AGREEMENT AND PLAN OF MERGER BY AND AMONG VIOQUEST PHARMACEUTICALS, INC., GREENWICH THERAPEUTICS, INC. AND VQ ACQUISITION CORP.
Exhibit
2.1
AGREEMENT
AND PLAN OF MERGER
BY
AND AMONG
GREENWICH
THERAPEUTICS, INC.
AND
VQ
ACQUISITION CORP.
This
AGREEMENT
AND PLAN OF MERGER
(this
“Agreement”) is made and entered into as of July 1, 2005, among VioQuest
Pharmaceuticals, Inc., a Minnesota corporation (“Parent”), Greenwich
Therapeutics, Inc., a Delaware corporation (“Greenwich”) and VQ Acquisition
Corp., a Delaware corporation and a wholly-owned subsidiary of Parent (“VQ
Merger Sub”).
RECITALS
A. Upon
the
terms and subject to the conditions of this Agreement and in accordance with
the
Delaware General Corporation Law (“DGCL”) and the Minnesota Business Corporation
Act (“MBCA”), Parent, Greenwich and VQ Merger Sub intend to enter into a
business combination transaction.
▇. ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, M.D., and certain trusts established for the benefit of ▇▇.
▇▇▇▇▇▇▇▇▇ collectively own approximately 48 percent of the outstanding capital
stock of Greenwich and substantially all of the remaining capital stock of
Greenwich is owned by employees of Paramount BioCapital, Inc., a corporation
owned and controlled by ▇▇. ▇▇▇▇▇▇▇▇▇. In addition, ▇▇. ▇▇▇▇▇▇▇▇▇, together
with
such trusts, beneficially owns approximately 16 percent of the outstanding
common stock of Parent.
C. The
Board
of Directors of Greenwich (i) has determined that the Merger (as defined
in
Section 1.1 below) is consistent with and in furtherance of the long-term
business strategy of Greenwich and fair to, and in the best interests of,
Greenwich and its stockholders, (ii) has approved this Agreement, the Merger
and
the other transactions contemplated by this Agreement, (iii) has adopted
a
resolution declaring the Merger advisable, and (iv) has determined to recommend
that the stockholders of Greenwich adopt this Agreement.
D. The
Board
of Directors of Parent (i) has determined that the Merger is consistent with
and
in furtherance of the long-term business strategy of Parent and fair to,
and in
the best interests of, Parent and its stockholders, (ii) has approved this
Agreement, the Merger and the other transactions contemplated by this Agreement,
(iii) has adopted a resolution declaring the Merger advisable, and (iv) has
approved the issuance of the Merger Consideration (as defined below) pursuant
to
the Merger.
E. The
Board
of Directors of VQ Merger Sub (i) has determined that the Merger is consistent
with and in furtherance of the long-term business strategy of VQ Merger Sub,
respectively, and fair to and in the best interests of, VQ Merger Sub and
its
stockholders, (ii) has approved this Agreement, the Merger and the other
transactions contemplated by this Agreement, (iii) has adopted a resolution
declaring the Merger advisable, and (iv) has determined to recommend that
the
sole stockholder of VQ Merger Sub adopt this Agreement.
NOW,
THEREFORE, in
consideration of the covenants, promises and representations set forth herein,
and for other good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, the parties agree as follows:
THE
MERGER
I.1 The
Merger.
At the
Effective Time (as defined in Section 1.2
hereof)
and subject to and upon the terms and conditions of this Agreement and the
applicable provisions of the DGCL, VQ Merger Sub shall be merged with and
into
Greenwich (the “Merger”), the separate corporate existence of VQ Merger Sub
shall cease and Greenwich shall continue as the surviving corporation and
shall
become a wholly-owned subsidiary of Parent. The surviving corporation after
the
Merger is sometimes referred to hereinafter as the “Greenwich Surviving
Corporation.”
I.2 Effective
Time.
Unless
this Agreement is earlier terminated pursuant to ARTICLE VII hereof, the
closing
of the Merger and the other transactions contemplated by this Agreement (the
“Closing”) will take place at the offices of Greenwich, at a time and date to be
specified by the parties, but in no event later than two (2) business days
following satisfaction or waiver of the conditions set forth in ARTICLE VI
hereof. The date upon which the Closing actually occurs is herein referred
to as
the “Closing Date.” On the Closing Date, the parties hereto shall cause the
Merger to be consummated by filing a Certificate of Merger or like instrument
(a
“Certificate of Merger”) with the Secretary of State of the State of Delaware,
in accordance with the relevant provisions of the DGCL (the times at which
the
Merger has become fully effective (or such later time as may be agreed in
writing by Greenwich and specified in the Certificate of Merger) is referred
to
herein as the “Effective Time”).
I.3 Effect
of the Merger.
(a) At
the
Effective Time, the effect of the Merger shall be as provided in the applicable
provisions of the DGCL. Without limiting the generality of the foregoing,
and
subject thereto, at the Effective Time, except as provided herein, all the
property, rights, privileges, powers and franchises of Greenwich and VQ Merger
Sub shall vest in the Greenwich Surviving Corporation, and all debts,
liabilities and duties of Greenwich and VQ Merger Sub shall become the debts,
liabilities and duties of the Greenwich Surviving Corporation.
(b) Prior
to
or at the Effective Time, the properties and assets of VQ Merger Sub will
be
free and clear of any and all encumbrances, charges, claims equitable interests,
liens, options, pledges, security interests, mortgages, rights of first refusal
or restrictions of any kind and nature (collectively, the “Encumbrances”), other
than those Encumbrances set forth in the Parent Financials or, as to Parent,
which would not reasonably be expected to have a Parent Material Adverse
Effect
(as defined below).
(c) Prior
to
or at the Effective Time, the properties and assets of Greenwich will be
free
and clear of any and all Encumbrances, other than those Encumbrances set
forth
in the Greenwich Financials or which would not reasonably be expected to
have a
Greenwich Material Adverse Effect (as defined below).
I.4 Certificates
of Incorporation; Bylaws.
(a) At
the
Effective Time, the certificate of incorporation of VQ Merger Sub as in effect
immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Greenwich Surviving Corporation at and after the Effective
Time until thereafter amended in accordance with the DGCL and the terms of
such
certificate of incorporation.
(b) The
Bylaws of VQ Merger Sub as in effect immediately prior to the Effective Time
shall be the bylaws of the Greenwich Surviving Corporation at and after the
Effective Time, until thereafter amended in accordance with the DGCL and
the
terms of certificate of incorporation of the Greenwich Surviving Corporation
and
such bylaws.
I.5 Greenwich
Directors and Officers.
(a) The
directors of VQ Merger Sub immediately prior to the Effective Time shall
be the
directors of the Greenwich Surviving Corporation at and after the Effective
Time, each to hold the office of a director of the Greenwich Surviving
Corporation in accordance with the provisions of the DGCL and the certificate
of
incorporation and bylaws of the Greenwich Surviving Corporation until their
successors are duly elected and qualified.
(b) The
officers of VQ Merger Sub immediately prior to the Effective Time shall be
the
officers of the Greenwich Surviving Corporation at and after the Effective
Time,
each to hold office in accordance with the provisions of the bylaws of the
Greenwich Surviving Corporation.
I.6 Effect
on Capital Stock.
Subject
to the terms and conditions of this Agreement, at the Effective Time, by
virtue
of the Merger and without any action on the part of Parent, Greenwich and
VQ
Merger Sub or the holders of any of the following securities, the following
shall occur:
(a) Capital
Stock of VQ Merger Sub.
Each
issued and outstanding share of capital stock of VQ Merger Sub shall be
automatically converted into and become one fully paid and non-assessable
share
of common stock, par value $0.01 per share, of the Surviving
Corporation.
(b) Conversion
of Greenwich Capital Stock.
Each
share of common stock, par value $0.001 per share, of Greenwich (the “Greenwich
Common Stock”) issued and outstanding immediately prior to the Effective Time
(other than Appraisal Shares (as defined below)) will be automatically converted
(subject to the terms hereof, including Sections 1.6(c),
1.6(e)
and
1.6(f))
into a
number of shares of common stock, par value $0.01 per share, of Parent (the
“Parent Common Stock”) equal to the Exchange Ratio (as defined below). In
addition, holders of Greenwich Common Stock will receive on a pro rata basis
warrants to purchase an aggregate of 4,000,000 shares of Parent Common Stock
(the “Warrants,” and together with the aggregate shares of Parent Common Stock
referred to in the preceding sentence, the “Merger Consideration”), with a per
warrant exercise price of $1.41 and otherwise substantially in the form attached
hereto as Annex
I.
If any
shares of Greenwich Common Stock outstanding immediately prior to the Effective
Time are unvested or are subject to a repurchase option, risk of forfeiture
or
other condition under any applicable restricted stock purchase agreement
or
other agreement with Greenwich, then the shares of Parent Common Stock issued
in
exchange for such shares of Greenwich Common Stock will also be unvested
and
subject to the same repurchase option, risk of forfeiture or other condition,
and the certificates representing such shares of Parent Common Stock may
accordingly be marked with appropriate legends. The term “Exchange Ratio” shall
mean the quotient resulting from dividing (A) the product resulting from
multiplying the Merger Ratio (as defined below) by the number of shares of
Parent Common Stock issued and outstanding immediately prior to the Effective
Time, but excluding any shares issued in connection with the Offering, by
(B)
the number of shares of Greenwich Common Stock issued and outstanding
immediately prior to the Effective Time on a fully diluted basis. The term
“Merger Ratio” shall mean the quotient resulting from dividing 49 percent by 51
percent.
