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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported)
November 18, 1994
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Amgen Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-12477 95-3540776
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(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
1840 Dehavilland Drive, Thousand Oaks, California 91320-1789
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(805) 447-1000
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(Former name or former address, if changed since last report.)
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
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On November 18, 1994, Amgen Inc. ("Amgen") and Synergen,
Inc. ("Synergen") announced that they have entered into a
definitive agreement through which Amgen will acquire Synergen.
Pursuant to this agreement, Amgen will commence no later than
November 29, 1994 a cash tender offer for all outstanding shares
of Synergen common stock (including the associated preferred
stock purchase rights) for $9.25 per share. Any shares not
purchased in the offer will be acquired for the same price in
cash, in a second-step merger. Funds from Amgen's working
capital will be used to purchase shares of Synergen stock. In
determining the amount to be offered for the shares of Synergen
stock, Amgen considered, among other things, the financial
condition and results of operations of Synergen and detailed
financial and valuation analyses presented to Amgen by Amgen's
financial advisors. It is anticipated that at least some of the
assets constituting plant, equipment and other physical property
generally used in Synergen's business will continue to be used by
Amgen for such purposes but Amgen has not yet determined how it
intends to use all of such assets proposed to be acquired. The
proposed acquisition is subject to the purchase of a majority of
the outstanding shares of Synergen common stock in the tender
offer and various other conditions. Amgen and Synergen
anticipate that the acquisition will be completed by December 31,
1994.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
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(a) Financial statements of businesses acquired; and
(b) Pro forma financial information
It is impracticable to provide at this time the required
financial statements for Synergen and the required pro forma
financial information. The required financial statements and pro
forma financial information will be filed as soon as practicable,
but not later than the date required to be filed pursuant to the
provisions of Item 7(a)(4) of Form 8-K.
(c) Exhibits
7(c) Agreement and Plan of Merger among Amgen Inc.,
Amgen Acquisition Subsidiary, Inc. and Synergen,
Inc.
Signatures
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Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Amgen Inc.
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(Registrant)
December 2, 1994 /s/ Robert S. Attiyeh
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(Date) (Signature)
Robert S. Attiyeh
Senior Vice President,
Finance and Corporate Development,
and Chief Financial Officer
CONFORMED COPY
EXHIBIT 7(C)
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AGREEMENT AND PLAN OF MERGER
AMONG
AMGEN INC.
AMGEN ACQUISITION SUBSIDIARY, INC.
AND
SYNERGEN, INC.
TABLE OF CONTENTS
PAGE
----
RECITALS............................................................. 1
AGREEMENT............................................................ 1
1. THE OFFER....................................................... 1
1.1 The Offer................................................ 1
1.2 Company Action........................................... 2
1.3 Directors................................................ 3
2. THE MERGER...................................................... 3
2.1 The Merger............................................... 3
2.2 Effect of the Merger..................................... 3
2.3 Consummation of the Merger............................... 3
2.4 Certificate of Incorporation; Bylaws; Directors and Officers 4
2.5 Conversion of Securities................................. 4
2.6 Company Stock Options and Related Matters................ 4
2.7 Treatment of Warrants.................................... 4
2.8 Exchange of Certificates................................. 5
3. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER.......... 5
3.1 Organization and Qualification........................... 5
3.2 Authority Relative to this Agreement..................... 6
3.3 Compliance............................................... 6
3.4 Available Funds.......................................... 6
3.5 Company Stock............................................ 6
4. REPRESENTATIONS AND WARRANTIES OF COMPANY....................... 7
4.1 Organization and Qualification........................... 7
4.2 Subsidiaries............................................. 7
4.3 Capitalization........................................... 7
4.4 Authority Relative to this Agreement..................... 8
4.5 Compliance............................................... 8
4.6 Commission Filings....................................... 8
4.7 Absence of Undisclosed Liabilities....................... 9
4.8 Litigation............................................... 9
4.9 Board Recommendation; Qualifying Offer................... 9
4.10 Compliance with Law...................................... 9
4.11 Changes.................................................. 9
4.12 Taxes.................................................... 10
4.13 Title to Properties; Condition of Properties............. 10
4.14 Contracts................................................ 11
4.15 Employee Benefit Plans................................... 11
4.16 Compliance With Legislation Regulating Environmental Quality 14
4.17 Labor Matters............................................ 15
4.18 Absence of Questionable Payments......................... 15
4.19 Intellectual Property.................................... 15
4.20 Cash and Cash Equivalents and Short-term Investments..... 15
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PAGE
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5. CONDUCT OF BUSINESS PENDING THE MERGER.......................... 16
5.1 Ordinary Course of Business.............................. 16
5.2 Preservation of Organization............................. 16
5.3 Capitalization Changes................................... 16
5.4 Sale of Assets........................................... 16
5.5 Dividends and Repurchases................................ 16
5.6 Acquisitions............................................. 16
5.7 Indebtedness............................................. 16
5.8 Severance and Termination Pay............................ 16
5.9 Employee Benefits........................................ 17
5.10 Tax Election............................................. 17
5.11 Subsequent Financials.................................... 17
6. ADDITIONAL AGREEMENTS........................................... 17
6.1 Proxy Statement.......................................... 17
6.2 Meeting of Stockholders of Company; Voting
and Disposition of the Shares....................... 17
6.3 Stock Options............................................ 18
6.4 Fees and Expenses........................................ 18
6.5 Additional Agreements.................................... 18
6.6 No Solicitation of Transactions.......................... 18
6.7 Notification of Certain Matters.......................... 19
6.8 Access to Information.................................... 19
6.9 Officers' and Directors' Insurance; Indemnification...... 19
6.10 Severance................................................ 20
6.11 Liquidated Damages....................................... 20
7. CONDITIONS...................................................... 20
7.1 Conditions to Obligation of Each Party to Effect the Merger 20
8. TERMINATION, AMENDMENT AND WAIVER............................... 20
8.1 Termination.............................................. 20
8.2 Effect of Termination.................................... 21
8.3 Amendment................................................ 21
8.4 Waiver................................................... 21
9. GENERAL PROVISIONS.............................................. 22
9.1 Brokers.................................................. 22
9.2 Public Statements........................................ 22
9.3 Notices.................................................. 22
9.4 Interpretation........................................... 22
9.5 Representations and Warranties; Etc...................... 23
9.6 Miscellaneous............................................ 23
Annex I.............................................................. I-1
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of November
17, 1994, is among Amgen Inc., a Delaware corporation ("Parent"), Amgen
Acquisition Subsidiary, Inc., a Delaware corporation and a wholly owned
subsidiary of Parent ("Purchaser") and Synergen, Inc., a Delaware corporation
("Company").
RECITALS
A. The respective Boards of Directors of Parent, Purchaser and Company
have approved the acquisition of Company pursuant to the terms of this
Agreement.
B. In furtherance of such acquisition it is proposed that Purchaser will
make a tender offer (the "Offer") to purchase all of the issued and outstanding
shares of Common Stock, par value $0.01 per share, of Company (the "Common
Stock"), together with all of the associated rights to purchase units of Series
A Junior Participating Preferred Stock, par value $0.01 per share, of Company
(the "Rights"), for $9.25 per share net to the seller in cash. The Common Stock
and the Rights are hereinafter collectively referred to as the "Shares."
C. The Board of Directors of Company (the "Board of Directors") has duly
approved the Offer and resolved to recommend its acceptance by Company's
stockholders.
D. The respective Boards of Directors of Parent, Purchaser and Company
have each duly approved the merger of Purchaser and Company (the "Merger")
following consummation of the Offer, in accordance with the General Corporation
Law of the State of Delaware (the "Delaware Law").
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, Parent, Purchaser and Company hereby
agree as follows:
1. THE OFFER
1.1 The Offer.
(a) Provided that this Agreement shall not have been terminated pursuant to
Section 8.1 and that none of the events set forth in Annex I hereto shall have
occurred, Purchaser shall, and Parent shall cause Purchaser to, as soon as
practicable after the date hereof, and in any event within five business days of
the day on which the proposed Offer is announced, commence (within the meaning
of Rule 14d-2(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) the Offer for all of the outstanding Shares at a price of $9.25
per Share net to the seller in cash.
(b) The obligations of Purchaser to consummate the Offer and to accept for
payment and pay for any of the Shares tendered shall be subject only to the
conditions set forth on Annex I, including the condition that a minimum of not
less than a majority of the Shares outstanding on a fully diluted basis
(including for purposes of such calculation all Shares issuable upon exercise of
outstanding Options (as defined in Section 2.6), but excluding for purposes of
such calculation all Shares issuable upon exercise of outstanding Warrants (as
defined in Section 2.7), Rights and any other rights or securities to purchase
or acquire the Shares) being validly tendered and not withdrawn prior to the
expiration of the Offer (the "Minimum Condition"). The Offer shall remain open
for a minimum of 20 business days after commencement of the Offer as provided in
Rule 14e-1 promulgated by the Commission (the "Expiration Date"), unless
Purchaser extends the Offer as permitted by this Agreement, in which case the
"Expiration Date" means the latest time and date to which the Offer is extended.
(c) Purchaser reserves the right to waive any conditions to the Offer,
other than the Minimum Condition, to increase the price per Share payable in the
Offer or to make any other changes in the terms and
conditions of the Offer; provided, however, that no such change may be made
which decreases the price per Share, changes the form of consideration payable
in the Offer, reduces the maximum number of Shares to be purchased in the Offer,
imposes conditions to the Offer in addition to those set forth in Annex I or
amends any other material term of the Offer in a manner materially adverse to
Company's stockholders without Company's prior written consent; provided,
further, however, that notwithstanding the foregoing Purchaser may waive the
Minimum Condition if Purchaser after consultation with Company, upon
consummation of the Offer, accepts for payment and pays for a majority of the
Shares outstanding at the time of such consummation. The Offer may not, without
Company's prior written consent, be extended, except as necessary to provide
time to satisfy the conditions set forth in Annex I; provided, however, that
Purchaser may extend (and re-extend) the Offer for up to a total of 10 business
days, if as of the initial Expiration Date, there shall not have been validly
tendered and not withdrawn at least 90% of the outstanding Shares so that the
Merger can be effected without a meeting of Company's stockholders in accordance
with the Delaware Law. Purchaser agrees that if all conditions set forth in
Annex I are satisfied on the initial Expiration Date, other than the Minimum
Condition or the condition set forth in paragraph (b) of Annex I, Purchaser
shall extend (and re-extend) the Offer for up to a maximum of 20 business days
to provide time to satisfy either such conditions, so long as all such other
conditions remain satisfied.
(d) The Offer shall be made by means of an offer to purchase (the "Offer to
Purchase") containing the terms set forth in this Agreement and the conditions
set forth in Annex I. As soon as practicable on the date of commencement of the
Offer, Parent and Purchaser shall file with the Securities and Exchange
Commission (the "Commission") with respect to the Offer a Schedule 14D-1 (the
"Schedule 14D-1") which will comply as to form in all material respects with the
provisions of applicable federal securities law, and will contain the Offer to
Purchase and forms of the related letter of transmittal and summary
advertisement (which documents, together with any supplements or amendments
thereto, are referred to herein collectively as the "Offer Documents"). The
Schedule 14D-1 and the Offer Documents, on the date the Schedule 14D-1 is filed
with the Commission, and on the date the Offer Documents are first published,
sent or given to Company's stockholders, as the case may be, shall not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and Parent and Purchaser agree promptly to correct the Schedule
14D-1 or the Offer Documents if and to the extent that either shall have become
false or misleading in any material respect and to take all steps necessary to
cause such Schedule 14D-1 as so corrected to be filed with the Commission and
such Offer Documents as so corrected to be disseminated to holders of Shares, in
each case as and to the extent required by applicable federal securities laws.
