SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
August 23, 1997
---------------
Date of Report (Date of earliest event reported)
The Perkin-Elmer Corporation
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(Exact name of registrant as specified in its charter)
New York
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(State or other jurisdiction of incorporation)
1-4389 06-0490270
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(Commission File Number) (IRS Employer Identification No.)
761 Main Avenue, Norwalk, Connecticut 06859-0001
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Address of principal executive offices) (Zip Code)
(203) 762-1000
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(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events.
The Perkin-Elmer Corporation, a New York corporation (the
"registrant" or "Perkin-Elmer"), Seven Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of Perkin-Elmer ("Sub"), and
PerSeptive Biosystems, Inc., a Delaware corporation ("PerSeptive"), have
entered into an Agreement and Plan of Merger, dated as of August 23, 1997
(the "Merger Agreement"), whereby Sub will be merged with and into
PerSeptive, with PerSeptive as the surviving entity (the "Merger"). The
Merger was announced in a press release issued by the registrant and
PerSeptive on August 25, 1997.
As a result of the Merger, each outstanding share of common stock
of PerSeptive ("PerSeptive Common Stock") will be converted into shares of
common stock of Perkin-Elmer ("Perkin-Elmer Common Stock") at an exchange
ratio equal to (i) $13.00 divided by (ii) the average of the closing sales
prices of Perkin-Elmer Common Stock on the New York Stock Exchange Composite
Transactions Tape on each of the 20 consecutive trading days immediately
preceding the second trading day prior to the Effective Time of the Merger
(as defined in the Merger Agreement), rounded to the nearest 1/10,000th,
provided that such exchange ratio shall not be less than 0.1486 nor more than
0.1926. Each outstanding option and warrant for shares of PerSeptive Common
Stock will be converted into options and warrants for the number of shares of
Perkin-Elmer Common Stock that would have been received if such options and
warrants had been exercised immediately prior to the Effective Time of the
Merger. Any shares of Series A Redeemable Convertible Preferred Stock of
PerSeptive outstanding prior to the Effective Time of the Merger will be
converted in accordance with their terms into a number of shares of
PerSeptive Common Stock determined by dividing $10,000 by the average closing
price of PerSeptive Common Stock for each of the 10 trading days ending five
business days prior to the Effective Time of the Merger. The shares of
PerSeptive Common Stock issued upon such conversion will then be converted in
the Merger as set forth above. As a result of the Merger, PerSeptive's 8-1/4%
Convertible Notes Due 2001 will become convertible into Perkin-Elmer
Common Stock.
Concurrently with the execution and delivery of the Merger
Agreement, PerSeptive and the registrant entered into a Stock Option
Agreement (the "Stock Option Agreement") whereby PerSeptive has granted to
Perkin-Elmer an option to purchase up to 4,478,308 shares of PerSeptive
Common Stock at a price of $13.00 per share, exercisable only upon the
occurrence of certain events. The Stock Option Agreement provides Perkin-
Elmer (a) with the right, in certain circumstances, to require PerSeptive to
repurchase the option and any shares acquired by exercise of the option and
(b) with the right to require PerSeptive to register the PerSeptive Common
Stock acquired by or issuable upon exercise of the option under the
Securities Act of 1933, as amended.
The closing of the Merger is subject to certain conditions, includ-
ing the approval of the common stockholders of PerSeptive and the receipt of
certain regulatory approvals.
The Merger Agreement, the Stock Option Agreement and the
registrant's press release issued August 25, 1997 regarding the Merger are
attached as exhibits to this report and are incorporated herein by reference.
The foregoing summaries of the Merger Agreement and the Stock Option
Agreement do not purport to be complete and are qualified in their entirety
by reference to such exhibits.
<PAGE>
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
The following exhibits are filed with this report:
Exhibit Number Description
2 Agreement and Plan of Merger, dated as of
August 23, 1997, among the registrant,
Seven Acquisition Corp. and PerSeptive
Biosystems, Inc.
10 Stock Option Agreement, dated as of August
23, 1997, between PerSeptive Biosystems,
Inc. and the registrant.
99 Press release of the registrant, issued
August 25, 1997, regarding the Merger.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
THE PERKIN-ELMER CORPORATION
By /s/ Stephen O. Jaeger
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Name: Stephen O. Jaeger
Title: Vice President, Chief Financial
Officer and Treasurer
Dated: August 26, 1997.
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description Page
------- ----------- ----
2 Agreement and Plan of Merger, dated as
of August 23, 1997, among the
registrant, Seven Acquisition Corp.
and PerSeptive Biosystems, Inc.
10 Stock Option Agreement, dated as of
August 23, 1997, between PerSeptive
Biosystems, Inc. and the registrant.
99 Press release of the registrant,
issued August 25, 1997, regarding the
Merger.
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AGREEMENT AND PLAN OF MERGER
Dated as of August 23, 1997,
Among
The Perkin-Elmer Corporation
Seven Acquisition Corp.
And
PerSeptive Biosystems, Inc.
=============================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
The Merger . . . . . . . . . . . . . . 2
SECTION 1.01. The Merger . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.02. Closing . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.03. Effective Time of the Merger . . . . . . . . . . . . . . . 2
SECTION 1.04. Effects of the Merger . . . . . . . . . . . . . . . . . . 2
SECTION 1.05. Certificate of Incorporation; By-Laws;
Purposes . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.06. Directors . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.07. Officers . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
Effect of the Merger on the Capital Stock of the
Constituent Corporations . . . . . . . . . . 3
SECTION 2.01. Effect on Capital Stock . . . . . . . . . . . . . . . . . 3
SECTION 2.02. Exchange of Certificates . . . . . . . . . . . . . . . . . 4
SECTION 2.03. Treatment of Options. . . . . . . . . . . . . . . . . . . 7
SECTION 2.04. Treatment of Debt Securities, Convertible
Notes and Warrants. . . . . . . . . . . . . . . . . . . 8
ARTICLE III
Representations and Warranties . . . . . . . . . 9
SECTION 3.01. Representations and Warranties of the
Company . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.02. Representations and Warranties of Parent
and Sub . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE IV
Covenants Relating to Conduct of Business Prior to Merger. . . 28
SECTION 4.01. Conduct of Business . . . . . . . . . . . . . . . . . . . 28
<PAGE>
ARTICLE V
Additional Agreements . . . . . . . . . . . 33
SECTION 5.01. Preparation of Form S-4 and Proxy Statement;
Stockholder Meeting . . . . . . . . . . . . . . . . . 33
SECTION 5.02. Access to Information; Confidentiality . . . . . . . . . . 34
SECTION 5.03. Reasonable Best Efforts . . . . . . . . . . . . . . . . . 34
SECTION 5.04. Indemnification . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.05. Public Announcements . . . . . . . . . . . . . . . . . . . 36
SECTION 5.06. Affiliates . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.07. No Solicitation . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.08. Benefit Matters . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.09. Stock Exchange Listing . . . . . . . . . . . . . . . . . . 38
SECTION 5.10. Letters of the Company's Accountants . . . . . . . . . . . 39
SECTION 5.11. Letters of Parent's Accountants . . . . . . . . . . . . . 39
ARTICLE VI
Conditions Precedent . . . . . . . . . . . 39
SECTION 6.01. Conditions to Each Party's Obligation To
Effect the Merger . . . . . . . . . . . . . . . . . . . 39
SECTION 6.02. Conditions to Obligations of Parent and Sub . . . . . . . 40
SECTION 6.03. Conditions to Obligation of the Company . . . . . . . . . 41
ARTICLE VII
Termination, Amendment and Waiver . . . . . . . . 42
SECTION 7.01. Termination . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.02. Effect of Termination . . . . . . . . . . . . . . . . . . 43
SECTION 7.03. Amendment . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 7.04. Extension; Waiver . . . . . . . . . . . . . . . . . . . . 43
SECTION 7.05. Procedure for Termination, Amendment,
Extension or Waiver . . . . . . . . . . . . . . . . . . 44
<PAGE>
ARTICLE VIII
General Provisions . . . . . . . . . . . . 44
SECTION 8.01. Nonsurvival of Representations and
Warranties . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 8.02. Fees and Expenses . . . . . . . . . . . . . . . . . . . . 44
SECTION 8.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 8.04. Definitions . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 8.05. Interpretation . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 8.06. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 8.07. Entire Agreement; No Third-Party
Beneficiaries . . . . . . . . . . . . . . . . . . . . . 48
SECTION 8.08. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 8.09. Assignment . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 8.10. Enforcement . . . . . . . . . . . . . . . . . . . . . . . 49
SCHEDULES
Company Disclosure Schedule
Parent Disclosure Schedule
EXHIBITS
Exhibit A Stock Option Agreement
Exhibit B-1 Form of Company Affiliate Letter
Exhibit B-2 Form of Parent Affiliate Letter
<PAGE>
AGREEMENT AND PLAN OF MERGER, dated as of August 23, 1997, among
The Perkin-Elmer Corporation, a New York Corporation ("Parent"), Seven
Acquisition Corp., a Delaware corporation and a direct wholly owned
subsidiary of Parent ("Sub"), and PerSeptive Biosystems, Inc., a Delaware
corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have determined that the merger of Sub with and into the Company (the
"Merger"), upon the terms and subject to the conditions set forth in this
Agreement, would be fair and in the best interests of their respective
stockholders;
WHEREAS, such Boards of Directors have approved the Merger,
pursuant to which each share of common stock, par value $.01 per share, of
the Company (the "Company Common Stock", which term also refers to and
includes, unless the context otherwise requires, the associated Rights (as
defined in Section 8.04)) issued and outstanding immediately prior to the
Effective Time of the Merger (as defined in Section 1.03), other than shares
owned, directly or indirectly, by the Company or any subsidiary (as defined
in Section 8.04) of the Company or by Parent, Sub or any subsidiary of
Parent, will be converted into the right to receive the Merger Consideration
(as defined in Section 2.01(c));
WHEREAS, the Merger and this Agreement require the vote of the
holders of a majority of the outstanding shares of the Company Common Stock
for the approval thereof (the "Company Stockholder Approval");
WHEREAS, concurrently with the execution and delivery of this
Agreement and as a condition of and inducement to Parent's willingness to
enter into this Agreement, Parent and the Company are entering into a stock
option agreement, dated as of the date hereof, in the Form of Exhibit A
hereto (the "Stock Option Agreement"), pursuant to which the Company is
granting Parent an option to purchase shares of Company Common Stock;
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger;
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization under the provisions of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, for accounting purposes, it is intended that the Merger
shall be accounted for as a "pooling of interests";
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement and the
Stock Option Agreement, the parties agree as follows:
<PAGE>
ARTICLE I
The Merger
SECTION 1.01. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the Delaware
General Corporation Law (the "DGCL"), Sub shall be merged with and into the
Company at the Effective Time of the Merger. Upon the Effective Time of the
Merger, the separate existence of Sub shall cease, and the Company shall
continue as the surviving corporation.
SECTION 1.02. Closing. Unless this Agreement shall have been
terminated and the transactions herein contemplated shall have been abandoned
pursuant to Section 7.01, and subject to the satisfaction or waiver of the
conditions set forth in Article VI, the closing of the Merger (the "Closing")
will take place at 10:00 a.m. on the second business day after satisfaction
of the conditions set forth in Section 6.01 (or as soon as practicable
thereafter following satisfaction or waiver of the conditions set forth in
Sections 6.02 and 6.03) (the "Closing Date"), at the offices of Simpson
Thacher & Bartlett, 425 Lexington Avenue, New York, New York 10017, unless
another date, time or place is agreed to in writing by the parties hereto.
SECTION 1.03. Effective Time of the Merger. Upon the Closing, the
parties shall file with the Secretary of State of the State of Delaware a
certificate of merger (the "Certificate of Merger") executed in accordance
with the relevant provisions of the DGCL and shall make all other filings or
recordings required under the DGCL. The Merger shall become effective at
such time as the Certificate of Merger is duly filed with the Secretary of
State of the State of Delaware, or at such other time as is permissible in
accordance with the DGCL and as Sub and the Company shall agree should be
specified in the Certificate of Merger (the time the Merger becomes effective
being the "Effective Time of the Merger").
SECTION 1.04. Effects of the Merger. The Merger shall have the
effects set forth in the applicable provisions of the DGCL. As used herein,
"Surviving Corporation" shall mean and refer to the Company, at and after the
Effective Time of the Merger, as the surviving corporation in the Merger.
SECTION 1.05. Certificate of Incorporation; By-Laws; Purposes.
(a) At the Effective Time of the Merger, and without any further action on
the part of the Company or Sub, the certificate of incorporation of Sub as in
effect at the Effective Time of the Merger, shall be the certificate of
incorporation of the Surviving Corporation until thereafter amended as
provided therein or by applicable law.
(b) At the Effective Time of the Merger, and without any further
action on the part of the Company or Sub, the By-laws of Sub as in effect at
the Effective Time of the Merger shall be the By-laws of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law.
SECTION 1.06. Directors. The directors of Sub at the Effective
Time of the Merger shall be the directors of the Surviving Corporation, until
the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
<PAGE>
SECTION 1.07. Officers. The officers of the Company at the
Effective Time of the Merger shall be the officers of the Surviving
Corporation, until the earlier of their resignation or removal or until their
respective successors are duly elected or appointed and qualified, as the
case may be.
ARTICLE II
Effect of the Merger on the Capital Stock of the
Constituent Corporations
SECTION 2.01. Effect on Capital Stock. As of the Effective Time
of the Merger, by virtue of the Merger and without any action on the part of
the Company, Sub or any holder of any shares of Company Common Stock or any
shares of capital stock of Sub:
(a) Common Stock of Sub. Each share of common stock of Sub issued
and outstanding immediately prior to the Effective Time of the Merger shall
be converted into one share of the common stock, par value $.01 per share,
of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Company Common
Stock. Each share of Company Common Stock and each share of preferred stock,
par value $.01 per share, of the Company ("Company Preferred Stock") that is
owned by the Company or by any subsidiary of the Company, and each share of
Company Common Stock and Company Preferred Stock that is owned by Parent, Sub
or any other subsidiary of Parent shall automatically be cancelled and
retired and shall cease to exist, and no cash, Parent Common Stock (as
defined in Section 2.01(c)) or other consideration shall be delivered or
deliverable in exchange therefor.
(c) Conversion of Company Common Stock. Subject to Section
2.02(e) each issued and outstanding share of Company Common Stock (other than
shares cancelled pursuant to Section 2.01(b)) shall be converted into a
fraction equal to the Exchange Ratio (as defined in Section 8.04) of a share
of Common Stock, par value $1.00 per share, of Parent (the "Parent Common
Stock") (the amount of Parent Common Stock into which each such share of
Company Common Stock is converted being referred to herein as the "Merger
Consideration").
(d) Conversion of Series A Preferred Stock. Immediately prior to
the Effective Time of the Merger, pursuant to Section 3(b) of the Certificate
of Designations with respect to the Series A Redeemable Convertible Preferred
Stock, $.01 par value per share, of the Company (the "Series A Preferred
Stock"), each issued and outstanding share of Series A Preferred Stock shall
be converted into that number of shares of Company Common Stock determined by
dividing $10,000 by the average Closing Price (as defined in Section 7 of
such Certificate of Designations) of such Company Common Stock for each of
the ten trading days ending on the fifth business day immediately prior to
the Effective Time of the Merger, and pursuant to Section 2.01(c) hereof,
each such share of Company Common Stock issued upon such conversion shall be
converted in the Merger into the Merger Consideration (and cash in lieu of
fractional shares of Parent Common Stock).
(e) Cancellation and Retirement of Company Common Stock. As of
the Effective Time of the Merger, all shares of Company Common Stock
<PAGE>
(including shares of Company Common Stock issued upon conversion of the
Series A Preferred Stock) issued and outstanding immediately prior to the
Effective Time of the Merger shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist, and each
holder of a certificate representing any such shares of Company Common Stock
or any such shares of Series A Preferred Stock so converted (collectively,
the "Certificates") shall, to the extent such Certificate represents such
shares, cease to have any rights with respect thereto, except the right to
receive the Merger Consideration (and cash in lieu of fractional shares of
Parent Common Stock) to be issued or paid in consideration therefor upon
surrender of such certificate in accordance with Section 2.02.
SECTION 2.02. Exchange of Certificates. (a) Exchange Agent. As
of or as soon as reasonably practicable after the Effective Time of the
Merger, Parent shall enter into an agreement with such bank or trust company
as may be designated by Parent (the "Exchange Agent") which shall provide
that Parent shall deposit with the Exchange Agent, for the benefit of the
holders of Certificates, for exchange in accordance with this Article II,
certificates representing the shares of Parent Common Stock (such shares of
Parent Common Stock, together with any dividends or distributions with
respect thereto with a record date after the Effective Time of the Merger,
and any cash payable in lieu of any fractional shares of Parent Common Stock
being hereinafter referred to as the "Exchange Fund") issuable pursuant to
Section 2.01 in exchange for outstanding shares of Company Common Stock.
(b) Exchange Procedures. As soon as reasonably practicable after
the Effective Time of the Merger, the Exchange Agent shall mail to each
holder of record of Certificates immediately prior to the Effective Time of
the Merger whose shares were converted into shares of Parent Common Stock
pursuant to Section 2.01, (i) a letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the
Exchange Agent, and which shall be in such form and have such other
provisions as Parent may reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for certificates
representing shares of Parent Common Stock. Upon surrender of a Certificate
for cancellation to the Exchange Agent together with such letter of
transmittal, duly executed, the holder of such Certificate shall be entitled
to receive in exchange therefor a certificate representing that number of
whole shares of Parent Common Stock which such holder has the right to
receive in respect of the Certificate surrendered pursuant to the provisions
of this Article II (after taking into account all shares of Company Common
Stock (including Company Common Stock issued upon conversion of Series A
Preferred Stock) then held by such holder), and the Certificate so
surrendered shall forthwith be cancelled. In the event of a transfer of
ownership of shares of Company Common Stock or Series A Preferred Stock which
is not registered in the transfer records of the Company, a certificate
representing the proper number of shares of Parent Common Stock may be issued
to a transferee if the Certificate is presented to the Exchange Agent,
accompanied by all documents required to evidence and effect such transfer
and by evidence that any applicable stock transfer taxes have been paid.
Until surrendered as contemplated by this Section 2.02 each Certificate shall
be deemed at any time after the Effective Time of the Merger to represent
only the Parent Common Stock into which the shares of Company Common Stock
(including Company Common Stock issued upon conversion of Series A Preferred
Stock) represented by such Certificate have been converted as provided in
this Article II and the right to receive upon such surrender cash in lieu of
<PAGE>
any fractional shares of Parent Common Stock as contemplated by this Section
2.02.
(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions with respect to Parent Common Stock with a
record date after the Effective Time of the Merger shall be paid to the
holder of any unsurrendered Certificate with respect to the shares of Parent
Common Stock represented thereby, and no cash payment in lieu of fractional
shares shall be paid to any such holder pursuant to Section 2.02(e) until the
surrender of such certificate in accordance with this Article II. Subject to
the effect of applicable laws, following surrender of any such Certificate,
there shall be paid to the holder of the certificate representing whole
shares of Parent Common Stock issued in exchange therefor without interest,
(i) at the time of such surrender, the amount of any cash payable in lieu of
a fractional share of Parent Common Stock to which such holder is entitled
pursuant to Section 2.02(e) and the amount of any dividends or other
distributions with a record date after the Effective Time of the Merger
theretofore paid (but withheld pursuant to the immediately preceding
sentence) with respect to such whole shares of Parent Common Stock, and (ii)
at the appropriate payment date, the amount of any dividends or other
distributions with a record date after the Effective Time of the Merger but
prior to such surrender and a payment date subsequent to such surrender
payable with respect to such whole shares of Parent Common Stock.
(d) No Further Ownership Rights in Company Common Stock or Series
A Preferred Stock. All shares of Parent Common Stock issued upon conversion
of shares of Company Common Stock (including shares of Company Common Stock
issued upon conversion of Series A Preferred Stock) in accordance with the
terms hereof, and all cash paid pursuant to Sections 2.02(c) and 2.02(e),
shall be deemed to have been issued in full satisfaction of all rights
pertaining to such shares of Company Common Stock (including with respect to
the Rights), and there shall be no further registration of transfers on the
stock transfer books of the Surviving Corporation of the shares of Company
Common Stock or Series A Preferred Stock which were outstanding prior to the
Effective Time of the Merger. If, after the Effective Time of the Merger,
Certificates are presented to the Surviving Corporation for any reason, they
shall be cancelled and exchanged as provided in this Article II.
(e) No Fractional Shares. (i) No certificates or scrip
representing fractional shares of Parent Common Stock shall be issued upon
the surrender for exchange of Certificates, and such fractional share
interests will not entitle the owner thereof to vote or to any rights of a
stockholder of Parent. In lieu of such issuance of fractional shares, Parent
shall pay each holder of Certificates an amount in cash equal to the product
obtained by multiplying (a) the fractional share interest to which such
holder (after taking into account all shares of Company Common Stock
(including Company Common Stock issued upon conversion of Series A Preferred
Stock) held immediately prior to the Effective Time of the Merger by such
holder) would otherwise be entitled by (b) the average of the closing sale
prices for a share of Parent Common Stock on the New York Stock Exchange
("NYSE") Composite Transaction Tape for the ten trading days immediately
preceding the Effective Time of the Merger.
(ii) As soon as practicable after the determination of the amount
of cash, if any, to be paid to holders of Certificates with respect to any
fractional share interests, the Exchange Agent shall make available such
<PAGE>
amounts to such holders of Certificates, subject to and in accordance with
the terms of Section 2.02(c).
(f) Termination of Exchange Fund. Any portion of the Exchange
Fund deposited with the Exchange Agent pursuant to this Section 2.02 which
remains undistributed to the holders of the Certificates for six months after
the Effective Time of the Merger shall be delivered to the Parent, upon
demand, and any holders of Certificates prior to the Merger who have not
theretofore complied with this Article II shall thereafter look only to the
Parent and only as general creditors thereof for payment of their claim for
Parent Common Stock, cash in lieu of fractional shares of Parent Common Stock
and any dividends or distributions with respect to Parent Common Stock to
which such holders may be entitled.
(g) No Liability. None of Parent, Sub, the Company or the
Exchange Agent shall be liable to any person in respect of any shares of
Parent Common Stock (or dividends or distributions with respect thereto) or
cash from the Exchange Fund delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law. If any Certificates
shall not have been surrendered prior to three years after the Effective Time
of the Merger, or immediately prior to such earlier date on which any Merger
Consideration, any cash in lieu of fractional shares of Parent Common Stock
or any dividends or distributions with respect to Parent Common Stock would
otherwise escheat to or become the property of any Governmental Entity (as
defined in Section 3.01(d)), any such Merger Consideration or cash shall, to
the extent permitted by applicable law, become the property of the Surviving
Corporation, free and clear of all claims or interest of any person
previously entitled thereto.
(h) Investment of Exchange Fund. The Exchange Agent shall invest
any cash included in the Exchange Fund, as directed by Parent on a daily
basis. Any interest and other income resulting from such investments shall
be paid to Parent.
SECTION 2.03. Treatment of Options. (a) At the Effective Time of
the Merger, each outstanding option to purchase Company Common Stock (a
"Company Stock Option") issued pursuant to the Company's 1989 Stock Plan,
1992 Non-Employee Director Stock Option Plan, 1992 Stock Plan and 1997 Non-
Qualified Stock Plan (collectively, the "Company Stock Plans"), whether
vested or unvested, shall be deemed to constitute an option to acquire, on
the same terms and conditions as were applicable under such Company Stock
Option (each such Company Stock Option, other than certain Company Stock
Options under the 1992 Non-Employee Director Stock Option Plan, being fully
vested and exercisable as of the Effective Time of the Merger, in accordance
with its terms), the same number of shares of Parent Common Stock as the
holder of such Company Stock Option would have been entitled to receive
pursuant to the Merger had such holder exercised such option in full
immediately prior to the Effective Time of the Merger, at a price per share
equal to (y) the aggregate exercise price for the shares of Company Common
Stock otherwise purchasable pursuant to such Company Stock Option divided by
(z) the number of full shares of Parent Common Stock deemed purchasable
pursuant to such Company Stock Option; provided, however, that in the case of
any option to which Section 421 of the Code applies by reason of its
qualification under Section 422 of the Code ("incentive stock options"), the
option price, the number of shares purchasable pursuant to such option and
the terms and conditions of exercise of such option shall be determined in
order to comply with Section 424(a) of the Code.
<PAGE>
(b) As soon as practicable after the Effective Time of the Merger,
Parent shall deliver to the holders of Company Stock Options appropriate
notices setting forth such holders' rights pursuant to the Company Stock
Plans and the agreements evidencing the grants of such Company Stock Options
shall continue in effect on the same terms and conditions (subject to
adjustments required by this Section 2.03 after giving effect to the Merger
and the provisions set forth above and until otherwise determined). If
necessary, Parent shall comply with the terms of the Company Stock Plans and
ensure, to the extent required by, and subject to the provisions of, the
Company Stock Plans, that Company Stock Options that qualified as incentive
stock options prior to the Effective Time of the Merger continue to qualify
as incentive stock options after the Effective Time of the Merger.
(c) Parent shall take all corporate action necessary to reserve for
issuance a sufficient number of shares of Parent Common Stock for delivery
upon exercise of Company Stock Options. As soon as practicable after the
Effective Time of the Merger, Parent shall file a registration statement on
Form S-3 or Form S-8, as the case may be (or any successor or other
appropriate forms), or another appropriate form, with respect to the shares
of Parent Common Stock subject to such options and shall use its reasonable
best efforts to maintain the effectiveness of such registration statement or
registration statements (and maintain the current status of the prospectus or
prospectuses contained therein) for so long as such options remain
outstanding. With respect to those individuals who subsequent to the Merger
will be subject to the reporting requirements under Section 16(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), where
applicable, Parent shall administer the Company Stock Plan in a manner that
complies with Rule 16b-3 promulgated under the Exchange Act to the extent the
Company Stock Plans complied with such rule prior to the Merger.
