Exhibit 2.1
AGREEMENT AND PLAN OF
MERGER
Dated as of April 4, 2007
among
ROCHE HOLDING LTD,
LILI ACQUISITION
CORPORATION
and
BIOVERIS CORPORATION
TABLE OF CONTENTS
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ARTICLE I
THE MERGER
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Section 1.1
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The Merger
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5
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Section 1.2
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Closing
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5
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Section 1.3
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Effective Time
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5
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Section 1.4
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Effects of the Merger
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6
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Section 1.5
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Certificate of Incorporation and By-laws of the
Surviving Corporation
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6
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Section 1.6
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Directors and Officers of the Surviving
Corporation
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6
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ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL
STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES;
RELATED TRANSACTIONS
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Section 2.1
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Effect on Capital Stock
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6
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Section 2.2
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Exchange of Certificates
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7
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Section 2.3
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Appraisal Rights
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9
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Section 2.4
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Company Stock Options
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10
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Section 2.5
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Restricted Stock Awards
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10
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Section 2.6
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Adjustments
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11
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Section 2.7
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Related Transactions
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11
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY
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Section 3.1
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Organization, Standing and Corporate
Power
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11
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Section 3.2
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Corporate Authority; Enforceability; Voting
Requirements
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12
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Section 3.3
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Noncontravention
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13
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Section 3.4
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Governmental Approvals
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13
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Section 3.5
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Capitalization
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13
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Section 3.6
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Company SEC Documents
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15
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Section 3.7
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Absence of Certain Changes
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16
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Section 3.8
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Undisclosed Liabilities
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16
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Section 3.9
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Legal Proceedings
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16
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Section 3.10
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Compliance With Laws; Permits
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16
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Section 3.11
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Tax Matters
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17
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Section 3.12
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Employee Benefits
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17
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Section 3.13
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Labor Matters
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19
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Section 3.14
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Environmental Matters
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19
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Section 3.15
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Intellectual Property
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20
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i
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Section 3.16
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Properties
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21
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Section 3.17
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Company Rights Plan
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21
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Section 3.18
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Opinion of Financial Advisor
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21
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Section 3.19
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Brokers and Other Advisors
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22
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Section 3.20
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Anti-takeover Statutes
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22
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Section 3.21
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Material Contracts
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22
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Section 3.22
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Limitation
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23
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Section 3.23
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No Other Representations or
Warranties
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24
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND
MERGER SUB
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Section 4.1
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Organization; Standing and Corporate
Power
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24
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Section 4.2
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Corporate Authority
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25
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Section 4.3
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Noncontravention
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25
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Section 4.4
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Governmental Approvals
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25
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Section 4.5
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Ownership and Operations of Merger Sub;
Capitalization
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26
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Section 4.6
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Legal Proceedings
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26
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Section 4.7
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Financing
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26
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Section 4.8
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Company Stock
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26
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Section 4.9
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Brokers and Other Advisors
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27
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Section 4.10
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Disclaimer of Other Representations and
Warranties.
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27
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ARTICLE V
ADDITIONAL COVENANTS AND AGREEMENTS
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Section 5.1
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Conduct of Business
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27
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Section 5.2
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Stockholders Meeting
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31
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Section 5.3
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Proxy Statement
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31
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Section 5.4
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No Solicitation
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32
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Section 5.5
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Reasonable Best Efforts
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35
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Section 5.6
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Public Announcements
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36
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Section 5.7
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Access to Information;
Confidentiality
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36
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Section 5.8
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Indemnification and Insurance
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36
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Section 5.9
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Fees and Expenses
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39
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Section 5.10
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Employee Matters
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39
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Section 5.11
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Further Assurances
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40
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Section 5.12
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Section 16 Matters
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40
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Section 5.13
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Stock Exchange De-listing
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41
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Section 5.14
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Amendment of Asset Transfer
Agreements
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41
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Section 5.15
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Notice of Certain Events
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41
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Section 5.16
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Certain Actions Pursuant to the Asset Transfer
Agreements
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41
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Section 5.17
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Certain Actions
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42
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ii
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ARTICLE VI
CONDITIONS PRECEDENT
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Section 6.1
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Conditions to Each Party’s Obligation to
Effect the Merger
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42
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Section 6.2
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Conditions to Obligations of Parent and Merger
Sub
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42
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Section 6.3
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Conditions to Obligations of the
Company
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43
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Section 6.4
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Frustration of Closing Conditions
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43
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ARTICLE VII
TERMINATION
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Section 7.1
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Termination
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44
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Section 7.2
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Effect of Termination
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45
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Section 7.3
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Termination Fees
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45
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ARTICLE VIII
MISCELLANEOUS
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Section 8.1
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Independent Investigation
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46
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Section 8.2
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No Survival of Representations and Warranties
and Agreements
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46
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Section 8.3
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Amendment or Supplement
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47
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Section 8.4
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Extension of Time, Waiver, Etc
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47
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Section 8.5
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Assignment
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47
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Section 8.6
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Counterparts
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47
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Section 8.7
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Entire Agreement; Third-Party
Beneficiaries
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47
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Section 8.8
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Governing Law; Jurisdiction; Waiver of Jury
Trial
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48
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Section 8.9
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Specific Enforcement
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48
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Section 8.10
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Notices
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48
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Section 8.11
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Severability
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49
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Section 8.12
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Definitions
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49
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Section 8.13
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Certain Claims
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57
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Section 8.14
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Interpretation
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57
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iii
AGREEMENT AND PLAN OF
MERGER
This AGREEMENT AND PLAN OF MERGER,
dated as of April 4, 2007 (this " Agreement "), is among
Roche Holding Ltd, a joint stock company organized under the laws
of Switzerland (" Parent "), Lili Acquisition Corporation, a
newly-formed Delaware corporation and an indirect wholly-owned
Subsidiary of Parent (" Merger Sub "), and BioVeris
Corporation, a Delaware corporation (the " Company ").
Certain capitalized terms used in this Agreement are as defined in
this Agreement.
