______________________________________________________________________________
AGREEMENT AND PLAN OF
MERGER
AMONG
QIAGEN NORTH AMERICAN HOLDINGS,
INC.,
ELECTRA MERGER SUB,
INC.
AND
EGENE, INC.
Dated as of April 12, 2007
______________________________________________________________________________
TABLE OF CONTENTS
Page
1. THE MERGER 2
1.1 The Merger 2
1.2 Closing 2
1.3 Filing of Articles of Merger
2
1.4 Effect of the Merger
3
1.5 Articles of Incorporation and
Bylaws of the Surviving Corporation 3
1.6 Directors and Officers
3
1.7 Conversion of Company Common
Stock, Etc 3
1.8 Cancellation of Shares
5
1.9 Company Stock Options.
5
1.10 Capital Stock of Merger Sub
6
1.11 Adjustments to Merger
Consideration 6
1.12 No Fractional Shares.
6
1.13 Exchange of Certificates.
7
1.14 No Liability 10
1.15 Taking of Necessary Action;
Further Action 10
2. REPRESENTATIONS AND
WARRANTIES OF THE COMPANY 10
2.1 Organization and Qualification.
11
2.2 Subsidiaries. 11
2.3 Capital Structure.
12
2.4 Authority; No Conflict;
Required Filings. 14
2.5 Board Approval; Takeover
Statutes; Required Vote. 16
2.6 SEC Filings; Sarbanes-Oxley
Act. 17
2.7 Absence of Undisclosed
Liabilities 19
2.8 Absence of Certain Changes or
Events 19
2.9 Agreements, Contracts and
Commitments. 19
2.10 Compliance with Laws.
22
2.11 Material Permits.
22
2.12 Litigation and Product
Liability 23
2.13 Restrictions on Business
Activities 23
2.14 Employee Benefit Plans.
23
2.15 Labor and Employment Matters.
28
2.16 Registration Statement; Proxy
Statement/Prospectus. 29
2.17 Properties and Assets.
31
2.18 Insurance. 31
2.19 Taxes. 32
2.20 Environmental Matters.
33
2.21 Intellectual Property.
36
2.22 Brokers 38
2.23 Certain Business Practices
38
2.24 Government Contracts
39
2.25 Relationships with Customers
and Suppliers 39
2.26 Interested Party Transactions
39
2.27 Full Disclosure 39
3. REPRESENTATIONS AND
WARRANTIES OF PARENT AND MERGER SUB 40
3.1 Organization and Qualification.
40
3.2 Authority; No Conflict;
Required Filings. 40
3.3 Compliance with Law
42
3.4 Litigation
42
3.5 SEC Filings; Financial
Statements. 42
3.6 Registration Statement; Proxy
Statement/Prospectus. 43
3.7 Interim Operations of Merger
Sub (No Parent Vote Required) 44
3.8 Financing 44
3.9 QIAGEN Common Stock
44
3.10 Full Disclosure 44
4. CONDUCT OF BUSINESS
PENDING THE MERGER 45
4.1 Conduct of Business Pending the
Merger. 45
4.2 No Solicitation of
Transactions. 49
5. ADDITIONAL AGREEMENTS
54
5.1 Proxy Statement/Prospectus;
Registration Statement. 54
5.2 Meeting of Company
Stockholders. 55
5.3 Access to Information;
Confidentiality. 55
5.4 Best Efforts; Further
Assurances. 56
5.5 Employee Benefits 57
5.6 Cancellation of Stock Options
57
5.7 Notification of Certain
Matters. 57
5.8 Public Announcements
58
5.9 Directors and Officers
Insurance 58
5.10 Stockholder Litigation.
59
5.11 Company Benefit Plans
60
5.12 Loans to Company Employees,
Officers and Directors 60
6. CONDITIONS OF MERGER
60
6.1 Conditions to Obligation of
Each Party to Effect the Merger 60
6.2 Additional Conditions to
Obligations of Parent 61
6.3 Additional Conditions to
Obligations of the Company 63
7. TERMINATION, AMENDMENT AND
WAIVER 63
7.1 Termination 63
7.2 Effect of Termination
65
7.3 Fees and Expenses.
66
7.4 Amendment 66
7.5 Waiver 67
8. GENERAL PROVISIONS
67
8.1 Survival of Representations and
Warranties. 67
8.2 Notices 67
8.3 Interpretation 69
8.4 Severability 69
8.5 Entire Agreement 69
8.6 Assignment 70
8.7 Parties in Interest
70
8.8 Failure or Indulgence Not
Waiver; Remedies Cumulative 70
8.9 Governing Law; Enforcement
70
8.10 Counterparts 71
EXHIBITS
EXHIBIT A - Articles of Merger
INDEX OF
DEFINITIONS
|
|
|
|
|
|
|
Acquisition Agreement
|
52
|
|
Governmental Authority
|
16
|
|
Affiliate
|
10
|
|
HSR Act
|
16
|
|
Agreement
|
1
|
|
Interim Period
|
45
|
|
Articles of Merger
|
3
|
|
IP Agreements
|
1
|
|
Business Day
|
2
|
|
IRS
|
24
|
|
Closing
|
2
|
|
Law
|
5
|
|
Closing Average
|
7
|
|
Lease
|
31
|
|
Closing Date
|
2
|
|
Liens
|
12
|
|
COBRA Coverage
|
26
|
|
Material Permits
|
23
|
|
Code
|
25
|
|
Materials of Environmental Concern
|
36
|
|
Company
|
1
|
|
Merger
|
1
|
|
Company Certificate
|
4
|
|
Merger Consideration
|
4
|
|
Company Certificates
|
4
|
|
Merger Sub
|
1
|
|
Company Common Stock
|
3
|
|
Merger Sub Common Stock
|
6
|
|
Company Disclosure Letter
|
10
|
|
Most Recent Balance Sheet
|
19
|
|
Company Employee Plans
|
24
|
|
Most Recent Balance Sheet Date
|
19
|
|
Company Financial Statements
|
18
|
|
New Parent Proposal
|
53
|
|
Company Intellectual Property Rights
|
37
|
|
NRS
|
1
|
|
Company Material Adverse Effect
|
10
|
|
Option Cancellation Agreement
|
5
|
|
Company Material Contract
|
20
|
|
Order
|
52
|
|
Company Optionholder
|
5
|
|
Other Filings
|
55
|
|
Company Preferred Stock
|
12
|
|
Parent
|
1
|
|
Company SEC reports
|
17
|
|
Parent Material Adverse Effect
|
40
|
|
Company Software
|
38
|
|
Party
|
1
|
|
Company Stock Options
|
5
|
|
Person
|
13
|
|
Company Stock Plans
|
13
|
|
Proxy Statement
|
31
|
|
Company Stock warrants
|
13
|
|
QIAGEN
|
4
|
|
Confidentiality Agreement
|
57
|
|
QIAGEN Common Stock
|
4
|
|
Continuing Employees
|
58
|
|
QIAGEN Financial Statements
|
43
|
|
Contract
|
20
|
|
QIAGEN SEC Reports
|
43
|
|
Dissenting Shares
|
4
|
|
Registration Statement
|
30
|
|
Effective Time
|
3
|
|
Release
|
35
|
|
Employment Agreements
|
1
|
|
Representative
|
50
|
|
Environment
|
35
|
|
Requisite Stockholder Approval
|
15
|
|
Environmental Law
|
36
|
|
Returns
|
33
|
|
Equitable Exceptions
|
15
|
|
Sarbanes-Oxley Act
|
18
|
|
ERISA
|
24
|
|
SEC
|
12
|
|
ERISA Affiliate
|
24
|
|
Securities Act
|
12
|
|
Exchange Act
|
16
|
|
Special Meeting
|
30
|
|
Exchange Agent
|
7
|
|
Subsidiary
|
12
|
|
Exchange Ratio
|
4
|
|
Superior Takeover Proposal
|
51
|
|
Excluded Shares
|
5
|
|
Surviving Corporation
|
2
|
|
Founder Certificates
|
1
|
|
Takeover Proposal
|
50
|
|
GAAP
|
18
|
|
Tax
|
33
|
|
Termination Fee
|
67
|
|
Voting Agreements
|
1
|
|
Third Party Intellectual Property
Rights
|
38
|
|
|
|
AGREEMENT AND PLAN OF
MERGER
This AGREEMENT AND PLAN
OF MERGER (this “ Agreement ”), is made and
entered into as of April 12, 2007 by and among QIAGEN NORTH
AMERICAN HOLDINGS, INC., a California corporation (“
Parent ”), ELECTRA MERGER SUB, INC., a Nevada
corporation and wholly owned Subsidiary of Parent (“
Merger Sub ”), and EGENE, INC., a Nevada corporation
(the “ Company ”). Parent, Merger Sub and
the Company are sometimes referred to herein each individually as a
“ Party ” and, collectively, as the “
Parties .”