(c) Appraisal
Rights.
Notwithstanding anything in this Agreement to the contrary, shares (“Appraisal
Shares”) of Greenwich Common Stock that are outstanding immediately prior to the
Effective Time and that are held by any person who is entitled to demand
and
properly demands appraisal of such Appraisal Shares pursuant to, and who
complies in all respects with, Section 262 of the DGCL (“Section 262”) shall not
be converted into Merger Consideration as provided in Section 1.6(b), but
rather
the holders of Appraisal Shares shall be entitled to payment of the fair
market
value of such Appraisal Shares in accordance with Section 262; provided,
however,
that if
any such holder shall fail to perfect or otherwise shall waive, withdraw
or lose
the right to appraisal under Section 262, then the right of such holder to
be
paid the fair value of such holder’s Appraisal Shares shall cease and such
Appraisal Shares shall be treated as if they had been converted as of the
Effective Time into Merger Consideration as provided in Section
1.6(b).
(d) Greenwich
Stock Options.
There
are not currently, and at the Effective Time, there will not be, any outstanding
options or other rights to acquire any shares of Greenwich Common
Stock.
(e) Adjustments
to Merger Consideration.
Except
as described in Section 1.8, the Merger Consideration shall be adjusted,
if
necessary, to reflect appropriately the effect of any stock split, reverse
stock
split, stock dividend (including any dividend or distribution of securities
convertible into or exercisable or exchangeable for Parent Common Stock or
Greenwich Common Stock), reorganization, recapitalization, reclassification,
combination, exchange of shares or other like change with respect to Parent
Common Stock or Greenwich Common Stock occurring or having a record date
on or
after the date hereof and prior to the Effective Time.
(f) Escrow
of Merger Consideration.
On the
Closing Date, Parent shall deposit into escrow with a bank or other financial
institution to be mutually agreed to by the parties to serve as escrow agent
(the “Escrow Agent”) under the Escrow Agreement to be entered into among the
parties hereto and such Escrow Agent, substantially in the form attached
hereto
as Annex
II
(the
“Escrow Agreement”), fifty percent (50%) of the Parent Common Stock and the
Warrants comprising the Merger Consideration (the “Escrowed Securities”). The
Escrowed Securities shall be released from escrow in accordance with the
terms
and provisions of the Escrow Agreement.
(g) Fractional
Shares.
No
fraction of a share of Parent Common Stock will be issued by virtue of the
Merger. In lieu thereof any fractional share will be rounded to the nearest
whole share of Parent Common Stock (with 0.5 being rounded up).
1.7 Surrender
of Certificates.
(a) Parent
to Provide Common Stock.
Except
for the Escrowed Shares, promptly after the Effective Time, Parent shall
make
available in accordance with this ARTICLE I, the shares of Parent Common
Stock
issuable pursuant to Section 1.6(b) in exchange for outstanding shares of
Greenwich Common Stock.
(b) Exchange
Procedures.
Promptly after the Effective Time, Parent shall mail, or cause the transfer
agent and registrar for the Parent Common Stock to mail, to each holder of
record as of the Effective Time of a certificate or certificates, which
immediately prior to the Effective Time represented outstanding shares of
Greenwich Common Stock (the “Certificates”) (i) a letter of transmittal in
customary form, which shall specify that delivery shall be effected, and
risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Parent, and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for certificates representing shares
of Parent Common Stock and Warrants pursuant to Section 1.6(b). Upon surrender
of Certificates for cancellation to the Parent, together with such letter
of
transmittal, duly completed and validly executed in accordance with the
instructions thereto, the holders of such Certificates shall be entitled
to
receive in exchange therefor certificates representing the number of whole
shares of Parent Common Stock and Warrants into which their shares of Greenwich
Common Stock were converted pursuant to Section 1.6(b), and the Certificates
so
surrendered shall forthwith be canceled. Until so surrendered, outstanding
Certificates will be deemed, from and after the Effective Time, to evidence
only
the ownership of the number of whole shares of Parent Common Stock and Warrants
into which such shares
of
Greenwich Common Stock shall have been so converted (including any voting,
notice or other rights associated with the ownership of such shares of Parent
Common Stock under the articles or certificate of incorporation or bylaws
of
Parent or under the DGCL).
(c) Transfers
of Ownership.
If
certificates representing shares of Parent Common Stock are to be issued
in a
name other than that in which the Certificates surrendered in exchange therefor
are registered, it will be a condition of the issuance thereof that the
Certificates so surrendered will be properly endorsed and otherwise in proper
form for transfer and that the persons requesting such exchange will have
(i)
paid to Parent or any agent designated by it any transfer or other taxes
required by reason of the issuance of certificates representing shares of
Parent
Common Stock in any name other than that of the registered holder of the
Certificates surrendered, or (ii) established to the satisfaction of Parent
or
any agent designated by it that such tax has been paid or is not
payable.
(d) No
Liability.
Notwithstanding anything to the contrary in this Section 1.7, neither the
Parent
nor the Greenwich Surviving Corporation nor any party hereto shall be liable
to
a holder of shares of Parent Common Stock or Greenwich Common Stock for any
amount properly paid to a public official pursuant to any applicable abandoned
property, escheat or similar law.
(e)
Withholding
of Tax.
Parent
or Parent’s transfer agent shall be entitled to deduct and withhold from the
applicable amount of the Merger Consideration otherwise issuable to, and
any
cash payment in lieu of fractional shares otherwise payable pursuant to this
Agreement to, any former holder of Greenwich Common Stock such amounts as
Parent
(or any affiliate thereof) or Parent’s transfer agent is required to deduct and
withhold with respect to the making of such payment under the Code, or any
provision of state, local or foreign Tax law. To the extent that amounts
are so
withheld by Parent (or any affiliate thereof) or Parent’s transfer agent, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the former holder of Greenwich Common Stock in respect of whom
such
deduction and withholding was made by Parent (or any affiliate thereof) or
Parent’s transfer agent.
1.8 No
Further Ownership Rights in Greenwich Common Stock.
All
shares of Parent Common Stock and Warrants issued in accordance with the
terms
hereof shall be deemed to have been issued in full satisfaction of all rights
pertaining to such shares of Greenwich Common Stock. After the Effective
Time,
there shall be no further registration of transfers on the records of Greenwich
Surviving Corporation of shares of Greenwich Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to Greenwich Surviving Corporation for any reason,
they shall be canceled and exchanged as provided in this ARTICLE
I.
1.9 Lost,
Stolen or Destroyed Certificates.
In the
event that any Certificates shall have been lost, stolen or destroyed, the
Parent shall issue and pay in exchange for such lost, stolen or destroyed
Certificates, upon the making of an affidavit of that fact by the holder
thereof, certificates representing the shares of Parent Common Stock into
which
the shares of Greenwich Common Stock represented by such Certificates were
converted pursuant to Section 1.6(b); provided, however, that the Parent
may, in
its discretion and as a condition precedent to the issuance of such certificates
representing shares of Parent Common Stock require the owner of such lost,
stolen or destroyed Certificates to deliver a bond in such
sum
as it may reasonably direct or otherwise provide indemnity against any claim
that may be made against Parent or Greenwich Surviving Corporation with respect
to the Certificates alleged to have been lost, stolen or destroyed.
1.10 Tax
Treatment.
It is
intended by the parties hereto that the Merger shall constitute a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986,
as
amended (the “Code”). Each of the parties hereto adopts this Agreement as a
“plan of reorganization” within the meaning of Sections 1.368-2(g) and
1.368-3(a) of the United States Treasury Regulations (the “Regulations”). Both
prior to and after the Closing, each party's books and records shall be
maintained, and all federal, state and local income tax returns and schedules
thereto shall be filed in a manner consistent with the Merger being qualified
as
a reverse triangular merger under Section 368(a)(2)(E) of the Code (and
comparable provisions of any applicable state or local laws), except to the
extent the Merger is determined in a final administrative or judicial decision
not to qualify as a reorganization within the meaning of Code Section
368(a).
1.11 Taking
of Necessary Action; Further Action.
If, at
any time after the Effective Time, any further action is necessary or desirable
to carry out the purposes of this Agreement and to vest the Greenwich Surviving
Corporation (and/or its successor in interest) with full right, title and
possession to all assets, property, rights, privileges, powers and franchises
of
Greenwich and VQ Merger Sub, the officers and directors of Parent and the
Greenwich Surviving Corporation shall be fully authorized (in the name of
VQ
Merger Sub, Greenwich and otherwise) to take all such necessary
action.
1.12 Restrictions
on Transfer; Legends.
