TABLE OF CONTENTS

DEFINITIONS

Section 1.01		Definitions		2
Section 1.02		Interpretation and Rules of Construction		10
ARTICLE II THE OFFER
Section 2.01		The Offer		12
Section 2.02		Actions of Parent and Purchaser		14
Section 2.03		Actions by the Company		15
Section 2.04		Board of Directors		16
Section 2.05		Actions by Directors		18
ARTICLE III THE MERGER
Section 3.01		Merger		18
Section 3.02		Charter and Bylaws		18
Section 3.03		Effective Time of the Merger		19
Section 3.04		Closing		19
Section 3.05		Directors and Officers of the Surviving Corporation		19
ARTICLE IV EFFECTS OF THE MERGER
Section 4.01		Effects of the Merger on Company Securities		19
Section 4.02		Effects of the Merger on Purchaser Securities		21
Section 4.03		Payment of Merger Consideration; Stock Transfer Books		21
Section 4.04		Company Dissenting Shares		23
Section 4.05		Withholding Rights		24
Section 4.06		Adjustments to Prevent Dilution		24
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 5.01		Organization and Qualification; Authority		24
Section 5.02		Company Subsidiaries		25
Section 5.03		Capitalization		25
Section 5.04		Authority Relative to this Agreement; Validity and Effect of Agreements		27
Section 5.05		No Conflict; Required Filings and Consents		27
Section 5.06		Permits; Compliance with Laws		28
Section 5.07		SEC Filings; Financial Statements		28
Section 5.08		Absence of Certain Changes or Events		30
Section 5.09		Absence of Undisclosed Liabilities		30
Section 5.10		Absence of Litigation		30

 

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Section 5.11		Compliance with Laws		30
Section 5.12		Employee Benefit Plans		31
Section 5.13		Information Supplied		33
Section 5.14		Intellectual Property		33
Section 5.15		Regulatory Compliance		33
Section 5.16		Taxes		34
Section 5.17		Environmental Matters		35
Section 5.18		Real Property		36
Section 5.19		Material Contracts		36
Section 5.20		Interested Party Transactions		37
Section 5.21		Brokers		37
Section 5.22		Opinion of Financial Advisor		37
Section 5.23		Amendment of Rights Plan; State Takeover Statute		38
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE BUYER PARTIES
Section 6.01		Organization		38
Section 6.02		Ownership of Purchaser; No Prior Activities		38
Section 6.03		Power and Authority		38
Section 6.04		No Conflict; Required Filings and Consents		39
Section 6.05		Information Supplied		40
Section 6.06		Absence of Litigation		40
Section 6.07		Availability of Funds		40
Section 6.08		No Ownership of Company Capital Stock		40
Section 6.09		Other Agreements or Understandings		40
Section 6.10		Brokers		40
Section 6.11		No Additional Representations		41
ARTICLE VII CONDUCT OF BUSINESS PENDING THE MERGER
Section 7.01		Conduct of Business by the Company Pending the Merger		41
Section 7.02		Conduct of Business by Buyer Parties Pending the Merger		44
ARTICLE VIII ADDITIONAL AGREEMENTS
Section 8.01		Company Proxy/Information Statement; Other Filings; Stockholders’ Meeting		45
Section 8.02		Access to Information; Confidentiality		46
Section 8.03		No Solicitation of Transactions by the Company		47
Section 8.04		Employee Benefits Matters		49
Section 8.05		Directors’ and Officers’ Indemnification and Insurance of the Surviving Corporation		51
Section 8.06		Further Action; Reasonable Best Efforts		54
Section 8.07		Public Announcements		54
Section 8.08		State Takeover Laws		55
Section 8.09		Obligations of Parent Relating to Call Spread Warrants		55

 

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Section 8.10		Compensation Arrangements		55
Section 8.11		Notification of Certain Matters		55
Section 8.12		Nasdaq De-listing; Exchange Act Deregistration		56
Section 8.13		Further Assurances		56
ARTICLE IX CONDITIONS TO THE MERGER
Section 9.01		Conditions to the Obligations of Each Party		56
Section 9.02		Conditions to the Obligations of the Company		57
Section 9.03		Frustration of Conditions		57
ARTICLE X TERMINATION, AMENDMENT AND WAIVER
Section 10.01		Termination		57
Section 10.02		Effect of Termination		58
Section 10.03		Fees and Expenses		59
Section 10.04		Waiver		60
ARTICLE XI GENERAL PROVISIONS
Section 11.01		Non-Survival of Representations and Warranties		60
Section 11.02		Notices		60
Section 11.03		Severability		61
Section 11.04		Amendment		62
Section 11.05		Entire Agreement; Assignment		62
Section 11.06		Performance Guaranty		62
Section 11.07		Specific Performance		62
Section 11.08		Parties in Interest		63
Section 11.09		Governing Law; Forum		63
Section 11.10		Waiver of Jury Trial		63
Section 11.11		Headings		63
Section 11.12		Counterparts		64
Section 11.13		Waiver		64
Section 11.14		Company SEC Reports		64
Annex I		Conditions to the Offer

 

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AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this “ Agreement ”) is made and entered into as of April 22, 2007, by and among MedImmune, Inc., a Delaware corporation (the “ Company ”), AstraZeneca PLC, a public limited company incorporated under the laws of England and Wales (“ Parent ”), and AstraZeneca Biopharmaceuticals Inc., a Delaware corporation and an indirect wholly owned subsidiary of Parent (“ Purchaser ” and, together with Parent, the “ Buyer Parties ”).

WHEREAS, the respective boards of directors of Parent, Purchaser and the Company have determined that it is in the best interests of their respective stockholders for Parent to acquire the Company on the terms and subject to the conditions set forth in this Agreement;

WHEREAS, on the terms and subject to the conditions set forth herein, Purchaser has agreed to commence a tender offer (as it may be amended from time to time as permitted by this Agreement, the “ Offer ”) to purchase all outstanding shares of common stock, par value $0.01 per share, of the Company (the “ Company Common Stock ”), including the associated preferred stock purchase rights (the “ Rights ”) issued pursuant to the Rights Agreement dated as of October 31, 1998 between the Company and American Stock Transfer & Trust Company (as amended, the “ Rights Agreement ”) (the shares of Company Common Stock, together with the Rights, being referred to collectively as the “ Company Common Shares ”), at a price of $58.00 per Company Common Share, in cash without interest (such price, or any higher price as may be paid in the Offer in accordance with this Agreement, the “ Offer Price ”);

WHEREAS, following consummation of the Offer, the parties intend that Purchaser will be merged with and into the Company (the “ Merger ”), with the Company surviving the Merger as an indirect wholly owned subsidiary of Parent in accordance with the General Corporation Law of the State of Delaware (the “ DGCL ”), and each Company Common Share that is not tendered and accepted pursuant to the Offer (other than Dissenting Shares (as defined below) and Company Common Shares held in the treasury of the Company or owned by Parent or any direct or indirect wholly owned subsidiary of Parent or the Company) will thereupon be cancelled and converted into the right to receive cash in an amount equal to the Offer Price, on the terms and subject to the conditions set forth herein;

WHEREAS, the board of directors of the Company (the “ Company Board ”) (A) has by unanimous vote (i) determined that this Agreement and the transactions contemplated hereby, including the Offer and the Merger, are advisable, fair to and in the best interests of the Company’s stockholders and (ii) approved this Agreement and the transactions contemplated hereby, including the Offer and the Merger, on the terms and subject to the conditions set forth herein and (B) is recommending that the Company’s stockholders accept the Offer, tender their Company Common Shares into the Offer, approve the Merger and adopt this Agreement; and

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WHEREAS, the respective boards of directors of Parent and Purchaser have adopted, approved and declared advisable, and Parent has caused the sole stockholder of Purchaser to approve, this Agreement providing for the Offer and the Merger in accordance with the DGCL, upon the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing premises and the representations, warranties, covenants and agreements set forth herein, as well as other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, Parent, Purchaser and the Company hereby agree as follows:

DEFINITIONS

Section 1.01                                 Definitions .

(a)                                   For purposes of this Agreement:

“ Action ” means any claim, action, suit, proceeding, arbitration, mediation or investigation as to which notice has been provided to the applicable party.

“ Affiliate ” or “ affiliate ” of a specified person means a person who, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified person.