WITNESSETH
WHEREAS, the respective Boards of
Directors of the Company and Merger Sub deem it advisable and in
the best interests of their respective stockholders that the
parties consummate the transactions contemplated herein, upon the
terms and subject to the conditions provided for herein;
WHEREAS, in furtherance thereof, the
respective Boards of Directors of the Company and Merger Sub and
Parent have approved and adopted this Agreement and resolved that
the transactions contemplated hereby are advisable and in the best
interests of their respective stockholders, including the
consummation of the merger of Merger Subsidiary with and into the
Company (the " Merger "), upon the terms and subject to the
conditions set forth in this Agreement and in accordance with the
provisions of the General Corporation Law of the State of Delaware
(the " DGCL "); and
WHEREAS, the Board of Directors of
the Company has resolved to recommend to its stockholders approval
and adoption of this Agreement and the transactions contemplated
hereby (including the Merger), upon the terms and subject to the
conditions set forth in this Agreement;
WHEREAS, simultaneous with the
execution of this Agreement, the Company and 32 Mott Street
Acquisition I, LLC (" Newco I ") have entered into an
agreement (the " Vaccines Asset Transfer Agreement "),
attached hereto as Exhibit A, pursuant to which certain assets of
the Company will be sold to Newco I, a private entity controlled by
Samuel J. Wohlstadter; the Vaccines Asset Transfer Agreement, which
has been approved by the Board of Directors of the Company based on
a recommendation of a special committee of independent directors of
the Board of Directors of the Company (the " Special
Committee "), is conditioned upon, and will become effective
immediately prior to, the Effective Time;
WHEREAS, simultaneous with the
execution of this Agreement, the Company and 32 Mott Street
Acquisition II, LLC (" Newco II ") have entered into an
agreement (the " ECL
Asset Transfer
Agreement "), attached
hereto as Exhibit B, pursuant to which certain assets of the
Company will be sold to Newco II, a private entity controlled by
Samuel J. Wohlstadter, and related license and sublicense
agreements (the " ECL License Agreements "), attached hereto
as Exhibit C, pursuant to which the Company will grant Newco II a
license to use the Company’s electrochemiluminescence ("
ECL ") technology and sublicenses with respect to certain
ECL technology; the ECL Asset Transfer Agreement and ECL License
Agreements, which have been approved by the Board of Directors of
the Company based on a recommendation of the Special Committee, are
conditioned upon, and will become effective immediately prior to,
the Effective Time;
WHEREAS, simultaneous with the
execution of this Agreement, Parent and Samuel J. Wohlstadter have
entered into a Non-Disclosure and Non-Solicitation Agreement and a
Transaction Agreement (the " Wohlstadter Agreements "),
pursuant to which, among other things, Mr. Wohlstadter will
agree to certain confidentiality and non-solicitation agreements
and Parent will, immediately prior to the Effective Time, acquire
all of the Series B Preferred Stock (as defined herein) owned as of
the date hereof by Mr. Wohlstadter; and
NOW, THEREFORE, in consideration of
the representations, warranties, covenants and agreements contained
in this Agreement, the receipt and adequacy of which are hereby
acknowledged, and intending to be legally bound hereby, Parent,
Merger Sub and the Company hereby agree as follows:
ARTICLE I
THE MERGER
Section
1.1 The
Merger . Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the DGCL, at the
Effective Time (as defined herein), Merger Sub shall be merged with
and into the Company, and the separate corporate existence of
Merger Sub shall thereupon cease, and the Company shall continue
under the name "BioVeris Corporation" as the surviving corporation
in the Merger (the " Surviving Corporation ") and shall
continue to be governed by the laws of the State of
Delaware.
Section
1.2
Closing . Subject to the provisions of Article VI, the
closing of the Merger (the " Closing ") shall take place at
12:00 p.m. (New York City time) on the earliest date reasonably
practicable but in any event within two Business Days after
satisfaction or waiver of the conditions set forth in Article VI
(other than those conditions that by their nature are to be
satisfied at the Closing, but subject to the satisfaction or waiver
of those conditions at such time), at the offices of Skadden, Arps,
Slate, Meagher & Flom LLP, Four Times Square, New York, New
York 10036, unless another time, date or place is agreed to in
writing by the parties hereto. The date on which the Closing
actually occurs hereinafter is referred to as the " Closing
Date ".
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Section
1.3 Effective
Time . Subject to the provisions of this Agreement, as soon as
practicable on the Closing Date, the parties shall file with the
Secretary of State of the State of Delaware a certificate of merger
executed in accordance with, and in such form as is required by,
the relevant provisions of the DGCL (the " Certificate of
Merger "). The Merger shall become effective upon the filing of
the Certificate of Merger or at such later time as is agreed to by
the parties hereto and specified in the Certificate of Merger (the
time at which the Merger becomes effective is herein referred to as
the " Effective Time ").
Section
1.4 Effects of
the Merger . The Merger shall have the effects set forth herein
and in the applicable provisions of the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective
Time, all the properties, rights, privileges, powers and franchises
of the Company and Merger Sub shall vest in the Surviving
Corporation, and all claims, obligations, debts, liabilities and
duties of the Company and Merger Sub shall become the claims,
obligations, debts, liabilities and duties of the Surviving
Corporation, as provided under the DGCL.
Section
1.5
Certificate of Incorporation and By-laws of the Surviving
Corporatio n. The certificate of incorporation and by-laws set
forth in Exhibit D, shall at the Effective Time be the certificate
of incorporation and by-laws of the Surviving Corporation until
thereafter amended as provided therein or by applicable Law (and
subject to Section 5.8 hereof).
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Section 1.6
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Directors and Officers of the Surviving
Corporation .
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(a) Each
of the parties hereto shall take all necessary action to cause the
directors of Merger Sub immediately prior to the Effective Time to
be the directors of the Surviving Corporation immediately following
the Effective Time, until their respective successors are duly
elected or appointed and qualified or their earlier death,
resignation or removal in accordance with the certificate of
incorporation and by-laws of the Surviving Corporation.
(b) The
officers of Merger Sub shall be the officers of the Surviving
Corporation until their respective successors are duly appointed
and qualified or their earlier death, resignation or removal in
accordance with the certificate of incorporation and by-laws of the
Surviving Corporation.
ARTICLE II
EFFECT OF THE MERGER ON THE
CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF
CERTIFICATES; RELATED TRANSACTIONS
Section
2.1 Effect on
Capital Stock . At the Effective Time, by virtue of the Merger
and without any action on the part of Merger Sub, the Company or
the holders of any shares of common stock, par value $0.001 per
share, of the Company (" Company Common Stock "), shares of
Series B Preferred Stock, par value $0.001 per share, of the
Company (" Series B Preferred Stock ") or any shares of
capital stock of Merger Sub, the following shall occur:
6
(a)
Capital Stock of Merger Sub . Each share of capital stock,
par value $0.01 per share, of Merger Sub issued and outstanding
immediately prior to the Effective Time shall be converted into and
become one validly issued, fully paid and nonassessable share of
common stock, par value $0.01 per share, 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. From and after the Effective
Time, all certificates representing shares of capital stock of
Merger Sub shall be deemed for all purposes to represent the number
of shares of common stock of the Surviving Corporation into which
they were converted in accordance with the immediately preceding
sentence.
(b)
Cancellation of Treasury Stock and Parent-Owned Stock . Any
shares of Company Common Stock or Series B Preferred Stock that are
owned by the Company as treasury stock, and any shares of Company
Common Stock owned by Parent or Merger Sub, shall be automatically
canceled and shall cease to exist and no consideration shall be
delivered in exchange therefor.
(c)
Conversion of Company Common Stock . Each share of Company
Common Stock issued and outstanding immediately prior to the
Effective Time (other than shares to be canceled in accordance with
Section 2.1(b)and Dissenting Shares), together with all rights
attached to such Company Common Stock immediately prior to the
Effective Time, shall be converted into the right to receive
$ 21.50 in cash per share, without interest (the " Common
Merger Consideration "). As of the Effective Time, all such
shares of Company Common Stock shall no longer be outstanding and
shall automatically be canceled and shall cease to exist, and each
holder of a certificate (or evidence of shares in book-entry form)
which immediately prior to the Effective Time represented any such
shares of Company Common Stock (each, a " Common Certificate
") shall cease to have any rights with respect thereto, except the
right to receive the Common Merger Consideration to be paid in
consideration therefor upon surrender of such Certificate in
accordance with Section 2.2(b), without interest.
(d)
Series B Preferred Stock . Each share of Series B Preferred
Stock issued and outstanding immediately prior to the Effective
Time will remain issued and outstanding immediately following the
Effective Time and purchased by Parent pursuant to the Wohlstadter
Agreements.
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Section 2.2
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Exchange of Certificates .
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(a)
Paying Agent . Not less than five Business Days prior to the
Effective Time, Parent shall designate Computershare Investor
Services, Inc. or another national bank or trust company reasonably
acceptable to the Company to act as agent for the benefit of the
holders of shares of Company Common Stock in connection with the
Merger (the " Paying Agent ") to receive, on terms
reasonably acceptable to the Company, for the benefit of holders of
shares of Company Common Stock, cash constituting an amount equal
to the Total Common Merger Consideration, to which holders of
shares of Company Common Stock shall become entitled pursuant to
Section 2.1(c) hereof. The Paying Agent shall also act as the agent
for the
7
Company’s stockholders for the
purpose of holding the Certificates and shall obtain no rights or
interests in the shares represented by such Certificates. Parent
shall deposit such Total Common Merger Consideration with the
Paying Agent by wire transfer of immediately available United
States funds at the Effective Time. Such Total Common Merger
Consideration deposited with the Paying Agent shall, pending its
disbursement to such holders, be invested by the 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 the payment of
principal and interest or (iii) money market funds investing solely
in a combination of the foregoing. Parent shall promptly replace
any funds deposited with the Paying Agent that are lost through any
investment.
