SECRETARY'S CERTIFICATE. Company shall have delivered a certificate of
the Secretary of Company, dated as of the Closing Date, certifying as to (a) the
incumbency of officers of Company executing documents executed and delivered in
connection herewith, (b) a copy of the By-Laws of the Company, as in effect from
the date this Agreement was approved by the Board of Directors of Company until
the Closing Date, (c) a copy of the resolutions of the Board of Directors of the
Company authorizing and approving the applicable matters contemplated hereunder
and (iv) a copy of the resolutions of the stockholders of Company adopting this
Agreement.
6.4 AFFILIATE LETTERS. Parent shall have received the Affiliate Letters
referred to in Section 4.8 that the Company has obtained.
6.5 TAX OPINION. Parent shall have received the opinion of Palmer & Dodge
LLP, dated as of the Closing Date, to the effect that (i) the Merger will
constitute a reorganization under Section 368(a) of the Code, and (ii) Parent,
Company and Merger Sub will each be a party to that reorganization. In rendering
such opinion, counsel shall be entitled to rely on customary representation
letters of Parent, Company and Merger Sub and others, in form and substance
reasonably satisfactory to such counsel; provided, however, if Palmer & Dodge
LLP was unwilling to deliver such opinion, this condition shall be deemed
satisfied if Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. delivered such
opinion.
6.6 CONSENTS. Company shall have obtained waivers or consents, which shall
remain in full force and effect, with respect to agreements for which the
absence of such waivers or consents, individually or in the aggregate, could
reasonably be expected to have a Company Material Adverse Effect.
6.7 DISSENTING SHARES. The Dissenting Shares shall not exceed five percent
(5%) of the shares of Company Common Stock issued and outstanding on the Closing
Date.
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SECTION 7 - CONDITIONS PRECEDENT TO THE OBLIGATION OF
COMPANY TO CONSUMMATE THE MERGER
The obligation of Company to consummate the Merger is subject to the
fulfillment of the following conditions, any one or more of which may be waived
by it:
7.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations and
warranties made by Parent in this Agreement shall have been accurate as of the
date of this Agreement and, other than representations and warranties made as of
a particular date, the representations and warranties of Parent and Merger Sub
shall be accurate as of the Closing Date as if made on and as of the Closing
Date (without giving effect to any materiality or knowledge qualifiers) except
to the extent failure to be accurate, in the aggregate, could not reasonably be
expected to have a Parent Material Adverse Effect. Parent and Merger Sub shall
have performed and complied in all material respects with all covenants and
agreements required by this Agreement to be performed or complied with by it on
or prior to the Effective Time. Parent shall have delivered to Company a
certificate from its chief executive officer or chief financial officer, dated
the Closing Date, to the foregoing effect.
7.2 MERGER DOCUMENTS. Merger Sub shall have executed and delivered the
Certificate of Merger and Articles of Merger referred to in Section 1.2.
7.3 TAX OPINION. Company shall have received the opinion of Mintz, Levin,
Cohn, Ferris, Glovsky and Popeo, P.C., dated as of the Closing Date, to the
effect that (i) the Merger will constitute a reorganization under Section 368(a)
of the Code, and (ii) Parent, Company and Merger Sub will each be a party to
that reorganization. In rendering such opinion, counsel shall be entitled to
rely on customary representation letters of Parent, Company and Merger Sub and
others, in form and substance reasonably satisfactory to such counsel; provided,
however, if Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. was unwilling to
deliver such opinion, this condition shall be deemed satisfied if Palmer & Dodge
LLP delivered such opinion.
