EXHIBIT 2.3
EXECUTION
COPY
AGREEMENT AND
PLAN OF MERGER
DATED AS OF
JULY 9, 2008,
BY AND
AMONG
ACCESS
PHARMACEUTICALS, INC.,
MACM
ACQUISITION CORP.
AND
MACROCHEM
CORPORATION
TABLE OF CONTENTS
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Page
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ARTICLE I
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THE MERGER
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The Merger
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Closing
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Effective Time of the
Merger
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Effects of the Merger
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Certificate of Incorporation;
By-Laws; Purposes
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Directors
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Officers
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EFFECT OF THE MERGER ON THE
CAPITAL STOCK AND MEMBERSHIP UNITS OF THE CONSTITUENT
COMPANIES
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Effect on Capital Stock and
Membership Units
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Exchange of Certificates
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Treatment of Company
Warrants
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Company Notes
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Withholding Rights
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ARTICLE III
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REPRESENTATIONS AND
WARRANTIES
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Representations and Warranties of
the Company
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Representations and Warranties of
Parent and Merger Sub
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ARTICLE IV
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ADDITIONAL
AGREEMENTS
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Company Financial
Statements
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Access to Information;
Confidentiality
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Reasonable Best Efforts
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Indemnification of Company Directors
and Officers
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Public Announcements
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Shareholder Rights Plan
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Tax Free Reorganization
Treatment
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ARTICLE V
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CONDITIONS
PRECEDENT
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Conditions to each Party’s
Obligation to Effect the Merger
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Conditions to Obligations of Parent
and Merger Sub
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Conditions to Obligations of the
Company
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ARTICLE VI
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TERMINATION, AMENDMENT, AND
WAIVER
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Termination
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Effect of Termination
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Amendment
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Extension; Waiver
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Procedure for Termination,
Amendment, Extension or Waiver
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ARTICLE VII
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GENERAL PROVISIONS
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Nonsurvival of Representations and
Warranties
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Notices
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Definitions
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Interpretation
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Counterparts
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Entire Agreement; No Third-Party
Beneficiaries
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Governing Law; Consent to
Jurisdiction; Waiver of Jury Trial
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Assignment
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Remedies
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EXECUTION
COPY
AGREEMENT AND PLAN OF MERGER (this “
Agreement ”), dated as of July 9, 2008, by and
among Access Pharmaceuticals, Inc. (“ Parent
”), MACM Acquisition Corp., a Delaware corporation and a
direct wholly-owned subsidiary of Parent (“ Merger
Sub ”) and MacroChem Corporation, a Delaware
corporation (the “ Company
”). Certain capitalized terms used herein are
defined in Section 7.03 of this Agreement.
WHEREAS, each of the respective Boards of
Directors of Parent, Merger Sub and the Company has
(i) determined it advisable and in the best interests of each
corporation and their respective stockholders that Parent acquire
the Company upon the terms and subject to the conditions set forth
in this Agreement and (ii) approved this Agreement and the
transactions contemplated hereby on the terms and subject to the
conditions set forth herein;
WHEREAS, the acquisition of the Company shall be
effected through the merger (the “ Merger
”) of Merger Sub with and into the Company, upon the terms
and subject to the conditions set forth in this Agreement and in
accordance with the Delaware General Corporation Law (the “
DGCL ”), as a result of which the Company shall
become a wholly-owned Subsidiary of Parent;
WHEREAS, Parent, Merger Sub and the Company
desire to make certain representations, warranties, covenants and
agreements in connection with the Merger and also to prescribe
various conditions to the Merger; and
WHEREAS, for federal income Tax purposes, it is
intended that the Merger shall qualify as a reorganization under
the provisions of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the “ Code ”)
and this Agreement is intended to be a “plan of
reorganization” within the meaning of the regulations
promulgated under Section 368 of the Code.
NOW, THEREFORE, in consideration of the
representations, warranties, covenants and agreements contained in
this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Parent,
Merger Sub and the Company agree as follows:
ARTICLE I.
THE MERGER
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The Merger
. Upon the terms and subject
to the conditions set forth in this Agreement, and in accordance
with the DGCL, Merger Sub shall be merged with and into the Company
at the Effective Time. Upon the Effective Time, the separate
existence of Merger Sub shall cease, and the Company shall continue
as the surviving corporation and a wholly-owned Subsidiary of
Parent (the “ Surviving Corporation
”).
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Closing . Unless this Agreement shall have been
terminated and the transactions herein contemplated shall have been
abandoned pursuant to Section 7.01, and subject to the
satisfaction or waiver of the conditions set forth in
Article VI, the closing of the Merger (the “
Closing ”) shall take place at 10:00 a.m. (New
York time) on a date to be specified by the parties hereto, such
date to be no later than the second business day following
satisfaction or waiver of all of the conditions set forth in
Article VI capable of satisfaction prior to Closing (the “
Closing Date ”), at the offices of Bingham
McCutchen, LLP, 399 Park Avenue, New York, New York 10019, unless
another date, time or place is agreed to in writing by the parties
hereto.
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Effective Time
. Upon the Closing, the
parties shall file with the Secretary of State of the State of
Delaware a certificate of merger (the “ Certificate of
Merger ”) in such form as required by, and executed
and acknowledged in accordance with, the relevant provisions of the
DGCL and shall, in each case, make all other filings or recordings
required thereby. The Merger shall become effective at such
time as the Certificate of Merger is duly filed with the Secretary
of State of the State of Delaware, or at such other time as is
permissible in accordance with the DGCL and as Merger Sub and the
Company shall agree should be specified in the Certificate of
Merger (the time the Merger becomes effective being the “
Effective Time ”).
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Effects of the Merger
. The Merger shall have the
effects set forth 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 debts,
liabilities and duties of the Company and Merger Sub shall become
the debts, liabilities and duties of the Surviving
Corporation.
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Certificate of Incorporation;
By-Laws; Purposes .
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(a)
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At the Effective Time, and without
any further action on the part of the Company or Merger Sub, the
certificate of incorporation of Merger Sub as in effect at the
Effective Time shall be the certificate of incorporation of the
Surviving Corporation until thereafter amended as provided therein
or by applicable law.
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(b)
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At the Effective Time, and without
any further action on the part of the Company or Merger Sub, the
by-laws of Merger Sub as in effect at the Effective Time shall be
the by-laws of the Surviving Corporation until thereafter changed
or amended as provided therein or by applicable law.