SECTION 2.04. Treatment of Debt Securities, Convertible Notes and
Warrants. (a) All debt securities of the Company which are outstanding as of
the Effective Time of the Merger shall remain outstanding after the Effective
Time of the Merger in accordance with their respective terms and provisions.
Pursuant to Section 4.12 of the Indenture, dated as of August 26, 1994 (the
"Convertible Notes Indenture"), between the Company and State Street Bank and
Trust Company, as trustee, relating to the Company's 8-1/4% Convertible
Subordinated Notes (the "Convertible Notes"), prior to the Effective Time of
the Merger, the Company and Parent shall enter into a supplemental indenture
providing that each holder of Convertible Notes outstanding at the Effective
Time of the Merger shall have the right to convert such Convertible Notes
into the number of shares of Parent Common Stock which would be receivable at
the Effective Time of the Merger by a holder of the number of shares of
Company Common Stock deliverable upon conversion of such Convertible Notes
immediately prior to the Effective Time of the Merger, and subject to future
adjustments of the conversion price of the Convertible Notes as provided for
in Article IV of the Convertible Notes Indenture.
(b) At the Effective Time of the Merger, each Warrant (as defined
in Section 3.01(c)) which is outstanding and unexercised immediately prior
thereto shall, pursuant to the terms of such Warrant, cease to represent a
right to acquire shares of Company Common Stock and shall be converted
automatically into a warrant to purchase such number of shares of Parent
Common Stock as the holder of such Warrant would have been entitled to
receive pursuant to the Merger had such holder exercised such warrant in full
immediately prior to the Effective Time of the Merger, at a price per share
equal to (y) the aggregate exercise price for the shares of Company Common
<PAGE>
Stock otherwise purchasable pursuant to such Warrant divided by (z) the
number of full shares of Parent Common Stock deemed purchasable pursuant to
such Warrant, and subject to future adjustments in accordance with the terms
of such Warrant. Notwithstanding the foregoing, in the case of the Class F
Warrants, Parent shall issue a new warrant certificate in exchange for the
old warrant certificate.
(c) As soon as practicable after the Effective Time of the Merger,
Parent shall deliver to the holders of Convertible Notes and Warrants
appropriate notices setting forth such holders' rights pursuant to the
Convertible Notes Indenture and the applicable warrant agreements with
respect thereto to the extent required by the terms of the Convertible Notes
Indenture and the warrant agreements with respect thereto.
(d) Parent shall take all corporate action necessary to reserve for
issuance a sufficient number of shares of Parent Common Stock for delivery
upon conversion of the Convertible Notes and exercise of the Warrants. As
soon as practicable after the Effective Time of the Merger, Parent shall file
a registration statement or registration statements on Form S-3 (or any
successor or other appropriate form), with respect to the shares of Parent
Common Stock issuable upon exercise of the Warrants and shall use its
reasonable best efforts to maintain the effectiveness of such registration
statement or registration statements (and maintain the current status of the
prospectus or prospectuses contained therein) for so long as the Warrants
remain outstanding.
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of the Company. The
Company represents and warrants to Parent and Sub as follows:
(a) Organization, Standing and Corporate Power. Each of the
Company and each of its Subsidiaries (as defined in Section 3.01(b)) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized and has the requisite corporate power
and authority to carry on its business as now being conducted. Each of the
Company and each of its Subsidiaries is duly qualified or licensed to do
business and is in good standing in each jurisdiction (domestic or foreign)
in which the nature of its business or the ownership or leasing of its
properties makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed
(individually or in the aggregate) could not reasonably be expected to have a
Material Adverse Effect (as defined in Section 8.04) with respect to the
Company. Attached as Section 3.01(a) of the disclosure schedule delivered by
the Company to Parent and Sub at the time of execution of this Agreement (the
"Company Disclosure Schedule") are complete and correct copies of the
Company's Amended and Restated Certificate of Incorporation, as amended (the
"Certificate of Incorporation"), and the Company's Amended and Restated By-
laws, as amended (the "By-Laws"), as currently in effect. The Company has
made available to Parent and Sub complete and correct copies of the
certificates of incorporation and by-laws (or other organizational documents)
of each of its Subsidiaries, in each case as amended to the date of this
Agreement.
<PAGE>
(b) Subsidiaries. The only direct or indirect subsidiaries (as
defined in Section 8.04) of the Company (other than any subsidiary of the
Company that does not constitute a "Significant Subsidiary" within the
meaning of Rule 1-02 of Regulation S-X of the Securities and Exchange
Commission (the "SEC")) are those listed in Section 3.01(b) of the Company
Disclosure Schedule (the "Subsidiaries"). All of the outstanding shares of
capital stock of each subsidiary of the Company have been validly issued and
are fully paid and nonassessable and, except as disclosed in Section 3.01(b)
of the Company Disclosure Schedule, are owned (of record and beneficially) by
the Company, by another wholly owned subsidiary of the Company or by the
Company and another such wholly owned subsidiary, free and clear of all
pledges, claims, liens, charges, encumbrances and security interests of any
kind or nature whatsoever (collectively, "Liens"). Except for the ownership
interests set forth in Section 3.01(b) of the Company Disclosure Schedule,
the Company does not own, directly or indirectly, any capital stock or other
ownership interest in any corporation, partnership, business association,
joint venture or other entity.
(c) Capital Structure. The authorized capital stock of the
Company consists of 100,000,000 shares of Company Common Stock, par value
$.01 per share, and 1,000,000 shares of Company Preferred Stock, par value
$.01 per share. As of the close of business on August 18, 1997, there were:
(i) 22,504,061 shares of Company Common Stock issued and outstanding (after
giving effect to the issuance of the 1,019,108 shares issued on August 22,
1997 in connection with the redemption on August 22, 1997 of 1,000 shares of
Series A Preferred Stock on August 22, 1997); (ii) 28,774 shares of Company
Common Stock held in the treasury of the Company; (iii) 123,690 shares of
Company Common Stock reserved for issuance upon exercise of Company Stock
Options available for grant pursuant to the Company Stock Plans (adjusted for
28,800 Company Stock Options granted and an increase in the number of shares
reserved for issuance under the 1997 Non-Qualified Stock Option Plan by
300,000 on August 21, 1997), and no shares of Company Common Stock reserved
for issuance pursuant to the Company Stock Plans (other than upon exercise of
Company Stock Options); (iv) 4,921,214 shares of Company Common Stock
issuable upon exercise of awarded but unexercised Company Stock Options, with
an exercise price per each awarded but unexercised Company Stock Option as is
set forth in Section 3.01(c)(iv) of the Company Disclosure Schedule (after
giving effect to the grant of 28,800 Company Stock Options granted on August
21, 1997); (v) 59,039 shares of Company Common Stock reserved for issuance
pursuant to the Company's 1992 Employee Stock Purchase Plan (the "Stock
Purchase Plan"); (vi) 941,107 shares of Company Common Stock issuable upon
exercise of currently outstanding warrants to purchase Company Common Stock,
as more particularly described in Section 3.01(c)(vi) of the Company
Disclosure Schedule (the "Warrants") and with an exercise price for each such
Warrant as is set forth in such Section of the Company Disclosure Schedule;
(vii) 1,973,183 shares of Company Common Stock issuable upon conversion of
the Convertible Notes; (viii) 1,000 shares of Series A Preferred Stock issued
and outstanding (after giving effedt to the redemption of 1,000 shares of
Series A Preferred Stock on August 22, 1997); (ix) no shares of Series B
Junior Participating Preferred Stock, par value $.01 per share, of the
Company (the "Series B Preferred Stock") issued and outstanding; (x) 400,000
of Series B Preferred Stock reserved for issuance pursuant to the Rights
Agreement, dated as of March 1, 1995 (as amended, the "Rights Agreement"),
and (xi) no shares of Company Preferred Stock in the treasury of the Company.
Except as set forth above, and except for shares of Company Common Stock
issuable pursuant to the Rights Agreement between the Company and American
Stock Transfer and Trust Company, as of the close of business on August 18,
<PAGE>
1997 there were no shares of capital stock or other equity securities of the
Company issued, reserved for issuance or outstanding. All outstanding shares
of capital stock of the Company are, and all shares which may be issued
pursuant to the Company Stock Plans and the Warrants will be, when issued,
duly authorized, validly issued, fully paid and nonassessable and not subject
to preemptive rights. All securities issued by the Company were issued in
compliance in all material respects with all applicable federal and state
securities laws and all applicable rules and regulations promulgated
thereunder. Except for $27,230,000 principal amount of Convertible Notes,
there are no outstanding bonds, debentures, notes or other indebtedness or
debt securities of the Company having the right to vote (or convertible into,
or exchangeable for, securities having the right to vote) on any matters on
which stockholders of the Company may vote (collectively, "Voting Debt").
Except as set forth above and except pursuant to the Stock Option Agreement,
there are no outstanding securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to which
the Company or any of its subsidiaries is a party or by which any of them is
bound obligating the Company or any of its subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of capital
stock or other equity or voting securities of the Company or of any of its
subsidiaries or obligating the Company or any of its subsidiaries to issue,
grant, extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. Other than the Stock
Option Agreement and except as disclosed in Section 3.01(c) of the Company
Disclosure Schedule, (i) there are no outstanding contractual obligations,
commitments, understandings or arrangements of the Company or any of its
subsidiaries to repurchase, redeem or otherwise acquire or make any payment
in respect of any shares of capital stock of the Company or any of its
subsidiaries and (ii) to the knowledge of the Company, there are no
irrevocable proxies with respect to shares of capital stock of the Company or
any subsidiary of the Company. Except as set forth in Section 3.01(c) of the
Company Disclosure Schedule, there are no agreements or arrangements pursuant
to which the Company is or could be required to register shares of Company
Common Stock or other securities under the Securities Act of 1933, as amended
(the "Securities Act"), or other agreements or arrangements with or, to the
knowledge of the Company, among any securityholders of the Company with
respect to securities of the Company.
Since August 18, 1997, the Company has not (A) issued or permitted to be
issued any shares of capital stock, or securities exercisable for or
convertible into shares of capital stock, of the Company or any of its
subsidiaries, other than (1) pursuant to the Stock Option Agreement, (2) the
grant of any employee stock options prior to the date of this Agreement
pursuant to the Company Stock Plans, (3) the issuance of Company Common Stock
upon exercise of the options granted pursuant to the Company Stock Plans
prior to the date of this Agreement and (4) upon conversion or exercise of
Convertible Notes, Warrants or Series A Preferred Stock outstanding on the
date of this Agreement; (B) repurchased, redeemed or otherwise acquired,
directly or indirectly through one or more subsidiaries, any shares of
capital stock of the Company or any of its subsidiaries or (C) declared, set
aside, made or paid to the stockholders of the Company dividends or other
distributions on the outstanding shares of capital stock of the Company.
The Company has terminated its Stock Purchase Plan effective as of the
date of this Agreement pursuant to Article 15 thereof; provided, however,
that such termination shall not affect the options issued prior to the date
<PAGE>
of this Agreement with respect to the Payment Period (as defined therein)
ending November 30, 1997.
(d) Authority; Noncontravention. The Company has the requisite
corporate power and authority to enter into this Agreement and the Stock
Option Agreement and, subject to the Company Stockholder Approval in the case
of this Agreement, to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and the Stock Option
Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of the Company, subject, in the case
of this Agreement, to the Company Stockholder Approval. This Agreement and
the Stock Option Agreement have been duly executed and delivered by the
Company and (assuming due authorization, execution and delivery by Parent and
Sub) constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally,
general equitable principles (whether considered in a proceeding in equity or
at law) and an implied covenant of good faith and fair dealing. Except as
set forth in Section 3.01(d) of the Company Disclosure Schedule, the
execution and delivery of this Agreement and the Stock Option Agreement do
not, and the consummation by the Company of the transactions contemplated by
this Agreement and the Stock Option Agreement and compliance by the Company
with the provisions hereof and thereof will not, conflict with, or result in
any breach or violation of, or any default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancellation
or acceleration of, or a "put" right with respect to any obligation under, or
to a loss of a material benefit under, or result in the creation of any Lien
upon any of the properties or assets of the Company or any of its
subsidiaries under, (i) the Certificate of Incorporation or By-laws or the
comparable charter or organizational documents of any of its subsidiaries,
(ii) any loan or credit agreement, note, note purchase agreement, bond,
mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise or license applicable to the Company or any of its
subsidiaries or their respective properties or assets or (iii) subject to the
governmental filings and other matters referred to in the following sentence,
any judgment, order, decree, statute, law, ordinance, rule, regulation or
arbitration award applicable to the Company or any of its subsidiaries or
their respective properties or assets, other than, in the case of clauses
(ii) and (iii), any such conflicts, breaches, violations, defaults, rights,
losses or Liens that individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect with respect to the Company or
prevent or materially delay the ability of the Company to consummate the
transactions contemplated by this Agreement or to perform its obligations
under the Stock Option Agreement. No consent, approval, order or
authorization of, or registration, declaration or filing with, or notice to,
any federal, state or local government or any court, administrative agency or
commission or other governmental authority or agency, domestic or foreign (a
"Governmental Entity"), is required by or with respect to the Company or any
of its subsidiaries in connection with the execution and delivery of this
Agreement and the Stock Option Agreement by the Company or the consummation
by the Company of the transactions contemplated hereby and thereby or the
performance by the Company of its obligations hereunder or thereunder, except
for (i) the filing of a premerger notification and report form by the Company
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR Act"), and the filing of such applications by the Company as may be
<PAGE>
required pursuant to antitrust or similar laws or regulations in effect in
Germany, France, Japan, the United Kingdom or any political subdivision
thereof, (ii) the filing with the SEC and the National Association of
Securities Dealers (the "NASD") of (A) a proxy statement relating to the
Company Stockholder Approval (such proxy statement as amended or supplemented
from time to time, the "Proxy Statement") and (B) such reports under the
Exchange Act as may be required in connection with this Agreement and the
Stock Option Agreement and the transactions contemplated hereby and thereby,
(iii) the filing of the Certificate of Merger with the Secretary of State of
the State of Delaware and appropriate documents with the relevant authorities
of other states in which the Company is qualified to do business, and
(iv) such other consents, approvals, orders, authorizations, registrations,
declarations, filings or notices the failure of which to make or obtain,
individually or in the aggregate, could not reasonably be expected to (x)
prevent or materially delay consummation of the Merger or the other
transactions contemplated hereby or performance of the Company's obligations
hereunder or under the Stock Option Agreement or (y) have a Material Adverse
Effect with respect to the Company.
(e) SEC Documents; Undisclosed Liabilities. The Company has filed
with the SEC all reports, schedules, forms, statements and other documents
required pursuant to the Securities Act and the Exchange Act since October 1,
1994 (collectively, and in each case including all exhibits and schedules
thereto and documents incorporated by reference therein, the "SEC
Documents"). As of their respective dates, the SEC Documents complied as to
form in all material respects with the requirements of the Securities Act or
the Exchange Act, as the case may be, and the rules and regulations of the
SEC promulgated thereunder applicable to such SEC Documents. As of their
respective dates, (i) none of the SEC Documents (including any and all
financial statements included therein) filed pursuant to the Securities Act
or any rule or regulation thereunder contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading
and (ii) none of the SEC Documents (including any and all financial
statements included therein) filed pursuant to the Exchange Act or any rule
or regulation thereunder contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Except to the extent that
information contained in any SEC Document has been revised or superseded by a
later filed SEC Document, none of the SEC Documents (including any and all
financial statements included therein) contains any untrue statement of a
material fact or omits to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of the Company included in all SEC Documents filed since
October 1, 1994 (the "SEC Financial Statements") comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles (except, in the case
of unaudited consolidated quarterly statements, as permitted by Form 10-Q of
the SEC), applied on a consistent basis during the periods involved (except
as may be indicated in the notes thereto). The SEC Financial Statements
fairly present the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended
(subject, in the case of unaudited quarterly statements, to normal recurring
<PAGE>
audit adjustments). Except as disclosed in Section 3.01(e) of the Company
Disclosure Schedule, neither the Company nor any of its subsidiaries has any
liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by generally accepted accounting principles
to be recognized or disclosed on a consolidated balance sheet of the Company
and its subsidiaries or in the notes thereto, except (i) liabilities
reflected in the consolidated audited balance sheet of the Company as of
September 30, 1996 or the notes thereto (the "1996 Balance Sheet"), (ii)
liabilities disclosed in any SEC Document filed by the Company prior to the
date of this Agreement with respect to any period ending, or date occurring,
after September 30, 1996 and (iii) liabilities incurred since September 30,
1996 in the ordinary course of business consistent with past practice.
(f) Information Supplied. None of the information supplied or to
be supplied by the Company for inclusion or incorporation by reference in (i)
the registration statement on Form S-4 to be filed with the SEC by Parent in
connection with the issuance of Parent Common Stock in the Merger (the "Form
S-4") will, at the time the Form S-4 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 or (ii) the Proxy Statement will, at
the date it is first mailed to the Company's stockholders or at the time of
the Stockholders Meeting (as defined in Section 5.01(c)), 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
the light of the circumstances under which they are made, not misleading.
The Proxy Statement will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations promulgated
thereunder, except that no representation is made by the Company with respect
to statements made or incorporated by reference therein based on information
supplied in writing by Parent or Sub specifically for inclusion or
incorporation by reference therein.
(g) Absence of Certain Changes or Events. Except as disclosed in
Section 3.01(g) of the Company Disclosure Schedule or in the Recent SEC
Documents (as defined in Section 8.04), since September 30, 1996, the Company
has conducted its business only in the ordinary course consistent with past
practice, and there is not and has not been: (i) since September 30, 1996,
any Material Adverse Change (as defined in Section 8.04) with respect to the
Company; (ii) since September 30, 1996, any condition, event or occurrence
which as of the date of this Agreement, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect or give rise
to a Material Adverse Change with respect to the Company; (iii) since June
30, 1997, any action which, if it had been taken or occurred after the
execution of this Agreement, would have required the consent of Parent
pursuant to this Agreement; or (iv) since September 30, 1996, any condition,
event or occurrence which, individually or in the aggregate, could reasonably
be expected to prevent or materially delay the ability of the Company to
consummate the transactions contemplated by this Agreement or perform its
obligations hereunder.
(h) Litigation; Labor Matters; Compliance with Laws. (i) Except
as disclosed in Section 3.01(h)(i) of the Company Disclosure Schedule or in
the Recent SEC Documents, there is (1) no suit, action, arbitration or
proceeding pending, and (2) to the knowledge of the Company, no suit, action,
arbitration or proceeding threatened against or investigation pending with
<PAGE>
respect to the Company or any of its subsidiaries that, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect
with respect to the Company or prevent or materially delay the ability of the
Company to consummate the transactions contemplated by this Agreement or to
perform its obligations hereunder, nor is there any judgment, decree,
citation, injunction, rule or order of any Governmental Entity or arbitrator
outstanding against the Company or any of its subsidiaries which,
individually or in the aggregate, has or could reasonably be expected to
have, any such effect.
(ii) Except as disclosed in Section 3.01(h)(ii) of the Company
Disclosure Schedule or in the Recent SEC Documents, (1) neither the Company
nor any of its subsidiaries is a party to, or bound by, any collective
bargaining agreement, contract or other agreement or understanding with a
labor union or labor organization; (2) to the knowledge of the Company,
neither the Company nor any of its subsidiaries is the subject of any
proceeding asserting that it or any subsidiary has committed an unfair labor
practice or seeking to compel it to bargain with any labor organization as to
wages or conditions of employment; (3) there is no strike, work stoppage or
other similar labor dispute involving it or any of its subsidiaries pending
or, to its knowledge, threatened; (4) no grievance is pending or, to the
knowledge of the Company, threatened against the Company or any of its
subsidiaries which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect with respect to the Company; (5)
to the knowledge of the Company, the Company and each subsidiary is in
compliance with all applicable laws (domestic and foreign), agreements,
contracts, and policies relating to employment, employment practices, wages,
hours, and terms and conditions of employment except for failures so to
comply, if any, that individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect with respect to the Company; (6)
the Company has complied in all material respects with its payment
obligations to all employees of the Company and its subsidiaries in respect
of all wages, salaries, commissions, bonuses, benefits and other compensation
due and payable to such employees under any Company policy, practice,
agreement, plan, program or any statute or other law; (7) the Company is not
liable for any severance pay or other payments to any employee or former
employee arising from the termination of employment under any benefit or
severance policy, practice, agreement, plan, or program of the Company, nor
to the knowledge of the Company will the Company have any liability which
exists or arises, or may be deemed to exist or arise, under any applicable
law or otherwise, as a result of or in connection with the transactions
contemplated hereunder or as a result of the termination by the Company of
any persons employed by the Company or any of its subsidiaries on or prior to
the Effective Time of the Merger; and (8) the Company is in compliance with
its obligations pursuant to the Worker Adjustment and Retraining Notification
Act of 1988 ("WARN"), to the extent applicable, and all other employee
notification and bargaining obligations arising under any collective
bargaining agreement or statute.
(iii) The Company and its subsidiaries hold all permits, licenses,
variances, exemptions, orders and approvals of all Governmental Entities
which are material to the operation of the businesses of the Company and its
subsidiaries, taken as a whole (the "Company Permits"). The Company and its
subsidiaries are in compliance with the terms of the Company Permits, except
where the failure so to comply, individually or in the aggregate, would not
have a Material Adverse Effect with respect to the Company. Except as
disclosed in Section 3.01(h)(iii) of the Company Disclosure Schedule, the
<PAGE>
businesses of the Company and its subsidiaries are not being conducted in
violation of any law (domestic or foreign), ordinance or regulation of any
Governmental Entity, except for possible violations which, individually or in
the aggregate, do not and could not reasonably be expected to have a Material
Adverse Effect with respect to the Company.
(i) Employee Benefit Plans. (i) Section 3.01(i) of the Company
Disclosure Schedule contains a true and complete list of each "employee
benefit plan" (within the meaning of section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") (including, without
limitation, multiemployer plans within the meaning of Section 3(37) of
ERISA)), stock purchase, stock option, severance, employment, change-in-
control, fringe benefit, collective bargaining, bonus, incentive, deferred
compensation and all other employee benefit plans, agreements, programs,
policies or other arrangements relating to employment, benefits or
entitlements, whether or not subject to ERISA (including any funding
mechanism therefor now in effect or required in the future as a result of the
transactions contemplated by this Agreement or otherwise), whether formal or
informal, oral or written, legally binding or not under which any employee or
former employee of the Company or any of its subsidiaries has any present or
future right to benefits or under which the Company or any of its
subsidiaries has any present or future liability. All such plans,
agreements, programs, policies and arrangements are herein collectively
referred to as the "Company Plans".
(ii) Except as set forth in Schedule 3.01(i)(ii), with respect to
each Company Plan, the Company has delivered to Parent a current, accurate
and complete copy (or, to the extent no such copy exists, an accurate
description) thereof and, to the extent applicable, (A) any related trust
agreement, annuity contract or other funding instrument; (B) the most recent
determination letter; (C) the current summary plan description and other
written communications (or a description of any oral communications) by the
Company to its employees concerning the extent of the benefits provided under
a Company Plan; and (D) for the three most recent years (I) the Form 5500 and
attached schedules; (II) audited financial statements; (III) actuarial
valuation reports; and (IV) attorney's response to an auditor's request for
information.
(iii) Except as disclosed in Section 3.01(i) of the Company
Disclosure Schedule: (A) Each Company Plan has been established and
administered in material compliance with its terms and with the applicable
provisions of ERISA, the Code and other applicable laws, rules and
regulations (including the applicable laws, rules and regulations of any
foreign jurisdiction), in each case, in all material respects; (B) each
Company Plan which is intended to be qualified within the meaning of Code
Section 401(a) is so qualified and has received a favorable determination
letter as to its qualification and nothing has occurred, whether by action or
failure to act, which would cause the loss of such qualification; (C) with
respect to any Company Plan, no actions, suits or claims (other than routine
claims for benefits in the ordinary course) are pending or, to the best
knowledge of the Company, threatened; no facts or circumstances exist which
could give rise to any such actions, suits or claims and the Company will
promptly notify Parent in writing of any pending claims or, to the knowledge
of the Company, any threatened claims arising between the date hereof and the
Effective Time of the Merger; (D) neither the Company nor, to the knowledge
of the Company, any other party has engaged in a prohibited transaction, as
such term is defined under Code Section 4975 or ERISA Section 406, which
<PAGE>
would subject the Company or Parent or its subsidiaries to any material
taxes, penalties or other liabilities under the Code or ERISA; (E) no event
has occurred and no condition exists that would subject the Company, either
directly or by reason of its affiliation with any member of its "Controlled
Group" (defined as any organization which is a member of a controlled group
of organizations within the meaning of Code Sections 414(b), (c), (m) or
(o)), to any material tax, fine or penalty imposed by ERISA, the Code or
other applicable laws, rules and regulations (including the applicable laws,
rules and regulations of any foreign jurisdiction); (F) all insurance
premiums required to be paid and all contributions required to be made under
the terms of any Company Plan, the Code, ERISA or other applicable laws,
rules and regulations (including the applicable laws, rules and regulations
of any foreign jurisdiction) as of the Effective Time of the Merger have been
or will be timely paid or made prior thereto and adequate reserves have been
provided for on the Company's balance sheet for any premiums (or portions
thereof) and for all benefits attributable to service on or prior to the
Effective Time of the Merger; (G) for each Company Plan with respect to which
a Form 5500 has been filed, no material change has occurred with respect to
the matters covered by the most recent Form since the date thereof; and
(H) no Company Plan provides for an increase in benefits on or after the
Effective Time of the Merger.
(iv) No Company Plan is subject to Title IV of ERISA, and no
Company Plan is a multiemployer plan as defined in Section 4001(A)(3) of
ERISA. The Company has never contributed to or sponsored any multiemployer
plan or any plan subject to Title IV of ERISA. No Company Plan or related
trust is intended to meet the requirements for tax-favored treatment under
Subchapter B of Chapter 1 of the Code or Code Section 501(c)(9).