WHEREAS
, the Boards of
Directors of each of Parent, Merger Sub and the Company have
approved and declared it to be advisable and in the best interests
of their respective stockholders that Parent acquire the Company;
and
WHEREAS
, the Boards of
Directors of Parent, Merger Sub and the Company have each approved
this Agreement and the merger of Merger Sub with and into the
Company (the “ Merger ”), in accordance with the
Nevada Revised Statutes (the “ NRS ”) and the
terms and conditions set forth herein, which Merger will result in,
among other things, the Company becoming a wholly owned subsidiary
of Parent;
WHEREAS
, as a condition to the
willingness of, and an inducement to Parent and Merger Sub to enter
into this Agreement, contemporaneously with the execution and
delivery of this Agreement certain holders of shares of the
Company’s common stock are entering into voting agreements
(the “ Voting Agreements ”); and
WHEREAS
, as a further
condition to the willingness of, and a further inducement to Parent
and Merger Sub to enter into this Agreement, contemporaneously with
the execution and delivery of this Agreement certain officers of
the Company are entering into employment agreements (the “
Employment Agreements ”) and non-competition,
confidentiality and intellectual property agreements (the “
IP Agreements ”) and delivering certain certificates
to the Parent (the “ Founder Certificates”
”).
NOW,
THEREFORE ,
in consideration of the foregoing and the mutual representations,
warranties, covenants and agreements herein contained, and other
good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Parties hereby agree as
follows.
1.
THE MERGER
1.1
The Merger . At the Closing
(as defined in Section 1.2), in accordance with the NRS and the
terms and conditions of this Agreement, the Merger Sub shall be
merged with and into the Company. From and after the
Effective Time (as defined in Section 1.3), the separate corporate
existence of Merger Sub shall cease and the Company, as the
surviving corporation in the Merger, shall continue its existence
under the laws of the State of Nevada as a wholly owned subsidiary
of Parent. The separate existence of the Company with all of
its rights, privileges, immunities, powers and franchises shall
continue unaffected by the Merger, except as hereinafter set forth
in this Article 1. The Company, as the surviving corporation
after the Merger, is hereinafter sometimes referred to as the
“ Surviving Corporation .”
1.2
Closing . Unless this
Agreement shall have been terminated and the transactions
contemplated by this Agreement abandoned pursuant to the provisions
of Article 7, and subject to the
satisfaction or waiver, as the case
may be, of the conditions set forth in Article 6, the closing of
the Merger and other transactions contemplated by this Agreement
(the “ Closing ”) shall take place at a time and
on a date to be mutually agreed upon by the Parties (the “
Closing Date ”), which date shall be no later than the
second Business Day (as defined below) after all the conditions set
forth in Article 6 (excluding conditions that, by their nature,
cannot be satisfied until the Closing, it being understood that the
Closing shall remain subject to the satisfaction or waiver of such
conditions) shall have been satisfied or waived in accordance with
Section 7.5, unless another time and/or date is agreed to in
writing by the Parties. The Closing shall take place at the
offices of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., One
Financial Center, Boston, Massachusetts 02111. For purposes
of this Agreement, “ Business Day ” shall mean
any day other than a Saturday, Sunday or a legal holiday on which
banks are required or permitted to be closed in New York, New
York.
1.3
Filing of Articles of
Merger . Subject to the
provisions of this Agreement, at the Closing, the Parties shall
cause the Merger to become effective by causing Merger Sub and the
Surviving Corporation to execute and file in accordance with the
NRS articles of merger with the Secretary of State of the State of
Nevada in substantially the form of Exhibit A
attached hereto (the “ Articles of Merger ”).
The Merger shall become effective upon such filing, or at
such later date and time as is agreed by the Parent and the Company
and set forth in the Articles of Merger (the “ Effective
Time ”).
1.4
Effect of the Merger
.
Upon the Closing, the Merger shall have the effects set forth
in this Agreement and in Chapter 92A of the NRS.
1.5
Articles of Incorporation and Bylaws
of the Surviving Corporation . At the
Effective Time by virtue of the Merger and without further action
on the part of the Parties, the Articles of Incorporation and
Bylaws of the Merger Sub immediately prior to the Closing shall
become the Articles of Incorporation and Bylaws of the Surviving
Corporation until amended in accordance with the respective terms
thereof; provided , however , that, notwithstanding
the foregoing, Article 1 of the Articles of Incorporation of the
Surviving Corporation shall continue to read as follows:
“The name of the Corporation is EGENE,
INC.”
1.6
Directors and Officers
.
Subject to the requirements of Law (as defined in Section
1.7(c)), the directors and officers of Merger Sub immediately prior
to the Closing shall become the initial directors and officers of
the Surviving Corporation, each to hold office in accordance with
the Articles of Incorporation and the Bylaws of the Surviving
Corporation, in each case until their respective successors are
duly elected or appointed and qualified or until their earlier
death, resignation or removal in accordance with the Surviving
Corporation’s Articles of Incorporation and
Bylaws.
1.7
Conversion of Company Common Stock,
Etc . At the
Effective Time, by virtue of the Merger and without any action on
the part of the Parties or the holders of the following
securities:
(a)
Each share of the Company’s common
stock, par value $0.001 per share (“ Company Common
Stock ”) issued and
outstanding immediately prior to the Effective Time (other than
Excluded Shares and Dissenting Shares) shall be converted
automatically into the right to receive (i) $0.65 per share and
(ii) 0.0416 (the “Exchange Ratio”) fully paid and
non-assessable ordinary shares of QIAGEN N.V. (“
QIAGEN ”), the sole stockholder of Parent, EUR 0.01
par value per share (“ QIAGEN Common Stock ”),
but not to exceed an aggregate of 1,000,000 shares of QIAGEN Common
Stock, subject to adjustment as set forth in Section
1.11.
ii) At the Effective
Time, all shares of Company Common Stock shall automatically be
cancelled and shall cease to exist, and each holder of a
certificate which previously represented any such share of Company
Common Stock (each, a “ Company Certificate ”
and, collectively, the “ Company Certificates ”)
shall cease to have any rights with respect thereto other than the
right to receive the cash and a certificate representing the shares
of QIAGEN Common Stock such holder is entitled to receive pursuant
to this Section 1.7 together with cash in lieu of fractional
shares, if any, of QIAGEN Common Stock to be issued or paid in
consideration therefor upon surrender of such certificate in
accordance with Section 1.12 hereof, in each case without interest
(such cash and shares of QIAGEN Common Stock together with any cash
in lieu of fractional shares being referred to herein as the
“ Merger Consideration ”) and subject to Section
1.7(c) below.
(c)
Dissenting Shares
.