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Directors . From and after the Effective Time, the
directors of the Surviving Corporation shall be Jeffrey B. Davis
and David P. Luci, until the earlier of their respective
resignation or removal or until their successors are duly elected
and qualified, as the case may be.
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Officers . From and after the Effective Time, the
officer of the Surviving Corporation shall be Jeffrey B. Davis and
David Luci, until the earlier of their resignation or removal or
until their respective successors are duly elected or appointed and
qualified, as the case may be.
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ARTICLE II.
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT COMPANIES
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Effect on Capital Stock and
Company Notes . As
of the Effective Time, by virtue of the Merger and without any
action on the part of the Company, Merger Sub or any holder of any
shares of Company Common Stock, Company Notes, Company Warrants, In
the Money Company Warrants or any common stock of Merger
Sub:
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(a)
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Common Stock of Merger
Sub . Each share of
common stock of Merger Sub outstanding immediately prior to the
Effective Time shall be converted into one share of the common
stock, par value $0.001 per share, of the Surviving
Corporation.
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(b)
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Cancellation of Treasury Stock
and Parent-Owned Company Stock . Each share of Company Common Stock that
is owned by the Company, and each share of Company Common Stock
that is owned by Parent, Merger Sub or any other Subsidiary of
Parent shall automatically be cancelled and retired and shall cease
to exist, and no cash, Parent Capital Stock or other consideration
shall be delivered or deliverable in exchange therefor.
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(c)
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Conversion of Company Common
Stock and In the Money Company Warrants .
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(i)
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Each issued and outstanding share of
Company Common Stock (excluding shares cancelled pursuant to
Section 2.01(b ) and any Dissenting Shares to the
extent provided in Section 2.04 but including all shares of
Company Common Stock issued upon exercise of Company Options or
Company Warrants occurring after the date of this Agreement and
including all shares issuable upon conversion of any of the In the
Money Company Warrants) shall be converted into the right to
receive a number of shares of Parent Common Stock equal
to: (A) 2,500,000, divided by (B) the sum of (1) the
total number of shares of Company Common Stock outstanding at the
Effective Time, and (2) the total number of shares of Company
Common Stock issuable upon conversion of the In the Money Company
Warrants assuming a cashless conversion at the closing price of
Company Common Stock on the date of this Agreement, such quotient
to be carried out to eight decimal points (the “ Common
Stock Exchange Ratio ”); provided, however, that in
no event shall Parent be required to issue more than an aggregate
of 2,500,000 shares of Parent Common Stock as consideration for the
Merger and the transactions contemplated thereby;
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(ii)
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The total number of shares of Parent
Common Stock issuable in exchange for the Company Common Stock and
shares underlying the In the Money Company Warrants shall be
referred to herein collectively as the “ Merger
Consideration .” In no event shall the
aggregate number of shares of Parent Common Stock to be issued or
issuable hereunder in exchange for Company Common Stock and/or In
the Money Company Warrants exceed, in the aggregate, 2,500,000 (or
such lesser number if decreased in accordance with Section
2.04 ). Except as set forth in this Article II,
no other amounts shall be payable with respect to such Company
Common Stock or In the Money Company Warrants.
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(d)
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Cancellation and Retirement of
Company Common Stock . As of the Effective Time, all shares of
Company Common Stock issued and outstanding immediately prior to
the Effective Time shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist,
and each holder of a certificate representing any such shares of
Company Common Stock (collectively, the “
Certificates ”) shall, to the extent such
Certificate represents such shares, cease to have any rights with
respect thereto, except the right to receive the Merger
Consideration (and cash in lieu of fractional shares of Parent
Common Stock) to be issued or paid in consideration therefor upon
surrender of such Certificate in accordance with
Section 2.02 .
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(e)
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Cancellation and Retirement of In
the Money Company Warrants . As of the Effective Time, all of
the In the Money Company Warrants outstanding immediately prior to
the Effective Time shall no longer be outstanding and shall be
cancelled and retired and shall cease to exist, and each holder of
an In the Money Warrant shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration (and
cash in lieu of fractional shares of Parent Common Stock) to be
issued or paid in consideration therefor upon surrender of such In
the Money Warrant in accordance with Section 2.02
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(f)
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Company Notes
. At the Effective Time, Parent
shall assume the due and punctual performance of all of the terms
and conditions of each outstanding Company Note and each such
Company Note shall, unless the conversion rights thereunder have
previously expired, become convertible into the number of New
Securities (as defined in the Company Notes) of Parent and at such
Conversion Price (as defined in the Company Notes) as set forth
therein. The “ Company Notes ” shall be
the convertible promissory notes made by the Company listed in
Section 2.01(f) of the Company Disclosure Schedule. The
parties acknowledge that certain of the Company Notes automatically
will convert, at the closing price of Parent Common Stock on the
date hereof, to the right to receive Parent Common Stock at the
Effective Time.
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Exchange of
Certificates .
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(a)
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Exchange Agent
. As of the Effective Time,
Parent shall enter into an agreement with such bank or trust
company as may be designated by Parent (the “ Exchange
Agent ”) which shall provide that Parent shall
deposit with the Exchange Agent, for the benefit of the holders of
Certificates and In the Money Company Warrants, for exchange in
accordance with this Article II, certificates representing the
shares of Parent Common Stock (such shares of Parent Common Stock,
together with any dividends or distributions with respect thereto
with a record date after the Effective Time and any cash payable in
lieu of any fractional shares of Parent Common Stock being
hereinafter referred to as the “ Exchange Fund
”) issuable pursuant to Section 2.01 in exchange for
outstanding shares of Company Common Stock and In the Money Company
Warrants.