Company and its counsel shall be given reasonable opportunity to review the
Offer Documents prior to the filing with the Commission. Company agrees to file
contemporaneously with the commencement of the Offer with the Commission a
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
which will comply as to form in all material respects with the provisions of
applicable federal securities laws. The Schedule 14D9, on the date filed with
the Commission and on the date first published, sent or given to Company's
stockholders, as the case may be, shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and Company agrees
promptly to correct the Schedule 14D-9 if and to the extent that it shall have
become false or misleading in any material respect and to take all steps
necessary to cause such Schedule 14D-9 as so corrected to be filed with the
Commission and mailed to Company's stockholders to the extent required by
applicable federal securities laws. Subject to the fiduciary duties of the Board
of Directors, as advised by counsel, the Offer Documents and the Schedule 14D-9
shall contain the recommendation of the Board of Directors that Company's
stockholders accept the Offer.
1.2 Company Action. Company represents that the Board of Directors has
duly approved by a unanimous vote the Offer and the Merger and resolved to
recommend acceptance of the Offer and approval of the Merger by Company's
stockholders. Company will promptly furnish Parent or Purchaser with mailing
labels containing the names and addresses of the record holders of Shares and,
to the extent available (including upon request), lists of securities positions
of Shares held in stock depositories, each as of a recent date, and shall
furnish Purchaser with such additional information, including updated lists of
stockholders,
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mailing labels and lists of securities positions, and assistance as Purchaser
may reasonably request in connection with communicating the Offer. Subject to
the requirements of law, and except for such steps as are necessary to
disseminate the Offer Documents, Parent and Purchaser shall hold in confidence
the information contained in any of such labels and lists and the additional
information referred to in the preceding sentence, shall use such information
only in connection with the Offer, and, if this Agreement is terminated, shall
deliver to Company all such written information and any copies or extracts
thereof then in their possession.
1.3 Directors. Promptly upon the acceptance for payment and payment by
Purchaser or any of its subsidiaries of such number of Shares which satisfies
the Minimum Condition and from time to time thereafter, Parent shall be entitled
to designate a majority of the members of the Board of Directors, subject to
compliance with Section 14(f) of the Exchange Act. Subject to applicable law,
Company shall take all action necessary to effect any such election, including
mailing to its stockholders the information required by Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder. Notwithstanding anything in
this Agreement to the contrary, the affirmative vote of a majority of Company's
directors (or the approval of the director, if there is only one remaining) then
in office who are directors on the date hereof or are directors (other than
directors designated by Purchaser) designated by such persons to fill any
vacancy, shall be required to (i) amend or modify Company's Certificate of
Incorporation or Bylaws, (ii) take any action by Company pursuant to Sections
8.1, 8.3 or 8.4 of this Agreement or (iii) approve any other action by Company
which adversely affects the interests of the stockholders of Company (other than
Parent, Purchaser and their affiliates) with respect to the transactions
contemplated hereby.
2. THE MERGER
2.1 The Merger. At the Effective Date, in accordance with this Agreement
and the Delaware Law, Purchaser shall be merged with and into Company, the
separate existence of Purchaser (except as may be continued by operation of law)
shall cease, and Company shall continue as the surviving corporation under the
corporate name it possesses immediately prior to the Effective Date. Company
hereinafter sometimes is referred to as the "Surviving Corporation." At the
election of Parent, the Merger may be structured so that Company shall be merged
with and into Purchaser with the result that Purchaser shall be the "Surviving
Corporation." If Parent elects to structure the Merger so that Purchaser, rather
than Company, is the Surviving Corporation, the inaccuracy of any representation
or warranty of Company which is premised on the assumption that Company shall be
the Surviving Corporation, which representation or warranty becomes inaccurate
solely as a result of Purchaser, rather than Company, being the Surviving
Corporation, shall not be deemed to be a breach of such representation or
warranty and shall not release Purchaser from its duties and obligations under
the Offer and this Agreement.
2.2 Effect of the Merger. When the Merger has been effected, the
Surviving Corporation shall thereupon and thereafter possess all the rights,
privileges, immunities and franchises, of a public as well as of a private
nature, of Purchaser and Company (the "Constituent Corporations"); all property,
real, personal and mixed, and all debts due on whatever account and all choses
in action, and all and every other interest, of or belonging to or due each of
the Constituent Corporations shall be vested in the Surviving Corporation
without further act or deed; and the title to any real estate, or any interest
therein, vested in Purchaser, Company or the Surviving Corporation shall not
revert or be in any way impaired by reason of the Merger. The Surviving
Corporation shall thereupon and thereafter be responsible and liable for all the
liabilities and obligations of each of the Constituent Corporations so merged;
any claim existing or action or proceeding pending by or against any of the
Constituent Corporations may be prosecuted as if the Merger had not taken place,
or the Surviving Corporation may be substituted in its place. The Surviving
Corporation thereupon and thereafter shall have all the rights, privileges,
immunities and powers and shall be subject to all the duties and liabilities of
a corporation organized under the Delaware Law, and neither the rights of
creditors nor any liens upon the respective properties of the Constituent
Corporations and the Surviving Corporation shall be impaired by the Merger; all
with the effect set forth in the Delaware Law.
2.3 Consummation of the Merger. As soon as is practicable after the
satisfaction or waiver of the conditions hereinafter set forth, the parties
hereto will cause the Merger to be consummated by filing with the
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Secretary of State of Delaware a certificate of merger in such form as required
by, and executed in accordance with, the relevant provisions of the Delaware Law
(the time of such filing being the "Effective Date").
2.4 Certificate of Incorporation; Bylaws; Directors and Officers. The
Certificate of Incorporation and Bylaws of Purchaser shall be the Certificate of
Incorporation and Bylaws of the Surviving Corporation, as in effect immediately
prior to the Effective Date, until thereafter amended as provided therein and
under the Delaware Law. The directors of Purchaser immediately prior to the
Effective Date will be the initial directors of the Surviving Corporation, and
the officers of Company immediately prior to the Effective Date will be the
initial officers of the Surviving Corporation, in each case until their
successors are elected and qualified.
2.5 Conversion of Securities. At the Effective Date, by virtue of the
Merger and without any action on the part of Purchaser, Company, the Surviving
Corporation or the holder of any of the following securities:
(a) Each Share issued and outstanding immediately prior to the
Effective Date (other than Shares to be cancelled pursuant to Section
2.5(b) hereof and Shares held by any holder who becomes entitled to the
payment of the fair value for his Shares under the Delaware Law if the
Delaware Law provides for such payment in connection with the Merger
("Dissenting Shares")) shall be cancelled and extinguished and be converted
into and become a right to receive $9.25 in cash, or such higher amount per
share as is paid pursuant to the Offer (the "Merger Consideration").
(b) Each Share which is issued and outstanding immediately prior to
the Effective Date and owned by Purchaser, Parent or Company or any direct
or indirect subsidiary of Purchaser, Parent or Company, shall be cancelled
and retired, and no payment shall be made with respect thereto.
(c) Each share of Common Stock, par value $0.01 per share, of
Purchaser issued and outstanding immediately prior to the Effective Date
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.
(d) All notes and other debt instruments of Company which are
outstanding at the Effective Date shall continue to be outstanding
subsequent to the Effective Date as debt instruments of the Surviving
Corporation, if permitted by their respective terms and provisions.
The holders of Dissenting Shares, if any, shall be entitled to payment for
such Shares only to the extent permitted by and in accordance with the
provisions of Section 262 of the Delaware Law; provided, however, that if, in
accordance with such Section of the Delaware Law, any holder of Dissenting
Shares shall forfeit such right to payment of the fair value of such Shares,
such Shares shall thereupon be deemed to have been converted into and to have
become exchangeable for, as of the Effective Date, the right to receive the
Merger Consideration provided in Section 2.5(a) of this Agreement.
2.6 Company Stock Options and Related Matters. As promptly as practicable
after the Effective Date, each holder of a then outstanding employee or director
stock option (an "Option") to purchase Shares heretofore granted under any
Employee Plan (as defined in Section 4.15), other than any Options that are held
by any director of Company or any officer (as that term is defined in Rule
16a-1(f) promulgated by the Commission) of Company and that were granted (or
deemed granted) at any time on or after the date that is six months prior to the
Effective Date (the "Recent Insider Options"), will be entitled (whether or not
such Option is then exercisable) to receive in consideration of cancellation of
such Option (and any outstanding stock appreciation right related thereto) a
cash payment from Company in an amount equal to the difference between the
Merger Consideration and the per Share exercise price of such Option, multiplied
by the number of Shares covered by such Option. The Recent Insider Options shall
remain outstanding in accordance with their terms and shall not be affected in
any way by the consummation of the Merger.
2.7 Treatment of Warrants. Each (i) warrant outstanding pursuant to the
Warrant Agreement dated as of February 1, 1990 by and between Company and Bank
of America, NT & SA, as Warrant Agent (the "Warrant Agreement") (the "Syntex
Joint Venture Warrants"), (ii) Class A Warrant outstanding issued in connection
with the Sales Agency Agreement dated January 4, 1991 by and between, among
others, PaineWebber Development Corporation and Company (the "Sales Agency
Agreement") (the "Class A Warrants"), (iii) Class B Warrant outstanding issued
in connection with the Sales Agency Agreement (the "Class B Warrants"), (iv)
Investment Executive Warrant outstanding issued in connection with the Sales
4
Agency Agreement (the "Investment Executive Warrants") and (v) warrant
outstanding issued in connection with Company's purchase of the assets of
Synergen Development Partners Limited (the "Development Partners Warrants")
(collectively, the Syntex Joint Venture Warrants, Class A Warrants, Class B
Warrants, Investment Executive Warrants and Development Partners Warrants are
referred to herein as the "Warrants") will be unaffected by the Merger, except
as otherwise provided in the Warrant Agreement or Warrants.
2.8 Exchange of Certificates.
(a) From and after the Effective Date, a bank or trust company to be
designated by Parent (the "Exchange Agent") shall act as exchange agent in
effecting the exchange of certificates (the "Certificates") for the Merger
Consideration, which Certificates, prior to the Effective Date, represented
Shares entitled to payment pursuant to Section 2.5. On or before the Effective
Date, Parent or Purchaser shall deposit with the Exchange Agent the Merger
Consideration in trust for the benefit of the holders of Certificates. Upon the
surrender of each such Certificate and the issuance and delivery by the Exchange
Agent of the Merger Consideration in exchange therefor, such Certificates shall
forthwith be cancelled. Until so surrendered and exchanged, each such
Certificate (other than Certificates representing Shares held by Purchaser,
Parent or Company or any direct or indirect subsidiary of Purchaser, Parent or
Company or Dissenting Shares) shall represent solely the right to receive the
Merger Consideration multiplied by the number of Shares represented by such
Certificate. Upon the surrender and exchange of such an outstanding Certificate,
the holder shall receive the Merger Consideration, without any interest thereon.
If any cash is to be paid to a name other than the name in which the Certificate
representing Shares surrendered in exchange therefor is registered, it shall be
a condition to such payment or exchange that the person requesting such payment
or exchange shall pay to the Exchange Agent any transfer or other taxes required
by reason of the payment of such cash to a name other than that of the
registered holder of the Certificate surrendered, or such person shall establish
to the satisfaction of the Exchange Agent that such tax has been paid or is not
applicable. Notwithstanding the foregoing, neither the Exchange Agent nor any
party hereto shall be liable to a holder of Shares for any Merger Consideration
or interest or other payments made with respect to the Merger Consideration
delivered to a public official pursuant to applicable abandoned property,
escheat and similar laws.