(v) Section 3.01(i)(v) of the Company Disclosure Schedule sets
forth, on a plan by plan basis, the present value of benefits payable
presently or in the future to present or former employees of the Company
under each unfunded Company Plan that must be accounted for in accordance
with SFAS No. 87, 106 or 112.
(vi) Except as set forth in Section 3.01(i)(vi) of the Company
Disclosure Schedule, no Company Plan exists which could result in the payment
to any Company employee of any money or other property or rights or
accelerate or provide any other rights or benefits to any Company employee as
a result of the transaction contemplated by this Agreement, whether or not
such payment would constitute a parachute payment within the meaning of Code
section 280G.
(j) Taxes. Except as disclosed in Section 3.01(j) of the Company
Disclosure Schedule: (i) the Company and each of its subsidiaries, and any
consolidated, combined, unitary or aggregate group of which the Company or
any of its subsidiaries is or has been a member has timely filed all Tax
Returns required to be filed by it, or requests for extensions to file such
Tax Returns have been timely filed, granted and have not expired; (ii) the
Company and each of its subsidiaries, and any consolidated, combined, unitary
or aggregate group of which the Company or any of it subsidiaries is or has
been a member has paid all Taxes shown as due on such returns, and has
provided adequate reserves in its financial statements for any Taxes that
have not been paid, whether or not shown as being due on such Tax Returns;
(iii) no material claim for unpaid Taxes has been asserted by a Tax authority
or has become a lien against the property of the Company or any of its
subsidiaries (other than with respect to Taxes not yet due and payable) or is
<PAGE>
being asserted against the Company or any of its subsidiaries; (iv) no audit
or other proceeding with respect to any Taxes due from or with respect to the
Company or any of its subsidiaries or any Tax Return filed by the Company or
any of its subsidiaries is being conducted by any governmental or Tax
authority and the Company and its subsidiaries have not received notification
in writing that any such audit or other proceeding with respect to Taxes or
any Tax Return is pending; (v) no extension of the statute of limitations on
the assessment of any Taxes has been granted by the Company or any of its
subsidiaries; and (vi) neither the Company nor any of its subsidiaries is
subject to liability for Taxes of any Person (other than the Company or its
subsidiaries), including, without limitation, liability arising from the
application of Treasury Regulation section 1.1502-6 or any analogous
provision of state, local or foreign law, or as a transferee or successor, by
contract, or otherwise. As used herein, "Taxes" shall mean all taxes of any
kind, including, without limitation, those on or measured by or referred to
as income, gross receipts, sales, use, ad valorem, franchise, profits,
license, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, value added, property or windfall profits taxes,
customs, duties or similar fees, assessments or charges of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts imposed by any governmental authority, domestic or
foreign. As used herein, "Tax Return" shall mean any return, report or
statement required to be filed with any governmental authority with respect
to Taxes.
(k) Properties. Except as disclosed in Section 3.01(k) of the
Company Disclosure Schedule, the Company or one of its subsidiaries (i) has
good and marketable title to all the properties and assets (A) reflected in
the 1996 Balance Sheet as being owned by the Company or one of its
subsidiaries (other than any such properties or assets sold or disposed of
since such date in the ordinary course of business consistent with past
practice) or (B) acquired after September 30, 1996 which are material to the
Company's business on a consolidated basis, free and clear of all Liens,
except statutory Liens securing payments not yet due and such Liens as do not
materially affect the use of the properties or assets subject thereto or
affected thereby or otherwise materially impair business operations at such
properties and (ii) is the lessee of all leasehold estates (x) reflected in
the 1996 Balance Sheet or (y) acquired after September 30, 1996 which are
material to its business on a consolidated basis (except for leases that have
expired by their terms since the date thereof) and is in possession of the
properties purported to be leased thereunder, and each such lease is in full
force and effect and constitutes a legal, valid and binding obligation of,
and is legally enforceable against, the respective parties thereto (except as
affected by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding
in equity or at law) and an implied covenant of good faith and fair dealing),
and there is no default thereunder by the lessee or, to the Company's
knowledge, as of the date hereof, the lessor that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect
with respect to the Company. The Company has not received written notice and
does not otherwise have knowledge of any pending, threatened or contemplated
condemnation proceeding affecting any premises owned or leased by the Company
or any of its subsidiaries or any part thereof or of any sale or other
disposition of any such owned or leased premises or any part thereof in lieu
of condemnation.
<PAGE>
(l) Environmental Matters. Except as could not reasonably be
expected to result in any liability under Environmental Laws (as defined in
Section 8.04) to the Company or any of its subsidiaries which, individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect with respect to the Company:
(i) the Company and its subsidiaries hold and are in compliance
with all Environmental Permits (as defined in Section 8.04), and the
Company and its subsidiaries are, and have been, otherwise in compliance
with all Environmental Laws and, to the knowledge of the Company, there
are no conditions that might prevent or interfere with such compliance
in the future;
(ii) neither the Company nor any of its subsidiaries has received
any written Environmental Claim or has knowledge of any other
Environmental Claim or threatened Environmental Claim;
(iii) neither the Company nor any of its subsidiaries has entered
into any consent decree, order or agreement under any Environmental Law;
(iv) there are no (A) underground storage tanks,
(B) polychlorinated biphenyls, (C) friable asbestos or asbestos-
containing materials, (D) sumps, (E) surface impoundments, (F)
landfills, or (G) sewers or septic systems present at any facility
currently owned, leased, operated or otherwise used by the Company or
any of its subsidiaries that could reasonably be expected to give rise
to liability of the Company or any of its subsidiaries under any
Environmental Laws;
(v) there are no past (including, without limitation, with respect
to assets or businesses formerly owned, leased or operated by the
Company or any of its subsidiaries) or present actions, activities,
events, conditions or circumstances, including without limitation the
release, threatened release, emission, discharge, generation, treatment,
storage or disposal of Hazardous Materials, that could reasonably be
expected to give rise to liability of the Company or any of its
subsidiaries under any Environmental Laws;
(vi) no modification, revocation, reissuance, alteration, transfer,
or amendment of the Environmental Permits, or any review by, or approval
of, any third party of the Environmental Permits is required in
connection with the execution or delivery of this Agreement or the
consummation of the transactions contemplated hereby or the continuation
of the business of the Company or its subsidiaries following such
consummation;
(vii) Hazardous Materials (as defined in Section 8.04) have not
been generated, transported, treated, stored, disposed of, arranged to
be disposed of, released or threatened to be released at, on, from or
under any of the properties or facilities currently owned, leased or
otherwise used by the Company or any of its subsidiaries, in violation
of, or so as could result in liability under, any Environmental Laws;
and
(viii) neither the Company nor any of its subsidiaries has
contractually assumed any liabilities or obligations under any
Environmental Laws.
<PAGE>
(m) Contracts; Debt Instruments. (i) Neither the Company nor any
of its subsidiaries is, or has received any notice or has any knowledge that
any other party is, in default in any respect under any contract, agreement,
commitment, arrangement, lease, policy or other instrument to which it or any
of its subsidiaries is a party or by which it or any such subsidiary is
bound, except for those defaults which could not reasonably be expected,
either individually or in the aggregate, to have a Material Adverse Effect
with respect to the Company; and, to the knowledge of the Company, there has
not occurred any event that with the lapse of time or the giving of notice or
both would constitute such a default.
(ii) The Company has made available to Parent (x) true and correct
copies (or accurate English translations) of all loan or credit agreements,
notes, bonds, mortgages, indentures and other agreements and instruments
pursuant to which any indebtedness (as defined in section 8.04) of the
Company or any of its subsidiaries in an aggregate principal amount in excess
of $200,000 is outstanding or may be incurred and (y) accurate information
regarding the respective principal amounts currently outstanding thereunder.
(iii) Except as set forth in Section 3.01(m) of the Company
Disclosure Schedule, neither the Company nor any of its subsidiaries is a
party to or bound by any agreement which, pursuant to the requirements of
Form 10-K under the Exchange Act, would be required to be filed as an exhibit
to an Annual Report on Form 10-K of the Company, except agreements included
or incorporated by reference as exhibits to the Company's Annual Report on
Form 10-K for the fiscal year ended September 30, 1996 or any other Recent
SEC Document.
(n) Brokers. Except as disclosed in Section 3.01(n) of the
Company Disclosure Schedule, no broker, investment banker, financial advisor
or other person, other than PaineWebber Incorporated ("PaineWebber"), the
fees and expenses of which will be paid by the Company (pursuant to fee
agreements, copies of which have been provided to Parent), is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company. The Company agrees to
indemnify Parent and Sub and to hold Parent and Sub harmless from and against
any and all claims, liabilities or obligations with respect to any other fee,
commission or expense asserted by any person on the basis of any act or
statement alleged to have been made by the Company or its affiliates.
(o) Opinion of Financial Advisor. The Company has received as of
the date of this Agreement the opinion of PaineWebber to the effect that, as
of such date, the Merger Consideration is fair, from a financial point of
view, to the holders of Company Common Stock (other than Parent and its
affiliates).
(p) Board Recommendation; State Antitakeover Law. The Board of
Directors of the Company, at a meeting duly called and held, has by unanimous
vote of those directors present (i) determined that this Agreement and the
Stock Option Agreement and the transactions contemplated hereby and thereby,
including the Merger, taken together, are fair to and in the best interests
of the stockholders of the Company and has taken all actions necessary on the
part of the Company to render the restrictions on business combinations
contained in Section 203 of the DGCL inapplicable to this Agreement, and the
Merger and the Stock Option Agreement, and (ii) resolved to recommend that
<PAGE>
the holders of the shares of Company Common Stock approve this Agreement and
the transactions contemplated herein, including the Merger.
(q) Required Company Vote. The Company Stockholder Approval,
being the affirmative vote of a majority of the outstanding shares of the
Company Common Stock, is the only vote of the holders of any class or series
of the Company's securities necessary to approve this Agreement, the Merger
and the other transactions contemplated hereby. There is no vote of the
holders of any class or series of the Company's securities necessary to
approve the Stock Option Agreement.
(r) Rights Agreement. The Rights Agreement has been amended so as
to provide that neither Parent nor Sub will become an "Acquiring Person" or
an "Adverse Person" and that no "Triggering Event", "Stock Acquisition Date"
or "Distribution Date" (as such terms are defined in the Rights Agreement)
will occur as a result of the approval, execution or delivery of this
Agreement or the Stock Option Agreement or the consummation of the Merger or
the acquisition of shares of Company Common Stock by Parent pursuant to the
Stock Option Agreement.
(s) Intellectual Property. (i) Section 3.01(s)(i) of the Company
Disclosure Schedule sets forth all Intellectual Property (as defined in
Section 8.04) owned by the Company or its subsidiaries that is registered or
filed with any Governmental Entity (the "Registered Intellectual Property"),
all licenses of patented Intellectual Property to or from third parties (the
"Licensed Patent Intellectual Property") and all other licenses of
Intellectual Property to or from third parties by the Company or any of its
subsidiaries that are material to the business of the Company and its
subsidiaries (together with the Registered Intellectual Property and the
Licensed Patent Intellectual Property, the "Material Intellectual Property").
(ii) The Company and its subsidiaries own or have the right to use
all Intellectual Property necessary for the Company and its subsidiaries to
conduct their business substantially as it is currently conducted and
consistent with past practice.
(iii) Except as set forth on Section 3.01(s)(iii) of the Company
Disclosure Schedule: (1) all of the Registered Intellectual Property owned
or used by the Company or any of its subsidiaries is subsisting and
unexpired, has not been abandoned and, to the knowledge of the Company, does
not infringe or otherwise impair the intellectual property rights of any
third party; (2) none of the Material Intellectual Property owned or used by
the Company or any of its subsidiaries is the subject of any license,
security interest, Lien or other agreement granting rights therein to any
third party other than licenses listed on Schedule 3.01(s)(i) and except for
rights reserved by the U.S. Government pursuant research funding laws and
regulations; (3) the Company has not misappropriated the trade secrets,
technology, know-how, inventions or the like of any third party; (4) no
judgment, decree, injunction, rule or order has been rendered by any U.S.
federal or state or foreign Governmental Entity which would limit, cancel or
question the validity of, or the Company's or its subsidiaries' rights in and
to any Intellectual Property in any respect that could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect with
respect to the Company; (5) the Company has not received written notice, and
does not otherwise have knowledge, of any pending or threatened suit, action
or proceeding that seeks to limit, cancel or question the validity of, or the
Company's or its subsidiaries' rights in and to any Intellectual Property,
<PAGE>
which, if adversely determined, could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect with respect to
the Company; and (6) the Company and its subsidiaries have taken reasonable
steps to protect, maintain and safeguard their material Intellectual
Property, including any material Intellectual Property for which improper or
unauthorized disclosure would impair its value or validity, and have executed
appropriate nondisclosure agreements and made appropriate filings and
registrations in connection with the foregoing.
(t) Ownership of Parent Common Stock. Neither the Company nor, to
its best knowledge, any of its affiliates or associates (as such terms are
defined under the Exchange Act), (i) beneficially owns, directly or
indirectly, or (ii) is party to any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of, in each case,
shares of capital stock of Parent, which in the aggregate represent 5% or
more of the outstanding shares of such capital stock.
(u) Accounting Matters. To the Company's knowledge, neither the
Company nor any of its affiliates has through the date hereof taken or agreed
to take any action that would prevent the Parent from accounting for the
business combination to be effected by the Merger as a "pooling of
interests".
SECTION 3.02. Representations and Warranties of Parent and Sub.
Parent and Sub represent and warrant to the Company as follows:
(a) Organization, Standing and Corporate Power. Each of Parent,
Sub and each of Parent's "significant subsidiaries" (within the meaning of
Rule 1-02 of Regulation S-X of the SEC) (collectively, the "Parent
Subsidiaries") is duly organized, validly existing and in good standing under
the laws of the jurisdiction in which it is organized and has the requisite
corporate power and authority to carry on its business as now being
conducted. Each of Parent, Sub and each of the Parent Subsidiaries is duly
qualified or licensed to do business and is in good standing in each
jurisdiction (domestic or foreign) in which the nature of its business or the
ownership or leasing of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so
qualified or licensed (individually or in the aggregate) could not reasonably
be expected to have a Material Adverse Effect with respect to Parent. Parent
has made available to the Company complete and correct copies of its articles
of incorporation and by-laws and the certificate of incorporation and by-laws
of Sub.
(b) Capital Structure. As of the date of this Agreement, the
authorized capital stock of Parent consists of 90,000,000 shares of Parent
Common Stock and 1,000,000 shares of preferred stock of Parent (the "Parent
Preferred Stock"). As of the close of business on July 25, 1997, there were:
(i) 45,599,755 shares of Parent Common Stock issued and outstanding; (ii)
1,773,597 shares of Parent Common Stock held in the treasury of Parent; (iii)
5,233,411 shares of Parent Common Stock reserved for issuance pursuant to
Parent's stock option plans, Parent's employee stock purchase plans and
Parent's Director Stock Purchase and Deferred Compensation Plan (such plans,
collectively with the 1997 Stock Incentive Plan approved on August 21, 1997
subject to stockholder approval, the "Parent Stock Plans"); (iv) 3,356,441
shares of Parent Common Stock issuable upon exercise of awarded but
unexercised stock options; and (v) no shares of Parent Preferred Stock
outstanding. Except as set forth above and except for shares of junior
<PAGE>
participating preferred stock issuable pursuant to the Shareholder Protection
Rights Agreement, dated as of April 30, 1989, between Parent and The First
National Bank of Boston, as of the close of business on July 25, 1997 there
were no shares of capital stock or other equity securities of Parent issued,
reserved for issuance or outstanding. All outstanding shares of capital
stock of Parent are, and all shares which may be issued as described above
will be, when issued, duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights. There is no outstanding
Voting Debt of Parent. Except as set forth above, there are no outstanding
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which Parent is a party or by
which it is bound obligating Parent to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or other equity
or voting securities of Parent or obligating Parent to issue, grant, extend
or enter into any such security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking. There are no outstanding contractual
obligations, commitments, understandings or arrangements of Parent to
repurchase, redeem or otherwise acquire or make any payment in respect of any
shares of capital stock of Parent.
During the period from July 25, 1997 through the date of this
Agreement, except as set forth in Section 3.02(b) of the Parent Disclosure
Schedule, Parent did not (A) issue or permit to be issued any shares of
capital stock, or securities exercisable for or convertible into shares of
capital stock, of Parent, other than pursuant to or as permitted by the terms
of the Parent Stock Plans; (B) repurchase, redeem or otherwise acquire,
directly or indirectly through one or more subsidiaries, any shares of
capital stock of Parent; or (C) declare, set aside, make or pay to the
stockholders of Parent dividends or other distributions on the outstanding
shares of capital stock of Parent (other than regular quarterly cash
dividends on the Parent Common Stock).
As of the date hereof, the authorized capital stock of Sub consists
of 1,000 shares of common stock, par value $.01 per share, all of which have
been validly issued, are fully paid and nonassessable and are owned by
Parent, free and clear of any Lien, and as of the Closing Date, all the
issued and outstanding shares of the common stock of Sub will be owned by
Parent free and clear of any Lien.
(c) Authority; Noncontravention. Parent and Sub have all
requisite corporate power and authority to enter into this Agreement and the
Stock Option Agreement and to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this Agreement and the Stock
Option Agreement by Parent and Sub and the consummation by Parent and Sub of
the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on the part of Parent and Sub. This Agreement
and the Stock Option Agreement have been duly executed and delivered by each
of Parent and Sub and (assuming due authorization, execution and delivery by
the Company) constitute valid and binding obligations of Parent and Sub,
enforceable against them in accordance with their terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally,
general equitable principles (whether considered in a proceeding in equity or
at law) and an implied covenant of good faith and fair dealing. The
execution and delivery of this Agreement and the Stock Option Agreement do
not, and the consummation by Parent and Sub of the transactions contemplated
by this Agreement and compliance by Sub with the provisions of this Agreement
<PAGE>
and the Stock Option Agreement will not, conflict with, or result in any
breach or violation of, or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of, or a "put" right with respect to any obligation under, or to
a loss of a material benefit under, or result in the creation of any Lien
upon any of the properties or assets of Parent, Sub or any of Parent's other
subsidiaries under, (i) the certificate of incorporation or by-laws of
Parent, Sub or such other subsidiary, (ii) any loan or credit agreement,
note, bond, mortgage, indenture, lease or other agreement, instrument,
permit, concession, franchise or license applicable to Parent, Sub, such
other subsidiaries or any of their respective properties or assets or (iii)
subject to the governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law, ordinance,
rule, regulation or arbitration award applicable to Parent, Sub any of
Parent's other subsidiaries or their respective properties or assets, other
than, in the case of clauses (ii) and (iii), any such conflicts, breaches,
violations, defaults, rights, losses or Liens that individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect
with respect to Parent or prevent or materially delay the ability of Parent
and Sub to consummate the transactions contemplated by this Agreement and the
Stock Option Agreement or perform their respective obligations hereunder or
thereunder. No consent, approval, order or authorization of, or
registration, declaration or filing with, or notice to, any Governmental
Entity is required by or with respect to Parent or Sub in connection with the
execution and delivery of this Agreement or the Stock Option Agreement by
Parent and Sub or the consummation by Parent and Sub of any of the
transactions contemplated hereby or thereby, except for (i) the filing of a
premerger notification and report form under the HSR Act and the filing of
such applications by Parent and Sub as may be required pursuant to antitrust
or similar laws or regulations in effect in Germany, France, Japan, the
United Kingdom or any political subdivision thereof, (ii) the filing with the
SEC, the NYSE and the Pacific Stock Exchange of (A) the Form S-4 and (B) such
reports under the Exchange Act as may be required in connection with this
Agreement, the Stock Option Agreement and the transactions contemplated
hereby and thereby, (iii) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware and appropriate documents with
the relevant authorities of other states in which the Company is qualified to
do business, (iv) such other consents, approvals, orders, authorizations,
registrations, declarations, filings or notices as may be required under the
"takeover" or "blue sky" laws of various states and (v) such other consents,
approvals, orders, authorizations, registrations, declarations, filings or
notices the failure of which to make or obtain, individually or in the
aggregate, could not reasonably be expected to (x) prevent or materially
delay consummation of the Merger or the other transactions contemplated
hereby or performance of Parent's and Sub's obligations hereunder and under
the Stock Option Agreement or (y) have a Material Adverse Effect with respect
to Parent.
(d) Parent SEC Documents; Undisclosed Liabilities. Parent has
filed with the SEC all reports, schedules, forms, statements and other
documents required pursuant to the Securities Act and the Exchange Act since
July 1, 1994 (collectively, and in each case including all exhibits and
schedules thereto and documents incorporated by reference therein, the
"Parent SEC Documents"). Except as set forth in Section 3.02(d) of the
disclosure schedule delivered by Parent and Sub to the Company at the time of
the execution of this Agreement (the "Parent Disclosure Schedule"), as of
their respective dates, the Parent SEC Documents complied as to form in all
<PAGE>
material respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such Parent SEC Documents, and none of the Parent
SEC Documents (including any and all financial statements included therein)
as of such dates contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading. Except as set forth in Section 3.02(d) of
the Parent Disclosure Schedule, except to the extent that information
contained in any Parent SEC Document has been revised or superseded by a
later filed Parent SEC Document, none of the Parent SEC Documents (including
any and all financial statements included therein) contains any untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
consolidated financial statements of Parent included in all Parent SEC
Documents filed since July 1, 1994 (the "Parent SEC Financial Statements")
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with generally accepted accounting
principles (except, in the case of unaudited consolidated quarterly
statements, as permitted by Form 10-Q of the SEC), applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto) and fairly present the consolidated financial position of Parent and
its consolidated subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended
(subject, in the case of unaudited quarterly statements, to normal recurring
year-end audit adjustments). Except as disclosed in Section 3.02(d) of the
Parent Disclosure Schedule, neither Parent nor any of its subsidiaries has
any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by generally accepted accounting principles
to be recognized or disclosed on a consolidated balance sheet of Parent and
its subsidiaries or in the notes thereto, except (i) liabilities reflected in
the audited consolidated balance sheet of the Parent as of June 30, 1996,
(ii) liabilities disclosed in any SEC Document filed by Parent prior to the
date of this Agreement with respect to any period ending, or date occurring,
after June 30, 1996 and (iii) liabilities incurred since June 30, 1996, in
the ordinary course of business consistent with past practice.
(e) Information Supplied. None of the information supplied or to
be supplied by Parent or Sub for inclusion or incorporation by reference in
(i) the Form S-4 will, at the time the Form S-4 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 or (ii) the Proxy Statement will, at
the date it is first mailed to the Company's stockholders or at the time of
the 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 the light of the circumstances under
which they are made, not misleading. The Form S-4 will comply as to form in
all material respects with the requirements of the Securities Act and the
rules and regulations promulgated thereunder, except that no representation
is made by Parent or Sub with respect to statements made or incorporated by
reference therein based on information supplied in writing by the Company
specifically for inclusion or incorporation by reference therein.
<PAGE>
(f) Absence of Certain Changes or Events. Except as disclosed in
Section 3.02(f) of the Parent Disclosure Schedule, since June 30, 1996, there
is not and has not been: (i) any Material Adverse Change with respect to
Parent; (ii) any condition, event or occurrence which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect or
give rise to a Material Adverse Change with respect to Parent; (iii) any
action which, if it had been taken or occurred after the execution of this
Agreement, would have required the consent of the Company pursuant to this
Agreement; or (iv) any condition, event or occurrence which, individually or
in the aggregate, could reasonably be expected to prevent or materially delay
the ability of Parent and Sub to consummate the transactions contemplated by
this Agreement or perform its obligations hereunder or under the Stock Option
Agreement.
(g) Litigation; Compliance with Laws. (i) Except as disclosed in
Section 3.02(g)(i) of the Parent Disclosure Schedule, there is (1) no suit,
action, arbitration or proceeding pending, and (2) to the knowledge of
Parent, no suit, action, arbitration or proceeding threatened against or
investigation pending with respect to Parent or any of its subsidiaries that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect with respect to Parent or prevent or materially delay
the ability of Parent and Sub to consummate the transactions contemplated by
this Agreement or to perform their obligations hereunder and under the Stock
Option Agreement, nor is there any judgment, decree, citation, injunction,
rule or order of any Governmental Entity or arbitrator outstanding against
Parent or any of its subsidiaries which, individually or in the aggregate,
has or could reasonably be expected to have, any such effect.
(ii) Except as disclosed in Section 3.02(g)(ii) of the Parent
Disclosure Schedule, the businesses of Parent and its subsidiaries are not
being conducted in violation of any law (domestic or foreign), ordinance or
regulation of any Governmental Entity, except for possible violations which,
individually or in the aggregate, do not and could not reasonably be expected
to have a Material Adverse Effect with respect to Parent.
(h) Brokers. No broker, investment banker, financial advisor or
other person, other than Morgan Stanley and Co. Incorporated ("Morgan
Stanley"), the fees and expenses of which will be paid by Parent (pursuant to
fee agreements, copies of which have been provided to the Company), is
entitled to any broker's, finder's, financial advisor's or other similar fee
or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of Parent or Sub.
Parent agrees to indemnify the Company and to hold the Company harmless from
and against any and all claims, liabilities or obligations with respect to
any other fee, commission or expense asserted by any person on the basis of
any act or statement alleged to have been made by Parent or its affiliates.
(i) Opinion of Financial Advisor. Parent has received the opinion
of Morgan Stanley, dated the date of this Agreement, to the effect that, as
of such date, the Merger Consideration is fair to Parent from a financial
point of view.
(j) Interim Operations of Sub. Sub was formed on August 18, 1997
solely for the purpose of engaging in the transactions contemplated hereby,
has engaged in no other business activities and has conducted its operations
only as contemplated hereby.
<PAGE>
(k) Ownership of Company Common Stock. Other than pursuant to the
Stock Option Agreement, as of the date hereof, neither Parent nor, to its
best knowledge, any of its affiliates or associates (as such terms are
defined under the Exchange Act), (i) beneficially owns, directly or
indirectly, or (ii) is party to any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of, in each case,
shares of capital stock of the Company, which in the aggregate represent 5%
or more of the outstanding shares of such capital stock.