Any
shares of Parent Common Stock issued in the Merger will not be transferable
except (1) pursuant to an effective registration statement under the
Securities Act or (2) upon receipt by Parent of a written opinion
of
counsel reasonably satisfactory to Parent that is knowledgeable in securities
laws matters to the effect that the proposed transfer is exempt from the
registration requirements of the Securities Act and relevant state securities
laws. Restrictive legends must be placed on all certificates representing
Merger
Consideration, substantially as follows:
“THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED
(THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE, AND ARE BEING
OFFERED AND SOLD PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF
THE SECURITIES ACT AND SUCH LAWS. THESE SECURITIES MAY NOT BE SOLD OR
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OR SUCH OTHER LAWS.”
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF GREENWICH
Except
as
set forth in the corresponding sections or subsections of the letter of
exceptions delivered to Parent by Greenwich on or prior to entering into
this
Agreement and incorporated herein by this reference (the “Greenwich Schedule”),
Greenwich hereby represents and warrants to Parent and VQ Merger Sub
that:
2.1 Organization
of Greenwich.
(a) Greenwich
is a corporation duly organized, validly existing and in good standing under
the
laws of Delaware; has the corporate power and authority to own, lease and
operate its assets and property and to carry on its business as now being
conducted; and is duly qualified to do business and in good standing as a
foreign corporation in each jurisdiction in which the failure to be so qualified
would have a Greenwich Material Adverse Effect. As used in this Agreement,
the
term “Greenwich Material Adverse Effect” means a material adverse effect on the
condition (financial or otherwise), business, assets or results of operations
of
Greenwich, or on the ability of the Greenwich to consummate the transactions
contemplated by this Agreement; it being understood, however, that Greenwich's
continuing incurrence of losses, as long as such losses are in the ordinary
course of business shall not, alone, be deemed to be a Greenwich Material
Adverse Effect.
(b) Greenwich
has no subsidiaries.
(d) Greenwich
has delivered or made available to Parent a true and correct copy of the
certificate of incorporation and bylaws of Greenwich, each as amended to
date
(the “Greenwich Charter Documents”), and each such instrument is in full force
and effect. Greenwich is not in violation of any of the provisions of the
Greenwich Charter Documents.
2.2 Greenwich
Capital Structure.
The
authorized capital stock of Greenwich consists of 25,000,000 shares of Common
Stock, par value $0.001 per share, of which there are 4,000,000 shares issued
and outstanding as of the date hereof and 5,000,000 shares of preferred stock,
par value $0.001 per share, none of which are outstanding as of the date
hereof.
All outstanding shares of Greenwich Common Stock are duly authorized, validly
issued, fully paid and non-assessable, were issued in compliance with applicable
securities laws and are not subject to preemptive rights created by statute,
the
Greenwich Charter Documents, or any agreement or document to which Greenwich
is
a party or by which it is bound.
2.3 Obligations
With Respect to Capital Stock.
Except
as set forth in Section 2.2 of the Greenwich Schedule, there are no equity
securities, partnership interests or similar ownership interests, or any
securities exchangeable or convertible into or exercisable for such equity
securities, partnership interests or similar ownership interests issued,
reserved for issuance or outstanding, with respect to Greenwich. Except as
set
forth in Section 2.2 of the Greenwich Schedule, there are no options, warrants,
equity securities, partnership interests or similar ownership interests,
calls,
rights (including preemptive rights), commitments or agreements of any character
to which Greenwich is a party or by which it is bound obligating Greenwich
to
issue, deliver or sell, or cause to be issued, delivered or sold, or repurchase,
redeem or otherwise acquire, or cause the repurchase, redemption or acquisition,
of any shares of capital stock of Greenwich or obligating Greenwich to grant,
extend, accelerate the vesting of or enter into any such option, warrant,
equity
security, partnership interest or similar ownership interest, call, right,
commitment or agreement. There are no registration rights and, to the knowledge
of Greenwich there are no voting trusts, proxies or other agreements or
understandings with respect to any equity security of any class of
Greenwich.
2.4 Authority.
(a) Greenwich
has all requisite corporate power and authority to enter into this Agreement
and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby,
have been duly authorized by all necessary corporate action on the part of
Greenwich, subject only to the adoption of this Agreement by Greenwich's
stockholders and the filing and recordation of the Certificate of Merger
pursuant to the DGCL. A vote of the holders of at least a majority of the
outstanding shares of the Greenwich Common Stock is required for Greenwich's
stockholders to approve and adopt this Agreement and approve the Merger.
No
“control share acquisition”, state takeover statute or similar statute or
regulation applies or purports to apply to Greenwich with respect to this
Agreement, the Merger or the transactions contemplated hereby or thereby.
(b) This
Agreement has been duly executed and delivered by Greenwich and, assuming
the
due authorization, execution and delivery by Parent and VQ Merger Sub,
constitutes the valid and binding obligation of Greenwich, enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other similar laws and general principles of equity. The execution and delivery
of this Agreement by Greenwich does not, and the performance of this Agreement
by Greenwich will not (i) conflict with or violate the Greenwich Charter
Documents, (ii) subject to compliance with the requirements set forth in
Section
2.4(c) below, conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to Greenwich or by which its or any of its
respective properties is bound or affected, or (iii) result in any breach
of, or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or impair Greenwich's rights or alter the
rights
or obligations of any third party under, or to Greenwich's knowledge, give
to
others any rights of termination, amendment, acceleration or cancellation
of, or
result in the creation of an Encumbrance on any of the properties or assets
of
Greenwich pursuant to, any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation to which
Greenwich is a party or by which Greenwich or its or any of its respective
properties are bound or affected, except to the extent such conflict, violation,
breach, default, impairment or other effect would not, in the case of clause
(ii) or (iii), individually or in the aggregate, reasonably be expected to
have
a Greenwich Material Adverse Effect or prevent or delay consummation of the
Merger in any material respect or otherwise prevent Greenwich from performing
its obligations under this Agreement in any material respect.
(c) No
consent, approval, order or authorization of, or registration, declaration
or
filing with any court, administrative agency or commission or other governmental
authority or instrumentality (a “Governmental Entity”) is required by or with
respect to Greenwich in connection with the execution and delivery of this
Agreement, or the consummation of the transactions contemplated hereby, except
for (i) the filing of the Certificate of Merger with the Secretary of State
of
Delaware, (ii) such consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable federal and
state
securities laws and (iii) such other consents, authorizations, filings,
approvals and registrations which, if not obtained or made, individually
or in
the aggregate, would not be reasonably likely to have a Greenwich Material
Adverse Effect.
2.5 Greenwich
Financial Statements.
Prior
to the Effective Time, Greenwich shall provide to Parent, an audited balance
sheet of Greenwich as of December 31, 2004 (the “Greenwich Balance Sheet”),
together with the related statements of income and cash flows for the year
ended
December 31, 2004 (the “Greenwich Financial Statements”). Each of the Greenwich
Financial Statements (including, in each case, any related notes thereto)
was
prepared in accordance with generally accepted accounting principles (“GAAP”)
applied on a consistent basis throughout the periods involved (except as
may be
indicated in the notes thereto), and each fairly presents and will fairly
present the financial position of Greenwich as of the respective dates thereof
and the results of its operations and cash flows and stockholder equity for
the
periods indicated. Except as disclosed in the Greenwich Financial Statements,
Greenwich does not have any Liabilities of a nature required to be disclosed
on
a balance sheet or in the related notes to the consolidated financial statements
prepared in accordance with GAAP which are, individually or in the aggregate,
material to the business, results of operations or financial condition of
Greenwich, except Liabilities incurred since the date of the Greenwich Financial
Statements in the ordinary course of business consistent with past practices
and
which would not reasonably be expected to have a Greenwich Material Adverse
Effect. For purposes hereof, “Liabilities” shall mean any and all liabilities,
accounts payable, debts, adverse claims, duties, responsibilities and
obligations of every kind or nature, whether accrued or unaccrued, known
or
unknown, direct or indirect, absolute or contingent, liquidated or unliquidated
and whether arising under, pursuant to or in connection with any contract,
tort,
strict liability or otherwise.
2.6 Absence
of Certain Changes or Events.
Except
as contemplated by this Agreement, since the date of the Greenwich Balance
Sheet, Greenwich has conducted its business only in, and has not engaged
in any
material transaction other than according to, the ordinary and usual course
of
such businesses and there has not been (i) any change that, individually
or in
the aggregate, has had or is reasonably likely to have a Greenwich Material
Adverse Effect; (ii) any material damage, destruction or other casualty loss
with respect to any material asset or property owned, leased or otherwise
used
by Greenwich, whether or not covered by insurance; (iii) any declaration,
setting aside or payment of any dividend or other distribution in cash, stock
or
property in respect of the capital stock of Greenwich, except for dividends
or
other distributions on its capital stock publicly announced prior to the
date
hereof and except as expressly permitted hereby; (iv) any event that would
constitute a violation of Section 4.1 hereof if such event occurred after
the
date of this Agreement and prior to the Effective Time; or (v) any change
by
Greenwich in accounting principles, practices or methods. Since the date
of the
Greenwich Balance Sheet, there has not been any increase in the compensation
payable or that could become payable by Greenwich to officers or key employees
or any amendment of the Greenwich Option Plan other than increases or amendments
in the ordinary course of business or (y) as required by any relevant employment
agreement, option agreement or (z) which, individually or in the aggregate,
would not reasonably be expected to have a Greenwich Material Adverse
Effect.