(b) Promptly following the date which is six months after the Effective
Date, the Exchange Agent shall return to the Surviving Corporation all Merger
Consideration in its possession relating to the transactions described in this
Agreement, and the Exchange Agent's duties shall terminate. Thereafter, each
holder of a Certificate representing a Share may surrender such Certificate to
the Surviving Corporation and (subject to applicable abandoned property, escheat
and similar laws) receive in exchange therefor the Merger Consideration, without
any interest thereon.
(c) Promptly after the Effective Date, the Exchange Agent shall mail to
each record holder of Certificates which immediately prior to the Effective Date
represented Shares, a form of letter of transmittal and instructions for use in
surrendering such Certificates and receiving the Merger Consideration therefor.
(d) After the Effective Date, there shall be no transfers on the stock
transfer books of the Surviving Corporation of any Shares. If, after the
Effective Date, Certificates for Shares are presented to the Surviving
Corporation or the Exchange Agent, they shall be cancelled and exchanged for the
Merger Consideration, as provided in this Article 2, subject to applicable law
in the case of Dissenting Shares.
3. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Each of Parent and Purchaser represents and warrants to Company as follows:
3.1 Organization and Qualification. Each of Parent and Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of Delaware and has the requisite corporate power to carry on its respective
business as now conducted. Each of Parent and Purchaser is duly qualified as a
foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or leased or the nature
of its activities makes such qualification necessary, except for failures to be
so qualified or in good standing which would not have a material adverse effect
on the condition (financial or other), results of operations, business or
properties (a "Material Adverse Effect") of Parent and its subsidiaries
5
taken as a whole. Copies of the Certificates of Incorporation and Bylaws of
Parent and Purchaser delivered to Company are accurate and complete as of the
date hereof.
3.2 Authority Relative to this Agreement. Each of Parent and Purchaser
has the requisite corporate power and authority to enter into this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereunder. The execution and delivery of this Agreement by Parent
and Purchaser and the consummation by Parent and Purchaser of the transactions
contemplated hereby have been duly authorized by the respective Boards of
Directors of Parent and Purchaser and no other corporate proceeding on the part
of Parent and Purchaser is necessary to authorize the execution, delivery and
performance of this Agreement and the transactions contemplated hereby, except
for the corporate proceedings, if any, necessary to amend the Certificate of
Incorporation of Purchaser to provide the capital structure required for the
Merger (which proceedings shall be taken prior to the Effective Date). This
Agreement has been duly executed and delivered by Parent and Purchaser and
constitutes a valid and binding obligation of each such company, enforceable
against each such company in accordance with its terms, except to the extent
that its enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors' rights
generally or by general equitable principles.
3.3 Compliance.
(a) Neither the execution and delivery of this Agreement by Parent and
Purchaser, nor the consummation by Parent and Purchaser of the transactions
contemplated hereby, nor compliance by Parent and Purchaser with any of the
provisions hereof will (i) violate, conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or result in a right of
termination or acceleration under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or assets of
Parent and Purchaser or any other direct or indirect subsidiary of Parent under,
any of the terms, conditions or provisions of (x) the Certificates of
Incorporation or Bylaws of Parent or Purchaser or any other direct or indirect
subsidiary of Parent or (y) any material note, bond, mortgage, indenture, deed
of trust, license, lease, agreement or other material instrument or obligation
to which Parent and Purchaser or any other direct or indirect subsidiary of
Parent is a party, or to which any of them, or any of their respective
properties or assets, may be subject, or (ii) subject to compliance with the
statutes and regulations referred to in the next paragraph, violate any
judgment, ruling, order, writ, injunction, decree, statute, rule or regulation
applicable to Parent or Purchaser or any other direct or indirect subsidiary of
Parent or any of their respective properties or assets; except, in the case of
each of clauses (i) and (ii) above, for such violations, conflicts, breaches,
defaults, terminations, accelerations or creations of liens, security interests,
charges or encumbrances which would not have a Material Adverse Effect on Parent
and its subsidiaries taken as a whole.
(b) Other than in connection with or in compliance with the provisions of
the Delaware Law, the Exchange Act, the "takeover" or "blue sky" laws of various
states, the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations thereunder (the "Hart-Scott-Rodino Act"), and any
required material foreign regulatory approvals, no notice to, filing with, or
authorization, consent or approval of, any domestic or foreign public body or
authority is necessary for the consummation by Parent and Purchaser of the
transactions contemplated by this Agreement, except where failure to give such
notice, make such filings, or obtain such authorizations, consents or approvals
would not have a Material Adverse Effect on Parent and its subsidiaries taken as
a whole or prevent Parent and Purchaser from performing their obligations
hereunder.
3.4 Available Funds. Parent has or has available to it out of internal
corporate funds, and will make available to Purchaser, all funds necessary to
satisfy all of Parent's and Purchaser's obligations under this Agreement and in
connection with the transactions contemplated hereby, including, without
limitation, the obligation to purchase all outstanding Shares pursuant to the
Offer and the Merger and to pay, subject to Section 6.4, all related fees and
expenses in connection with the Offer and the Merger.
3.5 Company Stock. Parent does not beneficially own any Shares.
6
4. REPRESENTATIONS AND WARRANTIES OF COMPANY
Company represents and warrants to Parent and Purchaser, except as set
forth on a Disclosure Schedule previously delivered to Parent (the "Disclosure
Schedule") or as set forth in, or incorporated by reference into, the SEC
Reports (as defined in Section 4.6), the following:
4.1 Organization and Qualification. Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite corporate power to carry on its business as it is
now being conducted. Company is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
its properties owned or leased or the nature of its activities makes such
qualification necessary. Copies of the Certificate of Incorporation and Bylaws
of Company heretofore delivered to Parent are accurate and complete as of the
date hereof. All material corporate actions taken by Company and each of its
subsidiaries (the "Subsidiaries") since incorporation have been duly authorized
or ratified by all appropriate action.
4.2 Subsidiaries. The only Subsidiaries are those named in the Disclosure
Schedule or in Exhibit 21.1 to Company's Annual Report on Form 10-K for the
Fiscal Year Ended December 31, 1993, as filed with the Commission and heretofore
delivered to Parent. Except as set forth in such exhibit and except for
directors' qualifying shares in the case of non-United States Subsidiaries, (i)
Company is, directly or indirectly, the record and beneficial owner of all of
the outstanding shares of capital stock of each of the Subsidiaries, (ii) there
are no irrevocable proxies with respect to such shares, (iii) no equity
securities of any of the Subsidiaries are or may become required to be issued by
reason of any options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of any capital stock of any
Subsidiary, and (iv) there are no contracts, commitments, understandings or
arrangements by which any Subsidiary is bound to issue additional shares of its
capital stock or securities convertible into or exchangeable for such shares.
All of such shares so owned by Company are owned by it free and clear of any
claim, lien, encumbrance or agreement with respect thereto. Each Subsidiary is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation and has the requisite corporate power to
carry on its business as it is now being conducted. Each Subsidiary is duly
qualified as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of its properties owned or leased or the
nature of its activities makes such qualification necessary. Copies of the
charter documents, Bylaws, and regulations, if any, of each Subsidiary, which
have been heretofore delivered or made available to Parent, are accurate and
complete.
4.3 Capitalization. The authorized capital stock of Company consists of
120,000,000 Shares and 10,000,000 shares of Preferred Stock, par value $0.01 per
share (the "Preferred Stock"). As of the date of this Agreement (i) 25,936,248
Shares are validly issued and outstanding, fully paid and nonassessable, (ii) no
shares of Preferred Stock are issued and outstanding, (iii) 2,466,782 Shares are
issuable upon exercise of outstanding Options heretofore granted under the
Employee Plans, true and complete copies of which have heretofore been furnished
to Parent, and (iv) 5,419,491 Shares are issuable upon exercise of outstanding
Warrants. Upon the announcement of the Offer, each Warrant shall only represent
the right to receive the per Share Merger Consideration upon payment by the
holder thereof of the per Share exercise price provided for in each such
Warrant. The per Share exercise price of each Warrant is as follows: (1) Syntex
Joint Venture Warrants -- $12.67, (2) Class A Warrants -- $15.69, (3) Class B
Warrants -- $15.69, (4) Investment Executive Warrants -- $16.31 and (5)
Development Partners Warrants -- $67.77. Except as contemplated by clauses (i)
through (iv) above, there are no other shares of capital stock, or other equity
securities of Company outstanding, and no other outstanding options, warrants,
rights to subscribe to (including any preemptive rights), calls or commitments
of any character whatsoever to which Company or any of its Subsidiaries is a
party or may be bound, requiring the issuance or sale of, shares of any capital
stock or other equity securities of Company or securities or rights convertible
into or exchangeable for such shares or other equity securities, and there are
no contracts, commitments, understandings or arrangements by which Company is or
may become bound to issue additional shares of its capital stock or other equity
securities or options, warrants or rights to purchase or acquire any additional
shares of its capital stock or other equity securities or securities convertible
into or exchangeable for such shares or other equity securities.
7
4.4 Authority Relative to this Agreement. Company has the requisite
corporate power and authority to enter into this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereunder.
The execution and delivery of this Agreement by Company and the consummation by
Company of the transactions contemplated hereby have been duly authorized by the
Board of Directors and no other corporate proceeding on the part of Company is
necessary to authorize the execution, delivery and performance of this Agreement
and the transactions contemplated hereby, except for the approval of Company's
stockholders as set forth in Section 6.2 of this Agreement. This Agreement has
been duly executed and delivered by Company and constitutes a valid and binding
obligation of Company, enforceable against Company in accordance with its terms,
except to the extent that its enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or other laws affecting the enforcement
of creditors rights generally or by general equitable principles.
4.5 Compliance.
(a) Neither the execution and delivery of this Agreement by Company, nor
the consummation of the transactions contemplated hereby (including the purchase
of the Shares by Purchaser pursuant to the Offer), nor compliance by Company
with any of the provisions hereof will (i) violate, conflict with, or result in
a breach of any provision of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination of, or accelerate the performance required by, or result in the
loss of any material benefit under, or result in a right of termination or
acceleration under, or result in the creation of any lien, security interest,
charge or encumbrance upon any of the properties or assets of Company or any of
its Subsidiaries under, any of the terms, conditions or provisions of (x) their
respective charter documents or Bylaws or (y) any material note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other material instrument
or obligation to which Company or any such Subsidiary is a party, or to which
any of them or any of their respective properties or assets may be subject, or
(ii) subject to compliance with the statutes and regulations referred to in the
next paragraph, violate any judgment, ruling, order, writ, injunction, decree,
statute, rule or regulation applicable to Company and its Subsidiaries or any of
their respective properties or assets; except, in the case of each of clauses
(i) and (ii) above, for such violations, conflicts, breaches, defaults,
terminations, accelerations, losses and creations as to which requisite waivers
have been obtained. As used in Articles 4 and 5, Section 6.6 and Annex I, the
term assets shall include, but not be limited to, all Proprietary Matter,
products, product rights and technologies of Company.
(b) Other than in connection with or in compliance with the provisions of
the Delaware Law, the Exchange Act, the "takeover" or "blue sky" laws of various
states, the Hart-Scott-Rodino Act, and any required material foreign regulatory
approvals, no notice to, filing with, or authorization, consent or approval of,
any domestic or foreign public body or authority is necessary for the
consummation by Company of the transactions contemplated by this Agreement.