(l) Accounting Matters. Neither Parent nor, to its best
knowledge, any of its affiliates, has through the date hereof taken or agreed
to take any action that would prevent Parent from accounting for the business
combination to be effected by the Merger as a "pooling of interests".
(m) Required Vote. This Agreement has been approved by Parent, as
the sole stockholder of Sub. No other vote of holders of any class or series
of securities of Parent or Sub is necessary to approve this Agreement, the
Merger, the Stock Option Agreement and the transactions contemplated hereby
and thereby.
ARTICLE IV
Covenants Relating to Conduct of Business Prior to Merger.
SECTION 4.01. Conduct of Business. (a) Conduct of Business by the
Company. During the period from the date of this Agreement to the Effective
Time of the Merger (except as otherwise expressly contemplated by the terms
of this Agreement), and except as approved by Parent, which approval shall
not be unreasonably withheld or delayed, the Company shall, and shall cause
its subsidiaries to, act and carry on their respective businesses in the
ordinary course of business consistent with past practice and use its and
their respective reasonable best efforts to preserve substantially intact
their current business organizations, keep available the services of their
current officers and employees and preserve their relationships with
customers, suppliers, licensors, licensees, advertisers, distributors and
others having significant business dealings with them. Without limiting the
generality of the foregoing, during the period from the date of this
Agreement to the Effective Time of the Merger, the Company shall not, and
shall not permit any of its subsidiaries to:
(i) (x) declare, set aside or pay any dividends on, or make
any other distributions in respect of, any of its capital stock, other
than dividends and distributions by a direct or indirect wholly owned
domestic subsidiary of the Company to its parent, (y) split, combine or
reclassify any capital stock of the Company or any subsidiary or issue
or authorize the issuance of any other securities in respect of, in lieu
of or in substitution for shares of capital stock of the Company or any
subsidiary, or (z) purchase, redeem or otherwise acquire any shares of
capital stock of the Company or any of its subsidiaries or any other
securities thereof or any rights, warrants or options to acquire any
such shares or other securities, except that the Company may redeem
shares of its Series A Preferred Stock to the extent required by the
Certificate of Designations with respect thereto as in effect on the
date of this Agreement, provided that the redemption price for the
shares of Series A Preferred Stock so redeemed shall be paid by the
Company solely in shares of Company Common Stock;
<PAGE>
(ii) authorize for issuance, issue, deliver, sell, pledge or
otherwise encumber any shares of its capital stock or the capital stock
of any of its subsidiaries, any other voting securities or any
securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities or
any other securities or equity equivalents (including without limitation
stock appreciation rights), other than the issuance of Company Common
Stock upon (i) the exercise of Warrants outstanding on the date of this
Agreement in accordance with their present terms, (ii) the exercise of
Company Stock Options awarded prior to the date of this Agreement but
unexercised on the date of this Agreement in accordance with their
present terms, (iii) the exercise of options awarded pursuant to the
Stock Purchase Plan of the Company prior to the date of this Agreement
but unexercised on the date of this Agreement in accordance with their
present terms, (iii) the conversion of the Convertible Notes in
accordance with their present terms or (iv) the redemption of the Series
A Preferred Stock in accordance with the Certificate of Designations
with respect thereto as in effect on the date of this Agreement;
(iii) amend (A) the Certificate of Incorporation or By-Laws
or comparable charter or organizational documents of any subsidiary of
the Company or (B) the Rights Agreement;
(iv) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the stock or assets of,
or by any other manner, any business or any corporation, partnership,
joint venture, association or other business organization or division
thereof;
(v) sell, lease, license, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of any of its properties or
assets other than any such properties or assets the value of which do
not exceed $100,000 individually and $1,000,000 in the aggregate, except
(A) sales of inventory and receivables in the ordinary course of
business consistent with past practice, (B) the granting of purchase
money security interests in the ordinary course of business consistent
with past practice and (C) the granting of end-user licenses and the
right to grant end-user sublicenses in the ordinary course of business
consistent with past practice to customers of the Company or its
subsidiaries to the extent such licenses are necessary to permit such
customers to use products purchased from the Company or such
subsidiaries;
(vi) (A) incur any indebtedness for borrowed money or
guarantee any such indebtedness of another person, issue or sell any
debt securities or warrants or other rights to acquire any debt
securities of the Company or any of its subsidiaries, guarantee any debt
securities of another person, enter into any "keep well" or other
agreement to maintain any financial statement condition of another
person or enter into any arrangement having the economic effect of any
of the foregoing, except for short-term borrowings incurred in the
ordinary course of business consistent with past practice and
intercompany indebtedness between the Company and its wholly-owned
subsidiaries or between such wholly owned subsidiaries, or (B) make any
loans, advances or capital contributions to, or investments in, any
other person, other than to the Company or any direct or indirect wholly
owned subsidiary of the Company;
<PAGE>
(vii) acquire or agree to acquire any assets, other than
inventory in the ordinary course of business consistent with past
practice, or make or agree to make any capital expenditures, except
capital expenditures which, individually or in the aggregate, do not
exceed $1,000,000;
(viii) pay, discharge or satisfy any claims (including claims
of stockholders), liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), except for the
payment, discharge or satisfaction of (x) liabilities or obligations in
the ordinary course of business consistent with past practice or in
accordance with their terms as in effect on the date hereof or (y)
claims settled or compromised to the extent permitted by Section
4.01(a)(xii), or waive, release, grant, or transfer any rights of
material value or modify or change in any material respect any existing
material license, lease, contract or other document, other than in the
ordinary course of business consistent with past practice;
(ix) adopt a plan of complete or partial liquidation or
resolutions providing for or authorizing such a liquidation or a
dissolution, merger, consolidation, restructuring, recapitalization or
reorganization;
(x) enter into or amend any collective bargaining agreement;
(xi) change any material accounting principle used by it,
except as required by generally accepted accounting principles;
(xii) settle or compromise any litigation or claim (whether
or not commenced prior to the date of this Agreement), other than
settlements or compromises of litigation or claims that do not provide
for injunctive or similar relief and where the amount paid (after giving
effect to insurance proceeds actually received or reasonably believed by
management of the Company to be receivable) in settlement or compromise
does not exceed $150,000 provided that the aggregate amount paid in
connection with the settlement or compromise of all such litigation
matters shall not exceed $500,000;
(xiii) engage in any transaction with, or enter into any
agreement, arrangement, or understanding with, directly or indirectly,
any of the Company's affiliates, including, without limitation, any
transactions, agreements, arrangements or understandings with any
affiliate or other Person covered under Item 404 of SEC Regulation S-K
that would be required to be disclosed under such Item 404, other than
such transactions of the same general nature, scope and magnitude as are
disclosed in the Company SEC Documents;
(xiv) sell any shares of common stock of Millenium
Pharmaceuticals, Inc.;
(xv) transfer to any person or entity any rights to its
Intellectual Property other than the granting of end-user licenses and
the right to grant end-user sublicenses in the ordinary course of
business consistent with past practice to customers of the Company or
its subsidiaries to the extent such licenses are necessary to permit
such customers to use products purchased from the Company or such
subsidiaries;
<PAGE>
(xvi) enter into or amend any agreement pursuant to which any
other party is granted exclusive marketing or other exclusive rights of
any type or scope with respect to any of its products or technology; or
(xvii) authorize, or commit or agree to take, any of the
foregoing actions.
(b) Conduct of Business by Parent. During the period from the
date of this Agreement to the Effective Time of the Merger, Parent shall not:
(i) (x) declare, set aside or pay any dividends on, or make
any other distributions in respect of, any of its capital stock, other
than regular quarterly cash dividends (in an amount determined in a
manner consistent with Parent's past practice) with customary record and
payment dates or (y) split, combine or reclassify any of its capital
stock or issue or authorize the issuance of any other securities in lieu
of or in substitution for shares of its capital stock;
(ii) amend Parent's articles of incorporation or by-laws in a
manner that would be materially adverse to the holders of Parent Common
Stock (it being understood that an amendment to the articles of
incorporation of Parent increasing the number of authorized shares of
Parent Common Stock or other capital stock of Parent shall not be deemed
to be materially adverse to the holders of Parent Common Stock); or
(iii) authorize, or commit or agree to take, any of the
foregoing actions.
(c) Changes in Employment Arrangements. Neither the Company nor
any of its subsidiaries shall (i) adopt or amend (except as may be required
by law) any bonus, profit sharing, compensation, stock option, pension,
retirement, deferred compensation, employment or other employee benefit plan,
agreement, trust, fund or other arrangement for the benefit or welfare of any
employee, director or former director or employee or (ii) other than
increases for individuals (other than officers and directors) in the ordinary
course of business consistent with past practice, increase the compensation
or fringe benefits of any director, employee or former director or employee
or pay any benefit not required by any existing plan, arrangement or
agreement.
(d) Severance. Neither the Company nor any of its subsidiaries
shall grant any new or modified severance or termination arrangement or
increase or accelerate any benefits payable under its severance or
termination pay policies in effect on the date hereof.
(e) WARN. Neither the Company nor any of its subsidiaries shall
effectuate a "plant closing" or "mass layoff", as those terms are defined in
WARN, affecting in whole or in part any site of employment, facility,
operating unit or employee of the Company or any subsidiary, without
notifying Sub or its affiliates in advance and without complying with the
notice requirements and other provisions of WARN.
(f) Tax Elections. Except in the ordinary course of business and
consistent with past practice, neither the Company nor any of its
subsidiaries shall make any tax election or settle or compromise any federal,
state, local or foreign tax liability.
<PAGE>
(g) Pooling and Tax-Free Reorganization Treatment. Neither
Company nor Parent shall, and shall not permit any of their respective
subsidiaries to, intentionally take or cause to be taken any action which
would disqualify the Merger as a "pooling of interests" for accounting
purposes or as a "reorganization" within the meaning of Section 368(a) of the
Code; provided, however, that nothing hereunder shall limit the ability of
Parent to exercise its rights under the Stock Option Agreement.
(h) Other Actions. Neither the Company nor Parent shall, or shall
permit any of its subsidiaries to, (i) intentionally take any action that, if
taken on or prior to the date of this Agreement, would have resulted in any
of its representations and warranties set forth in this Agreement being
untrue in any material respect, or (ii) intentionally take any action that
would or reasonably might be expected to, result in any of the conditions to
the Merger set forth in Article VI not being satisfied or in a violation of
any provision of the Stock Option Agreement. The Company and Parent shall
promptly advise the other party orally and in writing of (x) any action of
the type set forth in clause (i) above, (y) the failure by such party to
comply with any covenant, condition or agreement hereunder or under the Stock
Option Agreement and (z) any event which could reasonably be expected to
cause the conditions set forth in Article VI not being satisfied; provided,
however, that no such notice shall affect the representations, warranties,
covenants and agreement of the parties or the conditions to their obligations
hereunder.
ARTICLE V
Additional Agreements
SECTION 5.01. Preparation of Form S-4 and Proxy Statement;
Stockholder Meeting. (a) Promptly following the date of this Agreement, the
Company shall prepare the Proxy Statement, and Parent shall prepare and file
with the SEC the Form S-4, in which the Proxy Statement will be included.
Parent and the Company shall each use its reasonable best efforts to have the
Form S-4 declared effective under the Securities Act as promptly as
practicable after such filing. The Company will use its reasonable best
efforts to cause the Proxy Statement to be mailed to the Company's
stockholders as promptly as practicable after the Form S-4 is declared
effective under the Securities Act. Parent shall also take any action (other
than qualifying to do business in any state in which it is not now so
qualified or filing a general consent to service of process) required to be
taken under any applicable state securities laws in connection with the
registration and qualification of the Parent Common Stock to be issued in the
Merger, and the Company shall furnish all information relating to the Company
and its stockholders as may be reasonably requested in connection with any
such action. The information provided and to be provided by Parent, Sub and
the Company, respectively, (i) for use in the Form S-4, at the time the Form
S-4 becomes effective, shall be true and accurate in all material respects
and shall not omit to state a material fact required to be stated therein or
necessary to make such information not misleading and (ii) for use in the
Proxy Statement, on the date the Proxy Statement is mailed to the Company's
stockholders and on the date of the Stockholders Meeting referred to below,
shall be true and correct in all material respects and shall not omit to
state any material fact required to be stated therein or necessary in order
to make such information, in the light of the circumstances under which the
statements therein were made, not misleading, and the Company and Parent each
<PAGE>
agree to correct any information provided by it for use in the Form S-4 and
the Proxy Statement which shall have become false or misleading.
(b) All mailings to the Company's stockholders in connection with
the Merger, including the Proxy Statement, shall be subject to the prior
review, comment and approval of Parent (such approval not to be unreasonably
withheld or delayed).
(c) The Company will, as promptly as practicable following the
date of this Agreement and in consultation with Parent, duly call, give
notice of, convene and hold a meeting of its stockholders (the "Stockholders
Meeting") for the purpose of approving this Agreement and the transactions
contemplated by this Agreement to the extent required by the DGCL. The
Company will, through its Board of Directors, recommend to its stockholders
approval of the foregoing matters, as set forth in Section 3.01(p); provided,
however, that the Board of Directors of the Company may fail to make or
withdraw or modify such recommendation, but only to the extent that the Board
of Directors of the Company shall have concluded in good faith on the basis
of written advice (or advice confirmed in writing) from outside counsel that
the failure to take such action would be contrary to the fiduciary duties of
the Board of Directors of the Company to the stockholders of the Company
under applicable law. Any such recommendation, together with a copy of the
opinion referred to in Section 3.01(o) shall be included in the Proxy
Statement. The Company will use its best efforts to hold such meeting as
soon as practicable after the Form S-4 shall have been declared effective.
SECTION 5.02. Access to Information; Confidentiality. (a) Each
of the Company and Parent shall, and shall cause its subsidiaries, officers,
employees, counsel, financial advisors and other representatives to, afford
to the other party and its representatives reasonable access during normal
business hours, during the period prior to the Effective Time of the Merger
to its properties, books, contracts, commitments, personnel and records, and,
during such period, each of the Company and Parent shall, and shall cause its
subsidiaries, officers, employees and representatives to, furnish promptly to
the other party (i) a copy of each report, schedule, registration statement
and other document filed by it during such period pursuant to the
requirements of Federal or state securities laws and (ii) all other
information concerning its business, properties, financial condition,
operations and personnel as such other party may from time to time reasonably
request. Each of the Company and Parent will hold, and will cause its
respective directors, officers, employees, accountants, counsel, financial
advisors and other representatives and affiliates to hold, any nonpublic
information in confidence to the extent required by, and in accordance with,
the provisions of each of the confidentiality agreements, dated December 13,
1996 and August 8, 1997, respectively, between Parent and the Company
(collectively, the "Confidentiality Agreements").
(b) No investigation pursuant to this Section 5.02 shall affect
any representations or warranties of the parties herein or the conditions to
the obligations of the parties hereto.
SECTION 5.03. Reasonable Best Efforts. (a) Upon the terms and
subject to the conditions set forth in this Agreement, each of the parties
agrees to use its reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate with the
other parties in doing, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective, in the most
<PAGE>
expeditious manner practicable, the Merger and the other transactions
contemplated by this Agreement, including (i) obtaining all consents,
approvals, waivers, licenses, permits or authorizations as are required to be
obtained (or, which if not obtained, would result in an event of default,
termination or acceleration of any agreement or any put right under any
agreement) under any applicable law or regulation or from any Governmental
Entities or third parties in connection with the transactions contemplated by
this Agreement, (ii) if required by any Governmental Entity as a condition to
the obtaining of any consent of such Governmental Entity or the agreement of
such Governmental Entity not to raise any objection to the transaction,
agreeing to dispose of any operations of the Company the disposal of which
could not reasonably be expected to have a Material Adverse Effect with
respect to the Company, (iii) defending any lawsuits or other proceedings
challenging this Agreement and (iv) accepting and delivering additional
instruments necessary to consummate the transactions contemplated by this
Agreement. The Company agrees that Parent shall have the opportunity to
negotiate and consult directly with all applicable Governmental Entities in
connection with their consideration of the transactions contemplated by this
Agreement, including, without limitation, the opportunity to select (to the
extent permitted by the applicable Governmental Entity), any operations to be
disposed of pursuant to clause (ii) above.
SECTION 5.04. Indemnification. (a) From and after the Effective
Time of the Merger, Parent and the Surviving Corporation shall indemnify,
defend and hold harmless each person who is now, or has been at any time
prior to the date hereof or who becomes prior to the Effective Time of the
Merger eligible for indemnification pursuant to the Certificate of
Incorporation and By-Laws (the "Indemnified Parties") against (i) all losses,
claims, damages, costs, expenses, liabilities or judgments or amounts that
are paid in settlement of or in connection with any claim, action, suit,
proceeding or investigation based in whole or in part on or arising in whole
or in part out of the fact that such person is or was a director, officer or
employee of the Company, pertaining to any matter existing or occurring at or
prior to the Effective Time of the Merger, whether asserted or claimed prior
to, or at or after, the Effective Time of the Merger ("Indemnified
Liabilities") and (ii) all Indemnified Liabilities based in whole or in part
on, or arising in whole or in part out of, or pertaining to this Agreement or
the transactions contemplated hereby, in each case to the extent the Company
would have been permitted under the Certificate of Incorporation and By-laws
to indemnify such person. Nothing contained herein shall limit any rights to
indemnification which any director or officer of the Company may have under
any indemnification agreement or the Certificate of Incorporation or By-Laws.
In the event any such claim, action, suit, proceeding or investigation is
brought against any Indemnified Parties (whether arising before or after the
Effective Time of the Merger), (i) any counsel retained by the Indemnified
Parties for any period after the Effective Time of the Merger shall be
reasonably satisfactory to Parent and the Surviving Corporation (it being
understood that Testa, Hurwitz & Thibeault, LLP is acceptable to Parent and
the Surviving Corporation); (ii) after the Effective Time of the Merger,
Parent or the Surviving Corporation shall pay all reasonable fees and
expenses of such counsel for the Indemnified Parties promptly as statements
therefor are received; and (iii) after the Effective Time of the Merger, the
Surviving Corporation will cooperate in the defense of any such matter,
provided that the Surviving Corporation shall not be liable for any
settlement of any claim effected without its written consent, which consent,
however, shall not be unreasonably withheld. Any Indemnified Party wishing
to claim indemnification under this Section 5.04, upon learning of any such
<PAGE>
claim, action, suit, proceeding or investigation, shall notify Parent and the
Surviving Corporation (but the failure so to notify the Surviving Corporation
shall not relieve them from any liability which they may have under this
Section 5.04 except to the extent such failure materially prejudices Parent
and the Surviving Corporation), and shall deliver to Parent and the Surviving
Corporation the undertaking, if any, required by Section 145(e) of the DGCL.
Parent and the Surviving Corporation shall be liable for the fees and
expenses hereunder with respect to only one law firm to represent the
Indemnified Parties as a group with respect to each such matter unless there
is, under applicable standards of professional conduct, a conflict between
the positions of any two or more Indemnified Parties that would preclude or
render inadvisable joint or multiple representation of such parties.
(b) Parent shall cause to be maintained in effect for six years
from the Effective Time of the Merger directors' and officers' liability
insurance coverage covering persons who are directors and officers of the
Company on the date of this Agreement, with respect to matters occurring
prior to the Effective Time of the Merger, and containing terms and
conditions which are not less advantageous to such persons than the policies
of the Company in effect on the date hereof (the "Company Insurance");
provided that Parent shall not be required to spend annually in excess of
150% of the annual premium for the Company Insurance paid by the Company as
of the date of this Agreement (the "Current Premium"); provided, further,
that if Parent would be required to spend annually in excess of 150% of the
Current Premium to obtain insurance having terms not less advantageous than
the Company Insurance, the Surviving Corporation will be required to spend up
to such amount to maintain or procure as much insurance coverage as can be
procured for such premium.
SECTION 5.05. Public Announcements. Neither Parent and Sub, on
the one hand, nor the Company, on the other hand, will issue any press
release or public statement with respect to the transactions contemplated by
this Agreement and the Stock Option Agreement, including the Merger, without
the other party's prior consent (such consent not to be unreasonably withheld
or delayed), except as may be required by applicable law, court process or by
obligations pursuant to any agreement with any securities exchange or
quotation system on which securities of the disclosing party are listed or
quoted. In addition to the foregoing, Parent, Sub and the Company will
consult with each other before issuing, and provide each other the
opportunity to review and comment upon, any such press release or other
public statements with respect to such transactions. The parties agree that
the initial press release or releases to be issued with respect to the
transactions contemplated by this Agreement shall be mutually agreed upon
prior to the issuance thereof.
SECTION 5.06. Affiliates. At least 40 days prior to the Closing
Date, (i) the Company shall deliver to Parent a letter identifying all
persons who are, at the time this Agreement is submitted for approval to the
stockholders of the Company, executive officers and directors of the Company
and all other persons that, to the knowledge of the Company, are "affiliates"
of the Company (as that term is used in Rule 145 under the Securities Act or
SEC Accounting Releases 130 and 135) and shall use all reasonable efforts to
cause each person named on the letter delivered by it to deliver to Parent at
least 30 days prior to the Closing Date a written agreement, substantially in
the form attached as Exhibit B-1 and (ii) Parent shall deliver to Company a
letter identifying all persons who are, at the time this Agreement is
submitted for approval to the stockholders of the Company, executive officers
<PAGE>
of Parent and all other persons that, to the knowledge of Parent are
"affiliates" of Parent (as that term is used in SEC Accounting Releases 130
and 135) and shall use all reasonable efforts to cause each person named on
the letter delivered by it to deliver to the Company at least 30 days prior
to the Closing Date a written agreement, substantially in the form attached
as Exhibit B-2.
SECTION 5.07. No Solicitation. Neither the Company nor any of its
subsidiaries shall (whether directly or indirectly through advisors, agents
or other intermediaries), nor shall the Company or any of its subsidiaries
authorize or permit any of its or their officers, directors, agents,
representatives, advisors or subsidiaries to, (a) solicit, initiate or take
any action knowingly to facilitate the submission of inquiries, proposals or
offers from any person (other than Sub or Parent) relating to (i) any
acquisition or purchase of 15% or more of the consolidated assets of the
Company and its subsidiaries or of over 15% of any class of equity securities
of the Company or any of its subsidiaries, (ii) any tender offer (including a
self tender offer) or exchange offer that if consummated would result in any
Person (as defined in Section 8.02) beneficially owning 15% or more of any
class of equity securities of the Company or any of its subsidiaries, (iii)
any merger, consolidation, business combination, sale of substantially all
assets, recapitalization, liquidation, dissolution or similar transaction
involving the Company or any of its subsidiaries whose assets, individually
or in the aggregate, constitute more than 15% of the consolidated assets of
the Company other than the transactions contemplated by this Agreement, or
(iv) any other transaction the consummation of which would or could
reasonably be expected to impede, interfere with, prevent or materially delay
the Merger (collectively, "Transaction Proposals"), or agree to or endorse
any Transaction Proposal, or (b) enter into or participate in any discussions
or negotiations regarding any of the foregoing, or furnish to any other
person any information with respect to its business, properties or assets or
any of the foregoing, or otherwise cooperate in any way with, or knowingly
assist or participate in, facilitate or encourage, any effort or attempt by
any other person (other than Sub or Parent) to do or seek any of the
foregoing; provided, however, that the foregoing shall not prohibit the
Company (either directly or indirectly through advisors, agents or other
intermediaries) from (i) furnishing information pursuant to an appropriate
confidentiality letter (which letter shall not be less favorable to the
Company in any material respect than the Confidentiality Agreement, dated as
of December 13, 1996, between the Company and Parent, and a copy of which
shall be provided for informational purposes only to Parent) concerning the
Company and its businesses, properties or assets to a third party who has
made a bona fide Transaction Proposal, (ii) engaging in discussions or
negotiations with such a third party who has made a bona fide Transaction
Proposal, (iii) following receipt of a bona fide Transaction Proposal, taking
and disclosing to its stockholders a position contemplated by Rule 14d-9 or
Rule 14e-2(a) under the Exchange Act or otherwise making disclosure to its
stockholders, (iv) following receipt of a bona fide Transaction Proposal,
failing to make or withdrawing or modifying its recommendation referred to in
Section 3.01(p), and/or (v) taking any action required to be taken by the
Company pursuant to a non-appealable, final order by any court of competent
jurisdiction, but in each case referred to in the foregoing clauses (i)
through (v) only to the extent that the Board of Directors of the Company
shall have concluded in good faith on the basis of written advice (or advice
confirmed in writing) from outside counsel that the failure to take such
action would be contrary to the fiduciary duties of the Board of Directors of
the Company to the stockholders of the Company under applicable law;
<PAGE>
provided, further, that, to the extent that it may do so without acting in a
manner contrary to its fiduciary duties under applicable law, the Board of
Directors of the Company shall not take any of the foregoing actions referred
to in clauses (i) through (iv) until after reasonable notice to Parent with
respect to such action and that such Board of Directors shall continue to
advise Parent after taking such action and, in addition, if the Board of
Directors of the Company receives a Transaction Proposal, then the Company
shall promptly inform Parent of the material terms and conditions of such
proposal and the identity of the person making it. The Company will
immediately cease and cause its advisors, agents and other intermediaries to
cease any and all existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any of the foregoing, and shall
use its reasonable best efforts to cause any such parties in possession of
confidential information about the Company that was furnished by or on behalf
of the Company to return or destroy all such information in the possession of
any such party or in the possession of any agent or advisor of any such
party.
SECTION 5.08. Benefit Matters. (a) During the period from the
Effective Time of the Merger until the first anniversary of the Effective
Time of the Merger, Parent shall cause the Surviving Corporation to maintain
employee benefit plans (as defined in Section 3(3) of ERISA) for the benefit
of employees of the Company or its subsidiaries, which are no less favorable
in the aggregate to those benefits provided under the Company Plans in effect
on the date hereof.