(b)
Payment Procedures . Promptly after the Effective Time (but
in no event more than five Business Days thereafter), the Surviving
Corporation shall cause the Paying Agent to mail to each holder of
record of a Certificate (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon delivery of the
Certificates to the Paying Agent, and which shall be in such form
and shall have such other customary provisions (including customary
provisions with respect to delivery of an "agent’s message"
with respect to shares held in book-entry form) as Parent may
reasonably specify) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for payment of the Common
Merger Consideration. Upon surrender of a Certificate for
cancellation to the Paying Agent, together with such letter of
transmittal, duly completed and validly executed in accordance with
the instructions (and such other customary documents as may
reasonably be required by the Paying Agent), the holder of such
Certificate shall be entitled to receive in exchange therefor the
Common Merger Consideration, without interest, for each share of
Company Common Stock formerly represented by such Certificate, and
the Certificate so surrendered shall forthwith be canceled. If
payment of the Common Merger Consideration is to be made to a
Person other than the Person in whose name the surrendered
Certificate is registered, it shall be a condition of payment that
(x) the Certificate so surrendered shall be properly endorsed or
shall otherwise be in proper form for transfer and (y) the Person
requesting such payment shall have paid any transfer and other
taxes required by reason of the payment of the Common Merger
Consideration to a Person other than the registered holder of such
Certificate surrendered or shall have established to the reasonable
satisfaction of the Surviving Corporation that such tax either has
been paid or is not applicable. Until surrendered as contemplated
by this Section 2.2, each Certificate shall be deemed at any time
after the Effective Time to represent only the right to receive the
Common Merger Consideration as contemplated by this Article II,
without interest.
(c)
Transfer Books; No Further Ownership Rights in Company Stock
. The Common Merger Consideration paid in respect of shares of
Company Common Stock upon the surrender for exchange of
Certificates in accordance with the terms of this Article II shall
be deemed to have been paid in full satisfaction of all rights
pertaining to the shares of Company Common Stock previously
represented by such Certificates, and at the Effective Time, the
stock transfer books of the Company shall be closed and thereafter
there shall be no further registration of transfers on the stock
transfer books of the Surviving Corporation of the shares of
Company Common Stock that were outstanding immediately prior to the
Effective Time. From and after
8
the Effective Time, the holders of
Certificates that evidenced ownership of shares of Company Common
Stock outstanding immediately prior to the Effective Time shall
cease to have any rights with respect to such shares of Company
Common Stock, except as otherwise provided for herein or by
applicable Law. Subject to the last sentence of Section 2.2(e), if,
at any time after the Effective Time, Certificates are presented to
the Surviving Corporation for any reason, they shall be canceled
and exchanged as provided in this Article II. Notwithstanding the
foregoing, the Common Merger Consideration payable in respect of
the Restricted Stock Awards shall be payable pursuant to Section
2.5 and not this Section 2.2.
(d)
Lost, Stolen or Destroyed Certificates . If any Certificate
shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Certificate to
be lost, stolen or destroyed and, if required by the Surviving
Corporation, the posting by such Person of a bond, in such
reasonable amount as Parent may direct, as indemnity against any
claim that may be made against it with respect to such Certificate,
the Paying Agent will pay, in exchange for such lost, stolen or
destroyed Certificate, the applicable Common Merger Consideration
to be paid in respect of the shares of Company Common Stock
formerly represented by such Certificate, as contemplated by this
Article II.
(e)
Termination of Fund . At any time following the sixth month
anniversary of the Closing Date, the Parent shall be entitled to
require the Paying Agent to deliver to it any funds that had been
made available to the Paying Agent (including any interest received
with respect thereto) and which have not been disbursed to holders
of Certificates, and thereafter such holders shall be entitled to
look only to Parent or the Surviving Corporation (subject to
abandoned property, escheat or other similar Laws) as general
creditors thereof with respect to the payment of any Common Merger
Consideration that may be payable upon surrender of any
Certificates held by such holders, as determined pursuant to this
Agreement, without any interest thereon. Any amounts remaining
unclaimed by such holders at such time at which such amounts would
otherwise escheat to or become property of any Governmental
Authority (as defined herein) shall become, to the extent permitted
by applicable Law, the property of Parent, free and clear of all
claims or interest of any Person previously entitled
thereto.
(f)
Withholding Taxes . Parent, the Surviving Corporation and
the Paying Agent shall be entitled to deduct and withhold from the
consideration otherwise payable to any Person pursuant to this
Article II such amounts as may be required to be deducted and
withheld with respect to the making of such payment under the
Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder (the " Code "), or under
any provision of state, local or foreign tax Law. To the extent
amounts are so withheld and paid over to the appropriate taxing
authority, the withheld amounts shall be treated for all purposes
of this Agreement as having been paid to the Person in respect of
which such deduction and withholding was made.
Section
2.3 Appraisal
Rights . Notwithstanding anything in this Agreement to the
contrary, shares of Company Common Stock that are issued and
outstanding immediately
9
prior to the Effective Time and
which are held by a stockholder who did not vote in favor of the
Merger (or consent thereto in writing) and who is entitled to
demand and properly demands appraisal of such shares pursuant to,
and who complies in all respects with, the provisions of Section
262 of the DGCL (the " Dissenting Stockholders "), shall not
be converted into or be exchangeable for the right to receive the
Common Merger Consideration (the " Dissenting Shares "), but
instead such holder shall be entitled to payment of the fair value
of such shares in accordance with the provisions of Section 262 of
the DGCL (and at the Effective Time, such Dissenting Shares shall
no longer be outstanding and shall automatically be canceled and
shall cease to exist, and such holder shall cease to have any
rights with respect thereto, except the right to receive the fair
value of such Dissenting Shares in accordance with the provisions
of Section 262 of the DGCL), unless and until such holder shall
have failed to perfect or shall have effectively withdrawn or lost
rights to appraisal under the DGCL or it is determined that such
holder does not have appraisal rights. If any Dissenting
Stockholder shall have failed to perfect or shall have effectively
withdrawn or lost such right or it is determined that such holder
does not have appraisal rights, such holder’s shares of
Company Common Stock shall thereupon be treated as if they had been
converted into and become exchangeable for the right to receive, as
of the Effective Time, the Common Merger Consideration for each
such share of Company Common Stock, in accordance with Section 2.1,
without any interest thereon. The Company shall give Parent (i)
prompt notice of any written demands for appraisal of any shares of
Company Common Stock, attempted withdrawals of such demands and any
other instruments served pursuant to the DGCL and received by the
Company relating to stockholders’ rights of appraisal and
(ii) the opportunity to participate in all negotiations and
proceedings with respect to demands for appraisal under the DGCL,
except as required by applicable Law, and will not settle any
demands for appraisal without Parent’s written
consent.