2.7 Taxes.
(a) For
purposes of this Agreement, (i) “Taxes” shall mean all Federal, state, local,
foreign, provincial, territorial or other taxes, imports, tariffs, fees,
levies
or other similar assessments or Liabilities and other charges of any kind,
including income taxes, profits taxes, franchise taxes, ad valorem taxes,
excise
taxes, withholding taxes, stamp taxes or other taxes of or with respect to
gross
receipts, premiums, real property, personal property, windfall profits, sales,
use, transfers, licensing, employment, social security, workers' compensation,
unemployment, payroll and franchises imposed by or under any law (meaning
all
laws, statutes, ordinances and regulations of any Governmental Entity including
all decisions of any court having the effect of law), and any other taxes,
duties or assessments, together with all interest, penalties and additions
imposed with respect to such amounts; (ii) “Tax Returns” shall mean any
declaration, return, report, schedule, certificate, statement or other similar
document (including relating or supporting information) required to be filed
with any Taxing Authority (as defined below), or where none is required to
be
filed with a Taxing Authority, the statement or other document issued by
the
applicable Taxing Authority in connection with any Tax, including, without
limitation, any information return, claim for refund, amended return or
declaration of estimated Tax; and (iii) “Taxing Authority” shall mean any
domestic, foreign, Federal, national, provincial, state, county or municipal
or
other local government or court, any subdivision, agency, commission or
authority thereof, or any quasi-governmental body exercising tax regulatory
authority.
(b) Greenwich
has (i) timely filed all Tax Returns that are required to have been filed
by it
with all appropriate Taxing Authorities (and all such returns are true and
correct and fairly reflect in all material respects its operations for tax
purposes), and (ii) timely paid all Taxes shown as owing on such Tax Returns
or
assessed by any Taxing Authority (other than Taxes the validity of which
are
being contested in good faith by appropriate proceedings). Between the date
of
the Greenwich Balance Sheet and the Closing Date, Greenwich has not incurred
(or
will not incur) a Tax Liability other than a Tax Liability in the ordinary
course of business and in accordance with past custom and practice. The
assessment of any additional Taxes for periods for which Tax Returns have
been
filed is not expected to exceed reserves made in accordance with GAAP and
reflected in the Greenwich Financial Statements and the Greenwich Balance
Sheet
and, to Greenwich's knowledge, there are no material unresolved questions
or
claims concerning Greenwich's Tax Liability. Greenwich's Tax Returns have
not
been reviewed or audited by any Taxing Authority, and no deficiencies for
any
Taxes have been proposed, asserted or assessed either orally or in writing
against Greenwich that are not adequately reserved for in accordance with
GAAP.
No liens exist for Taxes (other than liens for Taxes not yet due and payable)
with respect to any of the assets or properties of Greenwich.
(c) Greenwich
has no outstanding agreements or waivers extending, or having the effect
of
extending, the statute of limitations with respect to the assessment or
collection of any Tax or the filing of any Tax Return.
(d) Greenwich
is not a party to or bound by any tax-sharing agreement, tax indemnity
obligation or similar agreement, arrangement or practice with respect to
Taxes
(including any advance pricing agreement, closing agreement or other agreement
relating to Taxes with any Taxing Authority).
(e) Greenwich
shall not be required to include in a taxable period ending after the Closing
Date any taxable income attributable to income that accrued in a prior taxable
period but was not recognized in any prior taxable period as a result of
the
installment method of accounting, the long-term contract method of accounting,
the cash method of accounting or Section 481 of the Code or any comparable
provision of state, local or foreign Tax law, or for any other
reason.
(f) Neither
Greenwich nor any of its affiliates has made, with respect to Greenwich,
any
consent under Section 341 of the Code; no property of Greenwich is “tax exempt
use property” within the meaning of Section 168(h) of the Code; and none of the
assets of Greenwich is subject to a lease under Section 7701(h) of the Code
or
under any predecessor section thereof.
(g) Greenwich
has complied in all material respects with all applicable laws relating to
the
payment and withholding of Taxes (including, without limitation, withholding
of
Taxes pursuant to Sections 1441, 1442, 3121, 3402 and 3406 of the Code or
any
comparable provision of any state, local or foreign laws) and has, within
the
time and in the manner prescribed by applicable law, withheld from and paid
over
to the proper Taxing Authorities all amounts required to be so withheld and
paid
over under applicable laws.
(h) The
net
operating losses (“NOLs”) of Greenwich are not, as of the date hereof, subject
to Sections 382 or 269 of the Code, Regulations Section 1.1502-21(c), or
any
similar provisions or Regulations otherwise limiting the use of the NOLs
of
Greenwich.
(i) Greenwich
is not, and has not been for the five years preceding the Closing, a “United
States real property holding company” (as such term is defined in Section
897(c)(2) of the Code).
(j) As
of the
date hereof, to the knowledge of Greenwich, Greenwich has not taken or agreed
to
take any action or failed to take any action that would prevent the Merger
from
constituting a reorganization within the meaning of Section 368(a) of the
Code.
(k) Any
deficiency resulting from any audit or examination relating to Taxes of
Greenwich by any Taxing Authority has been timely paid.
(l) No
power
of attorney with respect to any Taxes has been executed or filed with any
Taxing
Authority by or on behalf of Greenwich.
2.8 Patents
and Trademarks.
(a) Greenwich
owns, or has the right to use pursuant to valid license, sublicense, agreement,
or permission, all intellectual property rights used in or necessary for
the
operation of its business as presently conducted. To Greenwich’s knowledge,
except as set forth in Section 2.8 of the Greenwich Schedule, (i) such
intellectual property rights are owned free and clear of royalty obligations
and
Encumbrances, (ii) the execution and delivery of this Agreement and the closing
of the transaction contemplated hereby will not alter or impair any such
rights,
(iii) the use of all such intellectual property by Greenwich does not infringe
or violate the intellectual property rights of any person or entity, and
(iv)
Greenwich has not granted any person or entity any rights, pursuant to written
license agreement or otherwise, to use such intellectual property. Greenwich
has
taken, and shall continue to take through the Closing Date, all necessary
action
to maintain and protect each item of intellectual property that it owns or
uses.
(b) Section
2.8 of the Greenwich Schedule identifies (i) each patent, trademark, trade
name,
service name or copyright with respect to any of Greenwich’s intellectual
property, all applications and registration statements therefor and renewals
thereof (and sets forth correct and complete copies of all such patents,
registrations and applications (as amended to date)) and (ii) all intellectual
property that Greenwich uses pursuant to license, sublicense, agreement,
or
permission, all of which are valid and in full force and effect, and the
execution and delivery of this Agreement and the closing of the transaction
contemplated hereby will not alter or impair any such rights.
(c) Greenwich
has at all times used reasonable efforts to protect all trade secrets related
to
its intellectual property.
2.9 Compliance;
Permits; Restrictions.
(a) Greenwich
is not in conflict with, or in default or violation of (i) any law, rule,
regulation, order, judgment or decree applicable to Greenwich or by which
its or
any of its respective properties is bound or affected, or (ii) any note,
bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise
or
other instrument or obligation to which Greenwich is a party or by which
Greenwich or its or any of its properties is bound or affected except for
those
conflicts, defaults or violations which would not be reasonably expected
to have
a Greenwich Material Adverse Effect. To the knowledge of Greenwich, no
investigation or review by any Governmental Entity is pending or threatened
against Greenwich, nor has any Governmental Entity indicated in writing an
intention to conduct the same other than those which would not reasonably
be
expected to have a Greenwich Material Adverse Effect. There is no agreement,
judgment, injunction, order or decree binding upon Greenwich which has or
would
reasonably be expected to have the effect of prohibiting or materially impairing
any business practice of Greenwich, any acquisition of material property
by
Greenwich or the conduct of business by Greenwich as currently
conducted.
(b) Greenwich
holds all permits, licenses, variances, exemptions, orders and approvals
from
Governmental Entities which are necessary to the conduct of its business
except
those the absence of which would not, individually or in the aggregate,
reasonably be likely to have a Greenwich Material Adverse Effect (collectively,
the “Greenwich Permits”). Greenwich is in compliance in all material respects
with the terms of the Greenwich Permits.
2.10 Litigation.
There
is no action, suit, proceeding, claim, arbitration or investigation pending,
including derivative suits brought by or on behalf of Greenwich or as to
which
Greenwich has received any written notice of assertion nor, to Greenwich's
knowledge, is there a threatened action, suit, proceeding, claim, arbitration
or
investigation against Greenwich seeking to delay, limit or enjoin the
transactions contemplated by this Agreement or which might reasonably be
expected to have a Greenwich Material Adverse Effect.
2.11 Brokers'
and Finders' Fees.
Greenwich has not incurred, nor will it incur, directly or indirectly, any
Liability for brokerage or finders' fees or agents' commissions or any similar
charges in connection with this Agreement or any transaction contemplated
hereby, other than finders’ fees, the payment for which will be the sole
responsibility of Greenwich.