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Exchange Procedures
. Promptly after the Effective
Time, the Exchange Agent shall mail to each holder of record of
Certificates and In the Money Company Warrants immediately prior to
the Effective Time whose shares of Company Common Stock and/or In
the Money Company Warrants were converted into shares of Parent
Common Stock pursuant to Section 2.01(c) a letter of
transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates and/or In the Money
Company Warrants shall pass only upon delivery of the Certificates
and/or In the Money Company Warrants, as applicable, to the
Exchange Agent, and which shall be in such form and have such other
provisions as Parent may reasonably specify) and (ii) instructions
for use in effecting the surrender of the Certificates and/or In
the Money Company Warrants in exchange for certificates
representing shares of Parent Common Stock. Upon
surrender of a Certificate and/or In the Money Company Warrants for
cancellation (or indemnity reasonably satisfactory to Parent and
the Exchange Agent, if any of such Certificates and/or In the Money
Company Warrants are lost, stolen or destroyed) to the Exchange
Agent together with such letter of transmittal, duly executed, the
holder of such Certificate and/or In the Money Company Warrants
shall be entitled to receive in exchange therefor a certificate
representing that number of whole shares of Parent Common Stock
which such holder has the right to receive in respect of all
Certificates and/or In the Money Company Warrants surrendered by
such holder pursuant to the provisions of this Article II (after
taking into account all shares of Company Common Stock than held by
such holder either directly or upon conversion of the In the Money
Company Warrants in a cashless conversion), and the Certificates
and/or In the Money Company Warrants, as applicable, so surrendered
shall forthwith be cancelled. In the event of a transfer
of ownership of shares of Company Common Stock and/or In the Money
Company Warrants which is not registered in the transfer records of
the Company, a certificate representing the proper number of shares
of Parent Common Stock may be issued to a transferee if the
Certificate and/or In the Money Company Warrants, as applicable, is
presented to the Exchange Agent, accompanied by all documents
required to evidence and effect such transfer and by evidence that
any applicable stock transfer Taxes have been
paid. Until surrender as contemplated by this Section
2.02(b) , subject to the provisions of Section 6.02(h)
(Dissenters Rights) each Certificate and In the Money Company
Warrants, in each case, shall be deemed at any time after the
Effective Time to represent only the Parent Common Stock into which
the shares of Company Common Stock represented by such Certificate
or In the Money Company Warrants have been converted as provided in
this Article II and the right to receive upon such surrender cash
in lieu of any fractional shares of Parent Common Stock as
contemplated by this Section 2.02(b) .
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Distributions with Respect to
Unexchanged Shares . No dividends or other distributions
with respect to Parent Common Stock with a record date after the
Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the shares of Parent Common Stock
represented thereby, and no cash payment in lieu of fractional
shares shall be paid to any such holder pursuant to this Section
2.02 until the surrender of such Certificate and/or In the
Money Company Warrants, as applicable, in accordance with this
Article II. Subject to the effect of applicable laws,
following surrender of any such Certificate and/or In the Money
Company Warrants, as applicable, there shall be paid to the holder
of the certificate representing the whole shares of Parent Common
Stock issued in exchange therefor without interest, (i) at the time
of such surrender, the amount of any cash payable in lieu of any
fractional share of Parent Common Stock to which such holder is
entitled pursuant to this Section 2.02 and the amount of any
dividends or other distributions with a record date after the
Effective Time and a payment date subsequent to such surrender
payable with respect to such whole shares of Parent Common
Stock.
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No further Ownership Rights in
Company Common Stock . All shares of Parent Common Stock
issued upon conversion of shares of Company Common Stock and In the
Money Company Warrants in accordance with the terms hereof, and all
cash paid pursuant to this Section 2.02 in lieu of
fractional shares, shall be deemed to have been issued in full
satisfaction of all rights pertaining to such Company Common Stock
and/or In the Money Company Warrants, and there shall be no further
registration of transfers on the stock transfer books of the
Surviving Corporation of the Company Common Stock and In the Money
Company Warrants which were outstanding prior to the Effective
Time. If, after the Effective Time, Certificates are
presented to the Surviving Corporation for any reason, they shall
be cancelled and exchanged as provided in this Article
II.
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No Fractional Shares
. (i) No certificate or
scrip representing fractional shares of Parent Common Stock shall
be issued upon the surrender for exchange of Certificates and/or In
the Money Company Warrants, and such fractional share interests
shall not entitle the owner thereof to vote or to any rights of a
stockholder of Parent. In lieu of such issuance of
fractional shares, Parent shall pay each holder of Certificates and
In the Money Company Warrants an amount in cash equal to the
product obtained by multiplying (a) the fractional share interest
to which such holder would otherwise be entitled (after taking into
account all shares of Company Common Stock held immediately prior
to the Effective Time by such holder) by (b) the average of the
closing sale prices for a share of Parent Common Stock on the OTC
Bulletin Board for the ten trading days immediately preceding the
date of the Effective Time.
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(b)
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As soon as reasonably practicable
after the determination of the amount of cash, if any, to be paid
to holders of Certificates and/or In the Money Company Warrants, as
applicable, with respect to any fractional share interests, the
Exchange Agent shall make available such amounts to such holders of
Certificates and/or In the Money Company Warrants, subject to and
in accordance with the terms of this Section 2.02
.
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(c)
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Termination of Exchange
Fund . Any
portion of the Exchange Fund deposited with the Exchange Agent
pursuant to this Section 2.02 which remains undistributed to
the holders of the Certificates and/or In the Money Company
Warrants six months after the Effective Time shall be delivered to
Parent, upon demand, and any holders of Certificates and/or In the
Money Company Warrants who have not theretofore complied with this
Article II shall thereafter look only to Parent and only as general
creditors thereof for payment of their claim for Parent Common
Stock, cash in lieu of fractional shares of Parent Common Stock and
any dividends or distributions with respect to Parent Common Stock
to which such holders may be entitled pursuant to this Article
II.
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(d)
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No Liability
. None of Parent, Merger
Sub, the Company or the Exchange Agent shall be liable to any
Person in respect of any shares of Parent Common Stock (or
dividends or distributions with respect thereto) or cash from the
Exchange Fund delivered to a public official pursuant to any
applicable abandoned property, escheat or similar
law. If any Certificates and/or In the Money Company
Warrants shall not have been surrendered prior to three years after
the Effective Time of the Merger, or immediately prior to such
earlier date on which any Merger Consideration, any cash in lieu of
fractional shares of Parent Common Stock or any dividends or
distributions with respect to Parent Common Stock would otherwise
escheat to or become the property of any Governmental Entity, any
such Merger Consideration or cash shall, to the extent permitted by
applicable law, become the property of the Surviving Corporation,
free and clear of all claims or interest of any Person previously
entitled thereto.
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(e)
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Investment of Exchange
Fund . The
Exchange Agent shall invest any cash included in the Exchange Fund,
as directed by Parent on a daily basis. Any interest and other
income resulting from such investments shall be paid to
Parent.