SECTION 8 - TERMINATION, AMENDMENT AND WAIVER
8.1 TERMINATION. This Agreement may be terminated at any time prior to the
Effective Time, whether prior to or after the stockholders of Company adopt this
Agreement:
(a) by either Company or Parent, by written notice to the other, if
the Effective Time shall not have occurred on or before May 15, 2001; provided,
however, that the right to terminate this Agreement under this Section 8.1(a)
shall not be available to any party whose willful failure to fulfill any
material covenant or other material agreement under this Agreement has resulted
in the failure of the Merger to occur on or before such date; provided, further,
however, that it shall be a condition precedent to the termination of this
Agreement by Company pursuant to this Section 8.1(a) that Company shall have
made any payment required by Section 8.3;
(b) by Company (provided that Company is not then in material breach
of any representation, warranty, covenant or other agreement contained herein),
by written notice to Parent, if a circumstance exists or circumstances exist
such that it is reasonably certain that the
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conditions to Company's obligation to close that are set forth in Section 7.1
will not be satisfied; provided, however, Company shall not have a right to
terminate this Agreement pursuant to this Section 8.1(b), (i) if the
circumstance is or the circumstances are susceptible to change through action or
inaction by Parent and (ii) within 20 days after written notice from Company,
Parent effects a change in the circumstance or circumstances such that it ceases
to be reasonably certain that the conditions to Company's obligation to close
that are set forth in Section 7.1 will not be satisfied;
(c) by Parent (provided that Parent is not then in material breach of
any representation, warranty, covenant or other agreement contained herein), by
written notice to Company, if a circumstance exists or circumstances exist such
that it is reasonably certain that the conditions to Parent's obligation to
close that are set forth in Section 6.1 will not be satisfied; provided,
however, Parent shall not have a right to terminate this Agreement pursuant to
this Section 8.1(c), (i) if the circumstance is or the circumstances are
susceptible to change through action or inaction by Company and (ii) within 20
days after written notice from Parent, Company effects a change in the
circumstance or circumstances such that it ceases to be reasonably certain that
the conditions to Company's obligation to close that are set forth in Section
6.1 will not be satisfied;
(d) by either Parent or Company, by written notice to the other, if
any governmental entity of competent jurisdiction shall have issued any
injunction or taken any other action permanently restraining, enjoining or
otherwise prohibiting the consummation of the Merger and such injunction or
other action shall have become final and non-appealable;
(e) by either Parent or Company, by written notice to the other, if
the stockholders of Company shall not have adopted this Agreement within sixty
(60) days after the later of (i) the date Company mails the Proxy
Statement/Prospectus to the Company stockholders or (ii) the date of the most
recent supplemental proxy materials that Company is legally required to
distribute to its stockholders; provided, however, that it shall be a condition
precedent to the termination of this Agreement by Company pursuant to this
Section 8.1(e) that Company shall have made any payment required by Section 8.3;
and provided, further however, that the right to terminate this Agreement under
this Section 8.1(e) shall not be available to any party whose willful failure to
fulfill any material covenant or other material agreement under this Agreement
has been the cause of or resulted in the failure to receive such stockholder
vote on or before such date;
(f) by Parent, by written notice to Company, if the Board of
Directors of the Company (i) fails to include in the Proxy Statement/Prospectus
its recommendation that Company's stockholders vote to adopt this Agreement or
(ii) withdraws, modifies or qualifies its approval of, or its recommendation
that Company stockholders vote in favor of, such action or takes any action or
makes any statement inconsistent with such approval or recommendation, (iii)
adopts resolutions approving or otherwise authorizes or recommends an
Alternative Transaction or (iv) fails to recommend against, or takes a neutral
position with respect to, a tender or exchange offer in any position taken
pursuant to Rules 14d-9 and 14e-2(a) under the Exchange Act;
(g) by Parent, in the event that Company or any of its directors
takes any of the actions described in clause (ii) of the second sentence of
Section 4.10 in response to a
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<PAGE>
proposal for an Alternative Transaction more than 15 business days after it is
obligated to notify Parent of its receipt of such Alternative Transaction
proposal.