“ beneficial owner ” or “ beneficial ownership ”, with respect to any Company Common Shares, has the meaning ascribed to such term under Rule 13d-3(a) of the Exchange Act.

“ Business Day ” or “ business day ” means any day on which the principal offices of the SEC in Washington, D.C. are open to accept filings and on which banks are not required or authorized to close in New York, New York.

“ Call Spread Warrants ” means warrants to purchase Company Common Shares pursuant to (a) the Confirmation of Warrant Transaction, dated June 22, 2006, between the Company and UBS AG, London Branch for warrants expiring in 2011, (b) the Confirmation of Warrant Transaction, dated June 22, 2006, between the Company and UBS AG, London Branch for warrants expiring in 2013, (c) the Confirmation of Warrant Transaction, dated June 22, 2006, between the Company and Lehman Brothers OTC Derivatives, Inc. for warrants expiring in 2011, (d) the Confirmation of Warrant Transaction, dated June 22, 2006, between the Company and Lehman Brothers OTC Derivatives, Inc. for warrants expiring in 2013, (e) the Confirmation of Amended Warrant Transaction, dated June 26, 2006, between the Company and UBS AG, London Branch for warrants expiring in 2011, (f) the Confirmation of Amended Warrant Transaction, dated June 26, 2006, between the Company and UBS AG, London Branch for warrants expiring in 2013, (g) the Confirmation of Amended Warrant Transaction, dated June 26, 2006, between the Company and Lehman Brothers OTC Derivatives, Inc.

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for warrants expiring in 2011 and (h) the Confirmation of Amended Warrant Transaction, dated June 26, 2006, between the Company and Lehman Brothers OTC Derivatives, Inc. for warrants expiring in 2013.

“ Claim ” means any threatened, asserted, pending or completed Action, suit or proceeding, or any inquiry or investigation, whether instituted by any party hereto, any Governmental Authority or any other party, that any Indemnified Party in good faith believes might lead to the institution of any such Action, suit or proceeding, whether civil, criminal, administrative, investigative or other, including any arbitration or other alternative dispute resolution mechanism, arising out of or pertaining to matters that relate to such Indemnified Party’s duties or service as a director, officer, trustee, employee, agent, or fiduciary of the Company, any of the Company Subsidiaries, or any employee benefit plan (within the meaning of Section 3(3) of ERISA) maintained by any of the foregoing or any other person at or prior to the Merger Effective Time at the request of the Company or any of Company Subsidiaries

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Company Acquisition Proposal ” means any proposal or offer for, whether in one transaction or a series of related transactions, any (a) merger, consolidation, business combination, reorganization, recapitalization or similar transaction involving the Company or any Company Subsidiary that would constitute a “significant subsidiary” (as defined in Rule 1-02 of Regulation S-X, but substituting 20% for references to 10% therein), (b) sale or other disposition, directly or indirectly, by merger, consolidation, liquidation, dissolution, share exchange or any similar transaction, of any assets of the Company or the Company Subsidiaries representing 20% or more of the consolidated assets of the Company and the Company Subsidiaries, (c) issue, sale or other disposition by the Company of (including by way of merger, consolidation, share exchange or any similar transaction) securities (or options, rights or warrants to purchase, or securities convertible into, such securities) representing 20% or more of the votes or value associated with the outstanding voting equity securities of the Company, (d) tender offer or exchange offer in which any Person or “group” (as such term is defined under the Exchange Act) offers to acquire beneficial ownership (as such term is defined in Rule 13d-3 under the Exchange Act), or the right to acquire beneficial ownership, of 20% or more of the outstanding Company Common Shares, or (e) transaction which is similar in form, substance or purpose to any of the foregoing transactions; provided , however , that the term “Company Acquisition Proposal” shall not include (i) the Offer, the Merger or any of the other transactions contemplated by this Agreement or (ii) any merger, consolidation, business combination, reorganization, recapitalization or similar transaction solely among the Company and one or more Company Subsidiaries or among Company Subsidiaries.

 “ Company Bylaws ” means the Amended and Restated Bylaws of the Company, as in effect immediately prior to the Merger Effective Time.

“ Company Charter ” means the Restated Certificate of Incorporation of the Company.

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“ Company Disclosure Schedule ” means the disclosure schedule delivered by the Company to Parent concurrently with the execution of this Agreement.

“ Company Hedge Options ” means options to purchase Company Common Shares pursuant to (i) the Confirmation of Convertible Bond Hedge Transaction related to the Company’s convertible senior notes due 2011, dated as of June 22, 2006, between the Company and UBS AG, London Branch; (ii) the Confirmation of Convertible Bond Hedge Transaction related to the Company’s convertible senior notes due 2013, dated as of June 22, 2006, between the Company and UBS AG, London Branch; (iii) the Confirmation of Convertible Bond Hedge Transaction related to the Company’s convertible senior notes due 2011, dated as of June 22, 2006, between the Company and Lehman Brothers OTC Derivatives, Inc.; and (iv) the Confirmation of Convertible Bond Hedge Transaction related to the Company’s convertible senior notes due 2013, dated as of June 22, 2006, between the Company and Lehman Brothers OTC Derivatives, Inc.

“ Company Notes ” means the convertible senior notes due 2011, 2013 and 2023 issued pursuant to the Indentures.

“ Company Outstanding Shares ” means the aggregate number of Company Common Shares outstanding immediately prior to the acceptance of Company Common Shares pursuant to the Offer.

“ Company Stock Options ” means options to purchase Company Common Shares issued pursuant to any Incentive Plan.

“ Company Superior Proposal ” means any bona fide, unsolicited written Company Acquisition Proposal (on its most recently amended and modified terms, if amended and modified) made by a third party which the Company Board determines in good faith (after consultation with its financial and legal advisors and taking into account all the terms and conditions of the Company Acquisition Proposal, including any break-up fees, expense reimbursement provisions and conditions to consummation) to be more favorable to the Company Stockholders than the Offer, the Merger and the other transactions contemplated by this Agreement and for which financing, if a cash transaction (in whole or in part), is then committed or determined by the Company Board to be reasonably likely to be obtained; provided , however ¸ for purposes of this definition of “Company Superior Proposal,” the term Company Acquisition Proposal shall have the meaning assigned to such term herein, except that the references to “20%” shall be deemed to be references to “50%.”

“ Company Warrant ” means warrants to purchase Company Common Shares, excluding the Call Spread Warrants.

“ control ” (including the terms “ controlled by ” and “ under common control with ”) means the possession, directly or indirectly of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, as trustee or executor, by contract or credit arrangement or otherwise.

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“ Director Stock Option Plans ” means the Company’s 1993 Non-Employee Director Stock Option Plan and the Company’s 2003 Non-Employee Director Stock Option Plan.

“ Director Stock Options ” means options to purchase Company Common Shares that were issued pursuant to the Director Stock Option Plans.

“ EMEA ” means the European Medicines Agency.

“ Employee Stock Options ” means the Company Stock Options, other than Director Stock Options.

“ Expenses ” means attorneys’ fees and all other costs, expenses and obligations (including, without limitation, experts’ fees, travel expenses, court costs, retainers, transcript fees, duplicating, printing and binding costs, as well as telecommunications, postage and courier charges) paid or incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to investigate, defend, be a witness in or participate in, any Claim for which indemnification is authorized pursuant to Section 8.05(a) , including any Action relating to a claim for indemnification or advancement brought by an Indemnified Party.

“ Environmental Law ” means any Law relating to the environment, natural resources, or safety or health of human beings or other living organisms, including the manufacture, distribution in commerce and use, presence or Release of pollutants, contaminants or toxic or hazardous substances.

“ FDA ” means the United States Food and Drug Administration.

“ GAAP ” means generally accepted accounting principles as applied in the United States.

“ Governmental Authority ” means any foreign or domestic national, state, provincial, municipal or local government, governmental, regulatory or administrative authority, agency, instrumentality or commission or any court, tribunal, or judicial or arbitral body.

“ Hazardous Substances ” means any pollutant, contaminant, hazardous substance, hazardous waste, medical waste, special waste, toxic substance, petroleum or petroleum-derived substance, waste or additive, radioactive material, or other compound, element, material or substance in any form whatsoever (including products) regulated, restricted or addressed by or under any applicable Environmental Law.

“ Incentive Plans” means all employee, director or executive share option or compensation plans or arrangements of the Company.