4.6 Commission Filings. Company has filed with the Commission all
reports, registration statements and definitive proxy statements required to be
filed with the Commission since January 1, 1992 (collectively, with any
documents filed as exhibits thereto, the "SEC Reports"). Company has heretofore
made available to Parent its (i) Annual Reports on Form 10-K for the years ended
December 31, 1991, 1992 and 1993, as filed with the Commission, (ii) Quarterly
Reports on Form 10-Q for the quarters ended March 31, 1994, June 30, 1994 and
September 30, 1994, (iii) proxy statements relating to all of Company's meetings
of stockholders (whether annual or special) since January 1, 1992, and (iv) all
other reports or registration statements filed by Company with the Commission
since January 1, 1992. As of their respective dates, such reports and statements
(including all exhibits and schedules thereto and documents incorporated by
reference therein) did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements made, in light of the circumstances under which
they were made, not misleading. The audited consolidated financial statements
and unaudited consolidated interim financial statements of Company and its
Subsidiaries included or incorporated by reference in such reports, and in
Company's Annual Reports for the years ended December 31, 1991, 1992 and 1993
heretofore delivered to Parent, have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the periods
involved (except as may be indicated in the notes, or schedules thereto and
except in the case of the unaudited interim statements, as may be permitted
under Form 10-Q of the
8
Exchange Act), and fairly present the consolidated financial position of Company
and its consolidated Subsidiaries as of the dates thereof and the consolidated
results of their operations and changes in financial position for the periods
then ended (subject, in the case of any unaudited interim financial statements,
to normal year-end adjustments).
4.7 Absence of Undisclosed Liabilities. Neither Company nor any of its
Subsidiaries has any material liabilities of any nature, whether absolute,
contingent or otherwise, and whether due or to become due (including, without
limitation, all tax liabilities) which should be reflected or reserved against,
in accordance with generally accepted accounting principles, and which are not
adequately reflected or reserved against in Company's balance sheet as of
December 31, 1993, including the footnotes thereto (the "Balance Sheet"), except
such as have arisen in the ordinary course of business since December 31, 1993.
4.8 Litigation. There are no actions, suits or proceedings pending or
threatened against Company or any of its Subsidiaries, ERISA Affiliates or
Employee Plans (as such terms are defined in Section 4.15), nor is Company or
any of its Subsidiaries, ERISA Affiliates or Employee Plans subject to any
order, judgment, writ, injunction or decree.
4.9 Board Recommendation; Qualifying Offer. The Board of Directors has
duly approved and adopted this Agreement, the Offer and the Merger and other
transactions contemplated herein on the terms and conditions set forth herein,
and recommended that the stockholders of Company tender their Shares and approve
and adopt this Agreement and the Merger. The Offer is a "Qualifying Offer" as
such term is defined in the Rights Agreement dated as of October 24, 1991 by and
between Company and Manufacturers Hanover Trust Company of California, as Rights
Agent (the "Rights Agreement").
4.10 Compliance with Law. Company has not violated or failed to comply
with any material statute, law, ordinance, regulation, rule or order of any
foreign, federal, state or local government or any other governmental department
or agency, or any material judgment, decree or order of any court, applicable to
its business or operations. Company has not received any notice asserting a
failure to comply with any such statute, law, ordinance, regulation, rule,
judgment, decree or order. Company has all material permits, licenses and
franchises from governmental agencies required to conduct its present business
as it is now conducted.
4.11 Changes. Except as contemplated by this Agreement, or reflected in
any financial statement or notes thereto referred to in Section 4.6, since
December 31, 1993, none of the following have occurred:
(a) any change (or any development involving a prospective change) or
threatened change which has had, or may reasonably be expected to have, a
Material Adverse Effect on Company and its Subsidiaries taken as a whole;
(b) any material change in accounting methods, principles or practices
by Company affecting its assets, liabilities or business;
(c) any revaluation by Company of any of its assets, including without
limitation, writing down the value of inventory or writing off notes or
accounts receivable other than in the ordinary course of business;
(d) any material damage, destruction or loss;
(e) any cancellation of any material debts or waiver or release of any
material right or claim of Company relating to its business activities or
properties;
(f) any declaration, setting aside or payment of dividends or
distributions in respect of the Shares or any redemption, purchase or other
acquisition of any of its securities;
(g) any issuance by Company of, or commitment of Company to issue, any
shares of stock, options, warrants or other equity securities or
obligations or securities convertible into or exchangeable for shares of
stock, options, warrants or other equity securities, other than upon
exercise of Options, or pursuant to the terms of an Employee Plan in the
ordinary course of business and consistent with past practices;
9
(h) negotiation or execution of any material arrangement, agreement or
understanding to which Company or any of its Subsidiaries is a party which
cannot be terminated by it on notice of 30 days or less without cost or
penalty;
(i) any loan or similar transaction with any person who is an officer,
director or stockholder of Company or any of its Subsidiaries, or who is an
affiliate or associate of such a person, except in the ordinary course of
business and consistent with past practices;
(j) any capital expenditures other than in the ordinary course of
business and consistent with past practice by Company or any of its
Subsidiaries;
(k) any adoption of a plan of liquidation or resolutions providing for
the liquidation, dissolution, merger, consolidation or other reorganization
of Company;
(l) any increase in salary, bonus, fringe benefit, or incentive or
other compensation payable or to become payable to any officer, director,
employee or other person receiving compensation of any nature from Company
or any of its Subsidiaries; or any increase in the number of shares
obtainable under, or the acceleration or creation of any rights of any
person to benefits under, any Employee Plan (including, without limitation,
the acceleration of the vesting or exercisability of any stock options, the
acceleration of the vesting of any restricted stock, the acceleration of
the accrual or vesting of any benefits under any Pension Plan or the
acceleration or creation of any rights under any severance, parachute or
change in control agreement); or
(m) any agreement by Company to do any of the things described in the
preceding clauses (a) through (l) other than as expressly provided for
herein.
4.12 Taxes. Each of Company and its Subsidiaries has duly filed all
material tax returns it is required to file. Each of Company and its
Subsidiaries has paid (or made adequate provision for payment of) all taxes
shown as due on those returns as well as all taxes, interest, penalties,
assessments and deficiencies due or claimed due from foreign, federal, state or
local taxing authorities (including without limitation taxes on properties,
income, franchises, licenses, sales and payrolls). The filed returns are correct
in all material respects and neither Company nor any of its Subsidiaries is
required to pay, for the periods represented by such tax returns, any material
taxes other than those shown in those returns or reflected on the balance sheet
of Company contained in the most recent SEC Report. Company's and each of its
Subsidiaries' federal income tax returns have not been audited by the Internal
Revenue Service since December 31, 1985. The provision for taxes on the Balance
Sheet is adequate to cover all accrued and unpaid taxes as of the date of the
Balance Sheet. Since December 31, 1991, neither Company nor any of its
Subsidiaries has requested or been granted any extension of limitation periods
applicable to audits or claims by any taxing authority. No material claim,
audit, action, suit, proceeding or investigation is pending or threatened with
respect to any taxes of Company or any of its Subsidiaries. There is no fact or
circumstance that, if known by any federal, state or local taxing authority,
could result in the assertion of a material deficiency with respect to any taxes
of Company or any of its Subsidiaries.
4.13 Title to Properties; Condition of Properties. The Disclosure
Schedule lists and reasonably describes all material real property owned or
leased by Company and its Subsidiaries. Company and each of its Subsidiaries has
good and valid title (in fee simple absolute in the case of real property) to
all properties and assets used in its business, except for leased properties and
assets; none of those owned properties is subject to any mortgage, deed of
trust, pledge, lien, claim, charge, equity, covenant, condition, restriction,
easement, right-of-way or encumbrance, except (i) liens, claims, charges and
encumbrances disclosed, or reserved against, in the Balance Sheet, (ii) liens
for current taxes not yet due and payable, and (iii) minor imperfections of
title not material (individually or in the aggregate) and not materially
detracting from the value, or the use (either actual or intended) Company and
its Subsidiaries make, of the property in question. All of the buildings,
fixtures, machinery and equipment owned or used by Company and its Subsidiaries
are in reasonably good operating condition and repair, normal wear and tear
excepted, and comply in all material respects with applicable zoning, building
and fire codes.
10
4.14 Contracts. The Disclosure Schedule lists all material contracts and
agreements to which Company or any of its Subsidiaries is a party which were not
filed as exhibits to the SEC Reports; all such contracts and agreements are duly
and validly executed by Company, are in full force and effect as of the date of
this Agreement and will be in full force and effect at the Effective Date. No
event has occurred which, after notice or the passage of time or both, would
constitute a material default under any such contract or agreement. All such
contracts and agreements will continue, after the Effective Date, to be binding
in accordance with their respective terms until their respective expiration
dates.
4.15 Employee Benefit Plans.
(a) Definitions. The following terms, when used in this Section, shall
have the following meanings. Any of these terms may, unless the context
otherwise requires, be used in the singular or the plural depending on the
reference.
(i) Benefit Arrangement. "Benefit Arrangement" shall mean any
material employment, consulting, severance or other similar contract,
arrangement or policy and each material plan, arrangement (written or
oral), program, agreement or commitment providing for insurance coverage
(including without limitation any self-insured arrangements), workers'
compensation, disability benefits, supplemental unemployment benefits,
vacation benefits, retirement benefits, life, health, disability or
accident benefits (including without limitation any "voluntary employees'
beneficiary association" as defined in Section 501(c)(9) of the Code
providing for the same or other benefits) or for deferred compensation,
profit-sharing bonuses, stock options, stock appreciation rights, stock
purchases or other forms of incentive compensation or post-retirement
insurance, compensation or benefits which
(A) (1) is not a Welfare Plan, Pension Plan or Multiemployer
Plan, (2) is entered into, maintained, contributed to or required to
be contributed to, as the case may be, by Company or an ERISA
Affiliate or under which Company or any ERISA Affiliate may incur any
liability, and (3) covers any employee or former employee of Company
or any ERISA Affiliate (with respect to their relationship with such
entities), or
(B) any plan covering employees or former employees of any
Foreign Subsidiary (with respect to their relationship with such
entities) which if maintained or administered in or otherwise
subject to the laws of the United States would be described in
paragraph (A).
(ii) Code. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(iii) Employee Plans. "Employee Plans" shall mean all Benefit
Arrangements, Multiemployer Plans, Pension Plans and Welfare Plans.
(iv) ERISA. "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
(v) ERISA Affiliate. "ERISA Affiliate" shall mean any entity which
is (or at any relevant time was) a member of a "controlled group of
corporations" with, under "common control" with, or a member of an
"affiliated service group" with, Company as defined in Section 414(b),
(c), (m) or (o) of the Code.
(vi) Foreign Subsidiary. "Foreign Subsidiary" shall mean any
Subsidiary organized under the laws of or doing business in any country
other than the United States.
(vii) Multiemployer Plan. "Multiemployer Plan" shall mean
(A) any "multiemployer plan," as defined in Section 4001(a)(3) or
Section 3(37) of ERISA, (1) which Company or any ERISA Affiliate
maintains, administers, contributes to or is required to contribute
to, or, after September 25, 1980, maintained, administered,
contributed to or was required to contribute to, or under which
Company or any ERISA Affiliate may incur any liability and (2) which
covers any employee or former employee of Company or any ERISA
Affiliate (with respect to their relationship with such entities), or
11
(B) any plan covering employees or former employees of any
Foreign Subsidiary (with respect to their relationship with such
entities) which if maintained or administered in or otherwise
subject to the laws of the United States would be described in
paragraph (A).
(viii) PBGC. "PBGC" shall mean the Pension Benefit Guaranty
Corporation.