(h) by Company at any time on or prior to the date that is four weeks
after the initial filing of the Registration Statement, if as a result of a
proposal for an Alternative Transaction, the Board of Directors of Company
(including through a special committee or otherwise) shall have determined in
good faith, after consultation with outside legal counsel, that the failure to
terminate this Agreement would be reasonably likely to constitute a breach of
their fiduciary duties under Delaware law in the absence of any limitation on
the right to terminate this Agreement; provided, however, that it shall be a
condition precedent to the termination of this Agreement by Company pursuant to
this Section 8.1(h) that Company shall have made the payment required by Section
8.3; provided, further, however, that it shall be a condition precedent to the
termination of this Agreement pursuant to Section 8.1(g) that Company shall have
given Parent notice of its intention to terminate at least 48 hours prior to
such termination;
(i) by Parent, if any person or group (as defined in Section 13(d)(3)
of the Exchange Act), other than Parent or any of its affiliates, shall have
become the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
at least 15% of the outstanding shares of Company Common Stock; and
(j) at any time with the written consent of Parent and Company.
8.2 EFFECT OF TERMINATION. If this Agreement is terminated as provided in
Section 8.1, this Agreement shall forthwith become void and have no effect,
without liability on the part of Parent, Merger Sub and Company and their
respective directors, officers or stockholders, except that (a) the provisions
of this Section 8, Section 9, Section 4.3 relating to expenses, and Section 4.7
relating to publicity shall survive, and (b) no such termination shall relieve
any party from liability by reason of any willful breach by such party of any of
its representations, warranties, covenants or other agreements contained in this
Agreement.
8.3 TERMINATION FEE
(a) FEE. If this Agreement is terminated by Company pursuant to
Section 8.1(a), (e) or (h), or by Parent (i) pursuant to Section 8.1(e) or (f)
or (ii) pursuant to Section 8.1(c) due to a breach of Section 4.1(b) or Section
4.10, then Company shall pay to Parent in cash $31 million (the "Fee");
provided, however, that the Fee shall not be owed if this Agreement is
terminated pursuant to 8.1(a) or (e) unless prior to the time of termination a
BONA FIDE Alternative Transaction shall have been announced and not withdrawn;
and, provided, further, however, that the fee shall not be owed if this
Agreement is terminated pursuant to Section 8.1(a) if, at the time of such
termination, the conditions set forth in Sections 5.2, 5.3, 5.4, 5.5, 5.6, 6.5
or Section 7.1 shall not have been satisfied or shall not have been capable of
immediate satisfaction unless such failure was due to a material breach of this
Agreement by the Company, or if Parent is in material breach of this Agreement
on the date of termination. Company shall pay the Fee to Parent concurrently
with Company terminating this Agreement and within one business day of Parent
terminating this Agreement.
(b) PAYMENTS. Any payments required under this Section 8.3 shall be
payable by Company by wire transfer of immediately available funds to an account
designated by Parent.
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If Company fails to promptly make any payment required under this Section 8.3
and Parent commences a suit to collect such payment, Company shall indemnify
Parent for its fees and expenses (including attorneys fees and expenses)
incurred in connection with such suit and shall pay Company interest on the
amount of the payment at the prime rate of Fleet National Bank (or its
successors or assigns) in effect on the date the payment was payable pursuant to
this Section 8.3.
8.4 AMENDMENT. This Agreement may be amended at any time before or after
adoption of this Agreement by the stockholders of Company by an instrument
signed by each of the parties hereto; provided, however, that after adoption of
this Agreement by the stockholders of Company, without the further approval of
the stockholders of Company, no amendment may be made that (a) alters or changes
the amount or kind of consideration to be received as provided in Section 1.6,
(b) alters or changes any term of the Articles of Organization of the Surviving
Corporation or (c) alters or changes any of the terms and conditions of this
Agreement if such alteration or change would adversely affect the stockholders
of Company.