“ Indentures ” means (a) the Indenture, dated as of July 15, 2003, by and between the Company and the Bank of New York relating to the convertible senior notes due 2023, (b) the Indenture, dated as of June 28, 2006, by and between the Company and

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the Bank of New York relating to the convertible senior notes due 2011 and (c) the Indenture, dated as of June 28, 2006, by and between the Company and the Bank of New York relating to the convertible senior notes due 2013.

“ Intellectual Property ” means (a) patents, patent applications and invention registrations of any type, (b) trademarks, service marks, trade dress, logos, trade names, domain names, corporate names and other source identifiers, and registrations and applications for registration thereof, (c) copyrightable works, copyrights, and registrations and applications for registration thereof, and (d) confidential and proprietary information, including trade secrets, know-how, inventions, discoveries, improvements and research and development information.

“ knowledge of the Company ” or “ knowledge ” when used in reference to the Company means the actual knowledge of those individuals listed on Section 1.01(a) of the Company Disclosure Schedule.

“ Law ” means any national, state, provincial, municipal or local statute, law, ordinance, regulation, rule, code, executive order, injunction, judgment, decree or other order.

“ Liens ” means with respect to any property or asset (including any security), any mortgage, claim, lien, pledge, charge, security interest, encumbrance, restriction, easement, right of way, title defect or other adverse claim of any kind in respect of such property or asset.

“ Material Adverse Effect ” means, with respect to the Company, an effect, event, development or change (each, an “ Effect ”) that, individually or when taken together with all other Effects, has a material adverse effect on the business, results of operations or financial condition of the Company and the Company Subsidiaries, taken as a whole, other than any Effect arising out of or resulting from (a) a decrease in the market price of Company Common Shares in and of itself, (b) changes in conditions in the U.S. or global economy or capital or financial markets generally, including changes in interest or exchange rates, (c) changes in general legal, tax, regulatory, political or business conditions in the countries in which the Company does business (except to the extent the Company and the Company Subsidiaries, taken as a whole, are disproportionately adversely affected relative to other pharmaceutical or biotechnology businesses in such countries), (d) general market or economic conditions in the pharmaceutical or biotechnology industries (except to the extent that the Company and the Company Subsidiaries, taken as a whole, are disproportionately adversely affected relative to other participants in such industries), (e) changes in GAAP, (f) the negotiation, execution, announcement, pendency or performance of this Agreement or the transactions contemplated hereby or the consummation of the transactions contemplated by this Agreement, including the impact thereof on relationships, contractual or otherwise, with customers, suppliers, vendors, lenders, investors, venture partners or employees, (g) acts of war, armed hostilities, sabotage or terrorism, or any escalation or worsening of any such acts of war, armed hostilities, sabotage or terrorism threatened or underway as of the date of this Agreement, (h) earthquakes, hurricanes, floods, or other natural disasters,

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(i) determinations by the FDA or its European or Japanese equivalent, or any panel or advisory body empowered or appointed thereby, with respect to any products or product candidates of Persons (other than the Company) similar to or competitive with the Company’s material products or product candidates or the results of any clinical trial with respect to any such products or product candidates, (j) the entry or threatened entry into the market of a generic version of Ethyol (amifostine), (k) the results of any review by the FDA (or any advisory committee thereof) of the Company’s application for label expansion permitting the marketing of FluMist to individuals below the age of five years or any other filing made by the Company with the FDA regarding FluMist, (l) any results from the Numax CP117 or CP124 studies, or (m) any action taken by the Company at the request or with the consent of any of the Buyer Parties.

“ Non-U.S. Plan ” means any Plan maintained outside the United States primarily for the benefits of employee or consultants based outside of the United States.

“ NYSE ” means the New York Stock Exchange, Inc.

“ Other Filings ” means any document, other than the Proxy/Information Statement, to be filed with the SEC in connection with this Agreement.

“ Parent Material Adverse Effect ” means any event, circumstance, change or effect that would reasonably be expected to prevent, or materially impair the ability of Parent or Purchaser to consummate the Merger or any of the other transactions contemplated by this Agreement.

“ Permitted Liens ” means (a) Liens for Taxes not yet delinquent and Liens for Taxes being contested in good faith and for which there are adequate reserves on the financial statements of the Company (if such reserves are required pursuant to GAAP), (b) inchoate mechanics’ and materialmen’s Liens for construction in progress, (c) workmen’s, repairmen’s, warehousemen’s and carriers’ Liens arising in the ordinary course of business of the Company or any Company Subsidiary, (d) zoning restrictions, utility easements, rights of way and similar Liens that are imposed by any Governmental Authority having jurisdiction thereon or otherwise are typical for the applicable property type and locality and that, individually or in the aggregate, would not reasonably be expected to materially interfere with the Company’s and the Company Subsidiaries’ ability to conduct their businesses as currently conducted, (e) Liens and obligations arising under or in connection with the Company Material Contracts, (f) matters that would be disclosed on current title reports or surveys that arise or have arisen in the ordinary course of business, (g) Liens reflected in the Company SEC Reports, (h) licenses of Intellectual Property, and (i) other Liens being contested in good faith in the ordinary course of business or which would not reasonably be expected to have a Material Adverse Effect.

“ person ” or “ Person ” means an individual, corporation, partnership, limited partnership, limited liability company, syndicate, person (including a “person” as defined in Section 13(d)(3) of the Exchange Act), trust, association or entity or Governmental Authority, but shall exclude Company Subsidiaries.

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“ Pharmaceutical Products ” means the following products of the Company and the Company Subsidiaries: Synagis (palivizumab), FluMist (Influenza Virus Vaccine Live, Intranasal) and Ethyol (amifostine).

“ PMDA ” means the Japanese Pharmaceutical and Medical Devices Agency.

“ Release ” means any release, pumping, pouring, emptying, injecting, escaping, leaching, migrating, dumping, seepage, spill, leak, flow, discharge or emission.

“ Securities Act ” means the Securities Act of 1933, as amended.

“ subsidiary ” or “ subsidiaries ” of the Company, Parent or any other person means a corporation, limited liability company, partnership, joint venture or other organization of which:  (a) such party or any other subsidiary of such party is a general partner (in the case of a partnership) or managing member (in the case of a limited liability company), (b) voting power to elect a majority of the board of directors or others performing similar functions with respect to such organization is held by such party or by any one or more of such party’s subsidiaries, (c) at least 50% of the equity interests is controlled by such party, (d) at least 50% if the beneficial interest is held by such party (in the case of a trust) or (e) at least 50% of the interest in the capital or profits is held by such party.

“ Tax ” or “ Taxes ” means any federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not.

“ Tax Return ” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“ Voting Debt ” shall mean bonds, debentures, notes or other indebtedness having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of equity interests in the Company or any Company Subsidiary may vote.

(b)                                  The following terms have the meaning set forth in the Sections set forth below:

Defined Term		Location of Definition
Acceptance Time		Section 2.04(a)
Adverse Recommendation Change		Section 8.03(b)
Agreement		Preamble

 

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Defined Term		Location of Definition
Antitrust Laws		Section 5.05(b)
Benefits Continuation Period		Section 8.04(a)
Buyer Parties		Preamble
Capital Expenditures		Section 7.01(m)
Certificate of Merger		Section 3.03
Closing		Section 3.04
Closing Date		Section 3.04
Company		Preamble
Company Board		Recitals
Company Board Recommendation		Section 2.03(a)
Company Common Shares		Recitals
Company Common Share Certificates		Section 4.03(c)
Company Common Stock		Recitals
Company Dissenting Shares		Section 4.04
Company Employees		Section 8.04(a)
Company Intellectual Property		Section 5.14
Company Material Contract		Section 5.19
Company Paying Agent		Section 4.03(a)
Company Preferred Shares		Section 5.03(a)
Company SEC Reports		Section 5.07(a)
Company Stockholders		Section 2.03(a)
Company Stockholder Approval		Section 5.04
Company Stockholders’ Meeting		Section 8.01(d)
Company Stock Awards		Section 5.03(b)
Company Subsidiaries		Section 5.02(a)
Company Warrant Consideration		Section 4.01(e)
Compensation Arrangement		Section 5.12(h)
Compensation Arrangement Approvals		Section 5.12(h)
Compensation Committee		Section 5.12(h)
Confidentiality Agreement		Section 8.02(b)
Continuing Directors		Section 2.04(a)
Contract		Section 5.05(a)
Delaware Courts		Section 11.09(b)
Director Option Consideration		Section 4.01(e)
DGCL		Recitals
Drug or Health Laws		Section 5.15(a)
Employee Option Consideration		Section 4.01(d)
Environmental Permits		Section 5.17(a)(i)
ERISA		Section 5.12(a)
ERISA Affiliate		Section 5.12(f)
Exchange Act		Section 5.05(b)
Foreign Antitrust Laws and Approvals		Annex I
fully-diluted basis		Annex I
Governmental Order		Section 10.01(c)
HSR Act		Section 5.05(b)