Notwithstanding anything to the contrary in this Section 1.7,
any shares of the Company Common Stock outstanding immediately
prior to the Effective Time and held by a person who has not voted
in favor of the Merger or consented thereto in writing and who has
demanded payment of fair value for such shares in accordance with
Sections 92A.300 to 92A.500, inclusive, of the NRS (the “
Dissenting Shares ”) shall not be converted into a
right to receive the Merger Consideration, unless such holder fails
to perfect or withdraws or otherwise loses its dissenters’
rights or it is determined that such holder does not have
dissenters’ rights in accordance with the NRS. If,
after the Closing, such holder fails to perfect or withdraws or
loses its dissenters’ right, or if it is determined that such
holder does not have dissenters’ rights, such shares shall be
treated as if they had been converted as of the Effective Time into
the right to receive the Merger Consideration. The Company shall
give Parent and Merger Sub prompt notice of any demands for payment
received by the Company, and Parent and Merger Sub shall have the
right to participate in all negotiations and proceedings with
respect to such demands except as required by applicable federal,
state, local or foreign statute, law, regulation, requirement,
interpretation, permit, license, approval, authorization, rule,
ordinance, code, policy or rule of common law of any Governmental
Authority (as such term is defined in Section 2.4(d) of this
Agreement), including any judicial or administrative interpretation
thereof (“ Law ”). The Company shall not, except
with prior written consent of Parent, make any payment with respect
to, or settle or offer to settle, any such demands, unless and to
the extent required to do so under Law.
1.8
Cancellation of Shares
. At
the Effective Time each share of Company Common Stock either owned
by the Company as treasury stock or owned by Parent or any direct
or indirect wholly owned Subsidiary of Parent or the Company
immediately prior to the Effective Time (collectively, “
Excluded Shares ”), shall be canceled and extinguished
without any conversion thereof or payment therefor.
1.9
Company Stock Options
.
(a)
Section 2.3(e) of the Company Disclosure
Letter sets forth a list of all grantees holding unexercised and
unexpired options to purchase shares of Company Common Stock (the
“ Company Stock
Options ”) as of the date
of this Agreement (each a “ Company Optionholder
”). Each vested and unvested Company Stock Option to
purchase Company Common Stock that is outstanding immediately
before the Effective Time and listed on Section 2.3(e) of the
Company Disclosure Letter shall be cancelled and extinguished at
the
Effective Time and shall become the
right to receive the amount set forth below in this Section 1.9,
provided that such Company Optionholder has entered into an option
cancellation agreement, in the form acceptable to Parent (each an
“ Option Cancellation Agreement ”), which
agreement shall become effective at the Effective Time. As
promptly as practicable subsequent to the Effective Time and
subject to each Company Optionholder entering into a Option
Cancellation Agreement, the Company shall provide from the assets
of the Company to each grantee listed in Section 2.3(e) of the
Company Disclosure Letter, for delivery and cancellation of such
Company Optionholder’s Company Stock Options, a cash payment
in an amount equal to the product of (a) the number of shares of
Company Common Stock subject to such Company Stock Option and (b)
an amount equal to the amount, if any, by which $1.36 exceeds the
exercise price per share of each such Company Stock Option.
At or before the Effective Time, the Company shall take any
necessary action pursuant to the terms of Company Stock Options or
the Company Option Plans pursuant to which they were issued to give
effect to the provisions of this Section 1.9 hereof.
(b)
Withholding of Tax
.
Parent or the Surviving Corporation will be entitled to
deduct and withhold from the Merger Consideration otherwise payable
pursuant to this Agreement to any holder of Company Stock Options
such amounts as Parent (or any Affiliate of Parent including the
Surviving Corporation) shall determine in good faith it is required
to deduct and withhold with respect to the making of such payment
under the Code or any provision of federal, state, local or foreign
tax law. To the extent that amounts are so withheld by Parent
or the Surviving Corporation, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to
the holder of the Company Stock Option in respect of whom such
deduction and withholding were made by Parent or the Surviving
Corporation.
1.10
Capital Stock of Merger Sub
.
Each share of common stock of Merger Sub, $0.01 par value per
share (“ Merger Sub Common Stock ”), issued and
outstanding immediately prior to the Effective Time shall be
converted automatically into one fully paid and non-assessable
share of common stock of the Surviving Corporation, $0.01 par value
per share. From and after the Effective Time, each stock
certificate of Merger Sub which previously represented shares of
Merger Sub Common Stock shall evidence ownership of an equal number
of shares of common stock of the Surviving Corporation.
1.11
Adjustments to Merger
Consideration . The Exchange
Ratio and the per share cash Merger Consideration shall be
appropriately adjusted, at any time and from time to time, to fully
reflect the effect of any reclassification, stock split, reverse
split, stock dividend (including any dividend or distribution of
securities convertible into QIAGEN Common Stock or Company Common
Stock, as the case may be), reorganization, recapitalization or
other like change with respect to QIAGEN Common Stock or, if
permitted by the terms of Section 4.1, Company Common Stock, as the
case may be, occurring (or for which a record date occurs) during
the Interim Period (as defined in Section 4.1).
1.12
No Fractional Shares
.
No certificate or scrip
representing fractional shares of QIAGEN Common Stock shall be
issued upon the surrender of Company Certificates for exchange, and
such fractional share interests will not entitle the owner thereof
to vote or to any other rights of a stockholder of Parent.
Each holder of shares of Company Common Stock exchanged
pursuant to the Merger who would otherwise be entitled to receive a
fraction of a share of QIAGEN Common Stock (after taking into
account all Company Certificates delivered by such holder) shall
receive from Parent, in lieu thereof, cash (without interest) in an
amount equal to such fractional part of a share of QIAGEN Common
Stock multiplied by the Closing Average.
For purposes of this Agreement, the
“ Closing Average ” shall be the average last
reported sale price per share of QIAGEN Common Stock (rounded up to
the nearest cent) on the Nasdaq Global Select Market
(“NGSM”) as reported in the Wall Street Journal
, or, if not reported therein, any other authoritative source
reasonably selected by Parent) for the ten (10) consecutive trading
days ending on the second trading day immediately prior to the
Closing.
1.13
Exchange of Certificates
.
(a)
Exchange Agent . Prior to the
Closing, Parent shall designate a bank or trust company reasonably
acceptable to the Company to act as Exchange Agent in the Merger
(the “ Exchange Agent ”). When and as
needed, Parent shall make available to the Exchange Agent for
exchange (through such procedures as Parent may reasonably adopt)
sufficient cash and shares of QIAGEN Common Stock to be exchanged
pursuant to Section 1.7 of the Agreement.
(b)
Exchange Procedures
.
Promptly after the Closing, the Surviving Corporation shall
cause to be mailed to each holder of record certificate or
certificates which immediately prior to the Closing represented
outstanding shares of Company Common Stock whose shares were
converted into the right to receive the Merger Consideration
pursuant to Section 1.7, a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title
to the Company Certificates shall pass, only upon delivery of the
Company Certificates to the Exchange Agent and shall be in such
form and have such other provisions as Parent may reasonably
specify) and instructions for use in effecting the surrender of the
Company Certificates in exchange for cash representing the Merger
Consideration. Upon surrender of a Company Certificate for
cancellation to the Exchange Agent or to such other agent or agents
as may be appointed by Parent, together with such letter of
transmittal, duly completed and validly executed in accordance with
the instructions thereto and such other documents as may be
required pursuant to such instructions, the holder of such Company
Certificate shall be entitled to receive in exchange therefor (A) a
certificate representing the number of whole shares of QIAGEN
Common Stock that such holder has the right to receive and (B) a
check for the cash consideration that such holder is entitled to
receive, including any cash consideration, any cash in lieu of
fractional shares of QIAGEN Common Stock, and any dividends or
other distributions to which such holder is entitled pursuant to
Section 1.7, and the Company Certificate so surrendered shall
forthwith be cancelled. Until so surrendered, each
outstanding Company Certificate that, prior to the Closing,
represented shares of Company Common Stock shall be deemed from and
after the Closing, for all corporate purposes, to evidence the
right to receive upon such surrender the number of full shares of
QIAGEN Common Stock into which the holder of such shares of Company
Common Stock is entitled and the right to receive an amount in cash
in lieu of the issuance of any fractional shares in accordance with
Section 1.13. Any portion of the shares of QIAGEN Common
Stock and cash deposited with the Exchange Agent pursuant to
Section (b) above, which remains undistributed to the holders of
the shares of Company Common Stock for six (6) months after the
Closing shall be delivered to Parent, upon demand, and any holders
of shares of Company Common Stock who have not theretofore complied
with this Section 1.13 shall thereafter look only to Parent and
only as general creditors thereof for payment of their claim for
QIAGEN Common Stock, cash consideration or any cash in lieu of
fractional shares of QIAGEN Common Stock and any dividends or
distributions with respect to QIAGEN Common Stock to which such
holders may be then entitled. Any portion of the cash
deposited with the Exchange Agent pursuant to Section 1.13(a)
remaining unclaimed by holders of Company Common Stock as of the
date which is immediately prior to the date that such amounts would
otherwise escheat to or become property of any government entity
shall, to the extent permitted by Law, become the property of
Parent free and clear of any claims or interest of any person
previously entitled thereto.