8.5 WAIVER. At any time prior to the Effective Time, either party hereto
may (a) extend the time for the performance of any of the obligations or other
acts of the other party hereto or (b) waive compliance with any of the
agreements of the other party or any conditions to its own obligations, in each
case only to the extent such obligations, agreements and conditions are intended
for its benefit; provided that any such extension or waiver shall be binding
upon a party only if such extension or waiver is set forth in a writing executed
by such party.
SECTION 9 - MISCELLANEOUS
9.1 NO SURVIVAL. None of the representations and warranties of Company,
Parent or Merger Sub contained herein shall survive the Effective Time, and only
those covenants and agreements contained herein that by their terms are to be
performed after the Effective Time shall survive the Effective Time.
9.2 NOTICES. Any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed given when so delivered in
person, by overnight courier, by facsimile transmission (with receipt confirmed
by telephone or by automatic transmission report) or two business days after
being sent by registered or certified mail (postage prepaid, return receipt
requested), as follows:
(a) if to Parent or Merger Sub, to:
Genzyme Corporation
One Kendall Square
Cambridge, Massachusetts 02139
Attn: Peter Wirth
Telephone: (617) 252-7882
Facsimile: (617) 252-7553
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with a copy to:
Palmer & Dodge LLP
One Beacon Street
Boston, Massachusetts 02108
Attn: Paul M. Kinsella
Telephone: (617) 573-0100
Facsimile: (617) 227-4420
(b) if to Company, to:
GelTex Pharmaceuticals, Inc.
Nine Fourth Avenue
Waltham, Massachusetts 02154
Attn: Mark Skaletsky
Telephone: (781) 290-5888
Facsimile: (781) 290-5890
with a copy to:
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02111
Attn: Jeffrey M. Wiesen
Lewis J. Geffen
Telephone: (617) 542-6000
Facsimile: (617) 542-2241
Any party may by notice given in accordance with this Section 9.2 to the other
parties designate another address or person for receipt of notices hereunder.
9.3 ENTIRE AGREEMENT. This Agreement contains the entire agreement between
the parties with respect to the Merger and related transactions, and supersede
all prior agreements, written or oral, between the parties with respect thereto,
other than the Confidentiality Agreement, which shall survive execution of this
Agreement and any termination of this Agreement.
9.4 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts without regard to
its conflict of law provisions, except to the extent that the laws of the State
of Delaware apply to the Merger and the rights of Company stockholders relative
to the Merger.
9.5 BINDING EFFECT; NO ASSIGNMENT; NO THIRD-PARTY BENEFICIARIES.
(a) This Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors and permitted assigns. This
Agreement is not assignable without the prior written consent of the other
parties hereto.
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(b) Other than Section 4.15, nothing in this Agreement, express or
implied, is intended to or shall confer upon any person other than Parent,
Merger Sub and Company and their respective successors and permitted assigns and
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement.
9.6 SECTION HEADINGS, CONSTRUCTION. The headings of Sections in this
Agreement are provided for convenience only and will not affect its construction
or interpretation. All references to "Section" or "Sections" refer to the
corresponding Section or Sections of this Agreement. All words used in this
Agreement will be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word "including" does not
limit the preceding words or terms.
9.7 COUNTERPARTS. This Agreement may be executed in two counterparts, each
of which shall be deemed an original, and both of which together shall
constitute one and the same instrument.
9.8 SEVERABILITY. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement shall remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable. The
parties further agree to replace such invalid or unenforceable provision of this
Agreement with a valid and enforceable provision that will achieve, to the
extent possible, the economic, business and other purposes of such invalid or
unenforceable provision.
9.9 SUBMISSION TO JURISDICTION; WAIVER. Each of Company, Parent and Merger
Sub (when joined pursuant to the Joinder Agreement) irrevocably agrees that any
legal action or proceeding with respect to this Agreement or for recognition and
enforcement of any judgment in respect hereof brought by the other party hereto
or its successors or assigns may be brought and determined in the courts of the
Commonwealth of Massachusetts and each of Company, Parent and Merger Sub (when
joined pursuant to the Joinder Agreement) hereby irrevocably submits with regard
to any action or proceeding for itself and in respect to its property, generally
and unconditionally, to the nonexclusive jurisdiction of the aforesaid courts.