 

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Defined Term		Location of Definition
Indemnified Parties		Section 8.05(a)
Independent Directors		Section 2.04(b)
internal controls		Section 5.07(d)
Initial Expiration Date		Section 2.01(d)
IRS		Section 5.12(a)
Leased Real Property		Section 5.18(b)
Merger		Recitals
Merger Consideration		Section 4.01(b)
Merger Effective Time		Section 3.03
Merger Shares		Section 4.01(b)
Minimum Condition		Annex I
Nasdaq		Section 5.05(b)
New Plans		Section 8.04(b)
Offer		Recitals
Offer Commencement Date		Section 2.01(a)
Offer Conditions		Section 2.01(b)
Offer Documents		Section 2.02(a)
Offer Price		Recitals
Old Plans		Section 8.04(b)
Outside Date		Section 10.01(b)
Owned Real Property		Section 5.18(a)
Parent		Preamble
Permits		Section 5.06(a)
Plans		Section 5.12(a)
Pro-Rata Payments		Section 8.04(c)
Proxy/Information Statement		Section 2.03(a)
Purchaser		Preamble
Rights		Recitals
Rights Agreement		Recitals
Schedule 14D-9		Section 2.03(b)
SEC		Section 5.07(a)
Section 16		Section 8.04(e)
Section 262		Section 4.04
Surviving Corporation		Section 3.01
Surviving Corporation Fund		Section 4.03(a)
Termination Date		Section 10.01
Termination Fee		Section 10.03(d)
Uncertificated Shares		Section 4.03(c)

 

Section 1.02                                 Interpretation and Rules of Construction .

In this Agreement, except to the extent otherwise provided or that the context otherwise requires:

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(a)                                   when a reference is made in this Agreement to an Article, Section, Annex or Schedule, such reference is to an Article or Section of, or an Annex or Schedule to, this Agreement unless otherwise indicated;

(b)                                  any capitalized terms used in any Annex or Schedule but not otherwise defined therein, shall have the meaning as defined in this Agreement;

(c)                                   the table of contents and headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement;

(d)                                  whenever the words “include,” “includes” or “including” are used in this Agreement, they are deemed to be followed by the words “without limitation”;

(e)                                   the words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement;

(f)                                     references to any statute, rule or regulation are to the statute, rule or regulation as amended, modified, supplemented or replaced from time to time (and, in the case of statutes, include any rules and regulations promulgated under said statutes) and to any section of any statute, rule or regulation include any successor to said section;

(g)                                  all terms defined in this Agreement have the defined meanings when used in any certificate or other document made or delivered pursuant hereto, unless otherwise defined therein;

(h)                                  the definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms;

(i)                                      references to a person are also to its successors and permitted assigns;

(j)                                      the use of “or” is not intended to be exclusive unless expressly indicated otherwise;

(k)                                   references to monetary amounts are to the lawful currency of the United States;

(l)                                      words importing the singular include the plural and vice versa and words importing gender include all genders; and

(m)                                time periods within or following which any payment is to be made or act is to be done shall, unless expressly indicated otherwise, be calculated by excluding the day on which the period commences and including the day on which the period ends and by extending the period to the next Business Day following if the last day of the period is not a Business Day.

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ARTICLE II
THE OFFER

Section 2.01                                 The Offer .

(a)                                   Provided that this Agreement shall not have previously been validly terminated in accordance with Section 10.01 and that none of the events set forth in Paragraph (2) (excluding Paragraph (2)(c)) of Annex I hereto shall exist or have occurred and be continuing, as promptly as practicable after the date hereof, but in any event within ten (10) business days after the date of this Agreement, Parent shall cause Purchaser to, and Purchaser shall, commence (within the meaning of Rule 14d-2 under the Exchange Act) the Offer for all of the outstanding Company Common Shares (other than Company Common Shares described in Section 4.01(a) ) for a price per Company Common Share equal to the Offer Price (as adjusted as provided in Section 2.01(f) ).  The date on which Purchaser commences the Offer, within the meaning of Rule 14d-2 under the Exchange Act, is referred to in this Agreement as the “ Offer Commencement Date ”.

(b)                                  As promptly as practicable on the later of: (i) the earliest date as of which Purchaser is permitted under applicable Law to accept for payment Company Common Shares tendered pursuant to the Offer and (ii) the earliest date as of which each of the conditions set forth in Annex I (the “ Offer Conditions ”) shall have been satisfied or waived, Purchaser shall (and Parent shall cause Purchaser to) accept for payment all Company Common Shares tendered pursuant to the Offer (and not validly withdrawn). The obligation of Purchaser to accept for payment Company Common Shares tendered pursuant to the Offer shall be subject only to the satisfaction or waiver of each of the Offer Conditions (and shall not be subject to any other conditions). As promptly as practicable after the acceptance for payment of any Company Common Shares validly tendered pursuant to the Offer (and not properly withdrawn), Purchaser shall pay for such Company Common Shares.

(c)                                   Parent and Purchaser expressly reserve the right to increase the Offer Price, and subject to the immediately succeeding sentence, reserve the right to waive any of the Offer Conditions and to make any change in the terms of the Offer.  Notwithstanding anything to the contrary contained in this Agreement, neither Parent nor Purchaser shall (without the prior written consent of the Company):

(i)                                      change or waive the Minimum Condition (as defined in Annex I);

(ii)                                   decrease the number of Company Common Shares sought to be purchased by Purchaser in the Offer;

(iii)                                reduce the Offer Price;

(iv)                               extend or otherwise change the expiration date of the Offer (except to the extent required or permitted pursuant to Section 2.01(d) );

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(v)                                  change the form of consideration payable in the Offer; or

(vi)                               amend, modify or supplement any of the Offer Conditions or terms of the Offer in a manner that adversely affects, or would reasonably be expected to adversely affect, the holders of Company Common Shares.

(d)                                  Unless extended as provided in this Agreement, the Offer shall expire on the date (the “ Initial Expiration Date ”) that is twenty (20) business days (calculated as set forth in Rule 14d-1(g)(3) under the Exchange Act) after the Offer Commencement Date.  Notwithstanding the foregoing, (i) Purchaser shall extend the Offer for any period required by any rule, regulation, interpretation or position of the SEC or its staff or Nasdaq that is applicable to the Offer; provided , that in no event shall Purchaser be required to extend the Offer beyond the Outside Date, (ii) if, on the Initial Expiration Date or any subsequent date as of which the Offer is scheduled to expire, any Offer Condition is not satisfied and has not been waived, then, (A) Purchaser may in its discretion, without the consent of the Company and (B) Purchaser shall to the extent such Offer Condition could reasonably be satisfied and such extension is requested in writing by the Company no less than two (2) business days prior to the applicable expiration date, extend the Offer for one or more periods ending no later than the Outside Date to permit such Offer Condition to be satisfied; provided , however , that no individual extension shall be for a period of more than ten (10) business days; and (iii) Purchaser may, in its discretion, elect to provide for a subsequent offering period (and one or more extensions thereof) in accordance with Rule 14d-11 under the Exchange Act following the Acceptance Time, and, if immediately following the Acceptance Time (as defined in Section 2.04(a) ), Parent, Purchaser and their respective subsidiaries and Affiliates own more than 80% but less than 90% of the Company Common Shares outstanding at that time (which shares beneficially owned shall include shares tendered in the Offer and not withdrawn), to the extent requested by the Company, Purchaser shall provide for a subsequent offering period of at least ten (10) business days.  Subject to the terms and conditions set forth in this Agreement and the Offer, Parent shall cause Purchaser to, and Purchaser shall, accept for payment and pay for all Company Common Shares validly tendered and not withdrawn during such subsequent offering period as promptly as practicable after any such Company Common Shares are tendered during such subsequent offering period and in any event in compliance with Rule 14d-11(c) promulgated under the Exchange Act.