(ix) Pension Plan. "Pension Plan" shall mean
(A) any "employee pension benefit plan" as defined in Section
3(2) of ERISA (other than a Multiemployer Plan) (1) which Company or
any ERISA Affiliate maintains, administers, contributes to or is
required to contribute to, or, within the five years prior to the
Effective Date, maintained, administered, contributed to or was
required to contribute to, or under which Company or any ERISA
Affiliate may incur any liability and (2) which covers any employee
or former employee of Company or any ERISA Affiliate (with respect
to their relationship with such entities), or
(B) any plan covering employees or former employees of any
Foreign Subsidiary (with respect to their relationship with such
entities) which if maintained or administered in or otherwise
subject to the laws of the United States would be described in
paragraph (A).
(x) Welfare Plan. "Welfare Plan" shall mean
(A) any "employee welfare benefit plan" as defined in Section
3(1) of ERISA, (1) which Company or any ERISA Affiliate maintains,
administers, contributes to or is required to contribute to, or under
which Company or any ERISA Affiliate may incur any liability and (2)
which covers any employee or former employee of Company or any ERISA
Affiliate (with respect to their relationship with such entities), or
(B) any plan covering employees or former employees of any
Foreign Subsidiary (with respect to their relationship with such
entities) which if maintained or administered in or otherwise
subject to the laws of the United States would be described in
paragraph (A).
(b) Disclosure; Delivery of Copies of Relevant Documents and Other
Information. The Disclosure Schedule contains a complete list of Employee Plans
which cover or have covered employees of Company (with respect to their
relationship with such entities). True and complete copies of each of the
following documents have been delivered by Company to Parent: (i) each Welfare
Plan, Pension Plan and Multiemployer Plan (and, if applicable, related trust
agreements) which covers or has covered employees of Company (with respect to
their relationship with such entities) and all amendments thereto, all written
interpretations thereof and written descriptions thereof which have been
distributed to Company's employees and all annuity contracts or other funding
instruments, (ii) each Employee Plan which covers or has covered employees of
Company (with respect to their relationship with such entities) including
written interpretations thereof and written descriptions thereof which have
been distributed to Company's employees (including descriptions of the number
and level of employees covered thereby) and a complete description of any
Employee Plan which is not in writing, (iii) the most recent determination or
opinion letter issued by the Internal Revenue Service or analogous ruling under
foreign law with respect to each Pension Plan and each Welfare Plan (other than
a "multiemployer plan", as defined in Section 3(37) of ERISA) which covers or
has covered employees of Company (with respect to its relationship with such
entities), (iv) for the three most recent plan years, Annual Reports on Form
5500 Series required to be filed with any governmental agency for each Pension
Plan which covers or has covered employees of Company (with respect to its
relationship with such entities), (v) all actuarial reports prepared for the
last three plan years for each Pension Plan which covers or has covered
employees of Company (with respect to its relationship with such entities),
(vi) a description of complete age, salary, service and related data as of the
last day of the last plan year for employees and former employees of Company,
and (vii) a description setting forth the amount of any liability of the
company as of the Effective Date for payments more than thirty (30) calendar
days past due with respect to each Welfare Plan which covers or has covered
employees or former employees of Company.
12
(c) Representations. Company represents and warrants as follows:
(i) Pension Plans
(A) Neither Company nor any of its ERISA Affiliates has, at any
time, maintained, administered or contributed to, or was required to
contribute to, a Pension Plan that is or was subject to Title IV of
ERISA or the minimum funding requirements of Section 302 of ERISA or
Section 412 of the Code.
(B) Each Pension Plan and each related trust agreement, annuity
contract or other funding instrument which covers or has covered
employees or former employees of Company that is intended to be
qualified and tax exempt under the provisions of Code sections 401(a)
and 501(a) has received a favorable determination letter from the
Internal Revenue Service and nothing has occurred that would
adversely affect such plan's tax qualification or exemption.
(C) Each Pension Plan, each related trust agreement, annuity
contract or other funding instrument which covers or has covered
employees or former employees of Company (with respect to their
relationship with such entities) presently complies and has been
maintained in material compliance with its terms and, both as to form
and in operation, with the requirements prescribed by any and all
statutes, orders, rules and regulations which are applicable to such
plans, including without limitation ERISA and the Code.
(ii) Multiemployer Plans
(A) Neither Company nor any ERISA Affiliate has, at any time,
maintained, administered or contributed to, or was required to
contribute to, a Multiemployer Plan.
(iii) Welfare Plans
(A) Each Welfare Plan which covers or has covered employees or
former employees of Company (with respect to their relationship with
such entities) has been maintained in material compliance with its
terms and, both as to form and operation, with the requirements
prescribed by any and all statutes, orders, rules and regulations
which are applicable to such Welfare Plan, including without
limitation ERISA and the Code.
(B) None of Company, any ERISA Affiliate or any Welfare Plan
has any present or future obligation to make any payment to, or with
respect to any present or former employee of Company or any ERISA
Affiliate pursuant to, any retiree medical benefit plan, or other
retiree Welfare Plan, and no condition exists which would prevent
Company from amending or terminating any such benefit plan or Welfare
Plan.
(C) Each Welfare Plan which covers or has covered employees or
former employees of Company and which is a "group health plan," as
defined in Section 607(1) of ERISA, has been operated in compliance
with provisions of Part 6 of Title I, Subtitle B of ERISA and
Sections 162(k) and 4980B of the Code at all times.
(D) Neither Company nor any ERISA Affiliate has incurred any
liability with respect to any Welfare Plan that is a "multiemployer
plan", as defined in Section 3(37) of ERISA, under the terms of such
Welfare Plan, any collective bargaining agreement or otherwise
resulting from any cessation of contributions, cessation of
obligation to make contributions or other form of withdrawal from
such Welfare Plan.
(iv) Benefit Arrangements. Each Benefit Arrangement which covers or
has covered employees or former employees of Company (with respect to their
relationship with such entities) has been maintained in material compliance
with its terms and with the requirements prescribed by any and all
statutes, orders, rules and regulations which are applicable to such
Benefit Arrangement, including without limitation the Code. Except as
provided by law, the employment of all persons presently employed or
retained by Company is terminable at will.
13
(v) Unrelated Business Taxable Income. No Employee Plan (or trust or
other funding vehicle pursuant thereto) is subject to any tax under Code
Section 511.
(vi) Deductibility of Payments. There is no contract, agreement, plan
or arrangement covering any employee or former employee of Company (with
respect to its relationship with such entities) that, individually or
collectively, provides for the payment by Company of any amount (i) that is
not deductible under Section 404 of the Code, (ii) that is an "excess
parachute payment" pursuant to Section 280G of the Code or (iii) that is
not deductible pursuant to Section 162(m) of the Code.
(vii) Foreign Plans. Each Employee Plan that covers any employee or
former employee of any Foreign Subsidiary (with respect to their
relationship with such entities) or is otherwise not subject to ERISA or
the Code has been maintained in substantial compliance with its terms and
with the requirements prescribed by any and all applicable statutes,
orders, rules and regulations (including without limitation any special
provisions relating to the tax status of contributions to, earnings of or
distributions from such Plans where each such Plan was intended to have
such tax status) and has been maintained in good standing with applicable
regulatory authorities.
(viii) Fiduciary Duties and Prohibited Transactions. Neither Company
nor any plan fiduciary of any Welfare Plan or Pension Plan which covers or
has covered employees or former employees of Company or any ERISA
Affiliate, has engaged in any transaction in violation of Sections 404 or
406 of ERISA or any "prohibited transaction," as defined in Section
4975(c)(1) of the Code, for which no exemption exists under Section 408 of
ERISA or Section 4975(c)(2) or (d) of the Code, or for which a class of
individual exemption has not been granted by the Department of Labor, or
has otherwise violated the provisions of Part 4 of Title I, Subtitle B of
ERISA. Company has not knowingly participated in a violation of Part 4 of
Title I, Subtitle B of ERISA by any plan fiduciary of any Welfare Plan or
Pension Plan and has not been assessed any civil penalty under Section
502(l) of ERISA.
(ix) No Amendments. Neither Company nor any ERISA Affiliate has any
announced plan or legally binding commitment to create any additional
Employee Plans which are intended to cover employees or former employees of
Company (with respect to their relationship with such entities) or to amend
or modify any existing Employee Plan which covers or has covered employees
or former employees of Company (with respect to their relationship with
such entities).
(x) No Other Material Liability. No event has occurred in connection
with which Company or any ERISA Affiliate or any Employee Plan, directly or
indirectly, could be subject to any material liability (A) under any
statute, regulation or governmental order relating to any Employee Plans or
(B) pursuant to any obligation of Company to indemnify any person against
liability incurred under any such statute, regulation or order as they
relate to the Employee Plans.
(xi) Insurance Contracts. Neither Company nor any Employee Plan
(other than a "multiemployer plan", as defined in Section 3(37) of ERISA)
holds as an asset of any Employee Plan any interest in any annuity
contract, guaranteed investment contract or any other investment or
insurance contract issued by an insurance company that is the subject of
bankruptcy, conservatorship or rehabilitation proceedings.
(xii) No Acceleration or Creation of Rights. Neither the execution
and delivery of this Agreement or other related agreements by Company nor
the consummation of the transactions contemplated hereby or the related
transactions will result in the acceleration or creation of any rights of
any person to benefits under any Employee Plan (including, without
limitation, the acceleration of the vesting or exercisability of any stock
options, the acceleration of the vesting of any restricted stock, the
acceleration of the accrual or vesting of any benefits under any Pension
Plan or the acceleration or creation of any rights under any severance,
parachute or change in control agreement).
4.16 Compliance With Legislation Regulating Environmental Quality. All
plants, offices, manufacturing facilities, stores, warehouses, improvements,
administration buildings, and real property and related facilities of Company,
whether currently or previously owned, operated or leased by Company
(collectively, the "Facilities") are, and at all times owned, operated or leased
by Company, have been maintained and operated in material compliance with all
applicable federal, state and local environmental protection,
14
occupational, health and safety or similar laws, ordinances, restrictions,
orders, regulations and licenses (collectively "Environmental Laws") including
but not limited to the Federal Water Pollution Control Act (33 U.S.C sec. 1251
et seq. ), Resource Conservation & Recovery Act (42 U.S.C. sec. 6901 et seq.),
Safe Drinking Water Act (21 U.S.C. sec. 349, 42 U.S.C. sec.sec. 201, 300f),
Toxic Substances Control Act (15 U.S.C. sec. 2601 et seq.), Clean Air Act (42
U.S.C. sec. 7401 et seq.), and Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. sec. 9601 et seq.). No materials,
substances, or products have been at any time placed, held, located, disposed of
or released on, under, at, within, or about the Facilities which may reasonably
be expected to result in a regulatory agency or other governmental entity
requiring clean up, removal or other remedial action by Company under
Environmental Laws. No litigation, administrative enforcement actions,
proceedings or notices of potential liability have been received, served, filed
or threatened against Company relating to any material damage, contribution,
cost recovery, compensation, loss or injury resulting from any hazardous or
toxic substance, waste or material (collectively, "Hazardous Materials") or
arising out of the use, generation, storage, treatment, release, discharge,
transportation, handling or disposal of Hazardous Materials or resulting from a
violation or alleged violation of Environmental Laws.
4.17 Labor Matters. Company is not a party to any labor agreement with
respect to its employees with any labor organization, group or association.
Company has not experienced any attempt by organized labor or its
representatives to make Company conform to demands of organized labor relating
to its employees or to enter into a binding agreement with organized labor that
would cover the employees of Company. Company is in compliance in all material
respects with all applicable laws respecting employment practices, terms and
conditions of employment and wages and hours and is not engaged in any unfair
labor practice. There is no unfair labor practice charge or complaint against
Company pending before the National Labor Relations Board or any other
governmental agency arising out of Company's activities, and Company has no
knowledge of any facts or information which would give rise thereto; there is no
labor strike or labor disturbance pending or threatened against Company nor is
any grievance currently being asserted; and Company has not experienced a work
stoppage or other labor difficulty.