2.12 Labor
Agreements and Actions; Employee Benefit Plans.
(a) Greenwich
is not bound by or subject to (and none of its assets or properties is bound
by
or subject to) any written or oral, express or implied, contract, commitment
or
arrangement with any labor union, and no labor union has requested or, to
the
knowledge of Greenwich, has sought to represent any of the employees,
representatives, or agents of Greenwich. There is no strike or other labor
dispute involving Greenwich pending or, to the knowledge of Greenwich,
threatened, nor is Greenwich aware of any labor organization activity involving
its employees.
(b) Greenwich
has not and does not sponsor, maintain, contribute to, or is required to
contribute to, or has any Liabilities or responsibilities for, any pension,
profit-sharing or other retirement, bonus, deferred compensation, employment
agreement, severance agreement, compensation, stock purchase, stock option,
severance or termination pay, hospitalization or other medical, life or other
insurance, long- or short-term disability, fringe benefit, sick pay, or vacation
pay, or other employee benefit plan, program, agreement, or arrangement or
policy, whether formal or informal, funded or unfunded, written or unwritten,
and whether legally binding for any current or former employee or any current
or
former director or consultant of Greenwich, or of any trade or business,
whether
or not incorporated, that together with Greenwich would be deemed a “single
employer” within the meaning of Section 4001(a)(14) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), and the rules and regulations
promulgated thereunder, except those that may be terminated without penalty
on
thirty (30) days notice.
(c) Greenwich
has never represented, promised or contracted (whether in oral or written
form)
to or with any employee(s) that such employee(s) would be provided with retiree
health or life benefits.
(d) The
consummation of the transactions contemplated by this Agreement will not
(x)
entitle any employees of Greenwich or its subsidiaries to severance pay,
(y)
accelerate the time of payment or vesting or trigger any payment or funding
of
compensation or benefits under, increase the amount payable or trigger any
other
material obligation pursuant to, any cash or equity compensation or benefit
plan
maintained by Greenwich or any subsidiary or any agreement between Greenwich
or
any subsidiary and any employee or director of Greenwich or a subsidiary
or (z)
result in any breach or violation of, or a default under, any such plans
or
agreements.
(e) Any
amount that could be received (whether in cash, property, or vesting of
property) as a result of the transaction contemplated by this Agreement by
any
officer, director, employee or independent contractor of Greenwich, who is
a
“disqualified individual” (as defined in Treasury Regulation Section 1.280G-1),
under any employment arrangement or cash or equity compensation or benefit
plan
maintained by Greenwich or a subsidiary would not be characterized as an
“excess
parachute payment” (as defined in Section 280G of the Code).
2.13 Absence
of Encumbrances.
Greenwich has good and valid title to, or, in the case of leased properties
and
assets, valid leasehold interests in, all of its tangible properties and
assets,
real, personal and mixed, used in its business, free and clear of any
Encumbrances except (i) as reflected in the Greenwich Financial Statements,
(ii)
for liens for taxes not yet due and payable and (iii) for such imperfections
of
title and Encumbrances, if any, which would not be reasonably expected to
have a
Greenwich Material Adverse Effect.
2.14 Environmental
Matters.
(a) Hazardous
Materials Activities.
To its
knowledge, except as would not reasonably be likely to result in a material
Liability to Greenwich (in any individual case or in the aggregate), (i)
Greenwich has not transported, handled, treated, stored, used, manufactured,
distributed, disposed of, released or exposed its employees or others to
pollutants, contaminants, hazardous wastes, or any toxic, radioactive or
otherwise hazardous materials (“Hazardous Materials”) and (ii) Greenwich has not
disposed of, transported, sold, used, released, exposed its employees or
others
to or manufactured any product containing a Hazardous Material (collectively,
“Hazardous Materials Activities”), in either case, in violation of any
applicable law, rule, regulation, treaty or statute promulgated by any
Governmental Entity in effect prior to or as of the date hereof to prohibit,
regulate or control Hazardous Materials or any Hazardous Materials
Activity.
(b) Environmental
Liabilities.
No
action, proceeding, revocation proceeding, amendment procedure, writ, injunction
or claim is pending, or to Greenwich's knowledge, threatened against Greenwich
concerning (i) any Greenwich Permit relating to any environmental matter,
(ii)
any Hazardous Material or (iii) any Hazardous Materials Activity of Greenwich.
Greenwich is not aware of any fact or circumstance which could reasonably
involve Greenwich in any environmental litigation or impose upon Greenwich
any
Liability related to Hazardous Materials or Hazardous Materials
Activity.
(c) Compliance
with Environmental Laws.
Each of Greenwich and its predecessors and affiliates have complied and are
in
compliance, in each case in all material respects, with all applicable laws,
rules, regulations, treaties and statutes promulgated by any Governmental
Entity
in effect prior to or as of the date hereof to prohibit, regulate or control
Hazardous Materials or any Hazardous Materials Activity.
2.15 Agreements.
(a) Section
2.15(a) of the Greenwich Schedule lists all written agreements between Greenwich
and any of its officers, directors, employees or stockholders or any affiliate
thereof.
(b) Section
2.15(b) of the Greenwich Schedule lists all written agreements to which
Greenwich is a party or by which it is bound which (i) involve obligations
(contingent or otherwise) of, or payments to, Greenwich in excess of $25,000,
(ii) are material to the conduct and operations of Greenwich's business or
properties (including, without limitation, the license of any intellectual
property to or from Greenwich), (iii) restrict or materially adversely affect
the development, manufacture, sale, marketing or distribution of Greenwich's
products or services, (iv) relate to the employment or compensation of any
employee or consultant, (v) are of duration of six months or more and not
cancelable without penalty by Greenwich on 30 days or less notice or (vi)
relate
to the sale, lease, pledge or other disposition of any material assets of
or to
Greenwich.
(c) Neither
Greenwich, nor to Greenwich's knowledge any other party to a Greenwich Contract
(as defined below), is in breach, violation or default under, and Greenwich
has
not been notified that it has breached, violated or defaulted under, any
of the
material terms or conditions of any of the agreements, contracts or commitments
to which Greenwich is a party or by which it is bound that are required to
be
disclosed in Sections 2.15(a) or 2.15(b) of the Greenwich Schedule (any such
agreement, contract or commitment, a “Greenwich Contract”) in such a manner as
would permit any other party to cancel or terminate any such Greenwich Contract,
or would permit any other party to seek material damages or other remedies
(for
any or all of such breaches, violations or defaults, in the
aggregate).
(d) Each
of
the Greenwich Contracts are legal, valid, binding and enforceable and in
full
force and effect with respect to Greenwich and, to Greenwich’s knowledge, with
respect to each other party thereto, in either case subject to the effect
of
bankruptcy, insolvency, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and except as the availability
of
equitable remedies may be limited by general principles of equity; and the
Greenwich Contracts will continue to be legal, valid, binding and enforceable
and in full force and effect immediately following the Closing in accordance
with the terms thereof as in effect prior to the Closing subject to the effect
of bankruptcy, insolvency, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and except as the availability
of
equitable remedies may be limited by general principles of equity.
(e) Greenwich
has not been notified that any party to any of the Greenwich Contracts intends
to cancel, terminate, proposes to amend, not renew or exercise an option
under
any of Greenwich Contracts, whether in connection with the transactions
contemplated hereby or otherwise nor is Greenwich aware of any intention
by any
party to any Greenwich Contract to effect any of the foregoing.
2.16 Board
Approval.
The
Board of Directors of Greenwich has, as of or prior to the date of this
Agreement, at a meeting duly called and held, duly adopted resolutions (i)
approving this Agreement, the Merger and the transactions contemplated hereby
and thereby, (ii) determining that the terms of the Merger and the transactions
contemplated thereby are fair to and in the best interests of Greenwich and
its
stockholders, (iii) recommending that that the stockholders of Greenwich
adopt
this Agreement and (iv) declaring that this Agreement and the Merger are
advisable.
2.17 Regulatory
Compliance.
(a) Neither
Greenwich nor any officer, employee, agent or affiliate of Greenwich has
made
any untrue statement of a material fact or fraudulent statement to the U.
S.
Food and Drug Administration (“FDA”) or other Governmental Entity, failed to
disclose a fact required to be disclosed to the FDA or any other Governmental
Entity, or committed an act, made a statement, or failed to make a statement
that, at the time such disclosure was made, could reasonably be expected
to
provide a basis for the FDA or any other Governmental Entity to invoke its
policy respecting “Fraud, Untrue Statements of Material Facts, Bribery, and
Illegal Gratuities”, set forth in 56 Fed. Reg. 46191 (September 10, 1991) or any
similar policy. Neither Greenwich nor any officer, employee, agent or affiliate
of Greenwich has been convicted of any crime or engaged in any conduct for
which
debarment is mandated by 21 U.S.C. sec. 335a(a) or any similar law or authorized
by 21 U.S.C. sec. 335a(b) or any similar law.