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(f)
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Adjustment Provisions
. In the event Parent
changes (or establishes a record date for changing) the number of
shares of Parent Common Stock issued and outstanding prior to the
Effective Time as a result of, including, without limitation, a
forward or reverse stock split, stock dividend, recapitalization or
similar transaction with respect to the outstanding Parent Common
Stock and the record date therefor shall be prior to the Effective
Time, the Common Stock Exchange Ratio shall be proportionately
adjusted. If between the date hereof and the Effective
Time, Parent shall merge, be acquired or consolidated with, by or
into any other corporation (a “Business Combination”)
and the terms thereof shall provide that Parent Common Stock shall
be converted into or exchanged for the shares of any other
corporation or entity, then provision shall be made as part of the
terms of such Business Combination so that security holders of the
Company who would be entitled to receive shares of Parent Common
Stock pursuant to this Agreement shall be entitled to receive, in
lieu of each share of Parent Common Stock issuable to such security
holders as provided herein, the same kind and amount of securities
or assets as shall be distributable upon such Business Combination
with respect to one share of Parent Common Stock (provided that
nothing herein shall be construed so as to release the acquiring
entity in any such Business Combination from its obligations under
this Agreement as the successor to Parent).
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2.03
Treatment of Company Options and Company Warrants
. Parent shall not assume any options to purchase
shares of Company Common Stock (the “ Company
Options ”), even if such Company Options are
outstanding immediately prior to the Effective Time and are fully
vested and exercisable immediately prior to the Effective
Time. All Company Options shall have been exercised or
terminated prior to the Closing Date. The Company shall
have taken all necessary action to implement and carry out the
provisions of this Section 2.03 , including, without
limitation, taking the actions described in Section 6.02(e)
.
Section 2.03
of the Company Disclosure Letter
sets forth a list of the outstanding “in the money”
warrants to purchase shares of Company Common Stock (the “
In the Money Company Warrants ”). At
the Effective Time, the In the Money Company Warrants shall
automatically convert into the right to receive a portion of the
Merger Consideration as provided in Section 2.01
above. Except for the obligation to grant a portion of
the Merger Consideration to holders of the In the Money Company
Warrants, Parent shall not assume either the In the Money Company
Warrants or the warrants to purchase shares of Company Common Stock
(the “ Company Warrants ”), even if such
Company Warrants are outstanding immediately prior to the Effective
Time and are fully vested and exercisable immediately prior to the
Effective Time. The Company shall have taken all
necessary action to implement and carry out the provisions of this
Section 2.03 , including, without limitation, taking the
actions described in Section 6.02(e) .
2.04
Dissenting Shares .
(a) Subject to the
provisions of Section 6.02(g) and notwithstanding any
provision of this Agreement to the contrary, the shares of any
holder of Company Common Stock who has demanded and perfected
appraisal rights of such shares in accordance with Delaware Law and
who, as of the Effective Time of the Merger, has not effectively
withdrawn or lost such appraisal rights (" Dissenting
Shares ") shall not be converted into or represent a right
to receive Parent Common Stock pursuant to Section 2.01(c) ,
but the holder thereof shall only be entitled to such rights as are
granted by Delaware Law, and the total number of shares of Parent
Common Stock issuable as Merger Consideration as provided in
Section 2.01(c) shall be proportionately
decreased.
(b) Notwithstanding
the foregoing, if any holder of shares of Company Common Stock who
demands appraisal of such shares under Delaware Law shall
effectively withdraw the right to appraisal, then, as of the later
of the Effective Time and the occurrence of such event, such
holder's shares shall automatically be converted into and represent
only the right to receive Parent Common Stock, without interest
thereon, upon surrender of the Certificate representing such shares
as provided in Section 2.01(c) , and the total number of
shares of Parent Common Stock issuable as Merger Consideration as
provided in Section 2.01(c) shall be proportionally
increased to the extent such number was previously decreased
pursuant to Section 2.05(a) above with respect to such
shares.
(c) The Company shall
give Parent (i) prompt notice of any written demands for appraisal
of any shares of Company Common Stock, withdrawals of such demands,
and any other instruments served pursuant to Delaware Law and
received by the Company which relate to any such demand for
appraisal and (ii) the opportunity to participate in all
negotiations and proceedings which take place prior to the
Effective Time with respect to demands for appraisal under Delaware
Law. The Company shall not, except with the prior
written consent of Parent or as may be required by applicable law,
voluntarily make any payment with respect to any demands for
appraisal of the Company Common Stock or offer to settle or settle
any such demands.
2.05
Withholding Rights . Each of Parent and the
Surviving Corporation shall be entitled to deduct and withhold from
the consideration otherwise payable pursuant to this Agreement to
any holder of Company Common Stock such amounts as it is required
to deduct and withhold with respect to the making of such payment
under the Code, or any provision of state, local or foreign Tax
law. To the extent that amounts are so withheld by
Parent or the Surviving Corporation, as the case may be, such
withheld amounts shall be treated for all purposes of this
Agreement as having been paid to such holder in respect of which
such deduction and withholding was made by Parent or the Surviving
Corporation, as the case may be.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
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Representations and Warranties of
the Company and its Subsidiaries . Except as may be set forth in a disclosure
letter (to the extent each disclosure item therein is clearly
marked to indicate the section, paragraph or subparagraph of this
Agreement to which such disclosure is an exception, referencing the
same section, paragraph and subparagraph as used in this Agreement,
in each case, except to the extent that any such disclosure is
reasonably discernable to apply to more than one section, paragraph
or subparagraph of this Agreement) delivered by the Company to
Parent and Merger Sub at the time of execution of this Agreement
(the “ Company Disclosure Letter ”), the
Company hereby represents and warrants to Parent and Merger Sub as
follows:
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|
(a)
|
Organization; Standing and
Corporate Power . The
Company is duly organized, validly existing and in good standing
under the laws of the State of Delaware and has the requisite
corporate power and authority to carry on its business as it is now
being conducted. The Company is duly qualified or licensed to
do business and is in good standing in each jurisdiction (domestic
or foreign) in which the nature of its business or the ownership or
leasing of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be
so qualified or licensed (individually or in the aggregate) would
not have a Material Adverse Effect with respect to the Company.