(c)
Distributions With Respect to
Unexchanged Shares . No dividends or
other distributions declared or made after the Closing with respect
to QIAGEN Common Stock with a record date after the Closing will be
paid to the holder of any unsurrendered shares of Company Common
Stock with respect to the shares of QIAGEN Common Stock represented
thereby and no cash in lieu of fractional shares of QIAGEN Common
Stock shall be paid to any such holder until the holder of record
of such Company Certificate shall surrender such Company
Certificate. Subject to Law, following surrender of any such
Company Certificate, there shall be paid to the holder of record of
such Company Certificate representing the whole number of shares of
QIAGEN Common Stock to be issued in exchange therefor, without
interest, at the time of such surrender, the applicable cash
consideration, any cash in lieu of fractional shares of QIAGEN
Common Stock and any dividends or other distributions with a record
date after the Closing theretofore paid with respect to such whole
number of shares of QIAGEN Common Stock.
(d)
Transfers of Ownership
. If
any certificate for shares of QIAGEN Common Stock or check is to be
issued in a name other than that in which the Company Certificate
surrendered in exchange therefor is registered, it shall be a
condition of the issuance thereof that the Company Certificate so
surrendered shall be properly endorsed and otherwise in proper form
for transfer, accompanied by all documents reasonably requested or
required by Parent to evidence and effect such transfer, and that
the stockholder requesting such exchange shall have paid to Parent,
or any agent designated by it, any transfer or other taxes required
by reason of the issuance of a check or certificate for shares of
QIAGEN Common Stock in any name other than that of the registered
holder of the certificate surrendered, or established to the
reasonable satisfaction of Parent or any agent designated by it
that such tax has been paid or is otherwise not payable.
(e)
Withholding of Tax
.
Parent, Surviving Corporation or the Exchange Agent will be
entitled to deduct and withhold from the Merger Consideration
otherwise payable pursuant to this Agreement to any holder of
shares of Company Common Stock such amounts as Parent (or any
Affiliate of Parent (as defined in Rule 13e-3(a)(i) of the Exchange
Act, an “ Affiliate ”), including the Surviving
Corporation) or the Exchange Agent shall determine in good faith
they are required to deduct and withhold with respect to the making
of such payment under the Code or any provision of federal, state,
local or foreign tax law. To the extent that amounts are so
withheld by Parent, Surviving Corporation or the Exchange Agent,
such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the shares of
Company Common Stock in respect of whom such deduction and
withholding were made by Parent.
1.14
No Liability . To the extent
permitted by applicable law, none of the Exchange Agent, Parent,
Merger Sub or the Surviving Corporation shall be liable to a holder
of shares of Company Common Stock for any shares of QIAGEN Common
Stock or any amount of cash properly paid to a public official
pursuant to any applicable abandoned property, escheat or similar
law.
1.15
Taking of Necessary Action; Further
Action . If, at any time
and from time to time after the Closing, any further action is
necessary or desirable to carry out the purposes of this Agreement
and to vest in the Surviving Corporation full right, title and
possession of all properties, assets, rights, privileges, powers
and franchises of the Company and Merger Sub, the officers and
directors of the Surviving Corporation shall be and are fully
authorized, in the name of and on behalf of any of the Company,
Merger Sub or the Surviving Corporation, to take, or cause to be
taken, all such lawful and necessary action as is not inconsistent
with this Agreement.
2.
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY
Except as set forth in
the disclosure letter provided by the Company to Parent on the date
hereof (the “ Company Disclosure Letter ”), the
Company, on behalf of itself and its Subsidiaries, represents and
warrants to Parent that the statements contained in this Section 2
are true, complete and correct. The Company Disclosure Letter
shall be arranged in paragraphs corresponding to the numbered and
lettered paragraphs contained in this Section 2, and the disclosure
in any paragraph shall qualify only the corresponding paragraph of
this Section 2. As used in this Agreement, a “
Company Material Adverse Effect ” means any change,
event or effect that is materially adverse to the business, assets
(including intangible assets), condition (financial or otherwise),
results of operations or reasonably foreseeable prospects of the
Company and its Subsidiaries, taken as a whole, excluding any
changes, events or effects that are solely attributable to:
(i) general economic conditions worldwide or (ii) conditions
resulting from the announcement of this Agreement and the pendency
of the Merger and other transactions contemplated hereby. In
the event of any litigation regarding clause (ii) of the foregoing
provision, the Company shall be required to sustain the burden of
demonstrating that any such change, event or effect is directly
attributable to the Merger and other transactions contemplated by
this Agreement.
2.1
Organization and
Qualification .
The Company is a
corporation duly organized, validly existing and in corporate and
tax good standing under the laws of the State of Nevada. The
Company is duly qualified or licensed as a foreign corporation to
conduct business, and is in corporate and tax good standing, under
the laws of each jurisdiction where the character of the properties
owned, leased or operated by it, or the nature of its activities,
makes such qualification or licensing necessary, except where the
failure to be so qualified, licensed or in good standing,
individually or in the aggregate, has not had and would not
reasonably be expected to have a Company Material Adverse Effect.
The Company has provided to Parent true, complete and correct
copies of its Articles of Incorporation and Bylaws, each as amended
to date. The Company is not in default under or in violation
of any provision of its Articles of Incorporation or
Bylaws.
2.2
Subsidiaries .
(a)
Section 2.2(a) of the Company Disclosure
Letter sets forth a true, complete and correct list of each
Subsidiary of the Company and the jurisdiction of incorporation or
formation thereof.
(b)
Each Subsidiary of the Company is a
corporation duly organized, validly existing and in corporate and
tax good standing under the laws of the jurisdiction of its
incorporation, and is duly qualified or licensed as a foreign
corporation to conduct business, and is in corporate and tax good
standing, under the laws of each jurisdiction where the character
of the properties and other assets owned, leased or operated by it,
or the nature of its activities, makes such qualification or
licensing necessary, except where the failure to be so qualified,
licensed or in good standing, individually or in the aggregate, has
not had and would not reasonably be expected to have a Company
Material Adverse Effect.
(c)
All of the issued and outstanding shares
of capital stock of, or other equity interests in, each Subsidiary
of the Company are: (i) duly authorized, validly issued,
fully paid, non-assessable; (ii) owned, directly or indirectly, by
the Company free and clear of all liens, claims,
security
interests, pledges and encumbrances
of any kind or nature whatsoever (collectively, “
Liens ”); and (iii) free of any restriction, including
any restriction which prevents the payment of dividends to the
Company or any other Subsidiary of the Company, or which otherwise
restricts the right to vote, sell or otherwise dispose of such
capital stock or other ownership interest, other than restrictions
under the Securities Act of 1933, as amended (the “
Securities Act ”) and state securities Law.
(d)
None of the Company’s Subsidiaries
is required to file any forms, reports or other documents with the
U.S. Securities and Exchange Commission (the “
SEC
”).