(b) Greenwich
has not received any written notice that the FDA or any other Governmental
Entity has commenced, or threatened to initiate, any action to impose a clinical
hold on any clinical investigation by Greenwich, or enter into a consent
decree
or permanent injunction with Greenwich which would have a Greenwich Material
Adverse Effect.
(c) No
person
has filed a claim for loss or potential loss under any indemnity covering
participants in clinical trials conducted or being conduced by
Greenwich.
(d) Greenwich
has provided or made available to Parent all documents in its possession
concerning communication to or from FDA or prepared by FDA which bear in
any
material respect on compliance with FDA regulatory requirements, including,
but
not limited to, any deficiency letter, warning letter, non-approvable
letter/order, withdrawal letter/order, or similar communications.
2.18 Insurance.
Greenwich does not maintain any insurance policies.
2.19 Disclosure.
No
representation or warranty of the parties to this Agreement and no statement
in
the Greenwich Schedule, taken together, omits to state a material fact necessary
to make the statements herein or therein, in light of the circumstances in
which
they were made, not misleading.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
OF
PARENT AND VQ MERGER SUB
Except
as
set forth in the corresponding sections or subsections of the letter of
exceptions delivered to Greenwich by Parent on or prior to entering into
this
Agreement and incorporated herein by this reference (the “Parent Schedule”),
each of Parent and VQ Merger Sub, jointly and severally, hereby represents
and
warrants to Greenwich that:
3.1 Organization
of Parent and Subsidiaries.
(a) Parent
and each of its subsidiaries is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization;
has
the corporate power and authority to own, lease and operate its assets and
property and to carry on its business as now being conducted; and is duly
qualified to do business and in good standing in each jurisdiction in which
the
failure to be so qualified would have a Parent Material Adverse Effect. As
used
in this Agreement, the term “Parent Material Adverse Effect” means a material
adverse effect on the condition (financial or otherwise), business, assets
or
results of operations of Parent and its subsidiaries as a whole or on the
ability of Parent or VQ Merger Sub to consummate the transactions contemplated
by this Agreement; it being understood, however, that Parent's continuing
incurrence of losses, as long as such losses are in the ordinary course of
business shall not, alone, be deemed to be a Parent Material Adverse Effect.
(b) Section
3.1 of the Parent Schedule lists each subsidiary of Parent and its respective
jurisdiction of organization. Except for the capital stock of its subsidiaries,
Parent does not own, directly or indirectly, any capital stock or ownership
interest in any person. VQ Merger Sub has no subsidiaries.
(c) Parent
has delivered or made available to Greenwich a true and correct copy of the
articles or certificate of incorporation and bylaws of each of Parent and
VQ
Merger Sub, each as amended to date (the “Parent Charter Documents” and the
“Merger Sub Charter Documents”, respectively), and the comparable charter and
organizational documents of each other subsidiary of Parent, and each such
instrument is in full force and effect. Neither Parent nor VQ Merger Sub
is in
violation of any of the provisions of their respective Charter
Documents.
3.2 Capital
Structure.
The
authorized capital stock of Parent consists of 50,000,000 shares of Common
Stock, par value $0.01 per share, of which there are 17,827,924 shares issued
and outstanding as of the date hereof. The authorized capital stock of VQ
Merger
Sub consists of 100 shares of Common Stock, par value $0.01 per share, of
which
there are 100 shares issued and outstanding as of the date hereof. The
authorized capital stock of each other subsidiary of Parent is as set forth
in
Section 3.2 of the Parent Schedule. All outstanding shares of the capital
stock
of Parent and each of its subsidiaries are duly authorized, validly issued,
fully paid and non-assessable, were issued in compliance with applicable
securities laws and are not subject to preemptive rights created by statute,
the
Parent Charter Documents, the Merger Sub Charter Documents or the charter
documents of such subsidiary or any agreement or document to which Parent
or
such subsidiary is a party or by which it is bound. All of the outstanding
capital stock of each subsidiary of Parent is directly or indirectly owned
by
Parent, free and clear of any Encumbrance. Except as set forth in Section
3.2 of
the Parent Schedule, neither Parent nor any of its subsidiaries has any options
or warrants to purchase capital stock or other equity interests
outstanding.
3.3 Obligations
With Respect to Capital Stock.
Except
as set forth in Section 3.2 of the Parent Schedule, there are no equity
securities, partnership interests or similar ownership interests of any class
of
capital stock, or any securities exchangeable or convertible into or exercisable
for such equity securities, partnership interests or similar ownership interests
issued, reserved for issuance or outstanding with respect to Parent or any
of
its subsidiaries. Except as set forth in Section 3.2 of the Parent Schedule,
there are no options, warrants, equity securities, partnership interests
or
similar ownership interests, calls, rights (including preemptive rights),
commitments or agreements of any character to which Parent or any of its
subsidiaries is a party or by which it is bound obligating Parent or such
subsidiary to issue, deliver or sell, or cause to be issued, delivered or
sold,
or repurchase, redeem or otherwise acquire, or cause the repurchase, redemption
or acquisition, of any shares of capital stock of Parent or any of its
subsidiaries or obligating Parent or any of its subsidiaries to grant, extend,
accelerate the vesting of or enter into any such option, warrant, equity
security, partnership interest or similar ownership interest, call, right,
commitment or agreement. None of the options set forth in Section 3.2 of
the
Parent Schedule qualify as “incentive stock options” as defined under Section
422 of the Internal Revenue Code of 1986, as amended. There are no registration
rights and, to the knowledge of Parent there are no voting trusts, proxies
or
other agreements or understandings with respect to any equity security,
partnership interest or similar ownership interest with respect to Parent
or any
of its subsidiaries.
3.4 Authority.
(a) Each
of
Parent and VQ Merger Sub has all requisite corporate power and authority
to
enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation
of the
transactions contemplated hereby, have been duly authorized by all necessary
corporate action on the part of each of Parent and VQ Merger Sub, subject
only
to the approval of the Reincorporation Proposal by Parent shareholders and
the
filing and recordation of the Certificate of Merger pursuant to the DGCL.
No
“control share acquisition,” state takeover statute or similar statute or
regulation applies or purports to apply to Parent or VQ Merger Sub with respect
to this Agreement, the Merger or the transactions contemplated hereby or
thereby.
(b) This
Agreement has been duly executed and delivered by each of Parent and VQ Merger
Sub and, assuming the due authorization, execution and delivery by Greenwich,
constitutes the valid and binding obligation of each of Parent and VQ Merger
Sub, enforceable in accordance with its terms, except as enforceability may
be
limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other similar laws and general principles of equity. The
execution and delivery of this Agreement by each of Parent and VQ Merger
Sub, do
not, and the performance of this Agreement by each of Parent and VQ Merger
Sub,
will not (i) conflict with or violate the Parent Charter Documents or the
Merger
Sub Charter Documents, (ii) subject to compliance with the requirements set
forth in Section 3.4(c) below, conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to Parent or VQ Merger Sub,
respectively, or by which its or any of their respective properties is bound
or
affected or (iii) result in any breach of, or constitute a default (or an
event
that with notice or lapse of time or both would become a default) under,
or
impair any of, Parent's or VQ Merger Sub's rights or alter the rights or
obligations of any third party under, or to Parent's knowledge, give to others
any rights of termination, amendment, acceleration or cancellation of, or
result
in the creation of an Encumbrance on any of the properties or assets of Parent
or VQ Merger Sub, respectively, pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which any of Parent or VQ Merger Sub is a party
or
by which Parent or VQ Merger Sub, or any of their respective properties are
bound or affected, except to the extent such conflict, violation, breach,
default, impairment or other effect would not, in the case of clause (ii)
or
(iii), individually or in the aggregate, reasonably be expected to have a
Parent
Material Adverse Effect or prevent or delay consummation of the Merger in
any
material respect or otherwise prevent Parent or VQ Merger Sub from performing
its obligations under this Agreement in any material respect.
(c) No
consent, approval, order or authorization of, or registration, declaration
or
filing with any Governmental Entity is required by or with respect to either
Parent or VQ Merger Sub in connection with the execution and delivery of
this
Agreement or the consummation of the transactions contemplated hereby, except
for (i) the filing of the Certificate of Merger with the Secretary of State
of
Delaware, (ii) such consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable federal and
state
securities laws and (iii) such other consents, authorizations, filings,
approvals and registrations which, if not obtained or made, individually
or in
the aggregate, would not be reasonably likely to have a Parent Material Adverse
Effect.
3.5 Parent
SEC Filings; Parent Financial Statements.