(e)                                   The Offer may be terminated prior to its expiration date (as such expiration date may be extended and re-extended in accordance with this Agreement), but only if this Agreement is validly terminated in accordance with Section 10.01 .

(f)                                     The Offer Price shall be adjusted to the extent appropriate to reflect the effect of any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction with respect to Company Common Shares occurring or having a record date on or after the date of this Agreement and prior to the payment by Purchaser for the Company Common Shares.

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Section 2.02                                 Actions of Parent and Purchaser .

(a)                                   On the Offer Commencement Date, Parent and Purchaser shall: (i) cause to be filed with the SEC a Tender Offer Statement on Schedule TO with respect to the Offer, which will contain Purchaser’s offer to purchase and related letter of transmittal (the forms of which shall be reasonably acceptable to the Company) and the related form of summary advertisement (such Tender Offer Statement on Schedule TO and all exhibits, amendments and supplements thereto being referred to collectively in this Agreement as the “ Offer Documents ”) and (ii) cause the Offer Documents to be disseminated to holders of Company Common Shares as required by applicable Law.

(b)                                  Parent and Purchaser shall cause the Offer Documents to (i) comply in all material respects with the applicable requirements of the Exchange Act and the rules and regulations thereunder and (ii) on the date filed with the SEC and on the date first published, sent or given to the Company Stockholders, not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided , however , no covenant is made by Parent or Purchaser with respect to information supplied by or on behalf of the Company for inclusion or incorporation by reference in the Offer Documents.

(c)                                   The Company and its counsel shall be given a reasonable opportunity to review and comment on the Offer Documents (including any amendment or supplement thereto) prior to the filing thereof with the SEC.  Parent and Purchaser shall (i) promptly provide the Company and its counsel with a copy of any written comments or a description of any oral comments received by Parent or Purchaser (or by counsel to Parent or Purchaser) from the SEC or its staff with respect to the Offer Documents and (ii) give the Company and its counsel a reasonable opportunity to review and comment on any response formulated in connection with such comments prior to filing thereof with the SEC.  Each of Parent and Purchaser shall respond as promptly as practicable to any comments of the SEC or its staff with respect to the Offer Documents or the Offer.

(d)                                  To the extent required by the applicable requirements of the Exchange Act and the rules and regulations thereunder: (i) each of Parent, Purchaser and the Company shall promptly correct any information provided by it for use in the Offer Documents if such information shall have become false or misleading in any material respect and (ii) each of Parent and Purchaser shall use reasonable best efforts to promptly cause the Offer Documents, as supplemented or amended to correct such information, to be filed with the SEC and to be disseminated to holders of Company Common Shares.  Without limiting the generality of the foregoing, the Company shall promptly furnish to Parent and Purchaser the information relating to the Company required by the Exchange Act to be set forth in the Offer Documents.

(e)                                   Parent shall cause to be provided to Purchaser all of the funds necessary to purchase any Company Common Shares that Purchaser becomes obligated

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to purchase pursuant to the Offer, and shall cause Purchaser to perform, on a timely basis, all of Purchaser’s obligations under this Agreement.

Section 2.03                                 Actions by the Company .

(a)                                   The Company hereby approves of and consents to the Offer and represents that the Company Board, at a meeting duly called and held, unanimously (i) adopted and approved this Agreement and approved the transactions contemplated hereby, including the Offer and the Merger, in accordance with the DGCL; (ii) declared that the Offer and the Merger and the other transactions contemplated by this Agreement are fair to, and in the best interests of, the Company and the stockholders of the Company (the “ Company Stockholders ”); (iii) adopted resolutions recommending that the Company Stockholders accept the Offer, tender their Company Common Shares pursuant to the Offer and adopt this Agreement and approve the Merger, if required (the “ Company Board Recommendation ”); provided , however , that the Company Board may withdraw, modify or amend the Company Board Recommendation as provided by Section 8.03 of this Agreement; and (iv) adopted resolutions taking all other actions necessary to render Section 203 of the DGCL and the Rights inapplicable to each of the Offer, the Merger and the other transactions contemplated by this Agreement.  None of the aforesaid actions by the Company Board has been amended, rescinded or modified as of the date hereof.  The Company hereby consents to the inclusion in the Offer Documents of the Company Board Recommendation to the extent such Company Board Recommendation is not withheld or withdrawn in accordance with Section 8.03 of this Agreement.  To the extent the foregoing recommendation has been amended or modified in accordance with Section 8.03 of this Agreement, the Company hereby consents to the inclusion of such recommendation, as so amended or modified, in the Offer Documents. The Company represents that it has obtained all necessary consents to permit the inclusion in its entirety of the fairness opinion of Goldman, Sachs & Co. in the Schedule 14D-9 (as defined below) and, in each case, as necessary, the proxy statement (including the form of proxies) or information statement relating to the vote of the Company Stockholders with respect to this Agreement (as amended, supplemented or modified, the “ Proxy/Information Statement ”).  The Company has been advised by each of its directors and executive officers that each such person intends to tender all Company Common Shares owned by such person pursuant to the Offer.

(b)                                  On the Offer Commencement Date, the Company shall file with the SEC and (following or contemporaneously with the initial dissemination of the Offer Documents to holders of Company Common Shares to the extent required by applicable federal securities laws) disseminate to holders of Company Common Shares a Solicitation/Recommendation Statement on Schedule 14D-9 (together with any amendments or supplements thereto, the “ Schedule 14D-9 ”) that, subject to Section 8.03 , shall contain the Company Board Recommendation.  Except in connection with an Adverse Recommendation Change made in accordance with Section 8.03 , Parent and its counsel shall be given a reasonable opportunity to review and comment on the Schedule 14D-9 (including any amendment or supplement thereto) prior to the filing thereof with the SEC. The Company shall: (i) promptly provide Parent and its counsel with a copy of any written comments and a description of any oral comments received by the Company

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(or its counsel) from the SEC or its staff with respect to the Schedule 14D-9 and (ii) except with respect to any disclosure made relating to an Adverse Recommendation Change in accordance with Section 8.03 , give Parent and its counsel a reasonable opportunity to review and comment on any response formulated in connection with such comments prior to the filing thereof with the SEC.  The Company shall respond as promptly as reasonably practicable to any comments of the SEC or its staff with respect to the Schedule 14D-9. The Company shall cause the Schedule 14D-9 to (i) comply in all material respects with the requirements of the Exchange Act and (ii) on the date filed with the SEC and on the date first published, sent or given to the Company Stockholders, shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided , however , that no covenant is made by the Company with respect to information supplied by or on behalf of Parent or Purchaser for inclusion or incorporation by reference in the Schedule 14D-9.  To the extent required by the applicable requirements of the Exchange Act and the rules and regulations thereunder: (A) each of Parent, Purchaser and the Company shall promptly correct any information provided by it for use in the Schedule 14D-9 if such information shall have become false or misleading in any material respect and (B) the Company shall use reasonable best efforts to promptly cause the Schedule 14D-9, as supplemented or amended to correct such information, to be filed with the SEC and to be disseminated to holders of Company Common Shares.  Parent and Purchaser shall promptly furnish to the Company all information relating to Parent and Purchaser required by the Exchange Act to be set forth in the Schedule 14D-9.  To the extent requested by the Company, Parent shall cause the Schedule 14D-9 to be mailed or otherwise disseminated to the Company Stockholders together with the Offer Documents disseminated to the Company Stockholders.

(c)                                   In connection with the Offer, the Company shall instruct its transfer agent to promptly furnish to Purchaser a true and correct list, as of the most recent practicable date, of the record holders of Company Common Shares and their addresses, as well as mailing labels containing such names and addresses. The Company will furnish Purchaser with such additional information (including any security position listings in the Company’s possession or reasonably obtainable by the Company and any updated lists of stockholders, mailing labels and security positions) and assistance as Purchaser may reasonably request for purposes of communicating the Offer to the record holders and beneficial holders of Company Common Shares. All information furnished in accordance with this Section 2.03(c) shall be held in confidence by Parent and Purchaser in accordance with the requirements of the Confidentiality Agreement, and shall be used by Parent and Purchaser only in connection with the communication of the Offer and the dissemination of any Proxy/Information Statement relating to the Merger to the holders of Company Common Shares.

Section 2.04                                 Board of Directors .