(e)
For purposes of this Agreement, the term
“ Subsidiary
”
shall mean, with respect to any party, any corporation or other
organization, whether incorporated or unincorporated, of which (i)
such party or any other Subsidiary of such party is a general
partner, manager or managing member, (ii) such party or any
Subsidiary of such party owns a majority of the outstanding equity
or voting securities or interests or (iii) such party or any
Subsidiary of such party has the right to elect at least a majority
of the members of the board of directors or others performing
similar functions with respect to such corporation or other
organization.
2.3
Capital Structure
.
(a)
The authorized capital stock of the
Company consists of (i) 50,000,000 shares of Company Common Stock
and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per
share (“ Company Preferred
Stock ”).
(b)
As of the close of business on the day
prior to the date hereof: (i) 19,045,835 shares of Company
Common Stock were issued and outstanding; (ii) no shares of Company
Preferred Stock were issued or outstanding; (iii) no shares of
Company Common Stock were held in the treasury of the Company;
(iv) 1,990,535 shares of Company Common Stock were duly
reserved for future issuance pursuant to employee stock options
granted pursuant to the Company’s stock option plans (the
“ Company Stock
Plans ”); and
(v) 2,993,332 shares of Company Common Stock were duly
reserved for future issuance pursuant to warrants to purchase
shares of Company Common Stock (the “ Company Stock
Warrants ” ). Except as described above, as of the
close of business on the day prior to the date hereof, there were
no shares of voting or non-voting capital stock, equity interests
or other securities of the Company authorized, issued, reserved for
issuance or otherwise outstanding.
(c)
All outstanding shares of Company Common
Stock are, and all shares which may be issued pursuant to the
Company Stock Plan, the Company Stock Options and the Company Stock
Warrants, will be, when issued against payment therefore in
accordance with the terms thereof, duly authorized, validly issued,
fully paid and non-assessable, and not subject to, or issued in
violation of, any kind of preemptive, subscription or any kind of
similar rights.
(d)
There are no bonds, debentures, notes or
other indebtedness of the Company having the right to vote (or
convertible into securities having the right to vote) on any
matters on which
stockholders of the Company may
vote. Except as described in subsection (b) above, there are
no outstanding securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind
(contingent or otherwise) to which the Company is a party or bound
obligating the Company to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or
other voting securities of the Company or obligating the Company to
issue, grant, extend or enter into any agreement to issue, grant or
extend any security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking. Neither the Company
nor any Subsidiary of the Company is subject to any obligation or
requirement to provide funds for or to make any investment (in the
form of a loan or capital contribution) to or in any Person (as
defined in Section 3(a)(9) of the Exchange Act, a “
Person ”).
(e)
Section 2.3(e) of the Company Disclosure
Letter contains a true, complete, and correct list of each holder
of any Company Stock Options, including for each Company Stock
Option: (i) the date of grant; (ii) the exercise price; (iii) the
number of shares of Company Common Stock subject thereto; (iv) the
vesting schedule and expiration date; and (v) any other material
terms, including any terms regarding the acceleration of vesting.
Section 2.3(e) of the Company Disclosure Letter contains a
true, complete, and correct list of each holder of any Company
Stock Warrant, including for each Company Stock Warrant: (i) the
date of issuance; (ii) the exercise price; (iii) the number of
shares of Company Common Stock subject thereto; (iv) the vesting
schedule (if any) and expiration date; and (v) any other material
terms, including any terms regarding anti-dilution protection or
acceleration of vesting.
(f)
All of the issued and outstanding shares
of Company Common Stock were issued in compliance in all material
respects with all applicable federal and state securities
Law.
(g)
There are no outstanding contractual
obligations of the Company to repurchase, redeem or otherwise
acquire any shares of capital stock (or options to acquire any such
shares) or other security or equity interest of the Company.
Except as described in this Section 2.3, there are no
stock-appreciation rights, security-based performance units,
phantom stock or other security rights or other agreements,
arrangements or commitments of any character (contingent or
otherwise) pursuant to which any Person is or may be entitled to
receive any payment or other value based on the revenues, earnings
or financial performance, stock price performance or other
attribute of the Company or any of its Subsidiaries or assets or
calculated in accordance therewith (other than ordinary course
payments or commissions to sales representatives of the Company or
any of its Subsidiaries based upon revenues generated by them
without augmentation as a result of the Merger or other
transactions contemplated hereby) or to cause the Company or any of
its Subsidiaries to file a registration statement under the
Securities Act, or which otherwise relate to the registration of
any securities of the Company or any of its
Subsidiaries.
(h)
Other than the Voting Agreements, there
are no voting trusts, proxies or other agreements, commitments or
understandings of any character to which the Company or any of its
Subsidiaries or, to the knowledge of the Company, any of the
stockholders of the Company, is a party or by which any of them is
bound with respect to the issuance, holding, acquisition, voting or
disposition of any shares of capital stock or other security or
equity interest of the Company or any of its
Subsidiaries.
2.4
Authority; No Conflict; Required
Filings .
(a)
The Company has all requisite corporate
power and authority to execute and deliver this Agreement, and,
subject to the adoption of this Agreement by the affirmative vote
of the holders of a majority of the outstanding shares of Company
Common Stock in accordance with the NRS and the Company’s
Articles of Incorporation (the “ Requisite Stockholder
Approval ”), to perform
its obligations hereunder and consummate the Merger and the other
transactions contemplated hereby. The execution and delivery
of this Agreement by the Company and, subject to obtaining the
Requisite Stockholder Approval, the performance of its obligations
hereunder and the consummation of the Merger and other transactions
contemplated hereby, have been duly authorized by all necessary
corporate action on the part of the Company.
(b)
This Agreement has been duly executed and
delivered by the Company and constitutes a valid and binding
obligation of the Company, enforceable against it in accordance
with its terms, subject only to: (i) the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting the
enforcement of creditors’ rights generally; and (ii) general
equitable principles (whether considered in a proceeding in equity
or at law) (collectively, the “ Equitable
Exceptions ”).
(c)
The execution and delivery of this
Agreement by the Company do not, and the performance by the Company
of its obligations hereunder and the consummation of the Merger and
other transactions contemplated hereby will not, conflict with or
result in any 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 any obligation or to a
loss of a material benefit, or result in the creation of any Liens
in or upon any of the properties or other assets of the Company or
any of its Subsidiaries under any provision of: (i) the
Articles of Incorporation, Bylaws of the Company or other
equivalent organizational documents of any of its Subsidiaries;
(ii) subject to the governmental filings and other matters referred
to in paragraph (d) below, any (A) permit, license, franchise,
statute, law, ordinance or regulation or (B) judgment, decree or
order, in each case applicable to the Company or any of its
Subsidiaries, or by which any of their respective properties or
assets may be bound or affected; or (iii) any loan or credit
agreement, note, bond, mortgage, indenture, contract, agreement
(including any license agreement), lease or other instrument or
obligation to which the Company or any of its Subsidiaries is a
party or by which any of their respective properties may be bound
or affected, except, in the case of clauses (ii) or (iii) above,
for any such conflicts, violations, defaults or other occurrences,
if any, that could not, individually or in the aggregate,
reasonably be expected to result in a Company Material Adverse
Effect or impair in any material respect the ability of the Parties
to consummate the Merger and the other transactions contemplated
hereby on a timely basis.
(d)
No consent, approval, order or
authorization of, or registration, declaration or filing with, any
government, governmental, statutory, regulatory or administrative
authority, agency, body or commission or any court, tribunal or
judicial body, whether federal, state, local or foreign (each, a
“ Governmental
Authority ”) is required
by or with respect to the Company or any of its Subsidiaries in
connection with the execution and delivery by the Company of this
Agreement or the consummation of the Merger and other transactions
contemplated hereby except for: (i) compliance with any
applicable requirements under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the “ HSR Act
”) and any other applicable foreign or domestic laws; (ii)
the filing of the Articles of Merger with the Secretary of State of
the State
of Nevada in accordance with the
NRS; (iii) compliance with any applicable requirements under the
Securities Act; (iv) compliance with any applicable requirements
under the Securities Exchange Act of 1934, as amended (the “
Exchange Act ”); (v) compliance with any applicable
state securities, takeover or so-call “Blue Sky” Laws;
and (vi) such consents, approvals, orders or authorizations, or
registrations, declarations or filings which if not obtained or
made, could not reasonably be expected to result in a Company
Material Adverse Effect.