4.18 Absence of Questionable Payments. Neither Company nor any of its
Subsidiaries nor any of their respective officers, directors, agents or
employees purporting to act on behalf of Company or any of its Subsidiaries has
made or agreed to make any payment or other use of Company's or any of its
Subsidiaries' assets (i) to or on behalf of an official of any government, or
for any purpose related to political activity, except as permitted by applicable
law or (ii) for any of the purposes described in Section 162(c) of the United
States Internal Revenue Code.
4.19 Intellectual Property. The Disclosure Schedule contains detailed
information (including where applicable the federal registration number and the
date of registration or application for registration and the name in which
registration was applied for) concerning: (i) patents, copyrights, trademarks,
trade names and service marks, and all currently pending applications for any
thereof (collectively, "Proprietary Matter"), held by Company and it
Subsidiaries; (ii) any licenses or options to obtain rights or licenses granted
by Company or any of its Subsidiaries to others covering any Proprietary Matter;
and (iii) any licenses or options to obtain rights or licenses granted to
Company or any of its Subsidiaries covering any Proprietary Matter owned by
others. Neither Company nor any of its Subsidiaries has been sued, charged or
threatened with any suit or action relating to infringement by Company or any of
its Subsidiaries of any third party Proprietary Matter and no proceedings have
been instituted or are pending (or are threatened) that challenge the validity
of the ownership or use of any Proprietary Matter by Company or any of its
Subsidiaries. Each of Company and its Subsidiaries owns (or possesses adequate
and enforceable licenses or other rights to use) all Proprietary Matter now used
or required to be used in their respective businesses as now conducted and as
proposed to be conducted and neither Company nor any of its Subsidiaries has
received any notice of conflict with the asserted rights of others with respect
to any Proprietary Matter.
4.20 Cash and Cash Equivalents and Short-term Investments. As of the date
hereof, Company owns cash and cash equivalents and short-term investments in an
amount not less than $115,000,000.
15
5. CONDUCT OF BUSINESS PENDING THE MERGER
Company covenants and agrees that, prior to the Effective Date, unless
Parent shall otherwise agree in writing or unless the failure to comply with any
of the following covenants results from actions by the Board of Directors which
are approved by a majority of the directors appointed by Purchaser pursuant to
Section 1.3 or except as otherwise expressly contemplated by this Agreement or
as disclosed in the Disclosure Schedule:
5.1 Ordinary Course of Business. The business of Company and its
Subsidiaries shall be conducted only in, and Company and its Subsidiaries shall
not take any action except in, the ordinary course of business and consistent
with past practices.
5.2 Preservation of Organization. Company shall use its reasonable
efforts to maintain and preserve its business organization, assets, employees,
United States Food and Drug Administration and equivalent regulatory agency
licenses and approvals, and United States Patent and Trademark Office and
equivalent agency filings and advantageous business relationships. Neither
Company nor any of its Subsidiaries shall directly or indirectly amend or
propose to amend its charter, regulations or Bylaws or similar organizational
documents.
5.3 Capitalization Changes. Neither Company nor any of its Subsidiaries
shall directly or indirectly (i) issue, sell, pledge, transfer, dispose of or
encumber, or authorize, propose or agree to the issuance, sale, pledge,
transfer, disposition or encumbrance of, any shares of, or any options, warrants
or rights of any kind (including, without limitation, the Rights) to acquire any
shares of, or any securities convertible into or exchangeable for any shares of,
capital stock of any class of Company or any of its Subsidiaries, other than
Shares issuable upon exercise of Options or Warrants outstanding on the date
hereof as referred to in clauses (iii) or (iv) of Section 4.3 and consistent
with past practices, in accordance with the terms of the applicable agreements
and Employee Plans or (ii) authorize, recommend or propose any change in its
capitalization.
5.4 Sale of Assets. Neither Company nor any of its Subsidiaries shall
directly or indirectly (i) except in the ordinary course of business and
consistent with past practices, sell, pledge, transfer, assign, license, dispose
of, encumber or lease any assets of Company or of any of its Subsidiaries
(including, without limitation, any indebtedness owed to them or any claims held
by them) or (ii) whether or not in the ordinary course of business, sell,
pledge, transfer, assign, license, dispose of, encumber or lease any material
assets of Company and its Subsidiaries (including, without limitation, any
Facilities of Company, or any assets or the stock of any Subsidiaries
constituting a substantial portion of any line of business of Company).
5.5 Dividends and Repurchases. Neither Company nor any of its
Subsidiaries shall directly or indirectly (i) split, combine or reclassify any
shares of its capital stock or declare, set aside or pay any dividend or
distribution, payable in cash, stock, property or otherwise with respect to any
of its capital stock other than, dividends and distributions by a Subsidiary of
Company to Company or to a Subsidiary all of the capital stock of which (other
than directors' qualifying shares) is owned directly or indirectly by Company or
(ii) redeem, purchase or otherwise acquire or offer to redeem, purchase or
otherwise acquire any of its capital stock other than pursuant to Section 2.6.
5.6 Acquisitions. Neither Company nor any of its Subsidiaries or
affiliates shall, directly or indirectly, except in the ordinary course of
business and consistent with past practices, acquire (by merger, consolidation
or acquisition of stock or assets) any corporation, partnership or other
business organization or division thereof or make any investment either by
purchase of stock or securities, contributions to capital (other than to
Subsidiaries), property transfer or purchase of any amount of property or
assets, in any other individual or entity;
5.7 Indebtedness. Neither Company nor any of its Subsidiaries or
affiliates shall, directly or indirectly incur any indebtedness for borrowed
money or issue any debt securities or assume, guarantee, endorse or otherwise as
an accommodation become responsible for, the obligations of any other individual
or entity, or make any material loans or advances.
5.8 Severance and Termination Pay. Neither Company nor any of its
Subsidiaries shall take any action with respect to the grant of any severance or
termination pay (otherwise than pursuant to policies or
16
agreements of Company or any of its Subsidiaries in effect on or prior to the
date hereof) or with respect to any increase of benefits payable under its
severance or termination pay policies or agreements in effect on or prior to the
date hereof.
5.9 Employee Benefits. Neither Company nor any of its Subsidiaries shall
(except for annual salary increases not to exceed 5% adopted in the ordinary
course of business) adopt or amend any bonus, profit sharing, compensation,
stock option, pension, retirement, deferred compensation, employment or other
employee benefit plan, agreement, trust, fund or other arrangement for the
benefit or welfare of any employee or increase in any manner the compensation or
fringe benefits of any employee or pay any benefit not required by any existing
plan, arrangement or agreement.
5.10 Tax Election. Without the prior approval of Parent, neither Company
nor any of its Subsidiaries shall make any tax election or settle or compromise
any material federal, state, local or foreign income tax liability.
5.11 Subsequent Financials. Company shall deliver to Parent all of
Company's monthly and quarterly, if any, financial statements for periods and
dates subsequent to September 30, 1994, as soon as practicable after the same
are available to Company.
6. ADDITIONAL AGREEMENTS
6.1 Proxy Statement. If a meeting (or written consent in place of) of
Company's stockholders is required by the Delaware Law to approve this Agreement
and the Merger, then promptly after consummation of the Offer, Company shall
prepare and shall file with the Commission as promptly as practicable a
preliminary proxy statement, together with a form of proxy, with respect to the
meeting (or written consent in place of) of Company's stockholders at which the
stockholders of Company will be asked to vote upon and approve this Agreement
and the Merger as provided in Section 6.2. As promptly as practicable after such
filing, subject to compliance with the rules and regulations of the Commission,
Company shall prepare and file a definitive Proxy Statement and form of proxy
with respect to such meeting (or written consent in place of) (the "Proxy
Statement") and shall use all reasonable efforts to have the Proxy Statement
cleared by the Commission as promptly as practicable, and promptly thereafter
shall mail the Proxy Statement to stockholders of Company. The term "Proxy
Statement" shall mean such proxy or information statement at the time it
initially is mailed to Company's stockholders and all amendments or supplements
thereto, if any, similarly filed and mailed. The information provided and to be
provided by Parent, Purchaser and Company, respectively, for use in the Proxy
Statement shall, on the date the Proxy Statement is filed with the Commission,
first mailed to Company's stockholders and on the date of the Special Meeting
(as defined in Section 6.2) be true and correct in all material respects and
shall not omit to state any material fact necessary in order to make such
information not misleading, and Parent, Purchaser and Company each agree to
correct as promptly as practicable any information provided by it for use in the
Proxy Statement which shall have become false or misleading in any material
respect. The Proxy Statement shall comply as to form in all material respects
with all applicable requirements of federal securities laws.
6.2 Meeting of Stockholders of Company; Voting and Disposition of the
Shares. If a meeting of Company's Stockholders is required by the Delaware Law
to approve this Agreement and the Merger, then as promptly as practicable after
consummation of the Offer, Company shall take all action necessary, in
accordance with the Delaware Law and its Certificate of Incorporation and
Bylaws, to convene a meeting (or obtain the written consents) of its
stockholders (the "Special Meeting") to consider and vote upon this Agreement
and the Merger. The affirmative vote of stockholders required for approval of
this Agreement and Merger shall be no greater than a majority. Subject to the
fiduciary duties of the Board of Directors under the Delaware Law, as advised by
counsel, the Proxy Statement shall contain the recommendation of the Board of
Directors that the stockholders of Company vote to adopt and approve this
Agreement and the Merger and Company shall use its reasonable efforts to solicit
from stockholders of Company proxies in favor of such adoption and approval (and
Purchaser shall vote all Shares purchased by it in favor of such adoption and
approval) and to take all other action necessary or, in the reasonable judgment
of Parent, helpful to secure the vote or consent of stockholders required by the
Delaware Law to effect the Merger.
17
6.3 Stock Options. Company and its Subsidiaries shall take such action as
may be permitted under the Employee Plans to effect the cancellations described
in Section 2.6 and shall comply with all requirements regarding income tax
withholding in connection therewith. In addition to the foregoing and subject to
the terms of the Employee Plans and applicable law, Company will take all steps
necessary to cause the Employee Plans to be terminated on or prior to the
Effective Date, and to satisfy Parent that no holder of Options or participant
in any Employee Plans will have any right to acquire any interest in Company or
Parent as a result of the exercise of Options or other rights pursuant to such
Employee Plans on or after the Effective Date.
6.4 Fees and Expenses. If Purchaser shall have elected to terminate this
Agreement pursuant to Section 8.1(c)(ii) or Section 8.1(c)(iv), or if Company
shall have elected to terminate this Agreement pursuant to Section 8.1(b)(ii),
then Company shall promptly, but in no event later than two days after such
termination, pay Purchaser a fee of $8,000,000 (which includes a non-accountable
allowance for expenses and fees), which amount shall be payable in same day
funds, provided, that no fee shall be paid pursuant to this Section 6.4 if
either Parent or Purchaser shall be in material breach of its obligations
hereunder.
6.5 Additional Agreements. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use all reasonable efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by the Offer, this
Agreement, and to cooperate with each other in connection with the foregoing,
including using reasonable efforts (A) to obtain all necessary waivers, consents
and approvals from other parties to material loan agreements, leases, licenses
and other contracts, (B) to obtain all necessary consents, approvals and
authorizations as are required to be obtained under any federal, state or
foreign law or regulations, (C) to defend all lawsuits or other legal
proceedings challenging this Agreement, or the consummation of the transactions
contemplated hereby, and thereby, (D) to obtain final court approval of the
Stipulation of Settlement (as defined in Annex I), (E) to lift or rescind any
injunction or restraining order or other order adversely affecting the ability
of the parties to consummate the transactions contemplated hereby, (F) to effect
all necessary registrations and filings, including, but not limited to, filings
under the Hart-Scott-Rodino Act, and submissions of information requested by
governmental authorities; and (G) to fulfill all conditions to this Agreement.