(a) Since
February 18, 2003, Parent has timely filed all forms, reports and documents
required to be filed with the SEC by applicable law. All such required forms,
reports and documents (including the financial statements, exhibits and
schedules thereto and those documents that the Parent may file subsequent
to the
date hereof) are collectively referred to herein as the “Parent SEC Reports” and
Parent has provided or made available to Greenwich copies thereof and of
all
correspondence to or from the SEC with respect to the Parent. As of their
respective dates, the Parent SEC Reports (i) were prepared in accordance
with
the requirements of the Securities Act of 1933, as amended (the “Securities
Act”) or the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
as the case may be, and the rules and regulations of the SEC thereunder
applicable to such Parent SEC Reports, and (ii) did not at the time they
were
filed (or if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing) contain any untrue statement
of a
material fact or omit to state a material fact required to be stated therein
or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) Each
of
the financial statements (including, in each case, any related notes thereto)
contained in the Parent SEC Reports (the “Parent Financials”), including any
Parent SEC Reports filed after the date hereof until the Closing, as of their
respective dates, (i) complied as to form in all material respects with the
published rules and regulations of the SEC with respect thereto, (ii) was
prepared in accordance with GAAP applied on a consistent basis throughout
the
periods involved (except as may be indicated in the notes thereto or, in
the
case of unaudited interim financial statements, as may be permitted by the
SEC
on Form 10-QSB under the Exchange Act) and (iii) fairly presented the financial
position of the Parent at the respective dates thereof and the consolidated
results of its operations and cash flows for the periods indicated, except
that
the unaudited interim financial statements were or are subject to normal
and
recurring year-end adjustments which were not, or are not expected to be,
material in amount. The balance sheet of the Parent as of December 31, 2004
is
hereinafter referred to as the “Parent Balance Sheet.” Except as disclosed in
the Parent Financials, the Parent does not have any Liabilities of a nature
required to be disclosed on a balance sheet or in the related notes to the
consolidated financial statements prepared in accordance with GAAP which
are,
individually or in the aggregate, material to the business, results of
operations or financial condition of the Parent, except Liabilities (i) provided
for in the Parent Balance Sheet, or (ii) incurred since the date of the Parent
Balance Sheet in the ordinary course of business consistent with past practices
and which would not reasonably be expected to have a Parent Material Adverse
Effect.
(c) Parent
has heretofore furnished to Greenwich a complete and correct copy of any
amendments or modifications to the Parent SEC Reports, if any, which have
not
yet been filed with the SEC but which will be required to be filed, to
agreements, documents or other instruments which previously had been filed
by
the Parent with the SEC pursuant to the Securities Act or the Exchange
Act.
3.6 Absence
of Certain Changes or Events.
Except
as disclosed in the Parent SEC Reports filed prior to the date hereof or
as
contemplated by this Agreement, since the date of the Parent Balance Sheet,
Parent has conducted its business only in, and has not engaged in any material
transaction other than according to, the ordinary and usual course of such
businesses and there has not been (i) any change that individually or in
the
aggregate, has had or is reasonably likely to have a Parent Material Adverse
Effect; (ii) any material damage, destruction or other casualty loss with
respect to any material asset or property owned, leased or otherwise used
by
Parent or VQ Merger Sub, whether or not covered by insurance; (iii) any
declaration, setting aside or payment of any dividend or other distribution
in
cash, stock or property in respect of the capital stock of Parent, except
for
dividends or other distributions on its capital stock publicly announced
prior
to the date hereof and except as expressly permitted hereby; (iv) any event
that
would constitute a violation of Section 4.1 or Section 4.2 hereof, if such
event
occurred after the date of this Agreement and prior to the Effective Time;
or
(v) any change by Parent in accounting principles, practices or methods.
Since
the date of the Parent Balance Sheet, there has not been any increase in
the
compensation payable or that could become payable by Parent or any of its
subsidiaries to officers or key employees or any amendment of the Parent
Option
Plan (as defined below) other than increases or amendments in the ordinary
course of business or (y) as required by any relevant employment agreement,
option agreement or (z) which, individually or in the aggregate, would not
reasonably be expected to have a Parent Material Adverse Effect.
3.7 Tax
Matters.
(a) Parent
has (i) timely filed all Tax Returns that are required to have been filed
by it
with all appropriate Taxing Authorities (and all such returns are true and
correct and fairly reflect in all material respects its operations for tax
purposes), and (ii) timely paid all Taxes shown as owing on such Tax Returns
or
assessed by any Taxing Authority (other than Taxes the validity of which
are
being contested in good faith by appropriate proceedings). Between the date
of
the Parent Balance Sheet and the Closing Date, neither Parent nor VQ Merger
Sub
has incurred (or will incur) a Tax Liability other than a Tax Liability in
the
ordinary course of business and in accordance with past custom and practice.
The
assessment of any additional Taxes for periods for which Tax Returns have
been
filed is not expected to exceed reserves made in accordance with GAAP and
reflected in the Parent Financial Statements and the Parent Balance Sheet
and,
to Parent's knowledge, there are no material unresolved questions or claims
concerning Parent's Tax Liability. Parent's Tax Returns have not been reviewed
or audited by any Taxing Authority and no deficiencies for any Taxes have
been
proposed, asserted or assessed either orally or in writing against Parent
or VQ
Merger Sub that are not adequately reserved for in accordance with GAAP.
No
liens exist for Taxes (other than liens for Taxes not yet due and payable)
with
respect to any of the assets or properties of Parent or VQ Merger
Sub.
(b) Neither
Parent nor VQ Merger Sub has outstanding any agreements or waivers extending,
or
having the effect of extending, the statute of limitations with respect to
the
assessment or collection of any Tax or the filing of any Tax
Return.
(c) Neither
Parent nor VQ Merger Sub is a party to or bound by any tax-sharing agreement,
tax indemnity obligation or similar agreement, arrangement or practice with
respect to Taxes (including any advance pricing agreement, closing agreement
or
other agreement relating to Taxes with any Taxing Authority).
(d) Parent
shall not be required to include in a taxable period ending after the Closing
Date any taxable income attributable to income that accrued in a prior taxable
period but was not recognized in any prior taxable period as a result of
the
installment method of accounting, the long-term contract method of accounting,
the cash method of accounting or Section 481 of the Code or any comparable
provision of state, local or foreign Tax law, or for any other
reason.
(e) Neither
Parent nor VQ Merger Sub or affiliates has made, with respect to Parent,
any
consent under Section 341 of the Code; no property of Parent is “tax exempt use
property” within the meaning of Section 168(h) of the Code; and none of the
assets of Parent is subject to a lease under Section 7701(h) of the Code
or
under any predecessor section thereof.
(f) Parent
has complied in all material respects with all applicable laws relating to
the
payment and withholding of Taxes (including, without limitation, withholding
of
Taxes pursuant to Sections 1441, 1442, 3121, 3402 and 3406 of the Code or
any
comparable provision of any state, local or foreign laws) and has, within
the
time and in the manner prescribed by applicable law, withheld from and paid
over
to the proper Taxing Authorities all amounts required to be so withheld and
paid
over under applicable laws.
(g) The
NOLs
of Parent or VQ Merger Sub are not, as of the date hereof, subject to Sections
382 or 269 of the Code, Regulations Section 1.1502-21(c), or any similar
provisions or Regulations otherwise limiting the use of the NOLs of Parent
or VQ
Merger Sub.
(h) Parent
is
not, and has not been for the five years preceding the Closing, a “United States
real property holding company” (as such term is defined in Section 897(c)(2) of
the Code).
(i) As
of the
date hereof, to the knowledge of Parent, neither Parent nor VQ Merger Sub
has
taken or agreed to take any action or failed to take any action that would
prevent the Merger from constituting a reorganization within the meaning
of
Section 368(a) of the Code.
(j) Any
deficiency resulting from any audit or examination relating to Taxes of Parent
by any Taxing Authority has been timely paid.
(k) No
power
of attorney with respect to any Taxes has been executed or filed with any
Taxing
Authority by or on behalf of Parent.
(l) The
total
adjusted tax basis of the assets of each of Parent and VQ Merger Sub equals
or
exceeds the sum of any Liabilities of Parent.
(m) As
of the date of this Agreement it is the present intention, and as of the
date of
the Closing it will be the present intention, of Parent to continue, either
in
the form of Greenwich as a wholly owned subsidiary of Parent or through a
member
of Parent’s “qualified group” (as defined in Regulations Section 1.368-1(d)(4)),
at least one significant historic business line of Greenwich, or to use at
least
a significant portion of Greenwich's historic business assets in a business,
in
each case within the meaning of Regulations Section 1.368-1(d). As of the
date
of the Merger, (i) Parent will own all of the outstanding stock or
other
equity interests in VQ Merger Sub, and (ii) Parent will be in “control” of
VQ Merger Sub within the meaning of Code Section 368(c). Parent has no plan
or
present intention to sell, transfer or otherwise dispose of any of the stock
of
Greenwich following the Merger, and Parent has no present plan or intention
to
cause Greenwich to issue additional stock following the Merger, that in either
case would result in Parent’s not having “control” of Greenwich within the
meaning of Code Section 368(c).
3.8 Patents
and Trademarks.
(a) Parent
and each of its subsidiaries owns, or has the right to use pursuant to valid
license, sublicense, agreement, or permission, all intellectual property
rights
used in or necessary for the operation of its business as presently conducted.
To Parent’s knowledge, except as set forth in Section 3.8 of the Parent
Schedule, (i) such intellectual property rights are owned free and clear
of
royalty obligations and Encumbrances, (ii) the execution and delivery of
this
Agreement and the closing of the transaction contemplated hereby will not
alter
or impair any such rights, (iii) the use of all such intellectual property
by
Parent and each of its subsidiaries does not infringe or violate the
intellectual property rights of any person or entity, and (iv) neither Parent
nor any of its subsidiaries has granted any person or entity any rights,
pursuant to written license agreement or otherwise, to use such intellectual
property. Parent and each of its subsidiaries has taken, and shall continue
to
take through the Closing Date, all necessary action to maintain and protect
each
item of intellectual property that it owns or uses.