Section
2.4
Company Stock Options . At the Effective Time, all options
outstanding immediately prior to the Effective Time that represent
the right to acquire shares of Company Common Stock (each, an "
Option ") granted under the BioVeris Corporation 2003 Stock
Incentive Plan or otherwise (the " Company Stock Plan ")
shall be, without any further action by the Company or the
Surviving Corporation, fully vested and converted into the right to
receive, in full satisfaction of such Option, a cash amount equal
to the Option Consideration (as defined herein) for each share of
Company Common Stock then subject to the Option. Notwithstanding
the foregoing, Parent, the Company and the Surviving Corporations,
as applicable, shall be entitled to deduct and withhold from the
Option Consideration otherwise payable such amounts as may be
required to be deducted and withheld with respect to the making of
such payment under the Code, or any provision of state, local or
foreign tax Law. For purposes of this Agreement, " Option
Consideration " means, with respect to any share of Company
Common Stock issuable under a particular Option, an amount equal to
the excess, if any, of the Common Merger Consideration over the
exercise price payable in respect of such share of Company Common
Stock issuable under such Option. At the Effective Time, Parent
shall pay the aggregate Option Consideration to an account or
accounts designated by the Company by wire transfer of immediately
available United States funds. Notwithstanding anything to the
contrary contained herein, prior to the Effective Time, the Company
will take any and all actions necessary to effectuate this Section
2.4.
Section
2.5 Restricted
Stock Awards . As of the Effective Time, each then outstanding
share of Company Common Stock which is subject to a restricted
stock award
10
granted under the Company Stock Plan
or otherwise (each a " Restricted Stock Award ") shall, by
virtue of the Merger and without any action on the part of any
holder thereof, the Company or the Surviving Corporation, become
fully vested and converted into the right to receive, in full
satisfaction of such Restricted Stock Award, a cash amount equal to
the Common Merger Consideration for each share of Company Common
Stock then subject to the Restricted Stock Award (the "
Restricted Stock Consideration "). At the Effective Time,
Parent shall pay the aggregate Restricted Stock Consideration to an
account or accounts designated by the Company, by wire transfer of
immediately available United States funds for the benefit of the
holders of the Restricted Stock Awards. Notwithstanding anything
herein to the contrary, prior to the Effective Time, the Company
will take any and all actions necessary to effectuate this Section
2.5.
Section
2.6
Adjustments . Notwithstanding any provision of this Article
II to the contrary, if between the date of this Agreement and the
Effective Time the outstanding shares of Company Common Stock shall
have been changed into a different number of shares or a different
class by reason of the occurrence or record date of any stock
dividend, subdivision, reclassification, recapitalization, stock
split (including a reverse stock split), combination, exchange of
shares or similar transaction, the Common Merger Consideration
shall be equitably adjusted to reflect such stock dividend,
subdivision, reclassification, recapitalization, stock split
(including a reverse stock split), combination, exchange of shares
or similar transaction.
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Section 2.7
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Related Transactions .
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(a) Parent
and Merger Sub hereby acknowledge that immediately prior to the
Effective Time the Company intends to consummate the transactions
contemplated by the Asset Transfer Agreements.
(b) Following
the Effective Time, the Surviving Corporation shall, and Parent
shall cause the Surviving Corporation to, use commercially
reasonable efforts to take any actions required to consummate the
closing of the Asset Transfer Agreements to the extent such
closings have not been consummated prior to the Effective
Time.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
Except as (a) disclosed in the
disclosure schedule delivered by the Company to Parent (the "
Company Disclosure Schedule ") simultaneously with the
execution of this Agreement, it being acknowledged and agreed by
the parties that (i) disclosure in any section or subsection of
such Company Disclosure Schedule shall be deemed to be disclosed
with respect to any other sections or subsections of the Company
Disclosure Schedule so long as the application of such disclosure
to any such other section or subsection is readily apparent from
such disclosure and (ii) the mere inclusion of an item in such
Company Disclosure Schedule as an exception to a representation or
warranty shall not be deemed to constitute an admission by the
Company, or otherwise imply, that such item represents a material
exception or material fact,
11
event or circumstance or that such
item has had or would reasonably be expected to have a Material
Adverse Effect (as defined herein) or would have been material if
included in the Company SEC Documents filed prior to the date of
this Agreement (or incorporated by reference therein) or would
otherwise be material to the Company or (b) disclosed in the
Company SEC Documents (as hereinafter defined) filed prior to the
date hereof (the " Filed SEC Documents "), the Company
represents and warrants to Parent and Merger Sub as
follows:
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Section 3.1
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Organization, Standing and Corporate
Power .
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(a) Each
of the Company and its Subsidiaries is duly organized, validly
existing and in good standing (or equivalent status) under the Laws
(as defined herein) of the jurisdiction of its incorporation or
organization and has all requisite corporate power and corporate
authority necessary to own or lease all of its properties and
assets and to carry on its business as it is now being conducted,
except for such failures to be duly organized, validly existing or
in good standing or to have corporate power or corporate authority
that, individually or in the aggregate, would not have a Material
Adverse Effect. Each of the Company and its Subsidiaries is duly
licensed or qualified to do business and is in good standing (or
equivalent status) in each jurisdiction in which the nature of the
business conducted by it or the character or location of the
properties and assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so
licensed, qualified or in good standing (or equivalent status)
would not have a Material Adverse Effect.
(b) The
Company has made available to Parent complete and correct copies of
the certificate of incorporation and by-laws of the Company and the
organizational documents of each of its Subsidiaries, as amended to
the date of this Agreement (the " Company Charter Documents
").
Section
3.2
Corporate Authority; Enforceability; Voting Requirements
.
(a) The
Company has all necessary corporate power and authority to execute
and deliver this Agreement and, subject, with respect to the
Merger, to obtaining the Company Stockholder Approval (as defined
herein) in connection with the consummation of the Merger, to
perform its obligations hereunder and to consummate the
Transactions. The execution, delivery and performance by the
Company of this Agreement, and the consummation by it of the
Transactions (as defined herein), have been duly authorized and
approved by its Board of Directors, and except for the Company
Stockholder Approval, no other corporate action on the part of the
Company is necessary to authorize the execution, delivery and
performance by the Company of this Agreement and the consummation
by it of the Transactions. This Agreement has been duly executed
and delivered by the Company and, assuming due authorization,
execution and delivery hereof by the other parties hereto,
constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms,
except that such enforceability (i) may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
other similar Laws of general application affecting or relating to
the enforcement of creditors’ rights generally and (ii) is
subject to general principles
12
of equity, whether considered in a proceeding at
Law or in equity (the " Bankruptcy and Equity
Exception ").
(b) The
Company’s Board of Directors, at a meeting duly called and
held, has unanimously (i) approved and declared advisable this
Agreement and the Transactions, including the Merger, and (ii)
resolved, subject to Section 5.4 hereof, to recommend that
stockholders of the Company adopt this Agreement.
(c) The
affirmative vote (in person or by proxy) of the holders of a
majority of the outstanding shares of Company Common Stock and
Series B Preferred Stock, voting together as a single class, at the
Company Stockholders Meeting, or any adjournment or postponement
thereof, in favor of the adoption of this Agreement (the "
Company Stockholder Approval ") is the only vote or approval
of the holders of any class or series of capital stock of the
Company or any of its Subsidiaries which is necessary to adopt this
Agreement and approve the Transactions.
Section
3.3
Noncontravention . Except as disclosed in Section 3.3 of the
Company Disclosure Schedule, neither the execution and delivery of
this Agreement by the Company nor the consummation by the Company
of the Transactions, nor compliance by the Company with any of the
provisions hereof, will (i) conflict with or violate any provision
of the Company Charter Documents or (ii) assuming that the
authorizations, consents, filings and approvals referred to in
Section 3.4 and the Company Stockholder Approval are obtained or
made, (x) violate any Law, judgment, writ or injunction of any
Governmental Authority applicable to the Company or any of its
Subsidiaries, (y) require any consent, violate or constitute a
default, or an event that, with or without notice or lapse of time
or both, would constitute a default under, or cause or permit the
termination, cancellation, acceleration or other change of any
right or obligation or the loss of any benefit to which the Company
or any of its Subsidiaries is entitled under any Company Material
Contract or other agreement or other instrument binding upon the
Company or any of its Subsidiaries which contain annual payment
obligations of the Company or its Subsidiaries in excess of
$100,000 or (z) result in the creation or imposition of any
material Lien, other than Permitted Liens, on any asset of the
Company or its Subsidiaries, except for, in the case of clause (ii)
above, such matters as would not, individually or in the aggregate,
(1) have a Material Adverse Effect or (2) prevent or materially
delay the consummation of the Transactions.