The Company has delivered to Parent complete and correct
copies of each of (i) the certificate of incorporation
(including any Certificate of Designations thereto) (the “
Company Certificate ”) and by-laws (the “
Company By-laws ”) of the
Company, in each case as amended and as currently in effect and
(ii) the minute books of the Company which contain records of
all meetings held of, and other corporate actions taken by, its
stockholders, board of directors and any committees appointed by
its board of directors.
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(b)
|
Subsidiaries
. Except as set forth in Section
3.01(b) of the Company Disclosure Letter, the Company does not
own, directly or indirectly, any capital stock or other ownership
interest in any Person.
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(c)
|
Capital Structure.
The authorized capital
stock of the Company consists of (x) 100,000,000 shares of Company
Common
|
Stock and (y) 6,000,000 shares
of Company Preferred Stock. As of the date hereof, there
were: (i) 45,798,412 shares of Company Common Stock
issued and outstanding; (ii) 0 shares of Company Preferred
Stock issued and outstanding, (iii) 299 shares of Company
Common Stock held in the treasury of the Company;
(iv) 1,784,584 shares of Company Common Stock reserved for
issuance upon exercise of options available for grant pursuant to
the Company’s stock option plans; (v) 7,376,488 shares
of Company Common Stock issuable upon exercise of awarded but
unexercised stock options; and (vi) warrants representing the
right to purchase 20,445,984 shares of Company Common Stock.
Except as set forth above, as of the date hereof, there were no
shares of capital stock or other equity securities of the Company
issued, reserved for issuance or outstanding. All outstanding
shares of capital stock of the Company are, and all shares which
may be issued as described above will be, when issued, duly
authorized, validly issued, fully paid and nonassessable and not
subject to preemptive rights. The shares of Company Common
Stock to be issued in connection with the Merger (x) will,
when issued, be duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights and
(y) will be issued in compliance in all material respects with
all applicable federal and state securities laws and applicable
rules and regulations promulgated thereunder. Except as
set forth above and in (i) Section 3.01(c) of the Company
Disclosure Letter and (ii) the Rights Agreement dated as of
August 13, 1999, between the Company and American Stock
Transfer & Trust Company as Rights Agent (the “
Shareholder Rights Plan ”), there are no
outstanding securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind
to which the Company is a party or by which it is bound obligating
the Company to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other
equity or voting securities of the Company or obligating the
Company to issue, grant, extend, accelerate the vesting of or enter
into any such security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking. There are no
outstanding contractual obligations, commitments, understandings or
arrangements of the Company to repurchase, redeem or otherwise
acquire or make any payment in respect of any shares of capital
stock of the Company. As of the date hereof, all of the
issued and outstanding shares of common stock in Virium
Pharmaceuticals Inc., a Subsidiary of the Company, are owned by the
Company, free and clear of any Lien, and as of the Closing Date,
all of the common stock of Virium Pharmaceuticals Inc. will be
owned by the Company free and clear of any Lien.
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(d)
|
Authority;
Noncontravention . The
Company has the requisite corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company. This Agreement
has been duly executed and delivered by the Company and (assuming
due authorization, execution and delivery by Parent and Merger Sub)
constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
affecting creditors’ rights generally and general equitable
principles (whether considered in a proceeding in equity or at
law). The execution and delivery of this Agreement does not,
and the consummation by the Company of the transactions
contemplated by this Agreement and compliance by the Company with
the provisions hereof will not, conflict with, or result in any
breach or violation of, or any default (with or without notice or
lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of, or a
“put” right with respect to any obligation under, or to
a loss of a material benefit under, or result in the creation of
any pledge, claim, lien, charge, encumbrance or security interest
of any kind or nature whatsoever except for a Permitted Lien
(collectively, “ Liens ”) upon any of the
properties or assets of the Company under, (i) the Company
Certificate or Company By-laws, (ii) any agreement, contract,
license, loan or credit agreement, note, note purchase agreement,
bond, mortgage, indenture, lease or other agreement, instrument,
permit, concession, franchise or license applicable to the Company
or its properties or assets or (iii) subject to the
governmental filings and other matters referred to in the last
sentence of this Section 3.01(d), any judgment, order, decree,
statute, law, ordinance, rule, regulation or arbitration award
applicable to the Company or its properties or assets. Each Lien of
the Company in excess of $5,000 is set forth in
Section 3.01(d) of the Company Disclosure Letter. No
consent, approval, order or authorization of, or registration,
declaration or filing with, or notice to, any federal, state or
local government or any court, administrative agency or commission
or other governmental authority or agency, domestic or foreign (a
“ Governmental Entity ”) is required by
or with respect to the Company in connection with the execution and
delivery of this Agreement by the Company or the consummation by
the Company of any of the transactions contemplated hereby or the
performance by the Company of its obligations hereunder, except for
the filing of the Delaware Certificate of Merger with the Secretary
of State of the State of Delaware and appropriate documents with
the relevant authorities of other states in which the Company is
qualified to do business.
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(e)
|
Company SEC Documents;
Undisclosed Liabilities . Since January 1, 2005, the Company
has filed with the SEC all reports, schedules, forms, statements
and other documents required pursuant to the Securities Act and the
Exchange Act (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 dates, the Company SEC
Documents complied in all material respects with the requirements
of the Securities Act or the Exchange Act, as the case may be, and
the rules and regulations of the SEC promulgated thereunder
applicable to such Company SEC Documents. Except to the
extent that information contained in any Company SEC Document has
been revised or superseded by a later filed Company SEC Document,
none of the Company SEC Documents (including any and all Company
SEC Financial Statements included therein) contains any untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading. The financial statements of
Company included in the Company SEC Documents (the “
Company SEC Financial Statements ”) comply as
to form in all material respects with applicable published
accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been prepared in
accordance with GAAP, applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto)
and fairly present the financial position of the Company as of the
dates thereof and the results of its operations and cash flows for
the periods then ended (subject, in the case of unaudited quarterly
statements, to normal recurring year-end audit adjustments).
The Company has no liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) required by
GAAP to be recognized or disclosed on a balance sheet of the
Company or in the notes thereto, except (i) liabilities
reflected in the audited balance sheet of the Company as of
March 31, 2008, (ii) liabilities incurred since
March 31, 2008, in the ordinary course of business consistent
with past practice and (iii) liabilities that would not be
reasonably likely to have a Material Adverse Effect with respect to
the Company.