6.6 No Solicitation of Transactions.
(a) Company and its Subsidiaries will not, directly or indirectly, and will
use its reasonable efforts to cause its officers, directors and agents not to,
solicit, initiate or deliberately encourage submission of, or participate in
discussions concerning, or supply any information in response to, proposals or
offers from any person relating to any acquisition or purchase of all or (other
than in the ordinary course of business) a material amount of the assets of, or
any equity interest in, Company or any merger, consolidation or business
combination with Company (an "Acquisition Proposal"). Company shall promptly
notify Parent if any such proposal or offer, or any inquiry or contact with any
person with respect thereto, is made.
(b) Notwithstanding the foregoing, to the extent required by the fiduciary
obligations of the Board of Directors, as advised by counsel, Company may, in
response to a request or inquiry that could reasonably be expected to result in
an Acquisition Proposal, which request or inquiry was unsolicited after the date
of this Agreement, participate in discussions or negotiations with, or furnish
information with respect to Company pursuant to a confidentiality agreement
substantially similar to the Confidentiality Agreement (as defined in Section
6.8), to any person. In addition, following the receipt of an Acquisition
Proposal, which the Board of Directors determines in good faith, based upon the
advice of its outside financial advisors, to be more favorable to Company's
stockholders than the Offer and the Merger (a "Superior Proposal"), Company may
terminate this Agreement under Section 8.1(b)(ii) and accept such Superior
Proposal, and the Board of Directors may approve or recommend (and, in
connection therewith, withdraw or modify the approval or recommendation of the
Offer, this Agreement or the Merger) such Superior Proposal. Nothing contained
in this Section 6.6(b) shall prohibit Company or its Board of Directors from (i)
taking, and disclosing to Company's stockholders, a position with respect to an
Acquisition Proposal pursuant to Rules 14d-9 and 14e-2(a) under the Exchange Act
or (ii) making any disclosure to Company's stockholders that, in the judgment of
the Board of Directors or Company, is required under applicable law.
18
6.7 Notification of Certain Matters. Company shall give prompt notice to
Parent, and Parent shall give prompt notice to Company, of (i) the occurrence,
or failure to occur, of any event which occurrence or failure would be likely to
cause any representation or warranty contained in this Agreement, the Disclosure
Schedule or any written certificate or schedule delivered pursuant hereto to be
untrue or inaccurate in any material respect at any time from the date hereof to
the time Purchaser first pays for any Shares tendered pursuant to the Offer and
(ii) any material failure of Company, or Parent, Purchaser or any of their
affiliates, as the case may be, or of any officer, director, employee or agent
thereof, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement; provided, however, that
no such notification shall affect the representations or warranties of the
parties or the conditions to the obligations to the parties hereunder.
6.8 Access to Information.
(a) Subject to the terms and conditions of that certain Confidentiality
Agreement dated August 22, 1994 by and between Parent and Company (the
"Confidentiality Agreement"), Company shall, and shall cause its subsidiaries,
officers, directors, employees and agents to, provide to the officers, employees
and agents (including, without limitation, lawyers and investment bankers) of
Parent, Purchaser and their affiliates reasonable access, at all reasonable
times upon reasonable notice and in such manner as will not unreasonably
interfere with the conduct of Company's business, to, from the date hereof to
the Effective Date, Company's officers, employees, agents, properties, books,
records and contracts, and shall furnish to Parent, Purchaser and their
affiliates all financial, operating and other data and information as Parent,
Purchaser or their affiliates, through their respective officers, employees or
agents, may reasonably request.
(b) No investigation pursuant to this Section 6.8 shall affect any
representations or warranties of the parties herein or the conditions to the
obligations of the parties hereto.
6.9 Officers' and Directors' Insurance; Indemnification. It is understood
and agreed that Company shall, to the fullest extent permitted under applicable
laws, indemnify and hold harmless, and, after the Effective Date, Parent and the
Surviving Corporation shall, to the fullest extent permitted under applicable
laws, indemnify and hold harmless, each present and former director and officer
of Company (the "Indemnified Parties") against any losses, claims, damages,
liabilities, costs, expenses, judgments and amounts paid in settlement in
connection with any claim, action, suit, proceeding or investigation arising out
of or pertaining to any action or omission by such director or officer prior to
the Effective Date in his/her capacity as such (including, without limitation,
any claims, actions, suits, proceedings or investigations which arise out of or
relate to the transactions contemplated by this Agreement; provided, however,
that neither Company, Parent nor Surviving Corporation shall have any obligation
under this Section to indemnify any Indemnified Party hereunder against any
losses, claims, damages, liabilities, costs, expenses, judgments or amounts to
the extent the same is found to have resulted from such Indemnified Person's own
gross negligence or willful misconduct. In the event any such claim, action,
suit, proceeding or investigation is brought against any Indemnified Party
(whether arising before or after the Effective Date), (a) the Indemnified
Parties may retain counsel satisfactory to them and Company (or them and the
Surviving Corporation and Parent after the Effective Date), (b) Company (or
after the Effective Date, the Surviving Corporation and Parent) shall pay all
fees and expenses of such counsel for the Indemnified Parties promptly as
statements therefor are received, and (c) Company (or after the Effective Date,
the Surviving Corporation and Parent) will use their respective reasonable
efforts to assist in the vigorous defense of any such matter, provided, that
neither Company, the Surviving Corporation nor Parent shall be liable for any
such settlement effected without their written consent, which consent, however,
shall not be unreasonably withheld. Any Indemnified Party wishing to claim
indemnification under this Section 6.9, upon learning of any such claim, action,
suit, proceeding or investigation, shall notify Company, the Surviving
Corporation or Parent thereof and shall deliver to Company or the Surviving
Corporation an undertaking to repay any amounts advanced pursuant hereto when
and if a court of competent jurisdiction shall ultimately determine, after
exhaustion of all avenues of appeal, that such Indemnified Party was not
entitled to indemnification under this Section. The Indemnified Parties as a
group may retain only one law firm in each jurisdiction to represent them with
respect to any such matter unless there is, under applicable standards of
professional conduct as determined by such counsel, a conflict on any
significant issue between the positions of any two or more Indemnified Parties.
This Section 6.9 shall survive
19
the consummation of the Merger. The Certificate of Incorporation and Bylaws of
Company will not be amended in a manner which adversely affects the rights of
the Indemnified Parties under this Section 6.9. Nothing contained herein shall
in any way limit the rights of any director or officer under any indemnification
agreement or charter or Bylaw provision of Company existing on the date hereof.
6.10 Severance. If at any time during the one year period following the
Effective Date, Company effects any reduction in employment of any employee who
as of the Effective Date had been an employee of Company, Company shall, except
as otherwise required pursuant to applicable severance agreements, substantially
comply with the Synergen, Inc. August 1, 1994 Severance Benefits Program For
Eligible Employees Below Director Level; Synergen, Inc. August 1, 1994 Severance
Benefits Program For Eligible Director Level Employees; and Synergen, Inc.
August 1, 1994 Severance Benefits Program For Eligible Vice Presidents.
6.11 Liquidated Damages. If Purchaser shall have elected to terminate
this Agreement pursuant to Section 8.1(c)(v), then Company shall be obligated to
pay Purchaser $8,000,000 as liquidated damages. The parties acknowledge and
agree that it is difficult or impossible to determine with precision the amount
of damages that would or might be incurred by Purchaser if an event described in
Section 8.1(c)(v) were to occur. It is understood and agreed by the parties that
if Purchaser shall be damaged by an event described in Section 8.1(c)(v), (i) it
would be impracticable or extremely difficult to fix the actual damages
resulting therefrom, (ii) any sums which would be payable by Company under this
Agreement are in the nature of liquidated damages, and not a penalty, and are
fair and reasonable, and (iii) such payment represents a reasonable estimate of
fair compensation for the losses that may reasonably be anticipated from the
occurrence of any such events, and, except for the termination rights of
Purchaser set forth in Section 8.1(c)(v) and Annex I, shall be the sole and
exclusive measure of damages with respect to any such occurrence. Once such
liquidated damages have been paid in accordance with the provisions of this
Agreement, Company shall be relieved of any further liability in respect of
damages relating to the fact or circumstance giving rise to such liquidated
damages.
7. CONDITIONS
7.1 Conditions to Obligation of Each Party to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment at or prior to the Effective Date of the following conditions:
(a) If required by the Delaware Law, this Agreement and the Merger
shall have been approved and adopted by the requisite vote or consent of
the stockholders of Company;
(b) Subject to Section 1.1(c), Shares shall have been purchased
pursuant to the Offer; and
(c) No preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission nor any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority shall be in effect, which would make the acquisition or holding
by Parent, its subsidiaries or affiliates of the shares of Common Stock of
the Surviving Corporation illegal or otherwise prevent the consummation of
the Merger; provided, however, that the parties shall have used all
reasonable efforts to prevent such event.
8. TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Agreement may be terminated at any time prior to
the Effective Date, whether prior to or after approval by the stockholders of
Company:
(a) By mutual written consent of the Boards of Directors of Purchaser
and Company; or
(b) By Company:
(i) If (A) Purchaser or any of its subsidiaries or affiliates shall
have (1) failed to commence the Offer within the time period specified
in Section 1.1; (2) terminated the Offer in accordance with its terms;
or (3) failed to purchase Shares pursuant to the Offer within 120 days
after the
20
commencement of the Offer; or (B) the Offer shall expire without any
Shares having been purchased and without Purchaser having an
obligation to extend the Offer under Section 1.1, except that in
each case, Company may not terminate this Agreement pursuant to this
clause if it shall have failed to perform in any material respect
any of its material obligations under this Agreement;
(ii) In the event Company has complied in all material respects
with Section 6.6 and has determined to accept a Superior Proposal;
(iii) If the Effective Date shall not have occurred on or before
one year after the date hereof due to a failure of any of the
conditions to the obligations of Company set forth in Section 7.1; or
(iv) If Purchaser shall have breached or failed to perform in all
material respects any of its material obligations or agreements under
this Agreement, or any of Purchaser's material representations and
warranties shall be, or have become, inaccurate or incomplete in any
material respect.
(c) By Purchaser:
(i) If (A) Purchaser or any of its subsidiaries or affiliates
shall have (1) failed to commence the Offer within the time period
specified in Section 1.1; (2) terminated the Offer in accordance
with its terms; or (3) failed to purchase Shares pursuant to the
Offer within 120 days after the commencement of the Offer; or (B) the
Offer shall expire without any Shares having been purchased and
without Purchaser having an obligation to extend the Offer under
Section 1.1, except that in each case, Purchaser may not terminate
this Agreement pursuant to this clause if it shall have failed to
perform in any material respect any of its material obligations
under this Agreement;
(ii) In the event that Company has complied in all material
respects with Section 6.6 and has determined to accept a Superior
Proposal;
(iii) If the Effective Date shall not have occurred on or before
one year after the date hereof due to a failure of any of the
conditions to the obligations of Purchaser set forth in Section 7.1;
(iv) If Company shall have withdrawn or modified in a manner
adverse to Purchaser its approval or recommendation of the Offer, this
Agreement or the Merger, or the Board of Directors shall have resolved
to do any of the foregoing, except that Purchaser may not terminate
this Agreement pursuant to this clause if it shall have failed to
perform in any material respect any of its obligations under this
Agreement; or
(v) If Company shall have breached or failed to perform in all
material respects any of its obligations or agreements under this
Agreement, or any of the representations and warranties of Company set
forth in this Agreement, the Disclosure Schedule or in any written
certificate or schedule delivered pursuant thereto shall be, or have
become, inaccurate or incomplete in any respect, in each case, with
such exceptions as would not in the aggregate have a Material
Adverse Effect on Company and its Subsidiaries taken as a whole.