Each of Company, Parent and Merger sub (when joined pursuant to the Joinder
Agreement) hereby irrevocably waives, and agrees not to assert, by way of
motion, as a defense, counterclaim or otherwise, in any action or proceeding
with respect to this Agreement, (a) any claim that it is not personally subject
to the jurisdiction of the above-named courts for any reason other than the
failure to lawfully serve process, (b) that it or its property is exempt or
immune from jurisdiction of any such court or from any legal process commenced
in such courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or otherwise),
and (c) to the fullest extent permitted by applicable law, that (i) the suit,
action or proceeding in any such court is brought in an inconvenient forum, (ii)
the venue of such suit, action or proceeding is improper and (iii) this
Agreement, or the subject matter hereof, may not be enforced in or by such
courts.
9.10 ENFORCEMENT. The parties recognize and agree that if for any reason
any of the provisions of this Agreement are not performed in accordance with
their specific terms or are otherwise breached, immediate and irreparable harm
or injury would be caused for which money damages would not be an adequate
remedy. Accordingly, each party agrees that in addition to
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other remedies the other party shall be entitled to an injunction restraining
any violation or threatened violation of the provisions of this Agreement. In
the event that any action shall be brought in equity to enforce the provisions
of the Agreement, neither party will allege, and each party hereby waives the
defense, that there is an adequate remedy at law.
9.11 RULES OF CONSTRUCTION. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or ruling
of construction providing that ambiguities in an agreement or other document
will be construed against the party drafting such agreement or document.
9.12 WAIVER OF JURY TRIAL. EACH OF PARENT, COMPANY AND MERGER SUB (WHEN
JOINED PURSUANT TO THE JOINDER AGREEMENT) HEREBY IRREVOCABLY WAIVES THE RIGHT TO
A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED IN
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER RELATED DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALINGS, STATEMENT OR ACTION RELATED HERETO OR THERETO.
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IN WITNESS WHEREOF, the parties have executed this Agreement and Plan of
Merger under seal as of the date first stated above.
GELTEX PHARMACEUTICALS, INC.
By /s/ Mark Skaletsky
-----------------------------------------------
Name: Mark Skaletsky
Title: President and Chief Executive Officer
GENZYME CORPORATION
By /s/ Peter Wirth
-----------------------------------------------
Name: Peter Wirth
Title: Executive Vice President
[Signature Page to Agreement and Plan of Merger]
<PAGE>
EXHIBIT A
[FORM OF AGREEMENT OF JOINDER TO BE EXECUTED BY MERGER SUB]
The undersigned [Name] ("Merger Sub"), a Massachusetts corporation and
wholly-owned subsidiary of Genzyme Corporation, hereby joins in the foregoing
Agreement and Plan of Merger and agrees to be a party thereto and to perform the
obligations of Merger Sub thereunder, as though it had been a party thereto from
the date thereof.
IN WITNESS WHEREOF, Merger Sub has caused this Agreement of Joinder to be
signed as a sealed instrument by its duly authorized officers as of
_______________, 2000.
[NAME OF MERGER SUB]
By:
----------------------------------------------
President
By:
----------------------------------------------
Treasurer
<PAGE>
EXHIBIT B
[FORM OF AFFILIATE LETTER]
___________, 2000
Genzyme Corporation
One Kendall Square
Cambridge, MA 02139
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may be deemed
to be an "affiliate" of GelTex Pharmaceuticals, Inc.)(the "Company"), a Delaware
corporation, as the term "affiliate" is used in Rule 145 of the rules and
regulations of the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Securities Act"). Pursuant to the terms
of the Agreement and Plan of Merger (the "Merger Agreement") dated as of
September __, 2000 between Genzyme Corporation ("Parent"), a Massachusetts
corporation, and the Company, the Company will be merged with and into a wholly
owned subsidiary of Parent (the "Merger").