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(f)
|
Disclosure Controls and
Procedures . The
Company maintains disclosure controls and procedures required by
Rule 13a-15 and 15d-15 under the Exchange Act. Such
disclosure controls and procedures are designed to ensure that all
material information relating to the Company is made known to the
Company’s chief executive officer and chief financial officer
by others within the Company, particularly during the period in
which the Company’s applicable Exchange Act report is being
prepared, and effective, in that they provide reasonable assurance
that information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time
periods specified in the SEC’s rules and forms.
The Company’s management assessment was that disclosure
controls and procedures were effective as of March 31,
2008.
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(g)
|
Information Supplied
. None of the information
supplied or to be supplied by the Company in writing for inclusion
or incorporation by reference in (i) the registration statement on
Form S-4 to be filed with the SEC by Parent in connection with the
issuance of Parent Common Stock in the Merger (the “
Form S-4 ”) shall, at the time the Form S-4
becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state anymaterial fact
required to be stated therein or necessary to make the statements
therein not misleading or (ii) the Information Statement shall, at
(A) the date it is first mailed to the Company's stockholders
and/or (B) at the time of the Stockholder Meeting, contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under
which they are made, not misleading. The Information
Statement shall comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations
promulgated thereunder, except that no representation is made by
the Company with respect to statements made or incorporated by
reference therein based on information supplied in writing by
Parent or Merger Sub specifically for inclusion or incorporation by
reference therein.
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(h)
|
Absence of Certain Changes or
Events . Since
March 31, 2008, there is not and has not been: (i) any
Material Adverse Change with respect to the Company; (ii) any
condition, event or occurrence which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect or give rise to a Material Adverse Change with respect to
the Company; (iii) any condition, event or occurrence which,
individually or in the aggregate, could reasonably be expected to
prevent or materially delay the ability of the Company to
consummate the transactions contemplated by this Agreement or
perform its obligations hereunder.
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(i)
|
Litigation; Labor Matters; Compliance with Laws
.
|
|
(i)
|
Except as set forth in
Section 3.01(i)(i) of the Company Disclosure
Letter, there is no suit, action, claim, charge, arbitration,
investigation or proceeding pending before or, to the knowledge of
the Company, threatened by, a Governmental Entity, in each case
with respect to the Company that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect with
respect to the Company or prevent or materially delay the ability
of the Company to consummate the transactions contemplated by this
Agreement or to perform its obligations hereunder. There is no
judgment, decree, citation, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against the Company
which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect with respect to the
Company.
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(ii)
|
Except as set forth in
Section 3.01(i)(ii) of the Company Disclosure
Letter (1) the Company is not a party to, or bound by, any
collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization;
(2) the Company is not the subject of any strike, grievance or
other proceeding asserting that the Company has committed an unfair
labor practice or seeking to compel it to bargain with any labor
organization as to wages or conditions of employment;
(3) there is no strike, work stoppage or other labor
dispute involving the Company or, to its knowledge, threatened;
(4) no grievance is pending or, to the knowledge of the
Company, threatened against the Company which, individually or in
the aggregate, could reasonably be expected to have a Material
Adverse Effect with respect to the Company; (5) the Company is
in material compliance with all applicable laws (domestic and
foreign), agreements, contracts and policies relating to
employment, employment practices, wages, hours, immigration matters
and terms and conditions of employment; (6) the Company has
paid in full to all employees of the Company all wages, salaries,
commissions, bonuses, benefits and other compensation due and
payable to such employees under any policy, practice, agreement,
plan, program, statute or other law; (7) the Company is not
liable for any severance pay or other payments to any employee or
former employee arising from the termination of employment under
any benefit or severance policy, practice, agreement, plan or
program of the Company, nor will the Company have any liability
which exists or arises, or may be deemed to exist or arise, under
any applicable law, contract or otherwise, as a result of or in
connection with the transactions contemplated hereunder or as a
result of the termination by the Company of any Persons employed by
the Company on or prior to the Effective Time; and (8) the
Company is in compliance with its obligations pursuant to the
Worker Adjustment and Retraining Notification Act of 1988 (“
WARN ”) and any similar state or local laws,
and all other employee notification and bargaining obligations
arising under any statute or otherwise.
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(iii)
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The business of the Company is not
being conducted in violation of any law (domestic or foreign),
ordinance or regulation of any Governmental Entity in any material
respect.
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(j)
Employee Benefit Plans .
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(i)
|
Section 3.01(j)(i) of the Company Disclosure Letter contains
a true and complete list of each “employee benefit
plan” (within the meaning of Section 3(3) of ERISA)
(including, without limitation, multiemployer plans within the
meaning of Section 3(37) of ERISA or any of its foreign
equivalents)), stock purchase, stock option, severance, employment,
change-in-control, fringe benefit, collective bargaining, bonus,
incentive, deferred compensation and all other employee benefit
plans, agreements, programs, policies or other arrangements
relating to employment, benefits or entitlements, whether or not
subject to ERISA (including any funding mechanism therefor now in
effect or required in the future as a result of the transactions
contemplated by this Agreement or other activities taken by the
Company on or prior to the date of this Agreement), sponsored by
the Company or any other entity such as a co-employer, whether
formal or informal, oral or written, legally binding or not under
which any employee or former employee of the Company has any
present or future right to benefits based on such employee’s
employment with the Company and under which the Company has any
present or future liability. All such plans, agreements,
programs, policies and arrangements are herein collectively
referred to as the “ Company Plans
.”
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(ii)
|
With respect to each Company Plan,
the Company has delivered to the Parent a current, accurate and
complete copy (or, to the extent no such copy exists, an accurate
description) thereof and, to the extent applicable, (A) any
related trust agreement, annuity contract or other funding
instrument; (B) the most recent determination letter issued by
the IRS; (C) any summary plan description and other material
written communications (or a description of any material oral
communications) by the Company to its employees concerning the
extent of the benefits provided under a Company Plan; and
(D) for the three most recent years (I) the
Form 5500 and attached schedules; (II) audited financial
statements; (III) actuarial valuation reports; and
(IV) attorney’s response to an auditor’s request
for information.
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(iii)
|
(A) Neither the Company nor any
member of its Controlled Group has or shall have, as of the
Effective Time, any obligation to any multiemployer plan (within
the meaning of 4001(a)(3) of ERISA) or any collective
bargaining agreement; (B) neither the Company nor any member
of its Controlled Group has incurred any material withdrawal
liability under Title IV of ERISA; and (C) neither the Company
nor any member of its Controlled Group has engaged in a transaction
which could subject it to liability under ERISA
Section 4212(c).