(a)                                   After the first time that Purchaser accepts for payment any Company Common Shares tendered pursuant to the Offer (the “ Acceptance Time ”), and at all times thereafter, the Company will, upon Parent’s request and subject to compliance

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with applicable Law, take all actions reasonably necessary to cause persons designated by Parent to become directors of the Company so that the total number of such persons equals that number of directors, rounded up to the next whole number, determined by multiplying: (i) the total number of directors on the Company Board (after giving effect to the directors elected or designated by Parent in accordance with this Section 2.04(a) ) by (ii) the percentage that the number of Company Common Shares beneficially owned by Parent, Purchaser or any of their respective Affiliates bears to the total number of Company Common Shares outstanding at the Acceptance Time (determined on a fully-diluted basis but disregarding any unvested stock options and other unvested rights to acquire Company Common Shares).  The Company will take all actions reasonably necessary to permit Parent’s designees to be elected to the Company Board in accordance with this Section 2.04(a) , including using reasonable efforts to secure the resignation of directors, promptly filling vacancies or newly created directorships on the Company Board, increasing the size of the Company Board, and/or amending the bylaws of the Company; provided , however , that prior to the Merger Effective Time, the Company Board shall always have at least two Continuing Directors.  The Company shall, upon Parent’s request following the Acceptance Time, and at all times thereafter, also cause Persons designated by Parent to constitute the same percentage (rounded up to the next whole number) as is on the Company Board of (i) each committee of the Company Board, (ii) each board of directors (or similar body) of each Company Subsidiary and (iii) each committee (or similar body) of each such board, in each case, to the extent permitted by applicable Law and the Nasdaq Marketplace Rules.  For purposes of this Section 2.04(a) , any and all members of the Company Board immediately prior to the Acceptance Time who remain on the Company Board after such designation by Parent pursuant to this Section 2.04(a) shall be referred to as “ Continuing Directors ”.

(b)                                  In the event that Parent’s designees are elected or appointed to the Company Board pursuant to Section 2.04(a) hereof, until the Merger Effective Time, the Company Board shall have at least such number of directors as may be required by the Nasdaq Marketplace Rules or the federal securities laws who are considered independent directors within the meaning of such rules and laws (“ Independent Directors ”); provided , however , that in such event, if the number of Independent Directors shall be reduced below the number of directors as may be required by such rules or securities laws for any reason whatsoever, the remaining Independent Director(s) shall be entitled to designate persons to fill such vacancies who shall be deemed to be Independent Directors for purposes of this Agreement or, if no other Independent Director then remains, the other directors shall designate such number of directors as may be required by the rules of Nasdaq and the federal securities laws, to fill such vacancies who shall not be stockholders or Affiliates of Parent or Purchaser, and such Persons shall be deemed to be Independent Directors for purposes of this Agreement.

(c)                                   The Company’s obligation to cause Parent’s designees to be elected or appointed to the Company Board shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1 thereunder. The Company shall promptly take all actions, and shall include in the Schedule 14D-9 such information with respect to the Company and its officers and directors, as Section 14(f) of the Exchange Act and Rule 14f-1 thereunder require in order to fulfill its obligations under this Section 2.04 , so long as

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Parent shall have timely provided to the Company all information with respect to Parent and its designees, officers, directors and Affiliates required by Section 14(f) of the Exchange Act and Rule 14f-1 thereunder.  Parent shall promptly supply to the Company in writing, and shall be solely responsible for, all such information.

Section 2.05                                 Actions by Directors .  Following the election or appointment of Parent’s designees to the Company Board pursuant to Section 2.04(a) , and until the Merger Effective Time, the approval of a majority of the Continuing Directors shall be required to authorize: (a) any amendment to or termination of this Agreement by the Company; (b) any extension of time for the performance of any of the obligations or other acts of Parent or Purchaser; (c) any waiver of compliance with any covenant of Parent or Purchaser or any condition to any obligation of the Company or any waiver of any right of the Company under this Agreement; and (d) any other consent or action by the Company or the Company Board with respect to this Agreement, the Offer or the Merger or any other transaction contemplated thereby or in connection therewith.. The authorization of any such matter by a majority of the Continuing Directors shall constitute the authorization of such matter by the Company Board, and no other action on the part of the Company or any other director of the Company shall be required to authorize such matter.

ARTICLE III
THE MERGER

Section 3.01                                 Merger .  Upon the terms and subject to the conditions set forth in this Agreement, at the Merger Effective Time, Purchaser shall be merged with and into the Company in accordance with the DGCL and the separate corporate existence of Purchaser shall thereupon cease. The Company shall be the surviving corporation in the Merger (sometimes hereinafter referred to as the “ Surviving Corporation ”), and the separate corporate existence of the Company with all its rights, privileges, immunities, powers and franchises shall continue unaffected by the Merger. At the Merger Effective Time, the effect of the Merger shall be as provided in this Agreement, the Certificate of Merger and the applicable provisions of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Merger Effective Time, all of the property, rights, privileges, powers and franchises of the Company and Purchaser shall vest in the Surviving Corporation, and all debts, liabilities and duties of the Company and Purchaser shall become the debts, liabilities and duties of the Surviving Corporation.

Section 3.02                                 Charter and Bylaws .

(a)                                   At the Merger Effective Time, the Company Charter shall be amended so as to contain the provisions, and only the provisions, contained immediately prior to the Merger Effective Time in the Certificate of Incorporation of Purchaser, except for Article FIRST of the Company Charter, which shall read “The name of the corporation is MedImmune, Inc.” As so amended, such Company Charter shall be the Certificate of Incorporation of the Surviving Corporation until thereafter further amended as provided therein or by applicable Law.

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(b)                                  At the Merger Effective Time, the Bylaws of Purchaser in effect immediately prior to the Merger Effective Time shall be the Bylaws of the Surviving Corporation (except that the name of the Surviving Corporation shall be MedImmune, Inc. ) until thereafter amended as provided therein or by applicable Law.

Section 3.03                                 Effective Time of the Merger .  Subject to the provisions of this Agreement, as soon as practicable on the Closing Date, the Company and Purchaser shall file a certificate of merger as contemplated by the DGCL (the “ Certificate of Merger ”), together with any required related certificates, filings or recordings, with the Secretary of State of the State of Delaware, in such form as required by, and executed in accordance with the relevant provisions of, the DGCL. The Merger shall become effective upon the filing of the Certificate of Merger with the Secretary of State of the State of Delaware or at such later date and time as the Company and Parent may agree upon and as is set forth in such Certificate of Merger (such time, the “ Merger Effective Time ”).

Section 3.04                                 Closing .  Unless this Agreement shall have been terminated in accordance with Section 10.01 , the closing of the Merger (the “ Closing ”) shall occur as promptly as practicable (but in no event later than the third (3rd) Business Day) after all of the conditions set forth in Article IX (other than conditions which by their terms are required to be satisfied or waived at the Closing, but subject to the satisfaction or waiver of such conditions) shall have been satisfied or waived by the party entitled to the benefit of the same, or at such other time and on a date as agreed to by the parties (the “ Closing Date ”).  The Closing shall take place at the offices of Dewey Ballantine LLP, 1301 Avenue of the Americas, New York, New York, 10019, or at such other place as agreed to by the parties hereto.

Section 3.05                                 Directors and Officers of the Surviving Corporation .  From and after the Merger Effective Time, the directors of Purchaser immediately prior to the Merger Effective Time shall be the directors of the Surviving Corporation and the officers of the Company immediately prior to the Merger Effective Time shall be the officers of the Surviving Corporation, in each case, until their respective successors are duly elected or appointed and qualified, or until the earlier of their death, resignation or removal.

ARTICLE IV
EFFECTS OF THE MERGER

Section 4.01                                 Effects of the Merger on Company Securities .  At the Merger Effective Time, by virtue of the Merger and without any action on the part of the Company or the holders of any capital stock of the Company (other than any requisite approval of the Merger by the Company Stockholders in accordance with the DGCL):

(a)                                   Each Company Common Share held in treasury and each Company Common Share that is owned by Parent or Purchaser immediately prior to the Merger Effective Time shall be cancelled and retired and shall cease to exist, without any conversion thereof and no payment or distribution shall be made with respect thereto.

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(b)                                  Each Company Common Share issued and outstanding immediately prior to the Merger Effective Time (other than Company Dissenting Shares and except as otherwise provided in Section 4.01(a) and Section 4.01(c) ), shall be converted and exchanged automatically into the right to receive an amount in cash equal to the Offer Price (the “ Merger Consideration ”), payable to the holder thereof in accordance with Section 4.03 .  The Company Common Shares that are to be so converted into the right to receive the Merger Consideration are referred to herein as the “ Merger Shares ”.