(b) Parent will cause the Surviving Corporation to, (i) waive all
limitations as to preexisting conditions, exclusions and waiting periods with
respect to participation and coverage requirements applicable to the
employees of the Company under any Parent welfare plan that such employees
may be eligible to participate in after the Effective Time of the Merger and
(ii) provide each employee of the Company with credit for any co-payments and
deductibles paid prior to the Effective Time of the Merger in satisfying any
applicable deductible or out-of-pocket requirements under any Parent welfare
plans that such employees are eligible to participate in after the Effective
Time of the Merger.
SECTION 5.09. Stock Exchange Listing. Parent shall use all
reasonable efforts to cause the shares of Parent Common Stock to be issued in
the Merger and the shares of Parent Common Stock to be reserved for issuance
upon exercise of Company Stock Options, Warrants and the Convertible Notes to
be approved for listing on the NYSE and the Pacific Stock Exchange, subject
to official notice of issuance.
SECTION 5.10. Letters of the Company's Accountants. The Company
shall use its reasonable best efforts to cause to be delivered to Parent a
letter of Coopers & Lybrand LLP, the Company's independent public
accountants, dated a date within two business days before the Form S-4 shall
become effective and a letter of Coopers & Lybrand LLP dated a date within
two business days before the Closing Date, each addressed to Parent, in form
and substance reasonably satisfactory to Parent and customary in scope and
substance for letters delivered by independent public accountants in
connection with registration statements similar to the Form S-4.
SECTION 5.11. Letters of Parent's Accountants. Parent shall use
its reasonable best efforts to cause to be delivered to the Company a letter
of Price Waterhouse LLP, Parent's independent public accountants, dated a
<PAGE>
date within two business days before the Form S-4 shall become effective and
a letter of Price Waterhouse LLP dated a date within two business days before
the Closing Date, each addressed to the Company, in form and substance
reasonably satisfactory to the Company and customary in scope and substance
for letters delivered by independent public accountants in connection with
registration statements similar to the Form S-4.
ARTICLE VI
Conditions Precedent
SECTION 6.01. Conditions to Each Party's Obligation To Effect the
Merger. The respective obligation of each party to effect the Merger is
subject to the satisfaction or waiver on or prior to the Closing Date of the
following conditions:
(a) Company Stockholder Approval. The Company Stockholder
Approval shall have been obtained.
(b) 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.
(c) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect; provided, however, that the
parties hereto shall use their best efforts to have any such injunction,
order, restraint or prohibition vacated.
(d) Form S-4. The Form S-4 shall have become effective under the
Securities Act and shall not be the subject of any stop order or proceedings
seeking a stop order, and any material "blue sky" and other state securities
laws applicable to the registration and qualification of the Parent Common
Stock issuable or required to be reserved for issuance pursuant to this
Agreement shall have been complied with.
(e) Stock Exchange Listing. The shares of Parent Common Stock
issuable to Company stockholders pursuant to this Agreement and such other
shares of Parent Common Stock required to be reserved for issuance in
connection with the Merger shall have been authorized for listing on the NYSE
and the Pacific Stock Exchange upon official notice of issuance.
(f) Pooling. Parent shall have received a letter from Price
Waterhouse LLP to the effect that the Merger qualifies for "pooling of
interests" accounting treatment if consummated in accordance with this
Agreement] and such letter shall not have been withdrawn. The Company shall
have received a letter from Coopers & Lybrand LLP to the effect that the
Company is eligible to be acquired in a transaction to be accounted for using
"pooling of interests" accounting treatment and such letter shall not have
been withdrawn.
SECTION 6.02. Conditions to Obligations of Parent and Sub. The
obligations of Parent and Sub to effect the Merger are further subject to the
following conditions:
<PAGE>
(a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement shall be true and
correct, in each case, as of the date of this Agreement and, if and to the
extent such representations and warranties speak as of a later date, as of
such later date, except where the failure of such representations and
warranties to be so true and correct (without giving effect to any limitation
as to "materiality" or "Material Adverse Effect" set forth therein) would not
individually or in the aggregate reasonably be expected to have a Material
Adverse Effect. Parent shall have received a certificate signed on behalf of
the Company by the chief executive officer, the president and the chief
financial officer of the Company to the effect set forth in this paragraph.
(b) Performance of Obligations of the Company. The Company shall
have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date. Parent
shall have received a certificate signed on behalf of the Company by the
chief executive officer, the president and the chief financial officer of the
Company to the effect set forth in this paragraph.
(c) Consents, etc. Parent and Sub shall have received evidence,
in form and substance reasonably satisfactory to it, that such licenses,
permits, consents, approvals, authorizations, qualifications and orders of
(i) any United States federal or state governmental authorities and
governmental authorities in Germany, Japan, France, the United Kingdom or any
political subdivision thereof or (ii) any other governmental authorities or
third parties as are necessary in connection with the transactions
contemplated hereby have been obtained, except in the case of clause (ii)
where the failure to obtain such licenses, permits, consents, approvals,
authorizations, qualifications and orders could not, individually or in the
aggregate with all other failures, reasonably be expected to have a Material
Adverse Effect with respect to the Company.
(d) No Litigation. There shall not be pending or threatened by
any Governmental Entity, (i) challenging or seeking to restrain or prohibit
the consummation of the Merger or any of the other transactions contemplated
by this Agreement or the Stock Option Agreement or seeking to obtain from the
Company, Parent, Sub or any of their affiliates any damages that could
reasonably be expected to have a Material Adverse Effect with respect to the
Company, (ii) seeking to prohibit or limit the ownership or operation by the
Company, Parent or any of their respective subsidiaries of any material
portion of the business or assets of the Company and its subsidiaries taken
as a whole or to dispose of or hold separate any material portion of the
business or assets of the Company and its subsidiaries taken as a whole, as a
result of the Merger or any of the other transactions contemplated by this
Agreement or the Stock Option Agreement, (iii) seeking to impose limitations
on the ability of Parent to acquire or hold, or exercise full rights of
ownership of, any shares of the common stock of the Surviving Corporation,
including, without limitation, the right to vote such common stock on all
matters properly presented to the stockholders of the Surviving Corporation
or (iv) seeking to prohibit Parent or any of its subsidiaries from
effectively controlling in any material respect the business or operations of
the Company and its subsidiaries taken as a whole. No suit, action or
proceeding by any other person shall be pending that seeks any of the relief
or remedies described in clauses (i) through (iv) of the immediately
preceding sentence as to which there is a reasonable possibility of success
or that otherwise could reasonably be expected to have a Material Adverse
Effect with respect to the Company.
<PAGE>
(e) Affiliate Letters. Parent shall have received the agreements
to which it is party referred to in Section 5.06.
(f) Tax Opinion. Parent shall have received the opinion of
Simpson Thacher & Bartlett, counsel to Parent, dated the Closing Date, to the
effect that (i) the Merger will be treated for Federal income tax purposes as
a reorganization within the meaning of Section 368(a) of the Code and (ii)
Parent, Sub and the Company will each be a party to that reorganization
within the meaning of Section 368(b) of the Code. The parties to this
Agreement agree to make reasonable representations as requested by counsel
for the purpose of rendering such opinion.
(g) Rights Agreement. None of the events described in Section
11(a)(ii) or 13 of the Rights Agreement shall have occurred, and the Rights
shall not have become nonredeemable and shall not become nonredeemable upon
consummation of the Merger.
SECTION 6.03. Conditions to Obligation of the Company. The
obligation of the Company to effect the Merger is further subject to the
following conditions:
(a) Representations and Warranties. The representations and
warranties of Parent and Sub set forth in this Agreement shall be true and
correct, in each case, as of the date of this Agreement and, if and to the
extent such representations and warranties speak as of a later date, as of
such later date, except where the failure of such representations and
warranties to be so true and correct (without giving effect to any limitation
as to "materiality" or "material adverse effect" set forth therein) would not
individually or in the aggregate reasonably be expected to have a Material
Adverse Effect with respect to Parent. The Company shall have received a
certificate signed on behalf of Parent and Sub by an authorized officer of
Parent and Sub to the effect set forth in this paragraph.
(b) Performance of Obligations of Parent and Sub. Parent and Sub
shall have performed in all material respects all obligations required to be
performed by each of them under this Agreement at or prior to the Closing
Date. The Company shall have received a certificate signed on behalf of
Parent and Sub by an authorized officer of Parent and Sub to the effect set
forth in this paragraph.
(c) Tax Opinion. The Company shall have received the opinion of
Testa, Hurwitz & Thibeault, LLP, counsel to the Company, dated the Closing
Date, to the effect that (i) the Merger will be treated for Federal income
tax purposes as a reorganization within the meaning of Section 368(a) of the
Code and (ii) Parent, Sub and the Company will each be a party to that
reorganization within the meaning of Section 368(b) of the Code. The parties
to this Agreement agree to make reasonable representations as requested by
counsel for the purpose of rendering such opinion.
(e) Affiliate Letters. The Company shall have received the
agreements to which it is party referred to in Section 5.06.
<PAGE>
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01. Termination. This Agreement may be terminated and
abandoned at any time prior to the Effective Time of the Merger, whether
before or after the Company Stockholder Approval:
(a) by mutual written consent of Parent and the Company; or
(b) by either Parent or the Company if any Governmental Entity
shall have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the Merger and
such order, decree, ruling or other action shall have become final and
nonappealable; or
(c) by either Parent or the Company if the Merger shall not have
been consummated on or before January 31, 1998 (other than due to the failure
of the party seeking to terminate this Agreement to perform its obligations
under this Agreement required to be performed at or prior to the Effective
Time of the Merger); or
(d) by either Parent or the Company if at the duly held meeting of
the stockholders of the Company (including any adjournment thereof) held for
the purpose of voting on the Merger, this Agreement and the consummation of
the transactions contemplated hereby, the holders of a majority of the
outstanding shares of Company Common Stock shall not have approved the
Merger, this Agreement and the consummation of the transactions contemplated
hereby; or
(e) by Parent, if the Company or its Board of Directors shall have
(1) withdrawn, modified or amended in any respect adverse to Parent its
approval or recommendation of this Agreement or any of the transactions
contemplated herein, (2) failed as promptly as practicable after the Form S-4
is declared effective to mail the Proxy Statement to its stockholders or
failed to include in such statement such recommendation, (3) recommended any
Transaction Proposal from a person other than Parent or any of its
affiliates, (4) resolved to do any of the foregoing or (5) in response to the
commencement of any tender offer or exchange offer for more than 15% of the
outstanding shares of Company Common Stock, not recommended rejection of such
tender offer or exchange offer; or
(f) by the Company, if, pursuant to and in compliance with Section
5.07 hereof, the Board of Directors of the Company concludes in good faith,
based on written advice (or advice confirmed in writing) from outside
counsel, that in order to avoid acting in a manner contrary to the fiduciary
duties of the Board of Directors of the Company to the stockholders of the
Company under the DGCL, the Board of Directors must not make or must withdraw
or modify its recommendation referred to in Section 3.01(p) and the Board of
Directors does not make or withdraws or modifies such recommendation.
SECTION 7.02. Effect of Termination. In the event of termination
of this Agreement by either the Company or Parent as provided in Section
7.01, this Agreement shall forthwith become void and have no effect, without
any liability or obligation on the part of Parent, Sub or the Company, other
than the provisions of Section 3.01(n), Section 3.02(h), the last sentence of
Section 5.02(a), this Section 7.02, Section 8.02 and Section 8.07. Nothing
<PAGE>
contained in this Section shall relieve any party for any breach of the
representations, warranties, covenants or agreements set forth in this
Agreement.
SECTION 7.03. Amendment. This Agreement may be amended by the
parties at any time before or after any required approval of matters
presented in connection with the Merger by the stockholders of the Company;
provided, however, that after any such approval, there shall be made no
amendment that by law requires further approval by such stockholders without
the further approval of such stockholders. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties.
SECTION 7.04. Extension; Waiver. At any time prior to the
Effective Time of the Merger, the parties may (a) extend the time for the
performance of any of the obligations or other acts of the other parties, (b)
waive any inaccuracies in the representations and warranties contained in
this Agreement or in any document delivered pursuant to this Agreement or (c)
subject to the proviso of Section 7.03, waive compliance with any of the
agreements or conditions contained in this Agreement. Any agreement on the
part of a party to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party. The
failure of any party to this Agreement to assert any of its rights under this
Agreement or otherwise shall not constitute a waiver of such rights.
SECTION 7.05. Procedure for Termination, Amendment, Extension or
Waiver. A termination of this Agreement pursuant to Section 7.01, an
amendment of this Agreement pursuant to Section 7.03 or an extension or
waiver pursuant to Section 7.04 shall, in order to be effective, require in
the case of Parent, Sub or the Company, action by its Board of Directors or
the duly authorized designee of its Board of Directors.
ARTICLE VIII
General Provisions
SECTION 8.01. Nonsurvival of Representations and Warranties. None
of the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time of the
Merger and all such representations and warranties will be extinguished on
consummation of the Merger and neither the Company, the Parent, Sub, nor any
officer, director or employee or shareholder of any of them shall be under
any liability whatsoever with respect to any such representation or warranty
after such time. This Section 8.01 shall not limit any covenant or agreement
of the parties which by its terms contemplates performance after the
Effective Time of the Merger.
SECTION 8.02. Fees and Expenses. (a) (i) If this Agreement
shall have been terminated in accordance with its terms (except pursuant to
Section 7.01(b)) and either of the following shall have occurred: (A) prior
to such termination, any corporation (including the Company or any of its
subsidiaries or affiliates), partnership, person, other entity or "group" (as
referred to in Section 13(d)(3) of the Exchange Act) other than Parent, Sub
or any of its affiliates (collectively, "Persons"), shall have become the
beneficial owner of more than 15% of the outstanding shares of Company Common
Stock; or (B)(x) prior to such termination, any Person shall have made, or
proposed, communicated or disclosed in a manner which is or otherwise becomes
public (including being known by stockholders of the Company owning of record
<PAGE>
or beneficially in the aggregate 5% or more of the outstanding shares of
Company Common Stock) a bona fide intention to make a Transaction Proposal
(including by making such a Transaction Proposal) and (y) on or prior to
August 23, 1998, the Company either consummates with a Person a transaction
the proposal of which would otherwise qualify as a Transaction Proposal under
Section 5.07 or enters into a definitive agreement with a Person with respect
to a transaction the proposal of which would otherwise qualify as a
Transaction Proposal under Section 5.07 (whether or not such Person is the
Person referred to in clause (x) above); or
(ii) if this Agreement is terminated pursuant to Section
7.01(e) or Section 7.01(f);
then the Company shall, (1) in the case of clause (a)(i)(A) and (a)(ii)
above, promptly, but in no event later than one business day after the
termination of this Agreement and (2) in the case of clause (a)(i)(B) above,
promptly, but in no event later than one business day after an event
specified in subclause (y) thereof shall have occurred, pay Parent a fee of
$11,000,000 in cash, which amount shall be payable in same day funds. No
termination of this Agreement at a time when a fee is reasonably expected to
be payable pursuant to this Section 8.02(a) following termination of this
Agreement shall be effective until such fee is paid.
(b) In the event that the Merger is consummated, Parent shall (i)
pay all out-of-pocket costs, fees and expenses otherwise payable by the
Surviving Corporation directly and solely in connection with the transactions
contemplated by this Agreement and the Stock Option Agreement and (ii) pay
the Repurchase Price (as defined in the Convertible Notes Indenture) with
respect to any Convertible Notes required to be repurchased by the Company
pursuant to the terms of the Convertible Notes Indenture.
(c) Except as provided otherwise in paragraphs (a) and (b) above,
all costs and expenses incurred in connection with this Agreement and the
Stock Option Agreement and the transactions contemplated hereby and thereby
shall be paid by the party incurring such expenses, except that the cost of
filing, printing and distributing the Proxy Statement and the Form S-4 shall
be borne equally by Parent and the Company.
SECTION 8.03. Notices. All notices, requests, claims, demands and
other communications under this Agreement shall be in writing and shall be
deemed given if delivered personally or sent by overnight courier (providing
proof of delivery) to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
(a) if to Parent or Sub, to
The Perkin-Elmer Corporation
761 Main Street
Norwalk, Connecticut 06897
Attention: Chief Executive Officer
with a copy to:
<PAGE>
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Attention: James M. Cotter, Esq.
Richard A. Garvey, Esq.
(b) if to the Company, to
PerSeptive Biosystems, Inc.
500 Old Connecticut Path
Farmingham, MA 01701
Attention: Chief Executive Officer
with a copy to:
Testa, Hurwitz & Thibeault, LLP
High Street Tower
125 High Street
Boston, Massachusetts 02110
Attention: George Lloyd, Esq.
Rufus C. King, Esq.
SECTION 8.04. Definitions. For purposes of this Agreement:
(a) an "affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first person;
(b) "Environmental Claim" means any written or oral notice, claim,
demand, action, suit, complaint, proceeding or other communication by any
person alleging liability or potential liability (including without
limitation liability or potential liability for investigatory costs, cleanup
costs, governmental response costs, natural resource damages, property
damage, personal injury, fines or penalties) arising out of, relating to,
based on or resulting from (A) the presence, discharge, emission, release or
threatened release of any Hazardous Materials at any location, whether or not
owned, leased or operated by the Company or any of its subsidiaries or (B)
circumstances forming the basis of any violation or alleged violation of any
Environmental Law or Environmental Permit or (C) otherwise relating to
obligations or liabilities under any Environmental Laws;
(c) "Environmental Permits" means all permits, licenses,
registrations and other governmental authorizations required under
Environmental Laws for the Company and its subsidiaries to conduct their
operations and businesses on the date hereof and consistent with past
practices;
(d) "Environmental Laws" means all applicable federal, state and
local statutes, rules, regulations, ordinances, orders, decrees and common
law relating in any manner to contamination, pollution or protection of the
environment, including without limitation the Comprehensive Environmental
Response, Compensation and Liability Act, the Solid Waste Disposal Act, the
Clean Air Act, the Clean Water Act, the Toxic Substances Control Act, the
<PAGE>
Occupational Safety and Health Act, the Emergency Planning and Community-
Right-to-Know Act, the Safe Drinking Water Act, all as amended, and similar
state laws;
(e) "Exchange Ratio" means $13.00 divided by the Parent Common
Stock Price, rounded to the nearest 1/10,000, provided that the Exchange
Ratio shall not be less than .1486 nor more than .1926.
(f) "Hazardous Materials" means all hazardous or toxic substances,
wastes, materials or chemicals, petroleum (including crude oil or any
fraction thereof) and petroleum products, friable asbestos and asbestos-
containing materials, pollutants, contaminants and all other materials, and
substances regulated pursuant to, or that could reasonably be expected to
provide the basis of liability under, any Environmental Law;
(g) "indebtedness" means, with respect to any person, without
duplication, (A) all obligations of such person for borrowed money, or with
respect to deposits or advances of any kind to such person, (B) all
obligations of such person evidenced by bonds, debentures, notes or similar
instruments, (C) all obligations of such person under conditional sale or
other title retention agreements relating to property purchased by such
person, (D) all obligations of such person issued or assumed as the deferred
purchase price of property or services (excluding obligations of such person
to creditors for raw materials, inventory, services and supplies incurred in
the ordinary course of such person's business), (E) all capitalized lease
obligations of such person, (F) all obligations of others secured by any Lien
on property or assets owned or acquired by such person, whether or not the
obligations secured thereby have been assumed, (G) all obligations of such
person under interest rate or currency hedging transactions (valued at the
termination value thereof), (H) all letters of credit issued for the account
of such person and (I) all guarantees and arrangements having the economic
effect of a guarantee of such person of any indebtedness of any other person;
(h) "Intellectual Property" means all rights, privileges and
priorities provided under federal, state, foreign and multinational law
relating to intellectual property, including without limitation all (i) (a)
inventions, discoveries, processes, formulae, designs, methods, techniques,
procedures, concepts, developments, technology, new and useful improvements
thereof and know-how relating thereto, whether or not patented or eligible
for patent protection; (b) copyrights and copyrightable works, including
computer applications, programs, software, databases and related items; (c)
trademarks, service marks, trade names, brand names, corporate names, logos
and trade dress, the goodwill of any business symbolized thereby, and all
common-law rights relating thereto; (d) trade secrets and other confidential
information; and (ii) all registrations, applications, recordings, and
licenses or other similar agreements related to the foregoing;
(i) "knowledge" means, with respect to any matter, (i) in the case
of Parent, the knowledge of any director, executive officer or the General
Counsel of Parent after due inquiry into such matter and (ii) in the case of
the Company, the knowledge of Noubar Afeyan, John Smith, Donald Schoeny, Dick
Farrahar, Gerry Ruane, Archie Szeto, Samuel Hunt, Jeffrey Moore, and Marvin
Vestal after due inquiry into such matter.
(j) "Material Adverse Change" or "Material Adverse Effect" means,
when used in connection with the Company or Parent, any change, effect, event
or occurrence that either individually or in the aggregate with all other
<PAGE>
such changes, effects, events and occurrences is materially adverse to the
business, properties, financial condition or results of operations of the
Company or Parent, as the case may be, and its subsidiaries taken as a whole.
(k) "Parent Common Stock Price" means the average of the closing
sales prices of Parent Common Stock on the New York Stock Exchange Composite
Transactions Tape on each of the 20 consecutive trading days immediately
preceding the second trading day prior to the Effective Time of the Merger.
(l) "person" means an individual, corporation, partnership, joint
venture, association, trust, unincorporated organization or other entity;
(m) "Recent SEC Documents" means any SEC Documents filed by the
Company prior to the date of this Agreement with respect to any period
ending, or any date occurring, on or after September 30, 1996.
(n) "Rights" means the rights to acquire one-hundredth of a share
of Series B Preferred Stock issued pursuant to the Rights Agreement; and
(o) a "subsidiary" of any person means another person, an amount
of the voting securities, other voting ownership or voting partnership
interests of which is sufficient to elect at least a majority of its Board of
Directors or other governing body (or, if there are no such voting interests,
50% or more of the equity interests of which) is owned directly or indirectly
by such first person.
SECTION 8.05. Interpretation. When a reference is made in this
Agreement to a Section, Exhibit or Schedule, such reference shall be to a
Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation".
SECTION 8.06. Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.
SECTION 8.07. Entire Agreement; No Third-Party Beneficiaries.
This Agreement and the other agreements referred to herein constitute the
entire agreement, and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter of
this Agreement. This Agreement, other than Section 5.04 and Section 5.08, is
not intended to confer upon any person other than the parties any rights or
remedies.
SECTION 8.08. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE,
REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE
PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 8.09. Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by any of the parties
without the prior written consent of the other parties. Subject to the
<PAGE>
preceding sentence, this Agreement will be binding upon, inure to the benefit
of, and be enforceable by, the parties and their respective successors and
assigns.
SECTION 8.10. Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement.
<PAGE>
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
THE PERKIN-ELMER CORPORATION
By:/s/ Peter Barrett
______________________________
Name: Peter Barrett
Title: Vice President
SEVEN ACQUISITION CORP.
By:/s/ Peter Barrett
______________________________
Name: Peter Barrett
Title: Vice President
PERSEPTIVE BIOSYSTEMS, INC.
By:/s/ Noubar B. Afeyan
______________________________
Name: /s/ Noubar B. Afeyan
Title: Chief Executive Officer and
Chairman of the Board of
Directors
<PAGE>
Exhibit A
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of August 23, 1997 (the "Agreement"),
by and between PerSeptive Biosystems, Inc., a Delaware corporation
("Issuer"), and The Perkin-Elmer Corporation, a New York corporation
("Grantee").
WHEREAS, Grantee, Issuer and Seven Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of Grantee ("Sub"), are
concurrently herewith entering into an Agreement and Plan of Merger, dated as
of the date hereof (the "Merger Agreement"; capitalized terms not defined
herein shall have the meanings set forth in the Merger Agreement), providing
for, among other things, the merger of Sub with and into Issuer with Issuer
as the surviving corporation; and
WHEREAS, as a condition and inducement to Grantee's willingness to enter
into the Merger Agreement, Grantee has requested that Issuer agree, and
Issuer has agreed, to grant Grantee the Option (as defined below);
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Merger Agreement, Issuer and Grantee agree as follows:
1. Grant of Option. Subject to the terms and conditions set forth
herein, Issuer hereby grants to Grantee an irrevocable option (the "Option")
to purchase up to 4,478,308 (as adjusted as set forth herein) shares (the
"Option Shares") of Common Stock, par value $.01 per share, of Issuer (the
"Issuer Common Stock") at a purchase price of $13.00 per Option Share (the
"Purchase Price").
2. Exercise of Option. (a) If not in material breach of the Merger
Agreement, Grantee may exercise the Option, in whole or in part, at any time
(or, to the extent permitted pursuant to Section 2(c) hereof, from time to
time) following the occurrence of a Purchase Event (as defined below);
provided that, except as otherwise provided herein, the Option shall
terminate and be of no further force and effect upon the earliest to occur of
(i) the Effective Time of the Merger, (ii) 12 months after the first
occurrence of a Purchase Event or (iii) termination of the Merger Agreement
prior to the occurrence of a Purchase Event. The termination of the Option
shall not affect any rights hereunder which by their terms extend beyond the
date of such termination.
(b) As used herein, a "Purchase Event" means the termination of the
Merger Agreement under any circumstance which would entitle Grantee or Issuer
to receive any fee from Issuer pursuant to Section 8.02(a) of the Merger
Agreement, provided, however, that the termination of the Merger Agreement
(except pursuant to Section 7.01(b) thereof) after the occurrence of any
event described in Section 8.02(a)(i)(B)(x) thereof shall constitute a
Purchase Event hereunder whether or not any event described forth in Section
8.02(a)(i)(B)(y) of the Merger Agreement shall have occurred.