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(iv)
|
(A) Each Company Plan which is
intended to meet the requirements for Tax-favored treatment under
Subchapter B of Chapter 1 of Subtitle A of the Code meets such
requirements; and (B) the Company has received a favorable
determination from the IRS with respect to any trust intended to be
qualified within the meaning of Code
Section 501(c)(9).
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(v)
|
The Company has complied and
currently complies in all material respects with the applicable
continuation requirements for its welfare benefit plans, including
Section 4980B of the Code and Sections 601 through 608,
inclusive, of ERISA and any applicable state statutes maintaining
health insurance continuation coverage for employees and
beneficiaries.
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(vi)
|
Except as otherwise disclosed in
Section 3.01(j)(vi) of the Company Disclosure
Letter, none of the terms of the Company Plans provides that the
consummation of the transactions contemplated by this Agreement
will, either alone or in combination with another event,
(A) entitle any of the Company’s employees or current or
former officers or directors to severance pay, unemployment
compensation or any other payment, except as expressly provided in
this Agreement, or (B) accelerate the time of payment or
vesting, or increase the amount of compensation due any such
employee or officer.
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(vii)
|
Except as otherwise disclosed in
Section 3.01(j)(vii) of the Company Disclosure
Letter, no payment that is owed or may become due to any
director, officer, employee or agent of the Company will be
non-deductible or subject to tax under Section 280G,
Section 4999 or Section 162(m) of the Code; nor will
the Company be required to “gross up” or otherwise
compensate any such person because of the imposition of any excise
tax on a payment to such person.
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(vii)
|
Each Company Plan is amendable and
terminable at the sole discretion of the sponsor thereof without
notice to any participant or beneficiary.
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(ix)
|
There is no suit, action, claim,
charge, arbitration, investigation or proceeding (except with
respect to benefits payable in the normal operation of Company
Plans and qualified domestic relations orders) against or involving
any Company Plan or asserting any rights or claims to benefits
under any Company Plan that could give rise to any material
liability.
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(x)
|
Except as disclosed in
Section 3.01(j)(x) of the Company Disclosure
Letter, there are no obligations or potential liability under any
Company Plan for providing welfare benefits after termination of
employment to any employee (or any beneficiary of an employee),
including, but not limited to, retiree health and life insurance
coverage, but excluding continuation of health coverage required to
be continued under Section 4980B of the Code or other
applicable law and insurance conversion privileges under state law.
The assets of each Company Plan which is funded are reported on
their fair market value on the books and records of such Company
Plan.
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(xi)
|
No individuals are currently
providing, or have ever provided, services to the Company pursuant
to a leasing arrangement or similar type of arrangement. The
Company has no obligation to provide benefits under any Company
Plan maintained for its employees to or for the benefit of any
individual who has been treated as an independent contractor by the
Company.
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(i)
|
The Company has timely filed with
the appropriate Governmental Entity all Tax Returns required to be
filed by it, each such Tax Return has been prepared in compliance
with all applicable laws and regulations and all such Tax Returns
are true, accurate and complete in all material respects. The
Company has (A) timely paid in full all Taxes required to have
been paid by it (whether or not such Taxes were shown to be due on
such Tax Returns); and (B) made adequate provision for all
accrued Taxes not yet due. The Company has made accruals
for Taxes on the Company SEC Financial Statements that are adequate
to cover any Tax liability of the Company determined in accordance
with GAAP through the date of the applicable Company SEC Financial
Statements, and any Taxes of the Company arising after the date of
the most recent Company SEC Financial Statements and at or before
the Effective Time have been or will be incurred in the ordinary
course of the Company’s business.
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(ii)
|
As of the date of this Agreement, no
federal, state, local or foreign audits, suits or other
administrative proceedings or court proceedings are presently
pending with regard to any Taxes or Tax Returns of Parent, and the
Company has not received a written notice of any material pending
or proposed claims, audits or proceedings with respect to Taxes.
The Company has not granted any outstanding extensions of the time
in which any Tax may be assessed or collected by any Tax
authority. There is no action, suit, proceeding or audit with
respect to any Tax or, to the knowledge of the Company, threatened
against or with respect to the Company. The Company has
not received any notice of deficiency or assessment from any
Governmental Entity for any amount of Tax that has not been fully
settled or satisfied, and to the knowledge of the Company no such
deficiency or assessment is proposed.
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(iii)
|
No claim has been made in writing by
any Governmental Entity in a jurisdiction where the Company does
not file Tax Returns that any such entity is, or may be,
subject to taxation by that jurisdiction.
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(1)
|
Properties
. The Company (i) has good and
marketable title to all the properties and assets
(A) reflected in the Company Financial Statements as being
owned by the Company (other than any such properties or assets sold
or disposed of since such date in the ordinary course of business
consistent with past practice) or (B) acquired after March 31,
2008 which are material to the Company’s business, free and
clear of all Liens. The Company has good and valid leasehold
interests in all real property leases, subleases and occupancy
agreements to which the Company is a party (the “ Company
Leases ”) and is in sole possession of the properties
purported to be leased thereunder.
Section 3.01(l) of the Company Disclosure Letter
lists and describes briefly all Company Leases. Each Company
Lease is in full force and effect and constitutes a legal, valid
and binding obligation of, and is legally enforceable against, the
respective parties thereto. There is no uncured breach, and no
default exists, on the part of landlord under any of the
Company Leases, and the Company has no knowledge of breach or
default or any event, condition or state of facts, which with the
giving of notice or the passage of time, or both, would constitute
a breach or default by the Company under any Company Lease. There
is no suit, action, arbitration or other proceeding with respect to
the Company Leases or the premises leased under the Company Leases.
The Company has not received notice and does not otherwise have
knowledge of any pending, threatened or contemplated condemnation
proceeding affecting any premises leased by the Company or any
part thereof or of any sale or other disposition of any such
leased premises or any part thereof in lieu of condemnation.
The real property leased to the Company under the Company Leases
encompasses all real property used by the Company, and the Company
does not own any real property and does not have any options to
purchase real property. The landlord under each of the Company
Leases has performed all initial improvements required to be
performed by it under such Company Lease and all tenant
improvements allowances have been paid to the Company as tenant
under such Company Lease. All insurance required to be maintained
by the Company under each of the Company Leases is in full force
and effect.