(c)                                   Each Company Common Share held by any subsidiary of either the Company or Parent (other than Purchaser) immediately prior to the Merger Effective Time shall be converted into such number of shares of stock of the Surviving Corporation such that each such subsidiary owns the same percentage of the Surviving Corporation immediately following the Merger Effective Time as such subsidiary owned in the Company immediately prior to the Merger Effective Time.

(d)                                  All Employee Stock Options, whether vested or unvested, that are outstanding immediately prior to the Merger Effective Time shall become fully vested and each such Employee Stock Option shall be cancelled, as of the Merger Effective Time, in exchange for the right to receive an amount in cash (without interest and less any applicable Taxes required to be withheld in accordance with Section 4.05 with respect to such payment) determined by multiplying (x) the excess of the Merger Consideration over the applicable exercise price per share of such Employee Stock Option by (y) the number of Company Common Shares subject to such Employee Stock Option (the “ Employee Option Consideration ”). Payment of Employee Option Consideration shall be made as soon as practicable after the Merger Effective Time but in any event within three (3) Business Days following the Merger Effective Time.

(e)                                   Each Director Stock Option that is outstanding immediately prior to the Merger Effective Time shall, pursuant to the terms of the applicable Director Stock Option Plan, become fully vested and each such Director Stock Option shall be cancelled, as of the Merger Effective Time, in exchange for the right to receive an amount in cash (without interest and less any applicable Taxes required to be withheld in accordance with Section 4.05 with respect to such payment) determined by multiplying (x) the excess of the Merger Consideration over the applicable exercise price per share of such Director Stock Option by (y) the number of Company Common Shares subject to such Director Stock Option (the “ Director Option Consideration ”).  Payment of Director Option Consideration shall be made as soon as practicable after the Merger Effective Time but in any event within three (3) Business Days following the Merger Effective Time.

(f)                                     At the Merger Effective Time, each Company Warrant not theretofore exercised shall be cancelled in exchange for the right to receive an amount in cash equal to the excess, if any, of (i) the Merger Consideration over (ii) the exercise price per share of such Company Warrant, multiplied by the total number of Company Common Shares subject to such Company Warrant (the “ Company Warrant Consideration ”), without interest and less any applicable Taxes required to be withheld in accordance with Section 4.05 with respect to such payment.  Payment of the Company

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Warrant Consideration shall be made as soon as practicable after the Merger Effective Time but in any event within three (3) Business Days following the Merger Effective Time.

Section 4.02                                 Effects of the Merger on Purchaser Securities .  At the Merger Effective Time, by virtue of the Merger and without any action by Purchaser or Parent, as the holder of all outstanding capital stock of Purchaser (other than the requisite approval by the sole stockholder of Purchaser in accordance with the DGCL, which approval has been obtained), each outstanding share of common stock of Purchaser issued and outstanding immediately prior to the Merger Effective Time shall be converted into and become one fully paid and nonassessable share of common stock of the Surviving Corporation with the same rights, powers and privileges as the shares so converted and shall constitute the only outstanding shares of the Surviving Corporation.

Section 4.03                                 Payment of Merger Consideration; Stock Transfer Books .

(a)                                   Prior to the Merger Effective Time, the Company shall appoint as paying agent a bank or trust company reasonably satisfactory to Parent (the “ Company Paying Agent ”).  At or prior to the Merger Effective Time, Parent shall deposit or cause the Surviving Corporation to deposit with the Company Paying Agent, for the benefit of the holders of Merger Shares, Company Stock Options and Company Warrants, cash in an amount sufficient to pay the aggregate Merger Consideration required to be paid plus cash in an amount sufficient to pay holders of Company Stock Options and Company Warrants in accordance with this Agreement (such cash being hereinafter referred to as the “ Surviving Corporation Fund ”).

(b)                                  The Surviving Corporation Fund shall be invested by the Company Paying Agent in (i) direct obligations of the United States of America, (ii) obligations for which the full faith and credit of the United States of America is pledged to provide for payment of all principal and interest, (iii) commercial paper obligations receiving the highest rating from either Moody’s Investor Services, Inc. or Standard & Poor’s, a division of The McGraw Hill Companies or (iv) money market funds investing solely in a combination of the foregoing, or a combination thereof, as directed by and for the benefit of the Surviving Corporation; provided , however , that no gain or loss thereon shall affect the amounts payable to the holders of Merger Shares or Company Stock Options following completion of the Merger pursuant to this Article IV and Parent shall take all actions necessary to ensure that the Surviving Corporation Fund includes at all times cash sufficient to satisfy Parent’s obligation under this Article IV .  Any and all interest and other income earned on the Surviving Corporation Fund shall promptly be paid to the Surviving Corporation or Parent, as Parent directs.

(c)                                   As promptly as practicable after the Merger Effective Time, but in no event more than five (5) Business Days following the Merger Effective Time, Parent and the Surviving Corporation shall cause the Company Paying Agent to mail to each person who was, as of immediately prior to the Merger Effective Time, a holder of record of the Merger Shares (i) a letter of transmittal (which shall be in customary form and shall specify that delivery shall be effected, and risk of loss and title to the certificates

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representing the Merger Shares (the “ Company Common Share Certificates ”) or uncertificated Company Common Shares (“ Uncertificated Shares ”) shall pass, only upon proper delivery of the Company Common Share Certificates or transfer of the Uncertificated Shares to the Company Paying Agent) and (ii) instructions for effecting the surrender of the Company Common Share Certificates or transfer of the Uncertificated Shares in exchange for the Merger Consideration.

(d)                                  Upon (i) surrender to the Company Paying Agent of Company Common Share Certificates for cancellation, 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, or (ii) receipt of an “agent’s message” by the Company Paying Agent (or such other evidence, if any, of transfer as the Company Paying Agent may reasonably request) in the case of a book-entry transfer of Uncertificated Shares, the holder of such Company Common Share Certificates or Uncertificated Shares shall be entitled to receive in exchange therefor, in cash, the aggregate Merger Consideration in respect thereof, and the Company Common Share Certificates or Uncertificated Shares so surrendered shall forthwith be cancelled.  The Company Paying Agent shall accept such Company Common Share Certificates or Uncertificated Shares upon compliance with such reasonable terms and conditions as the Company Paying Agent may impose to effect an orderly exchange thereof in accordance with normal exchange practices.

(e)                                   In the event of a transfer of ownership of Merger Shares that is not registered in the transfer records of the Company, payment of the Merger Consideration in respect of the applicable Merger Shares may be made to a person other than the person in whose name the Company Common Share Certificates so surrendered or the Uncertificated Shares so transferred is registered if such Company Common Share Certificates shall be properly endorsed or otherwise be in proper form for transfer or such Uncertificated Share shall be properly transferred and the person requesting such payment shall pay any transfer or other taxes required by reason of the payment of the Merger Consideration in respect thereof or establish to the reasonable satisfaction of the Surviving Corporation that such tax has been paid or is not applicable.  Until surrendered or transferred, as the case may be, as contemplated by this Section 4.03 , each Company Common Share Certificate or Uncertificated Share shall be deemed at all times after the Merger Effective Time to represent only the right to receive upon such surrender or transfer the Merger Consideration.  No interest shall be paid or will accrue on any cash payable to holders of Company Common Share Certificates or Uncertificated Shares pursuant to the provisions of this Article IV .

(f)                                     Any portion of the Surviving Corporation Fund that remains undistributed to the holders of Merger Shares for six months after the Merger Effective Time shall be delivered to the Surviving Corporation, upon demand, and any holders of Merger Shares who have not theretofore complied with this Article IV shall thereafter look only to the Surviving Corporation for, and the Surviving Corporation shall remain liable for, payment of their claim for the Merger Consideration.  Any portion of the Surviving Corporation Fund remaining unclaimed by holders of Merger Shares as of a date which is immediately prior to such time as such amounts would otherwise escheat to

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or become property of any Governmental Authority shall, to the extent permitted by applicable Law, become the property of the Surviving Corporation free and clear of any claims or interest of any person previously entitled thereto.  None of Parent, the Company Paying Agent or the Surviving Corporation shall be liable to any holder of Merger Shares for any such shares (or dividends or distributions with respect thereto), or cash delivered to a public official pursuant to any abandoned property, escheat or similar Law.