Section
3.4 Governmental
Approvals . Except for (i) the filing with the U.S. Securities
and Exchange Commission (the " SEC ") of a proxy statement
relating to the Company Stockholders Meeting (as amended or
supplemented from time to time, the " Proxy Statement "),
and other filings required under, and compliance with other
applicable requirements of, (w) the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder (the
" Securities Act ") (x) the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder
(the " Exchange Act "), (y) state securities or "blue sky"
laws and (z) the rules and regulations of the Nasdaq Global Market
(the " NASDAQ "), (ii) the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware
pursuant to the DGCL, (iii) filings required under, and compliance
with other applicable requirements of,
13
the HSR Act, (iv) obtaining from
CFIUS a written termination of the review of clearance of the
Merger and (v) any applicable non-U.S. competition, antitrust or
investment Laws, no consents or approvals of, or filings,
notifications, declarations or registrations with, any Governmental
Authority are necessary for the execution and delivery of this
Agreement by the Company and the consummation by the Company of the
Transactions, other than such other consents, approvals, filings,
notifications, declarations or registrations that, if not obtained,
made or given, would not have, individually or in the aggregate, a
Material Adverse Effect or prevent or materially delay the
consummation of the Transactions.
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Section 3.5
|
Capitalization .
|
(a) The
authorized capital stock of the Company consists of 100,000,000
shares of Company Common Stock, par value $0.001 per share, and
15,000,000 shares of preferred stock, par value $0.001 per share
(the " Company Preferred Stock "). At the close of business
on March 30, 2007, (i) 27,247,802 shares of Company Common Stock
were issued and outstanding (including 500,000 shares of Restricted
Stock Awards, all of which are held by Samuel J. Wohlstadter and
are subject to a duly filed Section 83(b) Election), (ii) no shares
of Series A Preferred stock, par value $0.001 per share of the
Company (" Series A Preferred Stock ") were issued and
outstanding, (iv) 600,000 shares of Series A Preferred Stock have
been reserved for issuance upon the exercise of the rights
distributed to the holders of Company Common Stock pursuant to the
Company Rights Plan (as defined herein), (v) 1,000 shares of Series
B Preferred Stock were issued and outstanding, (vi) no shares of
Company Common Stock were held by the Company in its treasury and
(vii) 4,779,148 shares of Company Common Stock were reserved for
issuance under the Company Stock Plan (of which 911,900 shares of
Company Common Stock were subject to outstanding Options granted
under the Company Stock Plan). All outstanding shares of the
capital stock of the Company have been, and all shares of the
capital stock of the Company that may be issued pursuant to the
Company Stock Plan will be, when issued in accordance with the
respective terms thereof, duly authorized and validly issued and
are fully paid, nonassessable and free of preemptive rights. Except
as set forth above, and except for the Rights (as defined in the
Company Rights Plan) and changes since March 30, 2007 resulting
from the exercise of Options outstanding on such date or any Option
granted after the date hereof as permitted pursuant to Section
5.1(a)(i): (A) there are no outstanding shares of capital stock,
voting securities or other equity interests in the Company, (B)
there are no outstanding options or other rights of any kind which
obligate the Company or any of its Subsidiaries to issue or deliver
any shares of capital stock, voting securities or other equity
interests of the Company or any securities or obligations
convertible into or exchangeable into or exercisable for any shares
of capital stock, voting securities or other equity interests of
the Company (collectively, " Company Securities "); (C)
there are no outstanding obligations of the Company or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any Company
Securities; and (D) there are no other subscriptions, options,
calls, warrants, convertible securities or other rights,
agreements, arrangements or commitments of any character relating
to the issued or unissued capital stock of the Company to which the
Company or any of its Subsidiaries is a party. No Subsidiary of the
Company owns any shares of Company Common Stock.
14
(b) Each
of the outstanding shares of capital stock, voting securities or
other equity interests of each Subsidiary of the Company is duly
authorized, validly issued, fully paid, nonassessable and free of
any preemptive rights, and all such securities are owned by the
Company or another wholly-owned Subsidiary of the Company free and
clear of all Liens. There are no (i) outstanding options or other
rights of any kind which obligate the Company or any of its
Subsidiaries to issue or deliver any shares of capital stock,
voting securities or other equity interests of any such Subsidiary
or any securities or obligations convertible into or exchangeable
into or exercisable for any shares of capital stock, voting
securities or other equity interest of a Subsidiary of the Company,
(ii) outstanding obligations of the Company or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any of the
outstanding stock, securities or interests referred to in clause
(i) above; or (iii) other options, calls, warrants or other rights,
agreements, arrangements or commitments of any character relating
to the issued or unissued capital stock of any Subsidiary of the
Company to which the Company or any of its Subsidiaries is a
party.
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Section 3.6
|
Company SEC Documents .
|
(a) (a) Except
as set forth in Section 3.6 of the Company Disclosure Schedule, the
Company has filed all reports, schedules, forms, registration
statements and other documents required to be filed with the SEC
since March 31, 2005, together with any amendments or supplements
thereto (collectively, and in each case including all exhibits and
schedules thereto and documents incorporated by reference therein,
the " Company SEC Documents "). As of their respective
filing dates or the filing dates of amendments, the Company SEC
Documents complied as to form in all material respects with the
requirements of the Exchange Act applicable to such Company SEC
Documents, and none of the Company SEC Documents as of such
respective dates or the respective filing dates of amendments
contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(b) The
consolidated financial statements (giving effect to any amendments
or supplements thereto filed prior to the date of this Agreement,
and including all related notes and schedules) of the Company
included in the Company SEC Documents fairly present in all
material respects the consolidated financial position of the
Company and its consolidated Subsidiaries as at the respective
dates thereof and the consolidated results of their operations and
consolidated cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments
and to any other adjustments described therein including the notes
thereto) in conformity with GAAP (except, in the case of the
unaudited statements, as permitted by Form 10-Q) applied on a
consistent basis during the periods involved (except as may be
indicated therein or in the notes thereto).
(c) The
Company has established and maintains disclosure controls and
procedures (as defined in Rule 13a-15 under the Exchange Act).
Except as disclosed in the Filed SEC Documents, the Company’s
disclosure controls and procedures are designed to
ensure
15
that information required to be
disclosed in the Company’s periodic reports filed or
submitted under the Exchange Act is recorded, processed, summarized
and reported within the required time periods.
(d) The
Company has 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 the Company’s financial statements for
external purposes in accordance with GAAP. The Company has
disclosed, based on its most recent evaluation of internal controls
over financial reporting prior to the date of this Agreement, to
the Company’s auditors and audit committee of the Board of
Directors of the Company and to Parent (x) any significant
deficiencies and material weaknesses in the design or operation of
internal controls over financial reporting that existed as of March
31, 2005 or later which are reasonably likely to adversely affect
in any material respect the Company’s ability to record,
process, summarize and report financial information and (y) any
fraud, whether or not material, that involves management or other
employees who have a significant role in the Company’s
internal controls over financial reporting.
(e) Prior
to the date hereof, each of the principal executive officer and
principal financial officer of the Company (or each former
principal executive officer and principal financial officer of the
Company, as applicable) have made all certifications required by
Rule 13a-14 and 15d-14 under the Exchange Act and Sections 302 and
906 of the Sarbanes-Oxley Act and any related rules and regulations
promulgated by the SEC and the NASDAQ, and the statements contained
in any such certifications were complete and correct on the date
such certifications were made. For purposes of this Agreement,
"principal executive officer" and "principal financial officer"
shall have the meanings given to such terms in the Sarbanes-Oxley
Act.