(c) Except as otherwise provided in this Section 2(c), Grantee shall
be entitled to exercise the Option, in whole or in part, on only one occasion
<PAGE>
and, if Grantee elects to exercise the Option only in part, the unexercised
portion of the Option shall be forfeited and cancelled. Notwithstanding the
foregoing, in the event that by virtue of (i) any statute, law, rule or
regulation applicable to Grantee or Issuer, (ii) any order, decree or
injunction to which Grantee or Issuer is subject, (iii) any provision of
Issuer's Certificate of Incorporation or By-Laws, (iv) any agreement,
instrument or other document to which Issuer is a party or by which it is
bound or (v) the terms of any security issued by Issuer, (A) Grantee shall be
prohibited from acquiring or holding any of the Option Shares, (B) Grantee
shall be unable to exercise full rights of ownership with respect to any of
the Option Shares (including, without limitation, the right to vote such
Option Shares on all matters properly presented to the stockholders of
Issuer) or (C) any of such Option Shares shall be in any way distinguishable
from, or of lesser economic value than, any other shares of Issuer Common
Stock (any of the conditions described in clauses (A) through (C), an
"Impairment"; and the portion of the Option Shares affected by an Impairment,
the "Impaired Portion" of the Option Shares), then upon a partial exercise of
the Option by Grantee, the portion of the Option relating to the Impaired
Portion of the Option Shares shall not be forfeited or cancelled but shall
remain exercisable by Grantee in accordance with the terms of this Agreement.
When all Impairments relating to any Impaired Portion of the Option Shares
have been eliminated, Grantee may from time to time exercise the Option with
respect to Option Shares previously affected by such Impairment and upon any
such exercise, the unexercised portion of the Option (other than any
remaining Impaired Portion) shall be forfeited and cancelled.
(d) In the event Grantee wishes to exercise the Option, it shall
send to Issuer a written notice (the date of which being herein referred to
as the "Notice Date") specifying (i) the total number of Option Shares it
intends to purchase pursuant to such exercise and (ii) a place and date not
earlier than three business days nor later than 20 business days from the
Notice Date for the closing of such purchase (the "Closing"; and the date of
such Closing, the "Closing Date"); provided that the Closing shall be held
only if (i) such purchase would not otherwise violate or cause the violation
of applicable law (including the HSR Act) and (ii) no statute, rule,
regulation, decree, order or injunction shall have been promulgated, enacted,
entered into, or enforced by any Governmental Entity which prohibits delivery
of the Option Shares, whether temporary, preliminary or permanent (provided,
however, that the parties hereto shall use their best efforts to have any
such decree, order or injunction vacated or reversed). If the Closing cannot
be consummated by reason of a restriction set forth in clause (i) or (ii)
above, notwithstanding the provisions of Section 2(a), the Closing Date shall
be within 10 business days following the elimination of such restriction.
3. Payment and Delivery of Certificates. (a) On each Closing
Date, Grantee shall pay to Issuer in immediately available funds by wire
transfer to a bank account designated by Issuer an amount equal to the
Purchase Price multiplied by the Option Shares to be purchased on such
Closing Date.
(b) At each Closing, simultaneously with the delivery of
immediately available funds as provided in Section 3(a), Issuer shall deliver
to Grantee a certificate or certificates representing the Option Shares to be
purchased at such Closing, which Option Shares shall be free and clear of all
Liens, and Grantee shall deliver to Issuer a letter agreeing that Grantee
shall not offer to sell or otherwise dispose of such Option Shares in
violation of applicable law or the provisions of this Agreement. If at the
<PAGE>
time of issuance of any Option Shares pursuant to an exercise of all or part
of the Option hereunder, Issuer shall not have redeemed the Rights, or shall
have issued any similar securities, then each Option Share issued pursuant to
such exercise shall also represent a corresponding Right or new rights with
terms substantially the same as and at least as favorable to Grantee as are
provided under the Rights Agreement or any similar agreement then in effect.
(c) Certificates for the Option Shares delivered at each Closing
shall be endorsed with a restrictive legend which shall read substantially as
follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT DATED
AS OF AUGUST 23, 1997. A COPY OF SUCH AGREEMENT WILL BE PROVIDED TO
THE HOLDER HEREOF WITHOUT CHARGE UPON RECEIPT BY THE ISSUER OF A
WRITTEN REQUEST THEREFOR.
It is understood and agreed that (i) the reference to restrictions arising
under the Securities Act in the above legend shall be removed by delivery of
substitute certificate(s) without such reference if Grantee shall have
delivered to Issuer a copy of a letter from the staff of the SEC, or an
opinion of counsel in form and substance reasonably satisfactory to Issuer
and its counsel, to the effect that such legend is not required for purposes
of the Securities Act and (ii) the reference to restrictions pursuant to this
Agreement in the above legend shall be removed by delivery of substitute
certificate(s) without such reference if the Option Shares evidenced by
certificate(s) containing such reference have been sold or transferred in
compliance with the provisions of this Agreement under circumstances that do
not require the retention of such reference.
4. Authorized Stock. Issuer hereby represents and warrants to
Grantee that Issuer has taken all necessary corporate and other action to
authorize and reserve and to permit it to issue, and, at all times from the
date hereof until the obligation to deliver Issuer Common Stock upon the
exercise of the Option terminates, will have reserved for issuance, upon
exercise of the Option, shares of Issuer Common Stock necessary for Grantee
to exercise the Option, and Issuer will take all necessary corporate action
to authorize and reserve for issuance all additional shares of Issuer Common
Stock or other securities which may be issued pursuant to Section 6 upon
exercise of the Option. The shares of Issuer Common Stock to be issued upon
due exercise of the Option, including all additional shares of Issuer Common
Stock or other securities which may be issuable upon exercise of the Option
pursuant to Section 6, upon issuance pursuant hereto, shall be duly and
validly issued, fully paid and nonassessable, and shall be delivered free and
clear of all Liens, including any preemptive rights of any stockholder of
Issuer.
5. Purchase Not for Distribution. Grantee hereby represents
and warrants to Issuer that any Option Shares or other securities acquired by
Grantee upon exercise of the Option will not be taken with a view to the
public distribution thereof and will not be transferred or otherwise disposed
of except in a transaction registered or exempt from registration under the
Securities Act.
6. Adjustment upon Changes in Capitalization, etc. (a) In the
event of any change in Issuer Common Stock by reason of a stock dividend,
<PAGE>
split-up, recapitalization, combination, exchange of shares or similar
transaction, the type and number of shares or securities subject to the
Option, and the Purchase Price therefor, shall be adjusted appropriately, and
proper provision shall be made in the agreements governing such transaction,
so that Grantee shall receive upon exercise of the Option the number and
class of shares or other securities or property that Grantee would have
received in respect of Issuer Common Stock if the Option had been exercised
immediately prior to such event or the record date therefor, as applicable.
If any additional shares of Issuer Common Stock are issued after the date of
this Agreement at a price per share less than the Purchase Price, the number
of shares of Issuer Common Stock subject to the Option shall be adjusted so
that, after such issuance, it equals 19.9% of the number of shares of Issuer
Common Stock then issued and outstanding, without giving effect to any shares
subject to or issued pursuant to the Option.
(b) In the event that Issuer shall enter into an agreement (i)
to consolidate with or merge into any person, other than Grantee or one of
its subsidiaries, and shall not be the continuing or surviving corporation of
such consolidation or merger, (ii) to permit any person, other than Grantee
or one of its subsidiaries, to merge into Issuer and Issuer shall be the
continuing or surviving corporation, but, in connection with such merger, the
shares of Issuer Common Stock outstanding immediately prior to the
consummation of such merger shall be changed into or exchanged for stock or
other securities of Issuer or any other person or cash or any other property,
or the shares of Issuer Common Stock outstanding immediately prior to the
consummation of such merger shall after such merger represent less than 50%
of the outstanding voting securities of the merged company, or (iii) to sell
or otherwise transfer all or substantially all of its assets to any person,
other than Grantee or one of its subsidiaries, then, and in each such case,
the agreement governing such transaction shall make proper provisions so that
the Option shall, upon the consummation of any such transaction and upon the
terms and conditions set forth herein, be converted into, or exchanged for,
an option (the "Substitute Option"), at the election of Grantee, of either
(I) the Acquiring Corporation (as defined below) or (II) any person that
controls the Acquiring Corporation (any such person specified in clause (I)
or (II) being referred to as "Substitute Option Issuer").
(c) The Substitute Option shall have the same terms as the
Option; provided that the exercise price therefor and number of shares
subject thereto shall be as set forth in this Section 6 and the repurchase
rights relating thereto shall be as set forth in Section 8; provided,
further, that the Substitute Option shall be exercisable immediately upon
issuance without the occurrence of a Purchase Event with respect to the
Substitute Option; and provided, further, that if the terms of the Substitute
Option cannot, for legal reasons, be the same as the Option (subject to the
variations described in the foregoing provisos), such terms shall be as
similar as possible and in no event less advantageous to Grantee. Substitute
Option Issuer shall also enter into an agreement with Grantee in
substantially the same form as this Agreement (subject to the variations
described in the foregoing provisos), which shall be applicable to the
Substitute Option.
(d) The Substitute Option shall be exercisable for such number
of shares of Substitute Common Stock (as defined below) as is equal to the
Assigned Value (as defined below) multiplied by the number of shares of
Issuer Common Stock for which the Option was theretofore exercisable, divided
by the Average Price (as defined below), rounded up to the nearest whole
<PAGE>
share. The exercise price per share of Substitute Common Stock of the
Substitute Option (the "Substitute Option Price") shall then be equal to the
Purchase Price multiplied by a fraction in which the numerator is the number
of shares of Issuer Common Stock for which the Option was theretofore
exercisable and the denominator is the number of shares of Substitute Common
Stock for which the Substitute Option is exercisable.
(e) In no event, pursuant to any of the foregoing paragraphs,
shall the Substitute Option be exercisable for more than 19.9% of the
aggregate of the shares of Substitute Common Stock outstanding prior to
exercise of the Substitute Option. In the event that the Substitute Option
would be exercisable for more than 19.9% of the aggregate of the shares of
outstanding Substitute Common Stock but for the limitation in the first
sentence of this Section 6(e), Substitute Option Issuer shall make a cash
payment to Grantee equal to the excess of (i) the value of the Substitute
Option without giving effect to the limitation in the first sentence of this
Section 6(e) over (ii) the value of the Substitute Option after giving effect
to the limitation in the first sentence of this Section 6(e). This
difference in value shall be determined by a nationally recognized investment
banking firm selected by Grantee.
(f) Issuer shall not enter into any transaction described in
Section 6(b) unless the Acquiring Corporation and any person that controls
the Acquiring Corporation assume in writing all the obligations of Issuer
hereunder and take all other actions that may be necessary so that the
provisions of this Agreement are given full force and effect (including,
without limitation, any action that may be necessary so that the holders of
the other shares of common stock issued by Substitute Option Issuer are not
entitled to exercise any rights comparable to the Rights by reason of the
issuance or exercise of the Substitute Option and the shares of Substitute
Common Stock are otherwise in no way distinguishable from or have lesser
economic value than other shares of common stock issued by Substitute Option
Issuer (other than any diminution in value resulting from the fact, if
applicable, that the shares of Substitute Common Stock are restricted
securities, as defined in Rule 144 under the Securities Act or any successor
provision)).
(g) For purposes of this Agreement, the following terms have the
following meanings:
(1) "Acquiring Corporation" means (i) the continuing or
surviving corporation of a consolidation or merger with Issuer (if
other than Issuer), (ii) Issuer in a merger in which Issuer is the
continuing or surviving corporation and (iii) the transferee of all
or substantially all of Issuer's assets.
(2) "Assigned Value" means the highest of (w) the price per
share of Issuer Common Stock at which a tender offer or exchange
offer for Issuer Common Stock has been made after the date hereof and
prior to the consummation of the consolidation, merger or sale
referred to in Section 6(b), (x) the price per share to be paid by
any third party or the consideration per share to received by holders
of Issuer Common Stock, in each case pursuant to the agreement with
Issuer with respect to the consolidation, merger or sale referred to
in Section 6(b), (y) the highest closing sales price per share for
Issuer Common Stock quoted on the NYSE (or if such Issuer Common
Stock is not quoted on the NYSE, the highest bid price per share as
<PAGE>
quoted on the National Association of Securities Dealers Automated
Quotation System or, if the shares of Issuer Common Stock are not
quoted thereon, on the principal trading market on which such shares
are traded as reported by a recognized source) during the 12-month
period immediately preceding the consolidation, merger or sale
referred to in Section 6(b) and (z) in the event the transaction
referred to in Section 6(b) is a sale of all or substantially all of
Issuer's assets, an amount equal to (i) the sum of the price paid in
such sale for such assets and the current market value of the
remaining assets of Issuer, as determined by a nationally recognized
investment banking firm selected by Grantee divided by (ii) the
number of shares of Issuer Common Stock outstanding at such time. In
the event that a tender offer or exchange offer is made for Issuer
Common Stock or an agreement is entered into for a merger or
consolidation involving consideration other than cash, the value of
the securities or other property issuable or deliverable in exchange
for Issuer Common Stock shall be determined by a nationally
recognized investment banking firm selected by Grantee.
(3) "Average Price" means the average closing sales price
per share of a share of Substitute Common Stock quoted on the NYSE
(or if such Substitute Common Stock is not quoted on the NYSE, the
highest bid price per share as quoted on the National Association of
Securities Dealers Automated Quotation System or, if the shares of
Substitute Common Stock are not quoted thereon, on the principal
trading market on which such shares are traded as reported by a
recognized source) for the twenty trading days immediately preceding
the fifth business day prior to the consolidation, merger or sale in
question, but in no event higher than the closing price of the shares
of Substitute Common Stock on the day preceding such consolidation,
merger or sale; provided that if Substitute Option Issuer is Issuer,
the Average Price shall be computed with respect to a share of common
stock issued by Issuer, the person merging into Issuer or by any
company which controls such person, as Grantee may elect.
(4) "Substitute Common Stock" means the shares of capital
stock (or similar equity interest) with the greatest voting power in
respect of the election of directors (or persons similarly
responsible for the direction of the business and affairs) of the
Substitute Option Issuer.
7. Repurchase of Option and Option Shares. (a) Notwithstanding
the provisions of Section 2(a), at any time commencing upon the first
occurrence of a Repurchase Event (as defined below) and ending 12 months
after the occurrence of a Purchase Event, Issuer (or any successor entity
thereof) shall:
(i) at the request of Grantee, repurchase from Grantee the
Option (if and to the extent not previously terminated) at a price
equal to the excess, if any, of (x) the Applicable Price (as defined
below) as of the Section 7 Request Date (as defined below) for a
share of Issuer Common Stock over (y) the Purchase Price (subject to
adjustment pursuant to Section 6(a)), multiplied by the number of
shares of Issuer Common Stock with respect to which the Option has
not been exercised (the "Option Repurchase Price"); and
<PAGE>
(ii) at the request of an owner of Option Shares from time
to time, repurchase such number of Option Shares as such owner shall
designate at a price equal to the Applicable Price as of the Section
7 Request Date multiplied by the number of Option Shares requested to
be repurchased by such owner (the "Option Share Repurchase Price").
(b) If Grantee or an owner of Option Shares exercises its rights
under this Section 7, Issuer shall, within 10 business days after the Section
7 Request Date, pay the Option Repurchase Price or Option Share Repurchase
Price, as the case may be, in immediately available funds, and Grantee or
such owner, as the case may be, shall surrender to Issuer the Option or
Option Shares, as the case may be.
(c) For purposes of this Agreement, the following terms have the
following meanings:
(i) "Applicable Price," as of any date, means the highest
of (A) the highest price per share at which a tender offer or
exchange offer has been made for shares of Issuer Common Stock after
the date hereof and on or prior to such date, (B) the price per share
to be paid by any third party for shares of Issuer Common Stock or
the consideration per share to be received by holders of Issuer
Common Stock, in each case pursuant to an agreement for a merger or
other business combination transaction with Issuer entered into on or
prior to such date or (C) the highest closing sales price per share
of Issuer Common Stock quoted on the NYSE (or if Issuer Common Stock
is not quoted on the NYSE, the highest bid price per share as quoted
on the National Association of Securities Dealers Automated
Quotations System or, if the shares of Issuer Common Stock are not
quoted thereon, on the principal trading market on which such shares
are traded as reported by a recognized source) during the 60 business
days preceding such date. If the consideration to be offered, paid
or received pursuant to either of the foregoing clauses (A) or (B)
shall be other than in cash, the value of such consideration shall be
determined in good faith by an independent nationally recognized
investment banking firm selected by Grantee and reasonably acceptable
to Issuer, which determination shall be conclusive for all purposes
of this Agreement.
(ii) "Repurchase Event" means the occurrence of a Purchase
Event followed by the consummation of any transaction the proposal of
which would constitute a Transaction Proposal; and
(iii) "Section 7 Request Date" means the date on which
Grantee or an owner of Option Shares exercises its rights under this
Section.
8. Repurchase of Substitute Option. (a) At any time after
issuance of the Substitute Option, Substitute Option Issuer (or any successor
entity thereof) shall:
(i) at the request of Grantee, repurchase from Grantee the
Substitute Option (if and to the extent not previously terminated) at
a price equal to the excess, if any, of (x) the Highest Closing Price
as of the Section 8 Request Date (as defined below) for a share of
Substitute Common Stock over (y) the Purchase Price (subject to
adjustment pursuant to Section 6(a)), multiplied by the number of
<PAGE>
shares of Substitute Common Stock with respect to which the
Substitute Option has not been exercised (the "Substitute Option
Repurchase Price"); and
(ii) at the request of an owner of shares of Substitute
Common Stock issued upon exercise of the Substitute Option,
repurchase such number of shares of Substitute Common Stock as such
owner shall designate at a price equal to the Highest Closing Price
as of the Section 8 Request Date multiplied by the number of shares
of Substitute Common Stock requested to be repurchased by such owner
(the "Substitute Share Repurchase Price").
(b) If Grantee or an owner of shares of Substitute Common Stock
issued upon exercise of the Substitute Option exercises its rights under this
Section 8, Issuer shall, within 10 business days after the Section 8 Request
Date, pay the Option Repurchase Price or Option Share Repurchase Price, as
the case may be, in immediately available funds, and Grantee or such owner,
as the case may be, shall surrender to Issuer the Option or shares of
Substitute Common Stock, as the case may be.
(c) For purposes of this Agreement, the following terms have the
following meanings:
(i) "Highest Closing Price" means the highest closing sales
price for shares of Substitute Common Stock quoted on the NYSE (or if
the Substitute Common Stock is not quoted on the NYSE, the highest
bid price per share as quoted on the National Association of
Securities Dealers Automated Quotations System or, if the shares of
Substitute Common Stock are not quoted thereon, on the principal
trading market on which such shares are traded as reported by a
recognized source) during the six-month period preceding the Section
8 Request Date; and
(ii) "Section 8 Request Date" means the date on which
Grantee or an Owner exercises its rights under this Section.
9. Registration Rights. Issuer shall, if requested by Grantee
or any owner of Option Shares (collectively with Grantee, the "Owners") at
any time and from time to time within two years of the first exercise of the
Option, as expeditiously as possible prepare and file up to two registration
statements under the Securities Act if such registration is necessary in
order to permit the sale or other disposition of any or all shares of
securities that have been acquired by or are issuable to such Owners upon
exercise of the Option in accordance with the intended method of sale or
other disposition stated by such Owners, including a "shelf" registration
statement under Rule 415 under the Securities Act or any successor provision,
and Issuer shall use its best efforts to qualify such shares or other
securities under any applicable state securities laws. Issuer shall use all
reasonable efforts to cause each such registration statement to become
effective, to obtain all consents or waivers of other parties which are
required therefor and to keep such registration statement effective for such
period not in excess of 180 days from the day such registration statement
first becomes effective as may be reasonably necessary to effect such sale or
other disposition. The obligations of Issuer hereunder to file a
registration statement and to maintain its effectiveness may be suspended for
one or more periods of time not exceeding 30 days in the aggregate if the
Board of Directors of Issuer shall have determined that the filing of such
<PAGE>
registration statement or the maintenance of its effectiveness would require
disclosure of nonpublic information that would materially and adversely
affect Issuer. Any registration statement prepared and filed under this
Section 9, and any sale covered thereby, shall be at Issuer's expense except
for underwriting discounts or commissions, brokers' fees and the fees and
disbursements of Owners' counsel related thereto. The Owners shall provide
all information reasonably requested by Issuer for inclusion in any
registration statement to be filed hereunder. If during the time period
referred to in the first sentence of this Section 9 Issuer effects a
registration under the Securities Act of Issuer Common Stock for its own
account or for any other stockholders of Issuer (other than on Form S-4 or
Form S-8, or any successor form), it shall allow the Owners the right to
participate in such registration, and such participation shall not affect the
obligation of Issuer to effect two registration statements for the Owners
under this Section 9; provided that, if the managing underwriters of such
offering advise Issuer in writing that in their opinion the number of shares
of Issuer Common Stock requested to be included in such registration exceeds
the number which can be sold in such offering, Issuer shall include the
shares requested to be included therein by the Owners pro rata with the
shares intended to be included therein by Issuer. In connection with any
registration pursuant to this Section 9, Issuer and the Owners shall provide
each other and any underwriter of the offering with customary
representations, warranties, covenants, indemnification and contribution in
connection with such registration.
10. Listing. If Issuer Common Stock or any other securities to
be acquired upon exercise of the Option are then listed on the NYSE, Issuer,
upon the request of any Owner, will promptly file an application to list the
shares of Issuer Common Stock or other securities to be acquired upon
exercise of the Option on the NYSE and will use its best efforts to obtain
approval of such listing as soon as practicable.
11. Loss, Theft, Etc. of Agreement. Upon receipt by Issuer of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Agreement, and (in the case of loss, theft or destruction)
of reasonably satisfactory indemnification, and upon surrender and
cancellation of this Agreement, if mutilated, Issuer will execute and deliver
a new Agreement of like tenor and date. Any such new Agreement executed and
delivered shall constitute an additional contractual obligation on the part
of Issuer, whether or not the Agreement so lost, stolen, destroyed or
mutilated shall at any time be enforceable by anyone.
12. Limitation of Grantee Profit. (a) Notwithstanding any other
provision herein, in no event shall Grantee's Total Profit (as defined below)
exceed $11,000,000, and, if it otherwise would exceed such amount, Grantee,
at its sole discretion, shall either (i) reduce the number of shares subject
to the Option, (ii) deliver to Issuer for cancellation shares of Issuer
Common Stock (or other securities into which such Option Shares are converted
or exchanged), (iii) pay cash to Issuer, or (iv) any combination of the
foregoing, so that Grantee's actually realized Total Profit shall not exceed
$11,000,000 after taking into account the foregoing actions.
(b) For purposes of this Agreement, "Total Profit" shall
mean: (i) the aggregate amount of (A) the excess of (x) the net cash amounts
received by Grantee pursuant to a sale of Option Shares (or securities into
which such shares are converted or exchanged) to any unaffiliated third party
within 12 months after the exercise of the Option, over (y) the Grantee's
<PAGE>
purchase price of such Option Shares (or other securities), plus (B) any
amounts received by Grantee on the transfer of the Option, plus (C) any
equivalent amounts with respect to the Substitute Option, plus (D) the amount
received by Grantee pursuant to Section 8.02(a) of the Merger Agreement,
minus (ii) the amount of cash paid to Issuer pursuant to this Section 12 plus
the value of the Option Shares (or other securities) delivered to Issuer for
cancellation pursuant to this Section 12.
(c) If Grantee receives cash or other consideration in the
aggregate, pursuant to Section 8.02(a) of the Merger Agreement together with
proceeds in connection with any sales or dispositions of the Option, Option
Shares and any dividends received by Grantee declared on Option Shares, more
than the sum of (i) $22,000,000 and (ii) the Purchase Price multiplied by the
number of Option Shares purchased by Grantee pursuant to the Option, than all
proceeds of Grantee in excess of such sum shall be remitted to Issuer within
30 days of the receipt of such cash or other consideration.
(c) Notwithstanding any other provision of this Agreement,
nothing in this Agreement shall affect the ability of Grantee to receive, nor
relieve Issuer's obligation to pay, the fee pursuant to Section 8.02(a) of
the Merger Agreement; provided that if and to the extent the Total Profit
received by Grantee would exceed $11,000,000 following receipt of such fee,
without limiting Issuer's right of set-off, Grantee shall be obligated to
comply with the terms of Section 12(a) within 30 days of the latest of (i)
the date of receipt of such fee, (ii) the date of receipt of the net cash by
Grantee pursuant to the sale of Option Shares (or securities into which such
Option Shares are converted or exchanged) to any unaffiliated party within 12
months after the exercise of this Option with respect to such Option Shares,
(iii) the date of receipt of net cash from disposition of the Option and (iv)
the date of receipt of equivalent amounts pursuant to the sale of the
Substitute Option or shares of Substitute Common Stock (or other securities
into which such Substitute Common Stock is converted or exchanged).
(d) For purposes of Section 12(a) and clause (ii) of
Section 12(b), the value of any Option Shares delivered to Issuer shall be
the Assigned Value of such Option Shares and the value of any Substitute
Common Stock delivered to Issuer shall be the Highest Closing Price of such
Substitute Common Stock.
13. Miscellaneous. (a) Expenses. Except as otherwise provided
in Section 9 hereof, each of the parties hereto shall bear and pay all costs
and expenses incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including fees and expenses of its own
financial consultants, investment bankers, accountants and counsel.
(b) Waiver and Amendment. Any provision of this Agreement may
be waived at any time by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by the parties hereto.
(c) Entire Agreement; No Third-Party Beneficiary; Severability.
Except as otherwise set forth in the Merger Agreement, this Agreement,
together with the Merger Agreement, (a) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof and (b) is not
intended to confer upon any person other than the parties hereto any rights
<PAGE>
or remedies hereunder. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or a federal or
state regulatory agency to be invalid, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated. If for any reason such court or regulatory agency determines
that the Option does not permit Grantee to acquire, or does not require
Issuer (or Substitute Option Issuer) to repurchase, the full number of shares
of Issuer Common Stock (or Substitute Common Stock) as provided in Sections 2
and 7 (or in the case of Substitute Common Stock Sections 2 and 8), as
adjusted pursuant to Section 6, it is the express intention of Issuer to
allow Grantee to acquire or to require Issuer to repurchase such lesser
number of shares as may be permissible without any amendment or modification
hereof.