(g)                                  Any portion of the Surviving Corporation Fund made available to the Company Paying Agent pursuant to Section 4.03(a) to pay for Company Common Shares for which appraisal rights have been perfected shall be returned to the Surviving Corporation or Parent, upon demand by Parent.

(h)                                  If any Company Common Share Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Company Common Share Certificate to be lost, stolen or destroyed and, if required by the Surviving Corporation, the posting by such person of a bond, in such reasonable amount as the Surviving Corporation may direct, as indemnity against any claim that may be made against it with respect to such Company Common Share Certificate, the Company Paying Agent shall pay in respect of Merger Shares to which such lost, stolen or destroyed Company Common Share Certificate relate the Merger Consideration to which the holder thereof is entitled.

(i)                                      At the Merger Effective Time, the stock transfer books of the Company shall be closed and there shall be no further registration of transfers of Merger Shares thereafter on the records of the Company.  From and after the Merger Effective Time, the holders of Company Common Share Certificates or Uncertificated Shares shall cease to have any rights with respect to such shares, except as otherwise provided in this Agreement, the certificate of incorporation of the Surviving Corporation, or by applicable Law.

Section 4.04                                 Company Dissenting Shares .  Notwithstanding anything in this Agreement to the contrary, Company Common Shares that are outstanding immediately prior to the Merger Effective Time and that are held by any Person who is entitled to demand, and who properly demands, appraisal of such Company Common Shares pursuant to, and who complies in all respects with, Section 262 of the DGCL (such Section, “ Section 262 ,” and such Company Common Shares, “ Company Dissenting Shares ”) shall not be converted into the right to receive the Merger Consideration as provided in Section 4.01(b) , but rather, the holders of Company Dissenting Shares shall be entitled only to payment of the fair value of such Company Dissenting Shares in accordance with Section 262; provided that if any such holder shall fail to perfect or otherwise shall waive, withdraw or lose the right to appraisal under Section 262, then the right of such holder to be paid the fair value of such holder’s Company Dissenting Shares shall cease and such Company Dissenting Shares shall be deemed to have been converted as of the Merger Effective Time into, and to have become exchangeable solely for, the right to receive the Merger Consideration (without interest thereon) as provided in Section 4.01(b) .  The Company shall notify Parent as promptly as reasonably practicable of any demands received by the Company for appraisal of any Company Common

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Shares, and Parent shall have the right to participate in all negotiations and proceedings with respect to such demands. Prior to the Merger Effective Time, the Company shall not, without the prior written consent of Parent (which consent shall not be unreasonably withheld), voluntarily make any payment with respect to, or settle or offer to settle, any such demands, or agree to do any of the foregoing.

Section 4.05                                 Withholding Rights . The Company, the Surviving Corporation or the Company Paying Agent, as applicable, shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any holder of Company Common Shares, Company Stock Options or Company Warrants such amounts as it is required to deduct and withhold with respect to the making of such payment under the Code, and the rules and regulations promulgated thereunder, or any provision of state, local or foreign Tax law.  To the extent that amounts are so withheld by the Company, the Surviving Corporation, or the Company Paying Agent, as applicable, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the Company Common Shares, Company Stock Options and Company Warrants in respect of which such deduction and withholding was made by the Company, the Surviving Corporation or the Company Paying Agent, as applicable.

Section 4.06                                 Adjustments to Prevent Dilution .  In the event that, notwithstanding Section 7.01(c) , the Company changes (or establishes a record date for changing) the number of Company Common Shares issued and outstanding prior to the Merger Effective Time as a result of a stock split, stock dividend, recapitalization, subdivision, reclassification, combination, exchange of shares or similar transaction with respect to the outstanding Company Common Shares, at any time during the period from the date hereof to the Merger Effective Time, then the Merger Consideration, Employee Option Consideration, Director Option Consideration and Company Warrant Consideration shall be appropriately adjusted, taking into account the record and payment or effective dates, as the case may be, for such transaction.

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Subject to Section 11.14 , except as set forth in the Company Disclosure Schedule or the Company SEC Reports filed before the date of this Agreement, the Company hereby represents and warrants to the Buyer Parties as follows:

Section 5.01                                 Organization and Qualification; Authority .

(a)                                   The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.  The Company (i) is duly qualified or licensed to do business as a foreign corporation and is in good standing under the laws of any other jurisdiction in which the character of the properties owned, leased or operated by it therein or in which the transaction of its business makes such qualification or licensing necessary and (ii) has all requisite corporate power and authority to own, operate, lease and encumber its properties and carry on its business as

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now conducted, except where the failure to be so qualified, licensed or in good standing or have such corporate power and authority would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b)                                  The Company has previously provided or made available to Parent copies of the Company Charter and Company Bylaws and all such documents are in full force and effect and no dissolution, revocation or forfeiture proceedings regarding the Company have been commenced.  The Company is not in violation of the Company Charter and Company Bylaws in any material respect.

Section 5.02                                 Company Subsidiaries

(a)                                   Each of the Company’s subsidiaries (the “ Company Subsidiaries ”), together with the jurisdiction of organization of each such Company Subsidiary is set forth on Section 5.02(a) of the Company Disclosure Schedule.  Each Company Subsidiary is a corporation, partnership, limited liability company, trust or other organization duly incorporated or organized, validly existing and, to the extent applicable, in good standing under the laws of the jurisdiction of its incorporation or organization, except where the failure to be so incorporated, organized, validly existing or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Each of the Company Subsidiaries has the requisite corporate, limited partnership, limited liability company or similar power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted, except where the failure to have such power and authority would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Each of the Company Subsidiaries is duly qualified or licensed to do business, and is, (to the extent applicable) in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the conduct or nature of its business makes such qualification or licensing necessary, except for jurisdictions in which the failure to be so qualified, licensed or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b)                                  The Company is, directly or indirectly, the record and beneficial owner of all of the outstanding shares of capital stock or other equity interests of each of the Company Subsidiaries.  All of such shares and other equity interests so owned by the Company are validly issued, fully paid and nonassessable and are owned by it free and clear of any Liens.  Other than the Company Subsidiaries, neither the Company nor any Company Subsidiary owns, directly or indirectly, any equity or other ownership interest in any Person.

Section 5.03                                 Capitalization .

(a)                                   The authorized capital stock of the Company consists of 420,000,000 Company Common Shares and 5,524,525 shares of preferred stock, par value $0.01 per share, of the Company (“ Company Preferred Shares ”).  As of April 19, 2007, (i) 237,791,795 Company Common Shares were issued and outstanding, all of which are validly issued, fully paid and nonassessable and (ii) 17,669,541 Company

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Common Shares were held in the treasury of the Company.  As of the date of this Agreement, no Company Preferred Shares are issued and outstanding.

(b)                                  As of April 19, 2007, (i) 32,259,514 Company Common Shares were reserved for future issuance pursuant to outstanding Company Stock Options and other purchase rights and stock awards granted pursuant to the Incentive Plans (collectively, the “ Company Stock Awards ”) and (ii) 5,147 Company Common Shares were reserved for future issuance pursuant to outstanding Company Warrants.

(c)                                   Except as set forth in Section 5.03(c) of the Company Disclosure Schedule and except for the Call Spread Warrants:

(i)                                      there are no (A) options, warrants or other rights, agreements, arrangements or commitments of any character relating to the issued or unissued capital stock of the Company or any Company Subsidiary or obligating the Company or any Company Subsidiary to issue or sell any shares of capital stock of, or other equity interests in, the Company or any Company Subsidiary or (B) securities convertible or exchangeable for capital stock or other voting securities or equity interests in the Company or any Company Subsidiary;

(ii)                                   there are no outstanding contractual obligations of the Company or any Company Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of the Company or any Company Subsidiary;

(iii)                                there are no restricted shares, stock appreciation rights, performance units, contingent clause rights, “phantom” equity or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock of, or other voting securities of or ownership interests in, the Company or any Company Subsidiary;

(iv)                               there are no agreements or understandings to which the Company or any Company Subsidiary is a party with respect to the voting of any shares of capital stock of the Company or any Company Security or which restrict the transfer of any such shares, nor does the Company have knowledge of any third party agreements or understandings with respect to the voting of any such shares or which restrict the transfer of any such shares; and

(v)                                  there is no Voting Debt of the Company or any Company Subsidiary ou