Section
3.7 Absence of
Certain Changes . Since December 31, 2006, except as otherwise
contemplated or expressly permitted by this Agreement or the Asset
Transfer Agreements, and except as set forth in the Filed SEC
Documents, the businesses of the Company and its Subsidiaries have
been conducted in the ordinary course of business consistent with
past practice and there has not been any event, development or
state of circumstances that would have, individually or in the
aggregate, a Material Adverse Effect.
Section
3.8 Undisclosed
Liabilities . Except as set forth in Section 3.8 of the Company
Disclosure Schedule, from March 31, 2006 through the date of this
Agreement, neither the Company nor any of its Subsidiaries has
incurred any liabilities or obligations of any kind whatsoever,
whether accrued, contingent, absolute, determined, determinable or
otherwise, except for liabilities or obligations, (a) incurred in
the ordinary course of business, (b) reflected or reserved against
in the Company’s consolidated balance sheets (or the notes
thereto) included in the Filed SEC Documents, (c) that would not
have, individually or in the aggregate, a Material Adverse Effect
or (d) incurred in connection with this Agreement or the
Transactions.
16
Section
3.9 Legal
Proceedings . Except as disclosed in the Filed SEC Documents,
there is no pending or, to the Knowledge of the Company,
threatened, legal or administrative proceeding, claim, suit,
investigation or action against the Company or any of its
Subsidiaries, nor is there any injunction, order, judgment, ruling
or decree imposed upon the Company or any of its Subsidiaries, by
or before any Governmental Authority, that would have, individually
or in the aggregate, a Material Adverse Effect or prevent or
materially delay the consummation of the Transactions.
Section
3.10 Compliance With Laws;
Permits . Except as disclosed in the Filed SEC Documents, since
March 31, 2005, the Company and its Subsidiaries have been in
compliance with all laws, statutes, ordinances, codes, rules,
regulations, decrees, judgments and orders of Governmental
Authorities (collectively, " Laws ") applicable to the
Company or any of its Subsidiaries, except for such non-compliance
as would not have, individually or in the aggregate, a Material
Adverse Effect. The Company and each of its Subsidiaries hold all
licenses, franchises, permits, certificates, approvals and
authorizations from Governmental Authorities necessary for the
lawful conduct of their respective businesses as it is now being
conducted (collectively, " Permits "), except where the
failure to hold the same would not have, individually or in the
aggregate, a Material Adverse Effect. The Company and its
Subsidiaries are in compliance with the terms of all Permits,
except for such non-compliance as would have, individually or in
the aggregate, a Material Adverse Effect.
Section
3.11 Tax Matters .
Except as disclosed in Section 3.11 of the Company Disclosure
Schedule and for those matters that would not have a Material
Adverse Effect:
(a) (i)
each of the Company and its Subsidiaries has timely filed, or has
caused to be timely filed on its behalf (taking into account any
extension of time within which to file), all Tax Returns (as
defined herein) required to be filed by it, and all such filed Tax
Returns are correct and complete in all material respects; (ii) all
Taxes shown to be due on such Tax Returns have been timely paid;
(iii) all Taxes not yet due and payable have been properly accrued
or reserved for under GAAP; (iv) no deficiency with respect to
Taxes has been asserted or assessed in writing against the Company
or any of its Subsidiaries, which have not been fully paid or
adequately reserved (in accordance with GAAP) in the Filed SEC
Documents; and (v) no audit or other administrative or court
proceedings is pending with any Governmental Authority with respect
to Taxes of the Company or any of its Subsidiaries, and no written
notice thereof has been received.
(b) The
income and franchise Tax Returns of the Company and its
Subsidiaries have never been examined.
(c) During
the five-year period ending on the date hereof, neither the Company
nor any of its Subsidiaries was a distributing corporation or a
controlled corporation in a transaction intended to be governed by
Section 355 of the Code.
17
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Section 3.12
|
Employee Benefits .
|
(a) Section
3.12(a) of the Company Disclosure Schedule contains a true and
complete list of each material deferred compensation, incentive
compensation, stock purchase, stock option and other equity
compensation plan, fund or program; each severance or termination
pay, medical, surgical, hospitalization, life insurance and other
"welfare" plan, fund or program (within the meaning of section 3(1)
of the Employee Retirement Income Security Act of 1974, as amended
(" ERISA ")); each profit-sharing, stock bonus or other
"pension" plan, fund or program (within the meaning of section 3(2)
of ERISA); each bonus, employment, termination or severance
agreement; and each other material employee benefit plan, fund,
program or agreement or arrangement, in each case, that is
sponsored, maintained or contributed to or required to be
contributed to by the Company or by any trade or business, whether
or not incorporated (an " ERISA Affiliate "), that together
with the Company would be deemed a "single employer" within the
meaning of section 4001(b) of ERISA, or to which the Company or an
ERISA Affiliate is party, for the benefit of any employee or
consultant or former employee or consultant of the Company or any
Subsidiary (the " Company Benefit Plans ").
(b) With
respect to each Company Benefit Plan, the Company has heretofore
delivered to Parent true and complete copies of the Company Benefit
Plan and any amendments thereto (or if the Company Benefit Plan is
not a written Company Benefit Plan, a description thereof), any
related trust or other funding vehicle, any reports or summaries
required under ERISA or the Code and the most recent determination
letter received from the Internal Revenue Service with respect to
each Company Benefit Plan intended to qualify under Section 401 of
the Code. Each Company Benefit Plan intended to be "qualified"
within the meaning of section 401(a) of the Code has been
determined by the Internal Revenue Service to be so qualified and
the trusts maintained thereunder have been determined by the
Internal Revenue Service to be exempt from taxation under section
501(a) of the Code, and the Company is not aware of any occurrence
or amendment that could result in such determination no longer
being valid.
(c) Except
as disclosed in Section 3.12(c) of the Company Disclosure Schedule,
no Company Benefit Plan is a "multiemployer plan," as such term is
defined in Section 3(37) of ERISA, nor is any Company Benefit Plan
subject to Section 302 or Title IV of ERISA or Section 412 of the
Code. No liability under Title IV or Section 302 of ERISA has been
incurred by the Company or any ERISA Affiliate that has not been
satisfied in full, and no condition exists that presents a material
risk to the Company or any ERISA Affiliate of incurring any such
liability, other than liability for premiums due the Pension
Benefit Guaranty Corporation (which premiums have been paid when
due) and other than liabilities that, individually or in the
aggregate, would not have a Material Adverse Effect.
(d) Except
as disclosed in Section 3.12(d) of the Company Disclosure Schedule,
neither the Company, any Subsidiary, any Company Benefit Plan, any
trust created thereunder, nor any trustee or administrator thereof
has engaged in a transaction in connection with which the Company
or any Subsidiary, any Company Benefit Plan, any such trust, or any
trustee or administrator thereof, or any party dealing with any
Company Benefit Plan or any such trust could be subject to either a
civil penalty assessed pursuant to Section 409 or 502(i)
of
18
ERISA or a tax imposed pursuant to
Section 4975 or 4976 of the Code, other than penalties or taxes
that, individually or in the aggregate, would not have a Material
Adverse Effect.
(e) Each
Company Benefit Plan has been operated and administered in all
material respects in accordance with its terms and applicable law,
including but not limited to ERISA and the Code.
(f) Except
as disclosed in Section 3.12(f) of the Company Disclosure Schedule,
no Company Benefit Plan provides medical, surgical,
hospitalization, death or similar benefits (whether or not insured)
for employees or former employees of the Company or any Subsidiary
for periods extending beyond their retirement or other termination
of service, other than (i) coverage mandated by applicable law,
(ii) death benefits under any "pension plan," or (iii) benefits the
full cost of which is borne by the current or former employee (or
his beneficiary).