2.5
Board Approval; Takeover Statutes;
Required Vote .
(a)
The Board of Directors of the Company
has, at a meeting duly called and held, by a unanimous vote of all
directors: (i) approved and declared advisable this
Agreement; (ii) determined that the Merger and other transactions
contemplated by this Agreement are advisable, fair to and in the
best interests of the Company and its stockholders; (iii) resolved
to recommend to the stockholders of the Company (A) the approval of
the Merger and the other transactions contemplated hereby and (B)
the approval and adoption of this Agreement; and (iv) directed that
this Agreement be submitted to the stockholders of the Company for
their approval and adoption.
(b)
No “business combination,”
“fair price,” “moratorium,” “control
share acquisition” or other similar anti-takeover statute or
regulation under the laws of the State of Nevada or other
applicable Law is applicable to the Company, this Agreement, the
Merger or any of the other transactions contemplated by this
Agreement.
(c)
The Requisite Stockholder Approval is the
only vote of the holders of any class or series of capital stock of
the Company necessary to approve and adopt this Agreement, the
Merger or any of the other transactions contemplated
hereby.
2.6
SEC Filings; Sarbanes-Oxley
Act .
(a)
Except as set forth on Section 2.6(a) of
the Company Disclosure Letter, since January 1, 2001, the Company
has timely filed all forms, reports and documents required to be
filed by the Company with the SEC, including all exhibits required
to be filed therewith, and has made available to Parent true,
complete and correct copies of all of the same so filed (including
any forms, reports and documents filed after the date hereof, the
“ Company SEC
Reports ”). The
Company SEC Reports: (i) were (or will be when filed, as the
case may be) timely filed; (ii) at the time filed complied (or will
comply when filed, as the case may be) in all material respects
with the applicable requirements of the Securities Act and the
Exchange Act; and (iii) did not at the time they were filed (or, if
later filed, amended or superseded, then on the date of such later
filing) contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading.
(b)
Each of the consolidated financial
statements (including, in each case, any related notes thereto)
contained in the Company SEC Reports (collectively, the
“ Company Financial
Statements ”), at the time
filed (or to be filed): (i) complied or will comply, as the case
may be, as to form in all material respects with the applicable
published rules
and regulations of the SEC with
respect thereto, (ii) was or will be prepared in accordance with
U.S. generally accepted accounting principles (“ GAAP
”) applied on a consistent basis throughout the periods
involved except as may otherwise be indicated in the notes thereto
or, in the case of unaudited interim financial statements, as
permitted by Form 10-QSB promulgated by the SEC, and (iii) fairly
presented or will fairly present, as the case may be, in all
material respects, the consolidated financial position of the
Company and its Subsidiaries as at the respective dates indicated
and the consolidated results of operations and cash flows for the
periods therein indicated, except, in the case of the unaudited
interim financial statements for the absence of footnotes and
normal year-end adjustments which were not and will not be material
in amount.
(c)
Each Company Report that is a
registration statement, as amended or supplemented, if applicable,
filed pursuant to the Securities Act, as of the date of such
registration or any post effective amendment thereto became
effective, did not 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.
(d)
The Company has designed and maintains
disclosure controls and procedures (as defined in 15d-15(e) of the
Exchange Act) to ensure that material information required to be
disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC’s rules
and forms and is accumulated and communicated to the
Company’s management as appropriate to allow timely decisions
regarding required disclosure. The Company has complied in
all material respect with the applicable provisions of the
Sarbanes-Oxley Act of 2002 and the related rules and regulations
promulgated under or pursuant to such act (the “
Sarbanes-Oxley
Act ”) or under the
Exchange Act. Each Company SEC Report that was required to be
accompanied by a certification required to be filed or submitted by
the Company’s principal executive officer or the
Company’s principal financial officer was accompanied by such
certification and at the time of filing such certification was true
and accurate.
(e)
The management of the Company has (i)
established and maintained disclosure controls and procedures (as
defined in Rule 13a-15(e) under the Exchange Act) to ensure that
information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods
specified in the SEC’s rules and forms, (ii) established and
maintains a system of internal controls over financial reporting
(as defined in Rule 13a-15(f) under the Exchange Act) designed to
provide reasonable assurance regarding the reliability of the
Company’s financial reporting and the preparation of Company
financial statements for external purposes in accordance with GAAP,
and (iii) has disclosed, based on its most recent evaluation of
internal control over financial reporting, to the Company’s
auditors and the audit committee of the Company’s Board of
Directors (A) all significant deficiencies and material weaknesses
in the design or operation of internal control over financial
reporting identified by the management of the Company which are
reasonably likely to adversely affect the Company’s ability
to record, process, summarize and report financial information and
(B) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Company’s
internal control over financial reporting. The Company has
disclosed to Parent prior to the date hereof all disclosures
described in clause (iii) of the immediately preceding sentence
made prior to the date of this Agreement.
2.7
Absence of Undisclosed
Liabilities . The Company and
its Subsidiaries do not have any material liabilities or
obligations, whether fixed, contingent, accrued or otherwise,
liquidated or unliquidated and whether due or to become due, other
than: (i) liabilities reflected or reserved against on the
balance sheet (the “ Most Recent Balance Sheet
”) for the year ended December 31, 2006 (the “ Most
Recent Balance Sheet Date ”) contained in the
Company’s Form 10-KSB to be filed with the SEC not later than
April 16, 2007 in substantially the form delivered to Parent
together with the Company Disclosure Letter; (ii) obligations under
any Company Material Contract (as defined in Section 2.9); and
(iii) liabilities or obligations incurred since the Most Recent
Balance Sheet Date in the ordinary course of business, consistent
with past practice in both number, type and amount.
2.8
Absence of Certain Changes or
Events . Since the Most
Recent Balance Sheet Date, the Company and its Subsidiaries have
conducted their respective businesses only in the ordinary course
of business consistent with past practice, and there has not been:
(i) any action, event or occurrence which has had, or could
reasonably be expected to result in, a Company Material Adverse
Effect; or (ii) any other action, event or occurrence that would
have required the consent of Parent pursuant to Section 4.1 had
such action, event or occurrence taken place after the execution
and delivery of this Agreement.
2.9
Agreements, Contracts and
Commitments .
(a)
For purposes of this Agreement, the term
“ Contract
”
shall mean any legally binding contract, agreement, obligation,
commitment, arrangement, understanding, instrument, permit,
franchise or license, whether oral or written (each, including all
amendments thereto) to which the Company or any of its Subsidiaries
is a party or by which any of them or their respective properties
are bound.