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(m)
|
Environmental
Matters .
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(i)
|
The Company holds and is in
compliance in all material respects with all Environmental Permits
and the Company is, and has been, otherwise in compliance with all
Environmental Laws in all material respects and, to the knowledge
of the Company, there are no conditions that might prevent or
interfere with such compliance in the future.
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(ii)
|
The Company has not received any
Environmental Claim, and to the knowledge of the Company there is
no threatened Environmental Claim.
|
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(iii)
|
The Company has not entered into any consent
decree, order or agreement under any Environmental Law.
|
|
(iv)
|
There are no (A) underground
storage tanks, (B) polychlorinated biphenyls, (C) friable
asbestos or asbestos-containing materials, (D) sumps,
(E) surface impoundments, (F) landfills or
(G) sewers or septic systems present at any facility currently
leased, operated or otherwise used by the Company that could
reasonably be expected to give rise to liability of the Company
under any Environmental Laws.
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(v)
|
There are no past (including,
without limitation, with respect to assets or businesses formerly
owned, leased or operated by the Company) or present actions,
activities, events, conditions or circumstances, including, without
limitation, the release, threatened release, emission, discharge,
generation, treatment, storage or disposal of Hazardous Materials,
that could reasonably be expected to give rise to liability of the
Company under any Environmental Laws.
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(vi)
|
No modification, revocation,
reissuance, alteration, transfer or amendment of the Environmental
Permits, or any review by, or approval of, any third party of the
Environmental Permits is required in connection with the execution
or delivery of this Agreement or the consummation of the
transactions contemplated hereby or the continuation of the
business of the Company following such consummation.
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|
(vii)
|
Hazardous Materials have not been
generated, transported, treated, stored, disposed of, arranged to
be disposed of, released or threatened to be released at, on, from
or under any of the properties or facilities currently leased or
otherwise used by the Company, in violation of or so as could
result in liability under, any Environmental Laws.
|
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(viii)
|
The Company has not contractually assumed any
liabilities or obligations under any Environmental Laws.
|
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|
(n)
|
Contracts; Debt Instruments .
|
|
(i)
|
The Company is not, and has not
received any notice and has no knowledge that any other party is,
in default in any material respect under any contract, agreement,
commitment, arrangement, lease, policy or other instrument to which
it is a party or by which it is bound; and, to the knowledge of the
Company, there has not occurred any event that with the lapse of
time or the giving of notice or both would constitute such a
default.
|
|
(ii)
|
The Company has delivered to Parent
and Merger Sub (x) true, complete and correct copies of all
loan or credit agreements, notes, bonds, mortgages, indentures and
other agreements and instruments pursuant to which any Indebtedness
of the Company is outstanding and (y) accurate information
regarding the respective principal amounts currently outstanding
thereunder.
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(iii)
|
The Company has delivered to Parent
and Merger Sub true, complete and correct copies of all other
contracts, agreements, commitments, arrangements, leases, policies
or other instruments that are material to the business of the
Company, including, without limitation, any non-compete agreement
or any other agreement requiring expenditures above
$25,000.
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(o)
|
No Brokers
. No broker, investment
banker, financial advisor or other Person (including, without
limitation, SCO Capital Partners LLC and/or its affiliates) is
entitled to any broker’s finder’s, financial
advisor’s or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company.
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(p)
|
Intellectual Property
.
|
|
|
Section 3.01(p)(i) of the Company Disclosure Letter sets
forth all Intellectual Property owned by the Company, which is
registered or filed with, or has been submitted to, any
Governmental Entity, and all Intellectual Property licensed from
third parties by the Company, and the nature of the Company’s
rights therein.
|
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(ii)
|
The Company owns or has the right to
use all Intellectual Property necessary for the Company to conduct
its business as it is currently conducted and consistent with past
practice.
|
|
(iii)
|
All of the Intellectual Property
used by the Company is subsisting and unexpired, free of all Liens,
has not been abandoned and, to the knowledge of the Company, does
not infringe the intellectual property rights of any third party.
None of the Intellectual Property to the extent used by the Company
is the subject of any license, security interest or other agreement
to which the Company is a party granting rights therein to any
third party. No judgment, decree, injunction, rule or order
has been rendered by any U.S. federal or state or foreign
Governmental Entity which would limit, cancel or question the
validity of, or the Company’s rights in and to any
Intellectual Property in any material respect. The Company has not
received notice of any pending or threatened suit, action or
proceeding that seeks to limit, cancel or question the validity of,
or the Company’s rights in and to any Intellectual Property.
The Company takes reasonable steps to protect, maintain and
safeguard its Intellectual Property, including any Intellectual
Property for which improper or unauthorized disclosure would impair
its value or validity, and have executed appropriate agreements and
made appropriate filings and registrations in connection with the
foregoing.
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(q)
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Government Licenses; Compliance
With FDC Act and Other Regulatory Requirements.
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(i)
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The Company holds all material
authorizations, consents, approvals, franchises, licenses and
permits required under applicable law or regulation for the
operation of the business of the Company as presently operated (the
“ Company Permits ”). All the
Company Permits have been duly issued or obtained and are in full
force and effect, and the Company is in material compliance with
the terms of all the Company Permits. The Company has not
engaged in any activity that would cause revocation or suspension
of any such Company Permits. Neither the execution, delivery
nor performance of this Agreement shall adversely affect the status
of any of the Company Permits.
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(ii)
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Without limiting the generality of
the representations and warranties made in sub-paragraph
(i) above, the Company represents and warrants that
(i) all Pharmaceutical Products that are subject to the
jurisdiction of the United States Food and Drug Administration (the
“ FDA ”) are being developed, labelled,
stored, tested and distributed directly by the Company in
substantial compliance with all applicable requirements under the
Federal Food, Drug and Cosmetic Act of 1938 (the “
FDCA ”), the Public Health Service Act of 1944
(the “ PHSA ”) and all applicable similar
state and foreign Legal Requirements, including those relating to
investigational use, premarket clearance and applications or
abbreviated applications to market a new Pharmaceutical
Product. “ Pharmaceutical Products
” shall mean all biological and drug candidates, compounds or
products being researched, tested, developed, manufactured or
distributed by the Company, (ii) all preclinical studies and
clinical trials conducted by the Company have been, and are being,
conducted
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