(g) Except
as disclosed in Section 3.12(g) of the Company Disclosure Schedule,
the consummation of the transactions contemplated by this Agreement
(either alone or in connection with any other event such as
termination of employment) will not (i) entitle any current or
former employee or officer of the Company or any Subsidiary to
severance pay, unemployment compensation or any other payment,
except as expressly provided in this Agreement, (ii) accelerate the
time of payment or vesting, or increase the amount of compensation
due any such employee or officer or (iii) could give rise to the
payment of any amount that would not be deductible pursuant to the
terms of Section 280G or 162(m) of the Code.
(h) There
are no pending, or to the Knowledge of the Company, threatened or
anticipated claims by or on behalf of any Company Benefit Plan, by
any employee or beneficiary covered under any Company Benefit Plan,
or otherwise involving any Company Benefit Plan (other than routine
claims for benefits).
(i) Except
as disclosed in Section 3.12(i) of the Company Disclosure Schedule,
to the Knowledge of the Company, there has been no amendment to,
written interpretation or announcement (whether or not written) by
the Company or any of its Affiliates relating to, or change in
employee participation or coverage under, a Company Benefit Plan
which would increase materially the expense of maintaining such
Company Benefit Plan above the level of the expense incurred in
respect thereof for the year ended December 31, 2006.
Section
3.13 Labor Matters .
There is no labor strike or lockout, or, to the Knowledge of the
Company, threat thereof, by or with respect to any employee of the
Company or any of its Subsidiaries.
Section
3.14 Environmental
Matters . (a) Except as disclosed in Section 3.14 of the
Company Disclosure Schedule and except as would not have,
individually or in the aggregate, a Material Adverse Effect, (i) no
written notice, notification, demand, request for
information,
19
citation, summons, complaint or
order has been received by, no penalty has been assessed against,
and no action, claim, suit, proceeding or review or investigation
is pending or, to the Knowledge of the Company, threatened by any
Person against, the Company or any of its Subsidiaries with respect
to any matters relating to or arising out of any Environmental Law;
(ii) the Company and its Subsidiaries have been and are in
compliance with all Environmental Laws, including possessing and
complying with all Permits required for their operations under
applicable Environmental Laws; (iii) to the Knowledge of the
Company, there are no Environmental Liabilities of or relating to
the Company or any of its Subsidiaries, and to the Knowledge of the
Company, there are no facts, conditions or circumstances which
would reasonably be expected to result in, or be the basis for, any
such Environmental Liabilities; (iv) there have been no releases,
discharges, disposals, dumpings, injections, pumpings, deposits or
emissions into the environment of Hazardous Materials by the
Company or any of its Subsidiaries or, to the Knowledge of the
Company, by any third party, at any real property currently owned,
operated or leased by, or formerly owned, operated or leased by or
in connection with, the Company or its Subsidiaries that would
reasonably be expected to result in such Environmental Liabilities
of the Company; and (v) the Company has made available to Parent,
prior to the date hereof, copies of all environmental
investigations, studies, audits, tests, reviews or other analysis
in the possession or control of the Company or any of its
Subsidiaries in relation to the current or prior business of the
Company or any of its Subsidiaries or any property or facility now
or previously owned, leased or operated by the Company or any of
its Subsidiaries.
(b) Neither
the Company nor any Subsidiary owns, leases or operates any real
property in New Jersey or Connecticut.
(c) For
purposes of this Section, "Company" and "Subsidiary" shall include
any entity which is, in whole or in part, a predecessor of the
Company or any of its Subsidiaries, other than IGEN International,
Inc., or Parent or any of its Affiliates.
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Section 3.15
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Intellectual Property .
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(a) As
used herein: (i) " Intellectual Property " means all U.S.
and foreign (A) trademarks, service marks, trade names, trade dress
and Internet domain names, together with goodwill related to the
foregoing, (B) patents and all proprietary rights associated
therewith, (C) copyrights and rights associated therewith and the
underlying works of authorship, (D) all inventions, know-how,
technology, designs, computer source codes, programs and other
software (including all machine readable code, printed listings of
code and documentation), trade secrets, web sites and UPC codes;
and (E) all registrations of any of the foregoing and all
applications therefor; and (ii) " Company Intellectual
Property " means the Intellectual Property that is owned,
licensed, or used by the Company or any of its Subsidiaries in the
conduct of their businesses.
(b) Section
3.15(b) of the Company Disclosure Schedule sets forth, for the
Company Intellectual Property owned by the Company and its
Subsidiaries, a complete and
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accurate list of all U.S. and
foreign (i) patents and patent applications; (ii) trademark, trade
name and service mark registrations (including Internet domain name
registrations) and applications; and (iii) copyright registrations
and applications.
(c) Except
as set forth in Section 3.15(c) of the Company Disclosure
Schedule:
(i) To the
Knowledge of the Company, the Company and its Subsidiaries have
good title to or, with respect to items not owned by the Company or
its Subsidiaries, sufficient rights to use all Company Intellectual
Property;
(ii) To the Knowledge of
the Company, all registrations of Company Intellectual Property
have been properly registered, all pending registrations and
applications have been properly made and filed and all annuity,
maintenance, renewal and other fees relating to registrations or
applications are current;
(iii) To the Knowledge of the
Company, the conduct of the businesses of the Company and its
Subsidiaries do not materially infringe any Intellectual Property
of any third party and there is no such claim pending or to the
Knowledge of the Company within the last four (4) years threatened
by an overt act against the Company or any of its
Subsidiaries;
(iv) To the Knowledge of the
Company, no third party is materially infringing any Intellectual
Property owned or exclusively licensed by the Company or any of its
Subsidiaries and no such claims are pending or threatened against
any Person by the Company or its Subsidiaries;
(v) The
consummation of the transactions contemplated hereby, including the
Merger, will not impair any rights of the Company or any of its
Subsidiaries in, to or under the Intellectual Property owned or
exclusively licensed by the Company or its Subsidiaries;
(vi) No claims with respect to
Company Intellectual Property are pending or, to the Knowledge of
the Company, threatened by any Person challenging the ownership,
validity, enforceability or effectiveness of any of the Company
Intellectual Property;
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(vii) The
Company and its Subsidiaries do not currently pay any material
royalties or other material consideration for the right to use
material Intellectual Property of others; and
(viii) To
the Knowledge of the Company, the Company and its Subsidiaries are
in material compliance with all confidentiality agreements and
other protective agreements protecting the Intellectual Party of
third parties.
(d) Except
as disclosed in Section 3.15(d) of the Company Disclosure Schedule,
the Company and its Subsidiaries have taken commercially reasonable
measures to protect the confidentiality of their material trade
secrets and have appropriate procedures in place designed to
provide that all Intellectual Property conceived by their
employees, as a result of such employees performing their job
duties for the Company and its Subsidiaries, and, to the Knowledge
of the Company, third parties, performing research and development
for them, have been assigned or are required to be assigned to the
Company or its Subsidiaries.
Section
3.16 Properties . Except
as would not have, individually or in the aggregate, a Material
Adverse Effect, with respect to the real property leased or
subleased to the Company or its Subsidiaries (the " Leased Real
Property "), the lease or sublease for such property is valid
and binding and in full force and effect, and none of the Company
or any of its Subsidiaries is in breach of or default under such
lease or sublease and to the Knowledge of the Company no event has
occurred which, with notice, lapse of time or both, would
constitute a breach or default by any of the Company or its
Subsidiaries or permit termination, modification or acceleration by
any third party under such lease or sublease.