(b)
Section 2.9 of the Company Disclosure
Letter contains a complete list of the following Contracts (each a
“ Company Material
Contract ”):
(i)
any “material contract” (as
such term is defined in Item 601(b)(10) of Regulation S-B
promulgated under the Securities Act and the Exchange Act) of the
SEC with respect to the Company and its Subsidiaries;
(ii)
any employment-related Contract or plan,
including any stock option plan, stock appreciation right plan or
stock purchase plan or material Contract;
(iii)
any Contract containing any covenant (A)
limiting the right of the Company or any of its Subsidiaries to
engage in any line of business or to compete with any Person in any
line of business, or (B) prohibiting the Company or any of its
Subsidiaries (or, after the Closing Date, Parent) from engaging in
business with any Person or levying a fine, charge or other payment
for doing so;
(iv)
any Contract (A) relating to the pending
or future disposition or acquisition by the Company or any of its
Subsidiaries after the date of this Agreement of a material amount
of assets other than in the ordinary course of business or (B)
pursuant to which the Company or
any of its Subsidiaries will
acquire after the date of this Agreement any material assets or
ownership interest in any other Person or other business enterprise
other than the Company’s Subsidiaries;
(v)
any research, clinical trial,
development, distribution, sale, supply, license, marketing,
co-promotion or manufacturing by third parties of (x) products
(including products under development) of the Company or any of its
Subsidiaries, (y) products (including products under development)
licensed by the Company or any of its Subsidiaries, or (z) any
Company Intellectual Property Rights;
(vi)
any mortgages, indentures, guarantees,
loans or credit agreements, security agreements or other Contracts
relating to the borrowing of money or extension of credit, other
than (A) accounts receivables and payables, (B) loans to direct or
indirect wholly owned Subsidiaries, and (C) advances to employees
for travel and business expenses, in each case in the ordinary
course of business consistent with past practice;
(vii)
any settlement Contract with ongoing
obligations other than releases that are immaterial in nature or
amount and which are entered into in the ordinary course of
business;
(viii)
other than purchase orders in the
ordinary course of business, any other Contract that provides for
payment obligations by the Company or any of its Subsidiaries in
any twelve (12) month period of $100,000 or more in any individual
case that is not terminable by the Company or its Subsidiaries upon
notice of sixty (60) days or less without material liability to the
Company or its Subsidiaries; and
(ix)
any Contract, or group of Contracts with
a Person (or group of affiliated Persons), the termination of which
would be reasonably expected to have an Company Material Adverse
Effect and is not disclosed pursuant to clauses (i) through (viii)
above, inclusive.
(c)
The Company has made available to Parent
true, complete and correct copies of each Company Material
Contract. Neither the Company nor any of its Subsidiaries is
in breach, or has received in writing any claim or threat that it
is in breach, of any of the terms or conditions of any Company
Material Contract in such a manner as would permit any other party
thereto to cancel or terminate the same or to collect material
damages from the Company or any of its Subsidiaries. Each
Company Material Contract that has not expired or otherwise been
terminated in accordance with its terms is in full force and effect
and, to the knowledge of the Company, no other party to such
contract is in default in any material respect.
(d)
None of the Company Material Contracts or
any other Contract to which the Company or any of its Subsidiaries
is a party (A) grants or obligates the Company or any Subsidiary of
the Company to grant an exclusive right (or, in the case of any
product that has not been approved for commercial sale in the
United States, any right) to such third party for the research,
clinical trial, development, distribution, sale, supply, license,
marketing, co-promotion or manufacturing of any such product,
patent or other Company Intellectual Property Right, (B) provides
for the payment by the Company or any of its Subsidiaries of any
early termination fee or (C) requires or obligates the Company or
any of its Subsidiaries to purchase specified minimum amounts of
any product or to perform or
conduct research, clinical trials
or development for the benefit of any person other than the Company
or any of its Subsidiaries.
2.10
Compliance with Laws
.
(a)
Each of the Company and its Subsidiaries
has at all times complied with, and is presently in compliance
with, all Laws applicable to it, its properties or other assets or
its business or operations.
(b)
Each of the products and product
candidates of the Company and its Subsidiaries is being, and at all
times has been, developed, tested, manufactured and stored, as
applicable, in compliance with all Law, including those relating to
good manufacturing practice, good laboratory practice and good
clinical practice.
(c)
The Company has made available to Parent
each annual report filed by any of the Company and its Subsidiaries
with any Governmental Authority with respect to each product and
product candidates of the Company or its Subsidiaries.
2.11
Material Permits
.
(a)
Each of the Company and its Subsidiaries
holds all federal, state, local and foreign governmental licenses,
permits, franchises and authorizations necessary for conduct of its
business as presently conducted and the ownership and operation of
its properties and other assets, including those that are
required under all Environmental Laws (as defined in Section 2.20).
Each of the Company and its Subsidiaries has filed with all
applicable federal, state and local regulatory bodies for and
received approval of all registrations, applications, licenses,
requests for exemptions, permits and other regulatory
authorizations necessary to conduct the business of the Company and
its Subsidiaries as currently conducted, the absence of which
would, individually or in the aggregate, be reasonably likely to
have a Company Material Adverse Effect. The Company and its
Subsidiaries are, and at all relevant times have been, in
compliance in all material respects with all such licenses,
franchises, registrations, applications, licenses, requests for
exemptions, permits and other regulatory authorizations
(collectively the “ Material
Permits ”). To the
knowledge of the Company, each third party which is a manufacturer
or contractor for the Company or its Subsidiaries is in compliance
in all material respects with all registrations, applications,
licenses, requests for exemptions, permits and other regulatory
authorizations insofar as the same pertain to the manufacture of
products for the Company.
2.12
Litigation and Product
Liability . There
is no suit, action, arbitration, claim, governmental or other
proceeding before any Governmental Authority pending or, to the
knowledge of the Company, threatened, against the Company or any of
its Subsidiaries which, if decided adversely might (a) be
considered reasonably likely to result in (i) a Company Material
Adverse Effect or (ii) damages payable by the Company of any of its
Subsidiaries in excess of $50,000 in the aggregate, or (b)
otherwise impair in any material respect the ability of the Parties
to consummate the Merger and other transactions contemplated by
this Agreement on a timely basis. No product liability claims
have been asserted or, to the knowledge of the Company, threatened
against the Company or in respect of any product or product
candidate tested, researched, developed, manufactured, marketed,
distributed, handled, stored, or sold by,
on behalf of or in cooperation with
the Company.
2.13
Restrictions on Business
Activities . There is no
agreement, judgment, injunction, order or decree binding upon or
otherwise applicable to the Company or any of its Subsidiaries
which has the effect of prohibiting or materially impairing (a) any
current or future business practice of the Company or any of its
Subsidiaries or (b) any acquisition of any Person or property by
the Company or any of its Subsidiaries.
2.14
Employee Benefit Plans
.
(a)
Section 2.14 of the Company Disclosure
Letter lists all employee benefit plans (as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended
(“ ERISA
”))
and all bonus, stock or other security option, stock or other
security purchase, stock or other security appreciation rights,
incentive, deferred compensation, retirement or supplemental
retirement, severance, golden parachute, vacation, cafeteria,
dependent care, medical care, employee assistance program,
education or tuition assistance programs, insurance and other
similar fringe or employee benefit plans, programs or arrangements,
and any current or former employment or executive compensation or
severance agreements, written or otherwise, which have ever been
sponsored or maintained or entered into for the benefit of, or
relating to, any present or former employee or director of the
Company, or any trade or business (whether or not incorporated)
which is a member of a controlled group or which is under common
control with the Company within the meaning of Section 414 of the
Internal Revenue Code of 1986, as amended (an “ ERISA
Affiliate ”), whether or not such plan is terminated
(together, the “ Company Employee Plans ”).
With respect to each Company Employee Plan, the Company has
provided to Parent, the correct and complete copies of (where
applicable) (i) all plan documents, summary plan descriptions,
summaries of material modifications, amendments, and resolutions
related to such plans, (ii) the most recent determination letters
received from the Internal Revenue Service (“ IRS
”), (iii) the three most recent Form 5500 Annual Reports and
summary annual reports, (iv) the most recent audited financial
statement and actuarial valuation, if applicable, and (v) all
related agreements, insurance contracts and other agreements which
implement each such Company Employee Plan.