In connection with the Merger, I am entitled to receive shares of
Genzyme General Division common stock, $0.01 par value per share (the "Parent
Shares"), in exchange for the shares owned by me of common stock, $0.01 par
value per share, of the Company (the "Company Shares").
I represent, warrant and covenant to Parent that in the event I receive
any Parent Shares as a result of the Merger:
(a) I shall not make any sale, transfer or other disposition of
the Parent Shares in violation of the Securities Act or the rules and
regulations thereunder.
(b) I have carefully read this letter and the Merger Agreement and
discussed the requirements of such documents and other applicable limitations
upon my ability to sell, transfer or otherwise dispose of the Parent Shares, to
the extent I felt necessary, with my counsel or counsel for the Company.
(c) I have been advised that the issuance of the Parent Shares to
me pursuant to the Merger has been or will be registered with the SEC under the
Securities Act on a Registration Statement on Form S-4; however, because I may
be deemed to be an affiliate of the Company and the distribution of the Parent
Shares by me or on my behalf has not been registered under the Securities Act,
dispositions of the Parent Shares by me or on my behalf may be restricted under
the Securities Act and the rules and regulations thereunder. I will not sell,
transfer, hedge, encumber or otherwise dispose of the Parent Shares issued to me
in the Merger unless the disposition (x) is made in conformity with the volume
and other limitations of Rule 145 under the Securities Act, (y) is made pursuant
to an effective Registration Statement under the
<PAGE>
Securities Act or (z) is, in the opinion of counsel reasonably acceptable to
Parent or as described in a "no-action" or interpretive letter from the staff of
the SEC, exempt from registration under the Securities Act.
(d) I understand that Parent is under no obligation to register
under the Securities Act the disposition of the Parent Shares by me or on my
behalf or to take any other action necessary in order to make compliance with an
exemption from such registration available.
(e) I also understand that there will be placed on the
certificates for the Parent Shares issued to me, or any substitutions therefor,
a legend stating in substance:
THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, APPLIES. THE SHARES REPRESENTED BY
THIS CERTIFICATE MAY ONLY BE TRANSFERRED IN ACCORDANCE WITH
THE TERMS OF AN AGREEMENT BETWEEN THE REGISTERED HOLDER HEREOF
AND GENZYME CORPORATION.
(f) I also understand that unless a sale or transfer is made in
conformity with the provisions of Rule 145 under the Securities Act (and
satisfactory evidence of such conformity is provided to Parent), or pursuant to
an effective registration statement, Parent reserves the right to put the
following legend on the certificates issued to my transferee:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
WERE ACQUIRED FROM A PERSON WHO RECEIVED SUCH SHARES IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, APPLIES. THE SHARES HAVE BEEN
ACQUIRED BY THE HOLDER NOT WITH A VIEW TO, OR FOR RESALE IN
CONNECTION WITH, ANY DISTRIBUTION THEREOF WITHIN THE MEANING
OF THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE
WITH AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OF 1933, AS AMENDED.
It is understood and agreed that the legends set forth in paragraphs
(e) and (f) above shall be removed by delivery of substitute certificates
without such legends if the undersigned shall have delivered to Parent a copy of
a "no action" or interpretive letter from the staff of the SEC, or an opinion of
counsel reasonably satisfactory to Parent in form and substance satisfactory to
Parent, to the effect that disposition of the shares by the holder thereof is
not restricted under the Securities Act.
Execution of this letter should not be considered an admission on my
part that I am an "affiliate" of the Company as described in the first paragraph
of this letter, or as a waiver of any
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rights I may have to object to any claim that I am such an affiliate on or after
the date of this letter.
Very truly yours,
--------------------------------------
Name (print):
Address:
Accepted:
GENZYME CORPORATION
By:
----------------------------
Name (print):
Title:
Dated:
-------------------------
3