8.2 Effect of Termination. In the event of the termination of this
Agreement as provided in Section 8.1, (A) this Agreement shall forthwith become
void, and there shall be no liability on the part of Parent, Purchaser or
Company, except as set forth in this Section 8.2 and in Section 6.4 and (B)
Purchaser shall terminate the Offer, if still pending, without purchasing any
additional Shares.
8.3 Amendment. Subject to applicable law, this Agreement may be amended,
modified or supplemented by written agreement of the parties hereto at any time
before the Effective Date.
8.4 Waiver. Subject to applicable law, at any time prior to the Effective
Date, whether before or after the Special Meeting, any party hereto may (i)
extend the time for the performance of any of the obligations or other acts of
any other party hereto or (ii) waive compliance with any of the agreements of
any other party or with any conditions to its own obligations. Any agreement on
the part of a party hereto to any such extension or waiver shall be valid only
if set forth in an instrument in writing signed on behalf of such party by a
duly authorized officer.
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9. GENERAL PROVISIONS
9.1 Brokers.
(a) Company represents and warrants that no broker, finder or investment
banker other than Morgan Stanley & Co. Incorporated and Alex. Brown & Sons
Incorporated are entitled to any brokerage, finder's or other fee or commission
in connection with the Offer or the Merger based upon arrangements made by or on
behalf of Company.
(b) Parent represents and warrants that no broker, finder or investment
banker other than CS First Boston Corporation is entitled to any brokerage,
finder's or other fee or commission in connection with the Offer or the Merger
based upon arrangements made by or on behalf of Parent or its affiliates.
9.2 Public Statements. The parties agree to consult with each other prior
to issuing any public announcement or statement with respect to the Offer or the
Merger.
9.3 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally or
sent by cable, telegram, telecopies or telex to the parties at the following
addresses or at such other addresses as shall be specified by the parties by
like notice:
(a) If to Parent or Purchaser:
Amgen Inc.
Amgen Center
1840 DeHavilland Drive
Thousand Oaks, California 91320-1789
Attention: Secretary
with a copy to:
Amgen Inc.
Amgen Center
1840 DeHavilland Drive
Thousand Oaks, California 91320-1789
Attention: Senior Vice President, Corporate Development
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071
Attention: George A. Vandeman, Esq.
(b) If to Company:
Synergen, Inc.
1885 33rd Street
Boulder, Colorado 80301
Attention: Secretary
with a copy to:
Wilson, Sonsini, Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304-1050
Attention: Larry W. Sonsini, Esq.
9.4 Interpretation. All defined terms herein include the plural as well
as the singular. All references in this Agreement to designated "Articles,"
"Sections" and other subdivisions are to the designated Articles, Sections and
other subdivisions of this Agreement. The words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular Article, Section or other subdivision. This Agreement
shall not be construed for or against either party by reason of the authorship
or alleged authorship of any provisions hereof or by reason of the status of the
respective parties. When a
22
reference is made in this Agreement to subsidiaries of Parent or Purchaser or
Company, the word "subsidiaries" means any corporation more than 50 percent of
whose outstanding voting securities, or any partnership, joint venture or other
entity more than 50 percent of whose total equity interest, is directly or
indirectly owned by Parent or Purchaser or Company, as the case may be. For
purposes of this Agreement, Company shall not be deemed to be an affiliate or
subsidiary of Purchaser or Parent. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.5 Representations and Warranties; Etc. The respective representations
and warranties of Company, Parent and Purchaser contained herein shall expire
with, and be terminated and extinguished upon, consummation of the Merger, and
thereafter neither Company, Parent nor Purchaser nor any officer, director or
principal thereof shall be under any liability whatsoever with respect to any
such representation or warranty. This Section 9.5 shall have no effect upon any
other obligation of the parties hereto, whether to be performed before or after
the consummation of the Merger.
9.6 Miscellaneous. This Agreement (including the Disclosure Schedule
referred to herein) (i) constitutes the entire agreement and supersedes all
other prior agreements and undertakings, both written and oral, among the
parties, or any of them, with respect to the subject matter hereof; (ii) except
for Sections 2.6, 6.8, 6.9 and 6.10, is not intended to confer upon any other
person any rights or remedies hereunder; (iii) shall not be assigned, except by
Parent and Purchaser to a directly or indirectly wholly owned subsidiary of
Parent which, in a written instrument shall agree to assume all of such party's
obligations hereunder and be bound by all of the terms and conditions of this
Agreement; provided, however, that no such assignment shall relieve the
assigning party of the obligations hereunder; and (iv) shall be governed in all
respects, including validity, interpretation and effect, by the internal laws of
the State of Delaware, without giving effect to the principles of conflict of
laws thereof. Only Purchaser (or Parent, or a directly or indirectly wholly
owned subsidiary of Parent, to which Purchaser assigns such rights and
obligations) may commence the Offer or purchase Shares thereunder. This
Agreement may be executed in one or more counterparts which together shall
constitute a single agreement.
IN WITNESS WHEREOF, Parent and Purchaser and Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunder duly authorized.
AMGEN INC.
/s/ GORDON M. BINDER
-------------------------------------
Name: Gordon M. Binder
Title: Chief Executive Officer and
Chairman of the Board
AMGEN ACQUISITION SUBSIDIARY, INC.
/s/ THOMAS E. WORKMAN, JR.
-------------------------------------
Name: Thomas E. Workman, Jr.
Title: Chief Executive Officer
SYNERGEN, INC.
/s/ GREGORY B. ABBOTT
-------------------------------------
Name: Gregory B. Abbott
Title: President and Chief Executive
Officer
23
ANNEX I
Certain Conditions of the Offer. Notwithstanding any other provisions of
the Offer, but subject to the terms of this Agreement, and in addition to the
Minimum Condition, Purchaser shall not be required to accept for payment or pay
for, or may delay the acceptance for payment of or payment for, tendered Shares,
or may, in the sole discretion of Purchaser, terminate the Offer as to any
Shares not then accepted for payment or paid for, if any of the following events
shall occur, which, in the reasonable judgment of Purchaser with respect to each
and every matter referred to below and regardless of the circumstances giving
rise to any of the following events, makes it inadvisable to proceed with the
Offer, the acceptance for payment or payment for the Shares or the Merger:
(a) The affirmative vote of the holders of more than a majority of the
outstanding Shares is required to consummate the Merger or Purchaser is not
entitled to vote its Shares for the Merger, or the affirmative vote of the
holders of any securities of Company other than the Shares is required to
consummate the Merger;
(b) Any waiting period (and any extension thereof) applicable to the
consummation of the transactions contemplated by this Agreement under the
Hart-Scott-Rodino Act shall not have expired or been terminated;
(c) Company shall not have obtained such licenses, permits, consents,
approvals, authorizations, qualifications and orders of governmental
authorities and parties to contracts with Company and its Subsidiaries as
are necessary for consummation of the Merger (excluding licenses, permits,
consents, approvals, authorizations, qualifications or orders, the failure
of which to obtain would not in the aggregate have a Material Adverse
Effect on Company and its Subsidiaries taken as a whole);
(d) Company shall have withdrawn or modified in a manner adverse to
Purchaser its approval or recommendation of the Offer, this Agreement or
the Merger, or the Board of Directors shall have resolved to do any of the
foregoing, except in the case that Purchaser or Parent shall have failed to
perform in any material respect any of their respective material
obligations under this Agreement;
(e) There shall be instituted or pending any action or proceeding
which has a reasonable probability of success before any domestic or
foreign court, legislative body or governmental agency or other regulatory
or administrative agency or commission (i) challenging the acquisition in
whole or in part of the Shares, seeking to restrain or prohibit the making
or consummation of the Offer or seeking to obtain any material damages or
otherwise directly or indirectly relating to the transaction contemplated
by the Offer, (ii) seeking to prohibit or restrict the ownership or
operation by Parent or Purchaser (or any of their respective affiliates or
subsidiaries) of any material portion of its or Company's business or
assets, or to compel Parent or Purchaser (or any of their respective
affiliates or subsidiaries) to dispose of or hold separate all or any
material portion of Company's business or assets as a result of the Offer,
(iii) making the purchase of, or payment for, some or all of the Shares
illegal, (iv) resulting in a delay in the ability of Purchaser to accept
for payment or pay for some or all of the Shares, (v) imposing material
limitations on the ability of Purchaser effectively to acquire or to hold
or to exercise full rights of ownership of the Shares, including, without
limitation, the right to vote the Shares purchased by Purchaser on all
matters properly presented to the stockholders of Company, (vi) imposing
any limitations on the ability of Parent or Purchaser or any of their
respective affiliates or subsidiaries effectively to control in any
material respect the business and operations of Company; (vii) which
otherwise is reasonably likely to have a Material Adverse Effect on Company
and its Subsidiaries taken as a whole; or (viii) which may result in a
material limitation on the benefits expected to be derived by Parent and
Purchaser as a result of the Offer, including without limitation, any
limitation on the ability to consummate the Merger;
(f) Any statute, rule, regulation or order shall be enacted,
promulgated, entered or deemed applicable to the Offer or the Merger, or
any other action shall have been taken, proposed or threatened, by any
domestic or foreign government or governmental authority or by any court,
domestic or foreign, which, in the reasonable judgment of Purchaser, is
reasonably likely, directly or indirectly, to result in any of the
consequences referred to in clauses (i)-(viii) of subsection (e) above;
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(g) Any change (or any development involving a prospective change)
shall have occurred which in the judgment of Purchaser had, or may
reasonably be expected to have, a Material Adverse Effect on Company and
its Subsidiaries taken as a whole;
(h) Company shall have breached or failed to perform in all material
respects any of its obligations or agreements under this Agreement, or any
of the representations and warranties of Company set forth in this
Agreement, the Disclosure Schedule or in any written certificate or
schedule delivered pursuant thereto shall be, or have become, inaccurate or
incomplete in any respect, in each case, with such exceptions as would not
in the aggregate have a Material Adverse Effect on Company and its
Subsidiaries taken as a whole;
(i) This Agreement shall have been terminated by Company, Parent or
Purchaser pursuant to its terms;
(j) Any "Triggering Event" under the Rights Agreement shall have
occurred and the Rights shall not be redeemable by Company; or
(k) (1) a Stipulation of Settlement shall not have been entered into
by Company and certain plaintiffs (the "Plaintiffs") (the "Stipulation of
Settlement") constituting, subject to court approval, a legally binding
agreement for the full and complete settlement of the class action
litigation captioned In re Synergen, Inc. Securities Litigation, Case No.
93-B-402, pending in the United States District Court for the District of
Colorado (the "Court"), as such settlement is described in that certain
Memorandum of Understanding dated the date hereof by and between Company
and the Plaintiffs (the "MOU"), (2) the Stipulation of Settlement shall not
be in full force and effect or shall not reasonably reflect the terms and
conditions of the MOU or (3) the Court shall not have entered a Scheduling
Order providing for, (a) approval of a form of notice to the class members
of the Stipulation of Settlement and a deadline for giving notice to the
class members, (b) deadlines for class members to object to the settlement
and/or to opt out of the class and (c) a hearing date upon which the Court
will consider whether to grant final approval of the Stipulation of
Settlement.
The foregoing conditions are for the sole benefit of Purchaser and may be
asserted regardless of the circumstances giving rise to any such conditions or
may be waived in whole or in part. The failure to exercise any of the foregoing
rights shall not be deemed a waiver of any such right, and each right shall be
deemed a continuing right which may be asserted at any time and from time to
time.
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