(D) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO ANY APPLICABLE CONFLICTS OF LAW RULES.
(e) Descriptive Headings. The descriptive headings contained
herein are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
(f) Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (with confirmation) or mailed by registered or certified mail
(return receipt requested) to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice):
If to Grantee to:
The Perkin-Elmer Corporation
761 Main Street
Norwalk, Connecticut 06859
Attention: Chief Executive Officer
Telecopier No.: 1-203-761-5015
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: James M. Cotter, Esq.
Richard A. Garvey, Esq.
Telecopier No.: (212) 455-2502
If to Issuer to:
PerSeptive Biosystems, Inc.
500 Old Connecticut Path
Framingham, Massachusetts 01701
Attention: Chief Executive Officer
Telecopier No.: 1-508-383-7852
<PAGE>
with a copy to:
Testa, Hurwitz & Thibeault, LLP
125 High Street
High Street Tower
Boston, Massachusetts 02110
Attention: George Lloyd, Esq.
Rufus C. King, Esq.
Telecopier No.: 1-617-248-7100
(g) Counterparts. This Agreement and any amendments hereto may
be executed in two counterparts, each of which shall be considered one and
the same agreement and shall become effective when both counterparts have
been signed by each of the parties and delivered to the other party, it being
understood that both parties need not sign the same counterpart.
(h) Assignment. Grantee may assign this Agreement in whole to
any affiliate of Grantee at any time. Except as provided in the next
sentence, Grantee may not, without the prior written consent of Issuer (which
shall not be unreasonably withheld), assign this Agreement to any other
person. Upon the occurrence of a Purchase Event, Grantee may sell, transfer,
assign or otherwise dispose of, in whole at any time, its rights and
obligations hereunder. In the case of any sale, transfer, assignment or
disposition of this Option, Issuer shall do all things reasonably necessary
to facilitate such transaction. This Agreement shall not be assignable by
Issuer except by operation of law. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns.
(i) Representations and Warranties. The representations and
warranties contained in Sections 3.01(a) and 3.02(a) of the Merger Agreement,
and, to the extent they relate to this Stock Option Agreement, in Sections
3.01(d), (p), (q) and (r) and 3.02(c) of the Merger Agreement, are
incorporated herein by reference.
(j) Further Assurances. In the event of any exercise of the
Option by Grantee, Issuer and Grantee shall execute and deliver all other
documents and instruments and take all other action that may be reasonably
necessary in order to consummate the transactions provided for by such
exercise.
(k) Specific Performance. The parties hereto agree that this
Agreement may be enforced by either party through specific performance,
injunctive relief and other equitable relief. Both parties further agree to
waive any requirement for the securing or posting of any bond in connection
with the obtaining of any such equitable relief and that this provision is
without prejudice to any other rights that the parties hereto may have for
any failure to perform this Agreement.
<PAGE>
IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly authorized
as of the day and year first written above.
PERSEPTIVE BIOSYSTEMS, INC.
by
____________________________
Name:
Title:
THE PERKIN-ELMER CORPORATION
by
____________________________
Name:
Title:
<PAGE>
Exhibit B-1
The Perkin-Elmer Corporation
500 Old Connecticut Path
Framingham, Massachusetts 01701
PerSeptive Biosystems, Inc.
761 Main Street
Norwalk, Connecticut 06859
Ladies and Gentlemen:
I have been advised that as of the date hereof I may be deemed to
be an "affiliate" of PerSeptive Biosystems, Inc., a Delaware corporation (the
"Company"), as the term "affiliate" is (i) defined for purposes of paragraphs
(c) and (d) of Rule 145 of the Rules and Regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"), and/or (ii) used in
and for purposes of Accounting Series Releases 130 and 135, as amended, of
the Commission. Pursuant to the terms of the Agreement and Plan of Merger
dated as of August 23, 1997 (the "Agreement"), among The Perkin-Elmer
Corporation, a New York corporation ("Parent"), Seven Acquisition Corp. a
Delaware Corporation and wholly-owned subsidiary of Parent ("Sub"), and the
Company, Sub will be merged with and into the Company (the "Merger").
As a result of the Merger, I may receive shares of Common Stock,
par value $1.00 per share, of Parent ("Parent Common Stock") in exchange for,
shares (or options or warrants for shares) owned by me of Common Stock, par
value $0.01 per share, of the Company ("Company Common Stock").
I represent, warrant and covenant to Parent and the Company that in
the event I receive any Parent Common Stock as a result of the Merger:
A. I shall not make any sale, transfer or other disposition of
the Parent Common Stock in violation of the Act or the Rules and
Regulations.
B. I have carefully read this letter and the Agreement and
discussed its requirements and other applicable limitations upon my
ability to sell, transfer or otherwise dispose of Parent Common Stock to
the extent I felt necessary, with my counsel or counsel for the Company.
C. I have been advised that the issuance of Parent Common Stock
to me pursuant to the Merger has been registered with the Commission
under the Act on a Registration Statement on Form S-4. However, I have
also been advised that, because at the time the Merger was submitted for
a vote of the stockholders of the Company, (a) I may be deemed to have
been an affiliate of the Company and (b) the distribution by me of the
Parent Common Stock has not been registered under the Act, I may not
sell, transfer or otherwise dispose of Parent Common Stock issued to me
in the Merger unless (i) such sale, transfer or other disposition has
been registered under the Act, (ii) such sale, transfer or other
disposition is made in conformity with the volume and other limitations
of Rule 145 promulgated by the Commission under the Act, or (iii) in the
opinion of counsel reasonably acceptable to Parent, such sale, transfer
<PAGE>
or other disposition is otherwise exempt from registration under the
Act.
D. I understand that, except as provided in the Agreement in
Sections 2.03(c) and 2.04(d), Parent is under no obligation to register
the sale, transfer or other disposition of the Parent Common Stock by me
or on my behalf under the Act or to take any other action necessary in
order to make compliance with an exemption from such registration
available.
E. I also understand that stop transfer instructions will be
given to Parent's transfer agents with respect to the Parent Common
Stock and that there will be placed on the certificates for the Parent
Common Stock issued to me in the Merger, 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 applies. The shares represented by this certificate may
only be transferred in accordance with the terms of an agreement
dated , 199 between the registered holder hereof and The
Perkin-Elmer Corporation, a copy of which agreement is on file at
the principal offices of The Perkin-Elmer Corporation."
F. I also understand that unless the transfer by me of my Parent
Common Stock has been registered under the Act or is a sale made in
conformity with the provisions of Rule 145, 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 and were acquired from
a person who received such shares in a transaction to which Rule
145 promulgated under the Securities Act of 1933 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 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."
It is understood and agreed that the legend set forth in paragraph
E or F above, as the case may be, shall be removed by delivery of substitute
certificates without such legend if the undersigned shall have delivered to
Parent a copy of a letter from the staff of the Commission, or an opinion of
counsel in form and substance reasonably satisfactory to Parent, to the
effect that such legend is not required for purposes of the Act.
I further represent to and covenant with Parent and the Company
that I have not and will not, within the 30 days prior to the Effective Time
of the Merger (as defined in the Agreement), sold, transferred or otherwise
disposed of any shares of the capital stock of Parent or the Company held by
me and that I will not sell, transfer or otherwise dispose of any shares of
Parent Common Stock received by me in the Merger or other shares of the
capital stock of Parent until after such time as results covering at least 30
days of combined operations of Parent and the Company have been published by
Parent, in the form of a quarterly earnings report, an effective registration
statement filed with the Commission, a report to the Commission on Form 10-K,
<PAGE>
10-Q, or 8-K, or any other public filing or announcement which includes the
combined results of operations.
By its acceptance hereof, Parent agrees, for a period of two years
after the Effective Time of the Merger, that it will file on a timely basis
all reports required to be filed by it pursuant to Section 13 of the
Securities Exchange Act of 1934, as amended, so that the public information
provisions of Rule 144(c) under the Act are satisfied and the resale
provisions of Rules 145(d)(1) and (2) under the Act are therefore available
to me in the event I desire to transfer any Parent Common Stock issued to me
in the Merger.
<PAGE>
By signing this letter, without limiting or abrogating my
agreements set forth above, I do not admit that I am an "affiliate" of the
Company within the meaning of the Act or the Rules and Regulations, and I do
not waive any right I may have to object to any assertion that I am such an
affiliate.
Very truly yours,
_________________________
Name:
Accepted this day of
, 199_, by
PerSeptive Biosystems, Inc.
By:_____________________
Name:
Title:
The Perkin-Elmer Corporation
By:_____________________
Name:
Title:
<PAGE>
Exhibit B-2
The Perkin-Elmer Corporation
761 Main Street
Norwalk, Connecticut 06859
PerSeptive Biosystems, Inc.
500 Old Connecticut Path
Framingham, Massachusetts 01701
Ladies and Gentlemen:
I have been advised that as of the date hereof I may be deemed to
be an "affiliate" of The Perkin-Elmer Corporation, a New York corporation
("Parent"), as the term "affiliate" is used in and for purposes of Accounting
Series Releases 130 and 135, as amended, of the Securities and Exchange
Commission (the "Commission"). Pursuant to the terms of the Agreement and
Plan of Merger dated as of August 23, 1997 (the "Agreement"), among Parent,
Seven Acquisition Corp., a Delaware Corporation and wholly-owned subsidiary
of Parent ("Sub") and PerSeptive Biosystems, Inc., a Delaware corporation
(the "Company"), Sub will be merged with and into the Company (the "Merger").
I represent to and covenant with Parent and the Company that I have
not and will not, within the 30 days prior to the Effective Time of the
Merger (as defined in the Agreement), sold, transferred or otherwise disposed
of any shares of the capital stock of Parent and the Company held by me and
that I will not sell, transfer or otherwise dispose of any shares of Parent
Common Stock received by me in the Merger or other shares of the capital
stock of Parent until after such time as results covering at least 30 days of
combined operations of Parent and the Company have been published by Parent,
in the form of a quarterly earnings report, an effective registration
statement filed with the Commission, a report to the Commission on Form 10-K,
10-Q, or 8-K, or any other public filing or announcement which includes the
combined results of operations.
By signing this letter, without limiting or abrogating my
agreements set forth above, I do not admit that I am an "affiliate" of Parent
within the meaning of the Act or the Rules and Regulations, and I do not
waive any right I may have to object to any assertion that I am such an
affiliate.
Very truly yours,
_________________________
Name:
Title:
Accepted this day of
, 199_, by
The Perkin-Elmer Corporation
By:________________________
Name:
Title:
PerSeptive Biosystems, Inc.
By:________________________
Name:
Title:
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of August 23, 1997 (the "Agreement"),
by and between PerSeptive Biosystems, Inc., a Delaware corporation
("Issuer"), and The Perkin-Elmer Corporation, a New York corporation
("Grantee").
WHEREAS, Grantee, Issuer and Seven Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of Grantee ("Sub"), are
concurrently herewith entering into an Agreement and Plan of Merger, dated as
of the date hereof (the "Merger Agreement"; capitalized terms not defined
herein shall have the meanings set forth in the Merger Agreement), providing
for, among other things, the merger of Sub with and into Issuer with Issuer
as the surviving corporation; and
WHEREAS, as a condition and inducement to Grantee's willingness to enter
into the Merger Agreement, Grantee has requested that Issuer agree, and
Issuer has agreed, to grant Grantee the Option (as defined below);
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Merger Agreement, Issuer and Grantee agree as follows:
1. Grant of Option. Subject to the terms and conditions set forth
herein, Issuer hereby grants to Grantee an irrevocable option (the "Option")
to purchase up to 4,478,308 (as adjusted as set forth herein) shares (the
"Option Shares") of Common Stock, par value $.01 per share, of Issuer (the
"Issuer Common Stock") at a purchase price of $13.00 per Option Share (the
"Purchase Price").
2. Exercise of Option. (a) If not in material breach of the Merger
Agreement, Grantee may exercise the Option, in whole or in part, at any time
(or, to the extent permitted pursuant to Section 2(c) hereof, from time to
time) following the occurrence of a Purchase Event (as defined below);
provided that, except as otherwise provided herein, the Option shall
terminate and be of no further force and effect upon the earliest to occur of
(i) the Effective Time of the Merger, (ii) 12 months after the first
occurrence of a Purchase Event or (iii) termination of the Merger Agreement
prior to the occurrence of a Purchase Event. The termination of the Option
shall not affect any rights hereunder which by their terms extend beyond the
date of such termination.
(b) As used herein, a "Purchase Event" means the termination of the
Merger Agreement under any circumstance which would entitle Grantee or Issuer
to receive any fee from Issuer pursuant to Section 8.02(a) of the Merger
Agreement, provided, however, that the termination of the Merger Agreement
(except pursuant to Section 7.01(b) thereof) after the occurrence of any
event described in Section 8.02(a)(i)(B)(x) thereof shall constitute a
Purchase Event hereunder whether or not any event described forth in Section
8.02(a)(i)(B)(y) of the Merger Agreement shall have occurred.
(c) Except as otherwise provided in this Section 2(c), Grantee shall
be entitled to exercise the Option, in whole or in part, on only one occasion
<PAGE>
and, if Grantee elects to exercise the Option only in part, the unexercised
portion of the Option shall be forfeited and cancelled. Notwithstanding the
foregoing, in the event that by virtue of (i) any statute, law, rule or
regulation applicable to Grantee or Issuer, (ii) any order, decree or
injunction to which Grantee or Issuer is subject, (iii) any provision of
Issuer's Certificate of Incorporation or By-Laws, (iv) any agreement,
instrument or other document to which Issuer is a party or by which it is
bound or (v) the terms of any security issued by Issuer, (A) Grantee shall be
prohibited from acquiring or holding any of the Option Shares, (B) Grantee
shall be unable to exercise full rights of ownership with respect to any of
the Option Shares (including, without limitation, the right to vote such
Option Shares on all matters properly presented to the stockholders of
Issuer) or (C) any of such Option Shares shall be in any way distinguishable
from, or of lesser economic value than, any other shares of Issuer Common
Stock (any of the conditions described in clauses (A) through (C), an
"Impairment"; and the portion of the Option Shares affected by an Impairment,
the "Impaired Portion" of the Option Shares), then upon a partial exercise of
the Option by Grantee, the portion of the Option relating to the Impaired
Portion of the Option Shares shall not be forfeited or cancelled but shall
remain exercisable by Grantee in accordance with the terms of this Agreement.
When all Impairments relating to any Impaired Portion of the Option Shares
have been eliminated, Grantee may from time to time exercise the Option with
respect to Option Shares previously affected by such Impairment and upon any
such exercise, the unexercised portion of the Option (other than any
remaining Impaired Portion) shall be forfeited and cancelled.
(d) In the event Grantee wishes to exercise the Option, it shall
send to Issuer a written notice (the date of which being herein referred to
as the "Notice Date") specifying (i) the total number of Option Shares it
intends to purchase pursuant to such exercise and (ii) a place and date not
earlier than three business days nor later than 20 business days from the
Notice Date for the closing of such purchase (the "Closing"; and the date of
such Closing, the "Closing Date"); provided that the Closing shall be held
only if (i) such purchase would not otherwise violate or cause the violation
of applicable law (including the HSR Act) and (ii) no statute, rule,
regulation, decree, order or injunction shall have been promulgated, enacted,
entered into, or enforced by any Governmental Entity which prohibits delivery
of the Option Shares, whether temporary, preliminary or permanent (provided,
however, that the parties hereto shall use their best efforts to have any
such decree, order or injunction vacated or reversed). If the Closing cannot
be consummated by reason of a restriction set forth in clause (i) or (ii)
above, notwithstanding the provisions of Section 2(a), the Closing Date shall
be within 10 business days following the elimination of such restriction.
3. Payment and Delivery of Certificates. (a) On each Closing
Date, Grantee shall pay to Issuer in immediately available funds by wire
transfer to a bank account designated by Issuer an amount equal to the
Purchase Price multiplied by the Option Shares to be purchased on such
Closing Date.
(b) At each Closing, simultaneously with the delivery of
immediately available funds as provided in Section 3(a), Issuer shall deliver
to Grantee a certificate or certificates representing the Option Shares to be
purchased at such Closing, which Option Shares shall be free and clear of all
Liens, and Grantee shall deliver to Issuer a letter agreeing that Grantee
shall not offer to sell or otherwise dispose of such Option Shares in
violation of applicable law or the provisions of this Agreement. If at the
<PAGE>
time of issuance of any Option Shares pursuant to an exercise of all or part
of the Option hereunder, Issuer shall not have redeemed the Rights, or shall
have issued any similar securities, then each Option Share issued pursuant to
such exercise shall also represent a corresponding Right or new rights with
terms substantially the same as and at least as favorable to Grantee as are
provided under the Rights Agreement or any similar agreement then in effect.
(c) Certificates for the Option Shares delivered at each Closing
shall be endorsed with a restrictive legend which shall read substantially as
follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT DATED
AS OF AUGUST 23, 1997. A COPY OF SUCH AGREEMENT WILL BE PROVIDED TO
THE HOLDER HEREOF WITHOUT CHARGE UPON RECEIPT BY THE ISSUER OF A
WRITTEN REQUEST THEREFOR.
It is understood and agreed that (i) the reference to restrictions arising
under the Securities Act in the above legend shall be removed by delivery of
substitute certificate(s) without such reference if Grantee shall have
delivered to Issuer a copy of a letter from the staff of the SEC, or an
opinion of counsel in form and substance reasonably satisfactory to Issuer
and its counsel, to the effect that such legend is not required for purposes
of the Securities Act and (ii) the reference to restrictions pursuant to this
Agreement in the above legend shall be removed by delivery of substitute
certificate(s) without such reference if the Option Shares evidenced by
certificate(s) containing such reference have been sold or transferred in
compliance with the provisions of this Agreement under circumstances that do
not require the retention of such reference.
4. Authorized Stock. Issuer hereby represents and warrants to
Grantee that Issuer has taken all necessary corporate and other action to
authorize and reserve and to permit it to issue, and, at all times from the
date hereof until the obligation to deliver Issuer Common Stock upon the
exercise of the Option terminates, will have reserved for issuance, upon
exercise of the Option, shares of Issuer Common Stock necessary for Grantee
to exercise the Option, and Issuer will take all necessary corporate action
to authorize and reserve for issuance all additional shares of Issuer Common
Stock or other securities which may be issued pursuant to Section 6 upon
exercise of the Option. The shares of Issuer Common Stock to be issued upon
due exercise of the Option, including all additional shares of Issuer Common
Stock or other securities which may be issuable upon exercise of the Option
pursuant to Section 6, upon issuance pursuant hereto, shall be duly and
validly issued, fully paid and nonassessable, and shall be delivered free and
clear of all Liens, including any preemptive rights of any stockholder of
Issuer.
5. Purchase Not for Distribution. Grantee hereby represents
and warrants to Issuer that any Option Shares or other securities acquired by
Grantee upon exercise of the Option will not be taken with a view to the
public distribution thereof and will not be transferred or otherwise disposed
of except in a transaction registered or exempt from registration under the
Securities Act.
6. Adjustment upon Changes in Capitalization, etc. (a) In the
event of any change in Issuer Common Stock by reason of a stock dividend,
<PAGE>
split-up, recapitalization, combination, exchange of shares or similar
transaction, the type and number of shares or securities subject to the
Option, and the Purchase Price therefor, shall be adjusted appropriately, and
proper provision shall be made in the agreements governing such transaction,
so that Grantee shall receive upon exercise of the Option the number and
class of shares or other securities or property that Grantee would have
received in respect of Issuer Common Stock if the Option had been exercised
immediately prior to such event or the record date therefor, as applicable.
If any additional shares of Issuer Common Stock are issued after the date of
this Agreement at a price per share less than the Purchase Price, the number
of shares of Issuer Common Stock subject to the Option shall be adjusted so
that, after such issuance, it equals 19.9% of the number of shares of Issuer
Common Stock then issued and outstanding, without giving effect to any shares
subject to or issued pursuant to the Option.
(b) In the event that Issuer shall enter into an agreement (i)
to consolidate with or merge into any person, other than Grantee or one of
its subsidiaries, and shall not be the continuing or surviving corporation of
such consolidation or merger, (ii) to permit any person, other than Grantee
or one of its subsidiaries, to merge into Issuer and Issuer shall be the
continuing or surviving corporation, but, in connection with such merger, the
shares of Issuer Common Stock outstanding immediately prior to the
consummation of such merger shall be changed into or exchanged for stock or
other securities of Issuer or any other person or cash or any other property,
or the shares of Issuer Common Stock outstanding immediately prior to the
consummation of such merger shall after such merger represent less than 50%
of the outstanding voting securities of the merged company, or (iii) to sell
or otherwise transfer all or substantially all of its assets to any person,
other than Grantee or one of its subsidiaries, then, and in each such case,
the agreement governing such transaction shall make proper provisions so that
the Option shall, upon the consummation of any such transaction and upon the
terms and conditions set forth herein, be converted into, or exchanged for,
an option (the "Substitute Option"), at the election of Grantee, of either
(I) the Acquiring Corporation (as defined below) or (II) any person that
controls the Acquiring Corporation (any such person specified in clause (I)
or (II) being referred to as "Substitute Option Issuer").
(c) The Substitute Option shall have the same terms as the
Option; provided that the exercise price therefor and number of shares
subject thereto shall be as set forth in this Section 6 and the repurchase
rights relating thereto shall be as set forth in Section 8; provided,
further, that the Substitute Option shall be exercisable immediately upon
issuance without the occurrence of a Purchase Event with respect to the
Substitute Option; and provided, further, that if the terms of the Substitute
Option cannot, for legal reasons, be the same as the Option (subject to the
variations described in the foregoing provisos), such terms shall be as
similar as possible and in no event less advantageous to Grantee. Substitute
Option Issuer shall also enter into an agreement with Grantee in
substantially the same form as this Agreement (subject to the variations
described in the foregoing provisos), which shall be applicable to the
Substitute Option.
(d) The Substitute Option shall be exercisable for such number
of shares of Substitute Common Stock (as defined below) as is equal to the
Assigned Value (as defined below) multiplied by the number of shares of
Issuer Common Stock for which the Option was theretofore exercisable, divided
by the Average Price (as defined below), rounded up to the nearest whole
<PAGE>
share. The exercise price per share of Substitute Common Stock of the
Substitute Option (the "Substitute Option Price") shall then be equal to the
Purchase Price multiplied by a fraction in which the numerator is the number
of shares of Issuer Common Stock for which the Option was theretofore
exercisable and the denominator is the number of shares of Substitute Common
Stock for which the Substitute Option is exercisable.
(e) In no event, pursuant to any of the foregoing paragraphs,
shall the Substitute Option be exercisable for more than 19.9% of the
aggregate of the shares of Substitute Common Stock outstanding prior to
exercise of the Substitute Option. In the event that the Substitute Option
would be exercisable for more than 19.9% of the aggregate of the shares of
outstanding Substitute Common Stock but for the limitation in the first
sentence of this Section 6(e), Substitute Option Issuer shall make a cash
payment to Grantee equal to the excess of (i) the value of the Substitute
Option without giving effect to the limitation in the first sentence of this
Section 6(e) over (ii) the value of the Substitute Option after giving effect
to the limitation in the first sentence of this Section 6(e). This
difference in value shall be determined by a nationally recognized investment
banking firm selected by Grantee.
(f) Issuer shall not enter into any transaction described in
Section 6(b) unless the Acquiring Corporation and any person that controls
the Acquiring Corporation assume in writing all the obligations of Issuer
hereunder and take all other actions that may be necessary so that the
provisions of this Agreement are given full force and effect (including,
without limitation, any action that may be necessary so that the holders of
the other shares of common stock issued by Substitute Option Issuer are not
entitled to exercise any rights comparable to the Rights by reason of the
issuance or exercise of the Substitute Option and the shares of Substitute
Common Stock are otherwise in no way distinguishable from or have lesser
economic value than other shares of common stock issued by Substitute Option
Issuer (other than any diminution in value resulting from the fact, if
applicable, that the shares of Substitute Common Stock are restricted
securities, as defined in Rule 144 under the Securities Act or any successor
provision)).
(g) For purposes of this Agreement, the following terms have the
following meanings:
(1) "Acquiring Corporation" means (i) the continuing or
surviving corporation of a consolidation or merger with Issuer (if
other than Issuer), (ii) Issuer in a merger in which Issuer is the
continuing or surviving corporation and (iii) the transferee of all
or substantially all of Issuer's assets.
(2) "Assigned Value" means the highest of (w) the price per
share of Issuer Common Stock at which a tender offer or exchange
offer for Issuer Common Stock has been made after the date hereof and
prior to the consummation of the consolidation, merger or sale
referred to in Section 6(b), (x) the price per share to be paid by
any third party or the consideration per share to received by holders
of Issuer Common Stock, in each case pursuant to the agreement with
Issuer with respect to the consolidation, merger or sale referred to
in Section 6(b), (y) the highest closing sales price per share for
Issuer Common Stock quoted on the NYSE (or if such Issuer Common
Stock is not quoted on the NYSE, the highest bid price per share as
<PAGE>
quoted on the National Association of Securities Dealers Automated
Quotation System or, if the shares of Issuer Common Stock are not
quoted thereon, on the principal trading market on which such shares
are traded as reported by a recognized source) during the 12-month
period immediately preceding the consolidation, merger or sale
referred to in Section 6(b) and (z) in the event the transaction
referred to in Section 6(b) is a sale of all or substantially all of
Issuer's assets, an amount equal to (i) the sum of the price paid in
such sale for such assets and the current market value of the
remaining assets of Issuer, as determined by a nationally recognized
investment banking firm selected by Grantee divided by (ii) the
number of shares of Issuer Common Stock outstanding at such time. In
the event that a tender offer or exchange offer is made for Issuer
Common Stock or an agreement is entered into for a merger or
consolidation involving consideration other than cash, the value of
the securities or other property issuable or deliverable in exchange
for Issuer Common Stock shall be determined by a nationally
recognized investment banking firm selected by Grantee.