Section
3.17 Company Rights Plan
. The Company has taken all actions necessary (subject only to
execution by the Rights Agent, as defined in the Company Rights
Plan, which the Company shall cause to take place as soon as
reasonably practicable on the date hereof) to (a) render the
Company Rights Plan inapplicable to this Agreement and the
Transactions, (b) ensure that (i) none of Parent, Merger Sub or any
other Subsidiary of Parent is an Acquiring Person (as such term is
defined in the Company Rights Plan) pursuant to the Company Rights
Plan solely as a result of this Agreement or the Transactions and
(ii) a Distribution Date (as such term is defined in the Company
Rights Plan) does not occur, solely by reason of the execution of
this Agreement or the consummation of the Transactions and (c)
cause the Rights to expire in their entirety immediately prior to
the Effective Time without payment being made in respect
thereof.
Section
3.18 Opinion of Financial
Advisor . The Board of Directors of the Company has received
the opinion (which may be an oral opinion to be confirmed in
writing) of Lehman Brothers Inc. (the " Financial Advisor
"), dated the date of this Agreement, to the effect that, as of
such date, and subject to the various assumptions and
qualifications set forth in such opinion, the consideration to be
received in the Merger by holders of the Company Common Stock is
fair from a financial point of view to holders of such shares. The
Special Committee of the Board of Directors of the Company has
received the opinion (which may be an oral opinion to be confirmed
in writing) of Houlihan Lokey Howard & Zukin Financial
Advisors, Inc.,
22
dated the date of this Agreement, to
the effect that, as of such date, and subject to the various
assumptions and qualifications set forth in such opinion, the
consideration to be received under the Asset Transfer Agreements by
the Company is fair from a financial point of view to the
Company.
Section
3.19 Brokers and Other
Advisors . Except for Lehman Brothers Inc. and Houlihan Lokey
Howard & Zukin Financial Advisors, Inc., the fees and expenses
of which will be paid by the Company, no broker, investment banker,
financial advisor or other Person is entitled to any
broker’s, finder’s, financial advisor’s or other
similar fee or commission, or the reimbursement of expenses, in
connection with the Transactions based upon arrangements made by or
on behalf of the Company or any of its Subsidiaries.
Section
3.20 Anti-takeover
Statutes . As of the date hereof, the Company has taken all
action necessary to exempt the Merger, this Agreement, the
Transactions contemplated hereby and thereby from the provisions of
Section 203 of the DGCL.
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Section 3.21
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Material Contracts .
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(a) Section
3.21(a) of the Company Disclosure Schedule lists each of the
following contracts, whether written or oral, to which the Company
or any of its Subsidiaries is a party or by which it is bound as of
the date of this Agreement (each such contract listed or required
to be so listed, a " Company Material Contract
"):
(i) Any
"material contract" as such term is defined in item 601(b)(10) of
Regulation S-K promulgated by the SEC;
(ii) any
material contract for the sale of products or services involving
annual payments in excess of $250,000 individually, other than
pursuant to a purchase order;
(iii) any
material sales agency, sales representation or distributorship
agreement;
(iv) any
material joint venture, profit sharing, partnership agreements or
other similar agreements;
(v) any
contracts or series of related contracts relating to the
acquisition or disposition of the securities of any Person, any
business or any material amount of assets (in each case, whether by
merger, sale of stock, sale of assets or otherwise) in excess of
$250,000 individually or $2,000,000 in the aggregate, other than
the Asset Transfer Agreements;
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(vi) any
material contract with a Governmental Authority;
(vii) any
licenses of Intellectual Property to or from the Company or any of
its Subsidiaries that are material to the businesses of the Company
or any of its Subsidiaries, except for licenses of standard
software that are generally available to the public for a standard
fee;
(viii) any contract
that (A) limits the freedom of the Company or any of its
Subsidiaries to engage or compete in any line of business or with
any Person or in any area or which would so limit the freedom of
Parent, the Company or any of their respective Affiliates after the
Effective Time or (B) contains exclusivity, "most favored nation"
or similar obligations or restrictions that are binding on the
Company or any of its Subsidiaries or that would be binding on
Parent or its Affiliates after the Effective Time; and
(ix) any
material contracts with any (A) officer or director of the Company
or any of its Subsidiaries or, to the Knowledge of the Company, any
Affiliates or "associates" (or members of any of their "immediate
family") (as such terms are respectively defined in Rule 12b-2 and
Rule 16a-1 of the Exchange Act) of such officer or director; or (B)
Person who, to the Knowledge of the Company, is the record or
beneficial owner of five percent or more of the voting securities
of Company.
(b) The
Company has prior to the date of this Agreement made available to
Parent complete and accurate copies of each Company Material
Contract listed in Section 3.21(a) of the Company Disclosure
Schedule.
(c) Neither
the Company nor any Subsidiary of the Company is in breach of or
default under the terms of any Company Material Contract where such
breach or default would have, individually or in the aggregate, a
Material Adverse Effect. To the Knowledge of the Company, no other
party to any Company Material Contract is in breach of or default
under the terms of any Company Material Contract where such breach
or default would have, individually or in the aggregate, a Material
Adverse Effect. Each Company Material Contract is a valid and
binding obligation of the Company and, to the Knowledge of the
Company, is in full force and effect, except such as would not
have, individually or in the aggregate, a Material Adverse Effect;
provided that (i) such enforcement may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium or
other similar Laws, now or hereafter in effect, relating to
creditors’ rights generally and (ii) equitable remedies of
specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be
brought.
Section
3.22 Limitation .
NOTWITHSTANDING ANY PROVISION IN THIS AGREEMENT TO THE CONTRARY,
(A) NO REPRESENTATION OR WARRANTY IS
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MADE BY THE COMPANY WITH RESPECT TO
(I) PARENT OR ANY OF ITS AFFILIATES OR THEIR RESPECTIVE BUSINESSES,
PROPERTIES (INCLUDING ANY OR ALL PATENTS, PATENT RIGHTS,
TRADEMARKS, TRADEMARK RIGHTS, TRADE NAMES, TRADE NAME RIGHTS,
SERVICE MARKS, SERVICE MARK RIGHTS AND OTHER INTELLECTUAL PROPERTY
OWNED BY PARENT OR ANY OF ITS AFFILIATES), ASSETS OR OPERATIONS,
(II) ANY BUSINESS RELATIONSHIP BETWEEN THE COMPANY OR ANY OF ITS
AFFILIATES, ON THE ONE HAND, AND PARENT OR ANY OF ITS AFFILIATES,
ON THE OTHER HAND, OR (III) ANY ACTION, SUIT, PROCEEDING, DISPUTE,
MONITORING, AUDIT OR CONTRACT TO WHICH PARENT OR ANY OF ITS
AFFILIATES IS A PARTY (INCLUDING, WITHOUT LIMITATION, SALES OF ECL
TECHNOLOGY AND PRODUCTS OUTSIDE THE FIELDS COVERED BY THE
WORLDWIDE, NON-EXCLUSIVE, ROYALTY-FREE LICENSE BETWEEN PARENT AND
THE COMPANY) AND, (B) NO FACT, EVENT, CHANGE, EFFECT OR DEVELOPMENT
RELATING TO ANY OF THE FOREGOING SHALL BE DEEMED TO RESULT IN THE
BREACH BY THE COMPANY OF ANY REPRESENTATION, WARRANTY, COVENANT OR
AGREEMENT IN THIS AGREEMENT OR OTHERWISE IN A MATERIAL ADVERSE
EFFECT.
Section
3.23 No Other
Representations or Warranties . Except for the representations
and warranties contained in this Article III, neither the Company
nor any other person on behalf of the Company, including any
director, officer or employee of the Company, makes any express or
implied representation or warranty with respect to the Company or
its Subsidiaries or with respect to any other information provided
to Parent or Merger Sub in connection with the transactions
contemplated h