(b)
(i) There has been no
“prohibited transaction,” as such term is defined in
Section 406 of ERISA and Section 4975 of the Internal Revenue Code
of 1986, as amended (“ Code
”),
with respect to any Company Employee Plan, (ii) there are no claims
pending (other than routine claims for benefits) or threatened
against any Company Employee Plan or against the assets of any
Company Employee Plan, nor are there any current or threatened
Liens on the assets of any Company Employee Plan, (iii) all Company
Employee Plans conform to, and in their operation and
administration are in all respects in compliance with the terms
thereof and requirements prescribed by any and all Law (including
ERISA and the Code and all applicable requirements for
notification, reporting and disclosure to participants or the
Department of Labor, IRS or Secretary of the Treasury), (iv) the
Company and ERISA Affiliates have performed all obligations
required to be performed by them under, are not in default under or
violation of, and the Company has no knowledge of any default or
violation by any other party with respect to, any of the Company
Employee Plans, (v) each Company Employee Plan intended to qualify
under Section 401(a) of the Code and each corresponding trust
exempt under Section 501 of the Code has received or is the subject
of a favorable determination or opinion letter from the IRS, and
nothing has occurred which may be expected to cause the loss of
such qualification or exemption, (vi) all contributions required to
be made to any Company Employee Plan pursuant to Section 412 of the
Code or otherwise, the terms of the Company Employee Plan or any
collective bargaining agreement, have been made on or before their
due dates and a reasonable amount has been
accrued for contributions to each
Company Employee Plan for the current plan years, (vii) the
transaction contemplated herein will not directly or indirectly
result in an increase of benefits, acceleration of vesting or
acceleration of timing for payment of any benefit to any
participant or beneficiary under any Company Employee Plan, (viii)
each Company Employee Plan, if any, which is maintained outside of
the United States has been operated in all material respects in
conformance with the applicable statutes or governmental
regulations and rulings relating to such plans in the jurisdictions
in which such Company Employee Plan is present or operates and, to
the extent relevant, the United States and (ix) neither the Company
nor any ERISA Affiliate has ever made a complete or partial
withdrawal from a Multiemployer Plan (as such term is defined in
Section 3(37) of ERISA) resulting in “withdrawal
liability” (as such term is defined in Section 4201 of
ERISA), without regard to any subsequent waiver or reduction under
Section 4207 or 4208 of ERISA.
(c)
No Company Employee Plan is an
“employee pension benefit plan” (within the meaning of
Section 3(2) of ERISA) subject to Title IV of ERISA, and neither
the Company nor ERISA Affiliate has ever partially or fully
withdrawn from any such plan. No Company Employee Plan is a
Multiemployer Plan or “single-employer plan under multiple
controlled groups” as described in Section 4063 of ERISA, and
neither the Company nor any ERISA Affiliate has ever contributed to
or had an obligation to contribute, or incurred any liability in
respect of a contribution, to any Multiemployer Plan. No
Company Employee Plan is a “multiple employer welfare
arrangement” as described in Section 3(40) of
ERISA.
(d)
Each Company Employee Plan that is a
“group health plan” (within the meaning of Section
5000(b)(1) of the Code) has been operated in compliance with all
Law applicable to such plan, its terms, and with the group health
plan continuation coverage requirements of Section 4980B of the
Code and Sections 601 through 608 of ERISA (“
COBRA
Coverage ”), Section 4980D
of the Code and Sections 701 through 707 of ERISA, Title XXII of
the Public Health Service Act and the provisions of the Social
Security Act, to the extent such requirements are applicable.
No Company Employee Plan or written or oral agreement exists
which obligates the Company or any ERISA Affiliate to provide
health care coverage, medical, surgical, hospitalization, death or
similar benefits (whether or not insured) to any employee, former
employee or director of the Company or any ERISA Affiliate
following such employee’s, former employee’s or
director’s termination of employment with the Company or any
ERISA Affiliate, including retiree medical, health or life
benefits, other than COBRA Coverage.
(e)
Except as set forth on Schedule 2.14(e)
of the Company Disclosure Letter, no Company Employee Plan,
excluding any short-term disability, non-qualified deferred
compensation or health flexible spending account plan or program,
is self-funded, self-insured or funded through the general assets
of the Company or an ERISA Affiliate. Except as set forth on
Section 2.14(e) of the Company Disclosure Letter, no Company
Employee Plan which is an employee welfare benefit plan under
Section 3(1) of ERISA is funded by a trust or is subject to
Section 419, 419A or 501(c)(9) of the Code.
(f)
All contributions due and payable
on or before the Closing Date in respect of any Company Employee
Plan have been made in full and proper form, or adequate accruals
in accordance with generally accepted accounting principles have
been provided for in the Company’s Financial Statements for
all other contributions or amounts in respect of the Company
Employee Plans
for periods ending on the Closing
Date.
(g)
Except as set forth on Section 2.14(g) of
the Company Disclosure Letter, no Company Employee Plan currently
or previously maintained by Company or any of its ERISA Affiliates
provides any post-termination health care or life insurance
benefits, and neither the Company nor its ERISA Affiliates has any
obligations (whether written or oral) to provide any
post-termination benefits in the future (except for COBRA
Coverage).
(h)
The consummation of the transactions
contemplated by this Agreement will not, except as set forth in
Section 2.14(h) of the Company Disclosure Letter, (A) entitle any
individual to severance or separation pay, or (B) accelerate the
time of payment or vesting, or increase the amount, of compensation
due to any individual. No payment made or contemplated under
any Company Employee Plan or other benefit arrangement constitutes
an “excess parachute payment” within the meaning of
Section 280G of the Code.
(i)
With respect to each Company Employee
Plan, (A) other than as specifically required by law, there are no
restrictions on the ability of the sponsor of each Company Employee
Plan to amend or terminate any Company Employee Plan, the Company
has expressly reserved in itself the right to amend, modify or
terminate any such Company Employee Plan, or any portion of it, and
has made no representations (whether orally or in writing) which
would conflict with or contradict such reservation or right; and
(B) the Company has satisfied any and all bond coverage
requirements of ERISA. Each Company Employee Plan may be
transferred by the Company or ERISA Affiliate to Parent.
(j)
Each Company Employee Plan which is a
non-qualified deferred compensation plan is in “good
faith” compliance with Section 409A of the Code as modified
by the applicable Treasury guidance. No Company Employee Plan
providing for equity in the Company, including without limitation,
stock options and restricted stock grants, involve deferred
compensation under Section 409A of the Code.
(k)
No Company Employee Plan presents any
risk of liability to the Company, its assets or stock, including a
risk of Lien against the Company, its assets or stock whether
before or on or after the Closing.
(l)
Neither the Company nor any of its ERISA
Affiliates or Subsidiaries is a party to any written or oral: (i)
union or collective bargaining agreement; (ii) agreement with any
current or former employee the benefits of which are contingent
upon, or the terms of which will be materially altered by, the
consummation of the Merger or other transactions contemplated by
this Agreement; or (iii) except as set forth no Section
2.14(l)(iii) of the Company Disclosure Letter, agreement with any
current or former employee of the Company or any of its ERISA
Affiliates or Subsidiaries providing any term of employment or
compensation guarantee extending for a period longer than one year
from the date hereof or for the payment of compensation in excess
of $150,000 per annum.
(m)
Section 2.14(m) of the Company Disclosure
Letter sets forth a true and complete list of each current or
former employee, officer, director or investor of the Company who
holds, as of the date hereof, any option, warrant or other right to
purchase shares of capital stock of the Company, together with the
number of shares subject to such option, warrant or right, the date
of grant or issuance of such option, warrant or right, the extent
to which such option, warrant or right is vested and/or
exercisable, the exercise price of such option, warrant or right,
whether such option is intended to qualify as an incentive stock
option within the meaning of Section 422(b) of the Code, and the
expiration date of each such option, warrant and right.
Section 2.14(m) of the Company Disclosure Letter also sets
forth the total number of such options, warrants and rights.
True, complete and correct copies of each agreement
(including all amendments and modifications thereto) between the
Company and each holder of such options, warrants and rights
relating to the same have been furnished to Parent and are listed
in Section 2.14(m) of the Company Disclosure Letter.
2.15
Labor and Employment
Matters .
(a)
(i) There are no controversies pending
or, to the knowledge of the Company, threatened between the Company
or its Subsidiaries and any of their respective employees or former
employees; and (ii) neither the Company nor any of its
Subsidiaries is a party to any collective bargaining agreement,
work council agreement, work force agreement or any other labor
union contract applicable to persons employed by the Company or its
Subsidiaries, nor, to the knowledge of the Company, are there any
activities or proceedings of any labor union to organize any such
employees. The Company is not subject to any actual or
threatened charge of (i)