(3) "Average Price" means the average closing sales price
per share of a share of Substitute Common Stock quoted on the NYSE
(or if such Substitute Common Stock is not quoted on the NYSE, the
highest bid price per share as quoted on the National Association of
Securities Dealers Automated Quotation System or, if the shares of
Substitute Common Stock are not quoted thereon, on the principal
trading market on which such shares are traded as reported by a
recognized source) for the twenty trading days immediately preceding
the fifth business day prior to the consolidation, merger or sale in
question, but in no event higher than the closing price of the shares
of Substitute Common Stock on the day preceding such consolidation,
merger or sale; provided that if Substitute Option Issuer is Issuer,
the Average Price shall be computed with respect to a share of common
stock issued by Issuer, the person merging into Issuer or by any
company which controls such person, as Grantee may elect.
(4) "Substitute Common Stock" means the shares of capital
stock (or similar equity interest) with the greatest voting power in
respect of the election of directors (or persons similarly
responsible for the direction of the business and affairs) of the
Substitute Option Issuer.
7. Repurchase of Option and Option Shares. (a) Notwithstanding
the provisions of Section 2(a), at any time commencing upon the first
occurrence of a Repurchase Event (as defined below) and ending 12 months
after the occurrence of a Purchase Event, Issuer (or any successor entity
thereof) shall:
(i) at the request of Grantee, repurchase from Grantee the
Option (if and to the extent not previously terminated) at a price
equal to the excess, if any, of (x) the Applicable Price (as defined
below) as of the Section 7 Request Date (as defined below) for a
share of Issuer Common Stock over (y) the Purchase Price (subject to
adjustment pursuant to Section 6(a)), multiplied by the number of
shares of Issuer Common Stock with respect to which the Option has
not been exercised (the "Option Repurchase Price"); and
<PAGE>
(ii) at the request of an owner of Option Shares from time
to time, repurchase such number of Option Shares as such owner shall
designate at a price equal to the Applicable Price as of the Section
7 Request Date multiplied by the number of Option Shares requested to
be repurchased by such owner (the "Option Share Repurchase Price").
(b) If Grantee or an owner of Option Shares exercises its rights
under this Section 7, Issuer shall, within 10 business days after the Section
7 Request Date, pay the Option Repurchase Price or Option Share Repurchase
Price, as the case may be, in immediately available funds, and Grantee or
such owner, as the case may be, shall surrender to Issuer the Option or
Option Shares, as the case may be.
(c) For purposes of this Agreement, the following terms have the
following meanings:
(i) "Applicable Price," as of any date, means the highest
of (A) the highest price per share at which a tender offer or
exchange offer has been made for shares of Issuer Common Stock after
the date hereof and on or prior to such date, (B) the price per share
to be paid by any third party for shares of Issuer Common Stock or
the consideration per share to be received by holders of Issuer
Common Stock, in each case pursuant to an agreement for a merger or
other business combination transaction with Issuer entered into on or
prior to such date or (C) the highest closing sales price per share
of Issuer Common Stock quoted on the NYSE (or if Issuer Common Stock
is not quoted on the NYSE, the highest bid price per share as quoted
on the National Association of Securities Dealers Automated
Quotations System or, if the shares of Issuer Common Stock are not
quoted thereon, on the principal trading market on which such shares
are traded as reported by a recognized source) during the 60 business
days preceding such date. If the consideration to be offered, paid
or received pursuant to either of the foregoing clauses (A) or (B)
shall be other than in cash, the value of such consideration shall be
determined in good faith by an independent nationally recognized
investment banking firm selected by Grantee and reasonably acceptable
to Issuer, which determination shall be conclusive for all purposes
of this Agreement.
(ii) "Repurchase Event" means the occurrence of a Purchase
Event followed by the consummation of any transaction the proposal of
which would constitute a Transaction Proposal; and
(iii) "Section 7 Request Date" means the date on which
Grantee or an owner of Option Shares exercises its rights under this
Section.
8. Repurchase of Substitute Option. (a) At any time after
issuance of the Substitute Option, Substitute Option Issuer (or any successor
entity thereof) shall:
(i) at the request of Grantee, repurchase from Grantee the
Substitute Option (if and to the extent not previously terminated) at
a price equal to the excess, if any, of (x) the Highest Closing Price
as of the Section 8 Request Date (as defined below) for a share of
Substitute Common Stock over (y) the Purchase Price (subject to
adjustment pursuant to Section 6(a)), multiplied by the number of
<PAGE>
shares of Substitute Common Stock with respect to which the
Substitute Option has not been exercised (the "Substitute Option
Repurchase Price"); and
(ii) at the request of an owner of shares of Substitute
Common Stock issued upon exercise of the Substitute Option,
repurchase such number of shares of Substitute Common Stock as such
owner shall designate at a price equal to the Highest Closing Price
as of the Section 8 Request Date multiplied by the number of shares
of Substitute Common Stock requested to be repurchased by such owner
(the "Substitute Share Repurchase Price").
(b) If Grantee or an owner of shares of Substitute Common Stock
issued upon exercise of the Substitute Option exercises its rights under this
Section 8, Issuer shall, within 10 business days after the Section 8 Request
Date, pay the Option Repurchase Price or Option Share Repurchase Price, as
the case may be, in immediately available funds, and Grantee or such owner,
as the case may be, shall surrender to Issuer the Option or shares of
Substitute Common Stock, as the case may be.
(c) For purposes of this Agreement, the following terms have the
following meanings:
(i) "Highest Closing Price" means the highest closing sales
price for shares of Substitute Common Stock quoted on the NYSE (or if
the Substitute Common Stock is not quoted on the NYSE, the highest
bid price per share as quoted on the National Association of
Securities Dealers Automated Quotations System or, if the shares of
Substitute Common Stock are not quoted thereon, on the principal
trading market on which such shares are traded as reported by a
recognized source) during the six-month period preceding the Section
8 Request Date; and
(ii) "Section 8 Request Date" means the date on which
Grantee or an Owner exercises its rights under this Section.
9. Registration Rights. Issuer shall, if requested by Grantee
or any owner of Option Shares (collectively with Grantee, the "Owners") at
any time and from time to time within two years of the first exercise of the
Option, as expeditiously as possible prepare and file up to two registration
statements under the Securities Act if such registration is necessary in
order to permit the sale or other disposition of any or all shares of
securities that have been acquired by or are issuable to such Owners upon
exercise of the Option in accordance with the intended method of sale or
other disposition stated by such Owners, including a "shelf" registration
statement under Rule 415 under the Securities Act or any successor provision,
and Issuer shall use its best efforts to qualify such shares or other
securities under any applicable state securities laws. Issuer shall use all
reasonable efforts to cause each such registration statement to become
effective, to obtain all consents or waivers of other parties which are
required therefor and to keep such registration statement effective for such
period not in excess of 180 days from the day such registration statement
first becomes effective as may be reasonably necessary to effect such sale or
other disposition. The obligations of Issuer hereunder to file a
registration statement and to maintain its effectiveness may be suspended for
one or more periods of time not exceeding 30 days in the aggregate if the
Board of Directors of Issuer shall have determined that the filing of such
<PAGE>
registration statement or the maintenance of its effectiveness would require
disclosure of nonpublic information that would materially and adversely
affect Issuer. Any registration statement prepared and filed under this
Section 9, and any sale covered thereby, shall be at Issuer's expense except
for underwriting discounts or commissions, brokers' fees and the fees and
disbursements of Owners' counsel related thereto. The Owners shall provide
all information reasonably requested by Issuer for inclusion in any
registration statement to be filed hereunder. If during the time period
referred to in the first sentence of this Section 9 Issuer effects a
registration under the Securities Act of Issuer Common Stock for its own
account or for any other stockholders of Issuer (other than on Form S-4 or
Form S-8, or any successor form), it shall allow the Owners the right to
participate in such registration, and such participation shall not affect the
obligation of Issuer to effect two registration statements for the Owners
under this Section 9; provided that, if the managing underwriters of such
offering advise Issuer in writing that in their opinion the number of shares
of Issuer Common Stock requested to be included in such registration exceeds
the number which can be sold in such offering, Issuer shall include the
shares requested to be included therein by the Owners pro rata with the
shares intended to be included therein by Issuer. In connection with any
registration pursuant to this Section 9, Issuer and the Owners shall provide
each other and any underwriter of the offering with customary
representations, warranties, covenants, indemnification and contribution in
connection with such registration.
10. Listing. If Issuer Common Stock or any other securities to
be acquired upon exercise of the Option are then listed on the NYSE, Issuer,
upon the request of any Owner, will promptly file an application to list the
shares of Issuer Common Stock or other securities to be acquired upon
exercise of the Option on the NYSE and will use its best efforts to obtain
approval of such listing as soon as practicable.
11. Loss, Theft, Etc. of Agreement. Upon receipt by Issuer of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Agreement, and (in the case of loss, theft or destruction)
of reasonably satisfactory indemnification, and upon surrender and
cancellation of this Agreement, if mutilated, Issuer will execute and deliver
a new Agreement of like tenor and date. Any such new Agreement executed and
delivered shall constitute an additional contractual obligation on the part
of Issuer, whether or not the Agreement so lost, stolen, destroyed or
mutilated shall at any time be enforceable by anyone.
12. Limitation of Grantee Profit. (a) Notwithstanding any other
provision herein, in no event shall Grantee's Total Profit (as defined below)
exceed $11,000,000, and, if it otherwise would exceed such amount, Grantee,
at its sole discretion, shall either (i) reduce the number of shares subject
to the Option, (ii) deliver to Issuer for cancellation shares of Issuer
Common Stock (or other securities into which such Option Shares are converted
or exchanged), (iii) pay cash to Issuer, or (iv) any combination of the
foregoing, so that Grantee's actually realized Total Profit shall not exceed
$11,000,000 after taking into account the foregoing actions.
(b) For purposes of this Agreement, "Total Profit" shall
mean: (i) the aggregate amount of (A) the excess of (x) the net cash amounts
received by Grantee pursuant to a sale of Option Shares (or securities into
which such shares are converted or exchanged) to any unaffiliated third party
within 12 months after the exercise of the Option, over (y) the Grantee's
<PAGE>
purchase price of such Option Shares (or other securities), plus (B) any
amounts received by Grantee on the transfer of the Option, plus (C) any
equivalent amounts with respect to the Substitute Option, plus (D) the amount
received by Grantee pursuant to Section 8.02(a) of the Merger Agreement,
minus (ii) the amount of cash paid to Issuer pursuant to this Section 12 plus
the value of the Option Shares (or other securities) delivered to Issuer for
cancellation pursuant to this Section 12.
(c) If Grantee receives cash or other consideration in the
aggregate, pursuant to Section 8.02(a) of the Merger Agreement together with
proceeds in connection with any sales or dispositions of the Option, Option
Shares and any dividends received by Grantee declared on Option Shares, more
than the sum of (i) $22,000,000 and (ii) the Purchase Price multiplied by the
number of Option Shares purchased by Grantee pursuant to the Option, than all
proceeds of Grantee in excess of such sum shall be remitted to Issuer within
30 days of the receipt of such cash or other consideration.
(c) Notwithstanding any other provision of this Agreement,
nothing in this Agreement shall affect the ability of Grantee to receive, nor
relieve Issuer's obligation to pay, the fee pursuant to Section 8.02(a) of
the Merger Agreement; provided that if and to the extent the Total Profit
received by Grantee would exceed $11,000,000 following receipt of such fee,
without limiting Issuer's right of set-off, Grantee shall be obligated to
comply with the terms of Section 12(a) within 30 days of the latest of (i)
the date of receipt of such fee, (ii) the date of receipt of the net cash by
Grantee pursuant to the sale of Option Shares (or securities into which such
Option Shares are converted or exchanged) to any unaffiliated party within 12
months after the exercise of this Option with respect to such Option Shares,
(iii) the date of receipt of net cash from disposition of the Option and (iv)
the date of receipt of equivalent amounts pursuant to the sale of the
Substitute Option or shares of Substitute Common Stock (or other securities
into which such Substitute Common Stock is converted or exchanged).
(d) For purposes of Section 12(a) and clause (ii) of
Section 12(b), the value of any Option Shares delivered to Issuer shall be
the Assigned Value of such Option Shares and the value of any Substitute
Common Stock delivered to Issuer shall be the Highest Closing Price of such
Substitute Common Stock.
13. Miscellaneous. (a) Expenses. Except as otherwise provided
in Section 9 hereof, each of the parties hereto shall bear and pay all costs
and expenses incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including fees and expenses of its own
financial consultants, investment bankers, accountants and counsel.
(b) Waiver and Amendment. Any provision of this Agreement may
be waived at any time by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by the parties hereto.
(c) Entire Agreement; No Third-Party Beneficiary; Severability.
Except as otherwise set forth in the Merger Agreement, this Agreement,
together with the Merger Agreement, (a) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof and (b) is not
intended to confer upon any person other than the parties hereto any rights
<PAGE>
or remedies hereunder. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or a federal or
state regulatory agency to be invalid, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated. If for any reason such court or regulatory agency determines
that the Option does not permit Grantee to acquire, or does not require
Issuer (or Substitute Option Issuer) to repurchase, the full number of shares
of Issuer Common Stock (or Substitute Common Stock) as provided in Sections 2
and 7 (or in the case of Substitute Common Stock Sections 2 and 8), as
adjusted pursuant to Section 6, it is the express intention of Issuer to
allow Grantee to acquire or to require Issuer to repurchase such lesser
number of shares as may be permissible without any amendment or modification
hereof.
(D) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO ANY APPLICABLE CONFLICTS OF LAW RULES.
(e) Descriptive Headings. The descriptive headings contained
herein are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
(f) Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (with confirmation) or mailed by registered or certified mail
(return receipt requested) to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice):
If to Grantee to:
The Perkin-Elmer Corporation
761 Main Street
Norwalk, Connecticut 06859
Attention: Chief Executive Officer
Telecopier No.: 1-203-761-5015
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: James M. Cotter, Esq.
Richard A. Garvey, Esq.
Telecopier No.: (212) 455-2502
If to Issuer to:
PerSeptive Biosystems, Inc.
500 Old Connecticut Path
Framingham, Massachusetts 01701
Attention: Chief Executive Officer
Telecopier No.: 1-508-383-7852
<PAGE>
with a copy to:
Testa, Hurwitz & Thibeault, LLP
125 High Street
High Street Tower
Boston, Massachusetts 02110
Attention: George Lloyd, Esq.
Rufus C. King, Esq.
Telecopier No.: 1-617-248-7100
(g) Counterparts. This Agreement and any amendments hereto may
be executed in two counterparts, each of which shall be considered one and
the same agreement and shall become effective when both counterparts have
been signed by each of the parties and delivered to the other party, it being
understood that both parties need not sign the same counterpart.
(h) Assignment. Grantee may assign this Agreement in whole to
any affiliate of Grantee at any time. Except as provided in the next
sentence, Grantee may not, without the prior written consent of Issuer (which
shall not be unreasonably withheld), assign this Agreement to any other
person. Upon the occurrence of a Purchase Event, Grantee may sell, transfer,
assign or otherwise dispose of, in whole at any time, its rights and
obligations hereunder. In the case of any sale, transfer, assignment or
disposition of this Option, Issuer shall do all things reasonably necessary
to facilitate such transaction. This Agreement shall not be assignable by
Issuer except by operation of law. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns.
(i) Representations and Warranties. The representations and
warranties contained in Sections 3.01(a) and 3.02(a) of the Merger Agreement,
and, to the extent they relate to this Stock Option Agreement, in Sections
3.01(d), (p), (q) and (r) and 3.02(c) of the Merger Agreement, are
incorporated herein by reference.
(j) Further Assurances. In the event of any exercise of the
Option by Grantee, Issuer and Grantee shall execute and deliver all other
documents and instruments and take all other action that may be reasonably
necessary in order to consummate the transactions provided for by such
exercise.
(k) Specific Performance. The parties hereto agree that this
Agreement may be enforced by either party through specific performance,
injunctive relief and other equitable relief. Both parties further agree to
waive any requirement for the securing or posting of any bond in connection
with the obtaining of any such equitable relief and that this provision is
without prejudice to any other rights that the parties hereto may have for
any failure to perform this Agreement.
<PAGE>
IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly authorized
as of the day and year first written above.
PERSEPTIVE BIOSYSTEMS, INC.
by /s/ Peter Barrett
____________________________
Name: Peter Barrett
Title: Vice President
THE PERKIN-ELMER CORPORATION
by /s/ Noubar B. Afeyan
____________________________
Name: Noubar B. Afeyan
Title: Chief Executive
Officer and Chairman
of the Board of Directors
The Perkin-Elmer Corporation
761 Main Avenue
Norwalk, Connecticut
(203) 752-1000
Contact: Perkin-Elmer PerSeptive Biosystems
Investors: Charles Poole Noubar Afeyan
(203) 761-5400 Chairman and CEO
Media: Merle Spiegel (East Coast) (508) 383-7710
(203) 761-5292 Investors: Traci McCarty
Valerie Tucker (West Coast) (212) 696-4455, ext. 207
(415) 638-5530 Media: Anthony J. Russo
(212) 696-4455, ext. 202
For Immediate Release
PERKIN-ELMER AND PERSEPTIVE BIOSYSTEMS TO MERGE IN
A $360 MILLION TRANSACTION
Companies to Combine Resources to Accelerate Scientific Discovery
in Rapidly Expanding Life Science Marketplace
NORWALK, CT and FRAMINGHAM, MA, August 25, 1997 - Perkin-Elmer (NYSE:PKN) and
PerSeptive Biosystems (NASDAQ:PBIO) announced today that they have signed a
definitive merger agreement in which Perkin-Elmer will acquire PerSeptive for
$13.00 per share, paid in Perkin-Elmer stock as described below. Based on
current market prices, this transaction will involve the exchange of
approximately $360 million in newly issued Perkin-Elmer stock for currently
outstanding PerSeptive securities.
The Companies said they will combine their resources to create a fully
integrated portfolio of products that will allow their customers to compress
the time and reduce the cost of pharmaceutical drug discovery and
development. As life science researchers increasingly use genomics to
understand the fundamental basis of human disease at the genetic level, it is
clear that this information must be complemented with technologies for the
study of proteins. The need for such technologies is expected to accelerate
as new drug targets are discovered through the use of genomics.
<PAGE>
The large-scale study of proteins and protein networks, known as
"proteomics," is emerging to fulfill the promise of genomics. By combining
forces, Perkin-Elmer and PerSeptive expect to develop new products to improve
the integration of genetic and protein sciences and to accelerate the
understanding, treatment, and prevention of disease. MALDI-TOF (Matrix
Assisted Laser Desorption Ionization Time-of-Flight) mass spectrometry is the
most effective approach to identifying intact proteins, and PerSeptive has a
leadership position in this technology. In addition, PerSeptive has
developed advanced products for the separation and purification of
biomolecules in the life science market. These technologies complement
Perkin-Elmer's leading position in genetic analysis systems as well as its
LC/MS (liquid chromatography/mass spectrometry) and protein sequencing
systems, which are used for the structural analysis of proteins. The
combined company will offer the broadest set of protein analysis and
purification products and intends to extend this offering through the use of
new and existing technology.
Tony L. White, Chairman, president and chief executive officer of Perkin-
Elmer, noted, "This merger will enhance our position as an effective provider
of innovative, integrated platforms enabling our customers to be more
efficient and cost-effective in bringing new pharmaceuticals to market. It
is the culmination of an intensive strategic review that led us to identify
PerSeptive as an ideal partner, and I am thrilled that we have agreed to join
forces. The combination of our two companies should bolster our presence in
the life sciences and enhance our potential for an accelerated revenue growth
rate in the future. Our Board and management team are united in the belief
that we must take bold action now to lead the emerging era of molecular
medicine with leading positions in both genetic and protein analysis."
<PAGE>
Speaking on behalf of PerSeptive, Dr. Noubar B. Afeyan, chairman and chief
executive officer, said, "We are pleased to have this opportunity to become a
part of Perkin-Elmer, a very successful, technology-driven company that
shares our vision of improving the process of drug discovery and development
leading to innovative therapies that culminate in better and more cost-
effective healthcare. For many years, PerSeptive has been recognized as an
innovator of technologies and products that are important to the life science
market. Partnering with Perkin-Elmer will create the critical mass and
capital resources to secure our mission of being the leader in protein
characterization in drug discovery."
Terms of the Agreement
The definitive agreement, unanimously approved by both Boards of Directors,
structures the transaction as a statutory tax-free merger to be accounted for
as a pooling of interests. In the merger, shares of PerSeptive common stock
will be converted into shares of Perkin-Elmer common stock at an exchange
rate equal to $13.00 divided by the average closing sales prices of Perkin-
Elmer stock on the New York Stock Exchange composite tape during the 20
trading days ending on the second trading prior to the merger. In no event,
however, will the exchange rate be more than 0.1926, or less than 0.1486, of
a share of Perkin-Elmer common stock for each share of PerSeptive common
stock. Based on the $78 1/16 per share closing price of Perkin-Elmer stock
on August 22, PerSeptive shareholders would receive 0.1665 of a share of
Perkin-Elmer stock, with a value of $13.00, for each share of PerSeptive
stock. The total consideration in the transaction, based on the August 22
closing price, is approximately $360 million for currently outstanding
PerSeptive securities.
Under the terms of the merger agreement, outstanding option, warrants, and
convertible securities of PerSeptive will remain outstanding following the
<PAGE>
merger but will become exercisable for, or convertible into, Perkin-Elmer
common stock in accordance with their terms. Separately, the previously
scheduled August 22 redemption of 1,000 shares of PerSeptive's Series A
Redeemable Convertible Preferred Stock was completed for 1,019,108 shares of
PerSeptive common stock.
As part of the transaction, PerSeptive has granted Perkin-Elmer an option to
purchase 4,478,308 shares of PerSeptive common stock at $13.00 per share.
The option would become exercisable in the even the merger agreement is
terminated under certain circumstances.
The transaction is subject to antitrust regulatory clearance, approval by
holders of a majority of the outstanding shares of PerSeptive common stock,
and certain other conditions. No vote of Perkin-Elmer shareholders is
required. Both companies expect the merger to be completed by year-end.
Morgan Stanley & Co. Incorporated is acting as financial advisor to Perkin-
Elmer in connection with this transaction. PerSeptive is being advised by
PaineWebber Incorporated.
Accelerating the Pace of Discovery
"We have a major opportunity to leverage our leadership position as the
company offering the broadest array of technologies available to life science
researchers in universities and pharmaceutical companies for human disease
research and drug discovery," said Dr. Michael W. Hunkapiller, vice president
of Perkin-Elmer and general manager of PE Applied Biosystems. "As the leader
in both genomics and proteomics, our combined intellectual property portfolio
will open up even more opportunities to provide total solutions that will
accelerate the drug discovery process as well as reduce costs in drug
development."
<PAGE>
White added, "This transaction is another step in the implementation of our
overall strategy to invest aggressively in the life sciences, accelerating
the pace of discovery. We believe that the combined resources of Perkin-
Elmer and PerSeptive can contribute to more effective drug development
programs that will improve the quality of healthcare delivery in the future.
This transaction, the largest since we set our new course almost two years
ago, will enable us to build upon our already-strong base as a research-
intensive, technology-drive company and become a broader organization, more
capable of meeting our customers' needs."
The Perkin-Elmer Corporation, headquartered in Connecticut, is the world
leader in the development, manufacture, and marketing of life science systems
and analytical instruments and in markets such as pharmaceuticals,
biotechnology, environmental testing, food, agriculture, and chemical
manufacturing. Its Applied Biosystems Division, based in Foster City,
California, is the leading provider of automated DNA analysis systems
worldwide. Perkin-Elmer had revenues of approximately $1.3 billion in fiscal
year 1997 and employs 5,700 people worldwide. Information about Perkin-Elmer
is available on the World Wide Web at http://www.Perkin-Elmer.com or by
phoning (800) 762-6923.
PerSeptive Biosystems develops, manufactures, and markets an integrated line
of proprietary consumable products and advanced instrumentation systems for
the purification, analysis, and synthesis of biomolecules. PerSeptive's
product sales have grown during its first five years of commercial operation
from under $1 million in fiscal 1991 to over $75 million in fiscal 1996. The
company's enabling products are used in the life science industry to
significantly reduce the time and cost required for the discovery,
development, and manufacture of novel pharmaceutical products. PerSeptive's
product lines are based on its patented core technologies in the fields of
<PAGE>
chromatography, immunoassay, solid-phase synthesis, biological mass
spectrometry, and microfluidc assay devices. Headquartered in Framingham,
Massachusetts, the company employs 550 people worldwide. Information about
PerSeptive is available on the World Wide Web at http://www.PBIO.com.
Certain statements in this press release and its attachments are forward-
looking. These may be identified by the use of forward-looking words or
phrases such as "believe," "expect," "anticipate," "should," "planned,"
"estimated," and "potential," among others. These forward-looking statements
are based on Perkin-Elmer's and PerSeptive's current expectations. The
Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for
such forward-looking statements. In order to comply with the terms of the
safe harbor, Perkin-Elmer and PerSeptive note that a variety of factors could
cause Perkin-Elmer's and PerSeptive's actual results and experience to differ
materially from the anticipated results or other expectations expressed in
such forward-looking statements. The risks and uncertainties that may affect
the operations, performance, development, and results of Perkin-Elmer's and
PerSeptive's businesses include (1) complexity and uncertainty regarding the
development of new high-technology products; (2) loss of market share through
competition; (3) introduction of competing products or technologies by other
companies; (4) pricing pressures from competitors and/or customers; (5)
changes in the life science or analytical instrument industries; (6) changes
in the pharmaceutical, environmental, research, or chemical markets; (7)
variable government funding in key geographical regions; (8) the companies'
ability to protect proprietary information and technology or to obtain
necessary licenses on commercially reasonable terms; (9) the loss of key
employees; (10) fluctuations in foreign currency exchange rates; and (11)
other factors that might be described from time to time in the companies'
filings with the Securities and Exchange Commission.
<PAGE>
Attachments:
- -- Setting a Course for Rapid Growth in the Life Sciences
- -- Perkin-Elmer Accelerates the Pace of Discovery
- -- PerSeptive Biosystems