(b) Section
3.8 of the Parent Schedule identifies (i) each patent, trademark, trade name,
service name or copyright with respect to any of Parent’s or its subsidiaries’
intellectual property, all applications and registration statements therefor
and
renewals thereof (and sets forth correct and complete copies of all such
patents, registrations and applications (as amended to date)) and (ii) all
intellectual property that Parent and each of its subsidiaries uses pursuant
to
license, sublicense, agreement, or permission, all of which are valid and
in
full force and effect, and the execution and delivery of this Agreement and
the
closing of the transaction contemplated hereby will not alter or impair any
such
rights.
(c) Parent
and each of its subsidiaries has at all times used reasonable efforts to
protect
all trade secrets related to its intellectual property.
3.9 Compliance;
Permits; Restrictions.
(a) Neither
Parent nor any of its subsidiaries is in conflict with, or in default or
violation of (i) any law, rule, regulation, order, judgment or decree applicable
to Parent or such subsidiary or by which its or any of their respective
properties is bound or affected, or (ii) any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument
or
obligation to which Parent or any of its subsidiaries is a party or by which
Parent or any of its subsidiaries or its or any of their respective properties
is bound or affected except for those conflicts, defaults or violations which
would not be reasonably expected to have a Parent Material Adverse Effect.
To
the knowledge of Parent, no investigation or review by any Governmental Entity
is pending or threatened against Parent or any of its subsidiaries, nor has
any
Governmental Entity indicated in writing an intention to conduct the same;
other
than those which would not reasonably be expected to have a Parent Material
Adverse Effect. There is no agreement, judgment, injunction, order or decree
binding upon Parent or any of its subsidiaries which has or would reasonably
be
expected to have the effect of prohibiting or materially impairing any business
practice of Parent or any of its subsidiaries, any acquisition of material
property by Parent or any of its subsidiaries or the conduct of business
by
Parent or any of its subsidiaries as currently conducted.
(b) Parent
and each of its subsidiaries holds all permits, licenses, variances, exemptions,
orders and approvals from Governmental Entities which are necessary to the
conduct of its business except those the absence of which would not,
individually or in the aggregate, be reasonably likely to have a Parent Material
Adverse Effect, (collectively, the “Parent Permits”). Parent and each of its
subsidiaries are in compliance in all material respects with the terms of
the
Parent Permits.
3.10 Litigation.
There
is no action, suit, proceeding, claim, arbitration or investigation pending,
including derivative suits brought by or on behalf of Parent, or as to which
Parent or any of its subsidiaries has received any written notice of assertion
nor, to Parent's knowledge, is there a threatened action, suit, proceeding,
claim, arbitration or investigation against Parent or any of its subsidiaries
seeking to delay, limit or enjoin the transactions contemplated by this
Agreement or which might reasonably be expected to have a Parent Material
Adverse Effect.
3.11 Brokers'
and Finders' Fees.
Parent
has not incurred, nor will it incur, directly or indirectly, any Liability
for
brokerage or finders' fees or agents' commissions or any similar charges
in
connection with this Agreement or any transaction contemplated hereby, other
than finders’ fees, the payment for which will be the sole responsibility of
Parent.
3.12 Labor
Agreements and Actions, Employee Benefit Plans.
(a) Neither
Parent nor any of its subsidiaries is bound by or subject to (and none of
its
assets or properties is bound by or subject to) any written or oral, express
or
implied, contract, commitment or arrangement with any labor union, and no
labor
union has requested or, to the knowledge of Parent, has sought to represent
any
of the employees, representatives, or agents of Parent or any of its
subsidiaries. There is no strike or other labor dispute involving Parent
or any
of its subsidiaries pending or, to the knowledge of Parent, threatened, nor
is
Parent aware of any labor organization activity involving its
employees.
(b) Neither
Parent nor any of its subsidiaries sponsors, maintains, contributes to, or
is
required to contribute to, and has any Liabilities or responsibilities for,
any
pension, profit-sharing or other retirement, bonus, deferred compensation,
employment agreement, severance agreement, compensation, stock purchase,
stock
option, severance or termination pay, hospitalization or other medical, life
or
other insurance, long- or short-term disability, fringe benefit, sick pay,
or
vacation pay, or other employee benefit plan, program, agreement, or arrangement
or policy, whether formal or informal, funded or unfunded, written or unwritten,
and whether legally binding for any current or former employees or any current
or former director or consultant of Parent or any of its subsidiaries, or
of any
trade or business, whether or not incorporated, that together with Parent
would
be deemed a “single employer” within the meaning of Section 4001(a)(14) of
ERISA, and the rules and regulations promulgated thereunder (collectively,
“Parent Benefit Plans”), except those that may be terminated without penalty on
thirty (30) days notice.
(c) No
claim
against any current or former Parent Benefit Plan, and no legal or regulatory
proceeding (including any audit or voluntary compliance resolution or closing
agreement program proceeding) involving any current or former Parent Benefit
Plan, is pending, or to the knowledge of Parent, threatened.
(d) Neither
Parent nor any of its subsidiaries has engaged in a transaction with respect
to
any current or former Parent Benefit Plan that, assuming the taxable period
of
such transaction expired as of the date hereof, could subject Parent or such
subsidiary to a tax or penalty imposed by either Section 4975 of the Code
or
Section 502(i) of ERISA in an amount which would be material.
(e) No
current or former Parent Benefit Plan or any of its subsidiaries, or any
ERISA
Affiliate, is or has ever been subject to Title IV of ERISA or Section 412
of
the Code. No Parent Benefit Plan constitutes a multiemployer plan within
the
meaning of Section 3(37) of ERISA.
(f) All
contributions required to be made under the terms of any current or former
Parent Benefit Plan have been timely made or have been reflected on the audited
financial statements of Parent.
(g) Neither
Parent nor any of its subsidiaries has any obligations for retiree health
and
life benefits under any current or former Parent Benefit Plan or has ever
represented, promised or contracted (whether in oral or written form) to
any
employee(s) that such employee(s) would be provided with retiree health or
life
benefits which would have a material impact on Parent, except as required
under
Section 601 of ERISA.
(h) The
consummation of the transactions contemplated by this Agreement will not
(x)
entitle any employees of Parent or any of its subsidiaries to severance pay,
(y)
accelerate the time of payment or vesting or trigger any payment or funding
(through a grantor trust or otherwise) of compensation or benefits under,
increase the amount payable or trigger any other material obligation pursuant
to, any of the Parent Benefit Plans or (z) result in any breach or violation
of,
or a default under, any of the Parent Benefit Plans.
(i) Any
amount that could be received (whether in cash, property, or vesting of
property) as a result of the transaction contemplated by this Agreement by
any
officer, director, employee or independent contractor of Parent or any of
its
subsidiaries, who is a “disqualified individual” (as defined in Treasury
Regulation Section 1.280G-1), under any employment arrangement or Parent
Benefit
Plan would not be characterized as an “excess parachute payment” (as defined in
Section 280G of the Code).
(j) All
current or former Parent Benefit Plans covering current or former non-U.S.
employees complies in all material respects with applicable law. No unfunded
Liabilities exist with respect to any Parent Benefit Plan that covers such
non-U.S. employees.
3.13 Absence
of Encumbrances.
Parent
and each of its subsidiaries has good and valid title to, or, in the case
of
leased properties and assets, valid leasehold interests in, all of its tangible
properties and assets, real, personal and mixed, used in its business, free
and
clear of any Encumbrances except (i) as reflected in the Parent Financial
Statements, (ii) for liens for taxes not yet due and payable and (iii) for
such
imperfections of title and encumbrances, if any, which would not be reasonably
expected to have a Parent Material Adverse Effect.
3.14 Environmental
Matters.
(a) Hazardous
Materials Activities.
To its
knowledge, except as would not reasonably be likely to result in a material
Liability to Parent (in any individual case or in the aggregate), (i) neither
Parent nor any of its subsidiaries has transported, handled, treated, stored,
used, manufactured, distributed, disposed of, released or exposed its employees
or others to Hazardous Materials and (ii) neither Parent nor any of its
subsidiaries has engaged in, Hazardous Materials Activities, in either case
in
violation of any applicable law, rule, regulation, treaty or statute promulgated
by any Governmental Entity in effect prior to or as of the date hereof to
prohibit, regulate or control Hazardous Materials or any Hazardous Materials
Activity.
(b) Environmental
Liabilities.
No
action, proceeding, revocation proceeding, amendment procedure, writ, injunction
or claim is pending, or to Parent's knowledge, threatened against Parent
or any
of its subsidiaries concerning (i) any Parent Permit relating to any
environmental matter, (ii) any Hazardous Material or (iii) any Hazardous
Materials Activity of Parent or any of its subsidiaries. Parent is not aware
of
any fact or circumstance which could reasonably involve Parent or any of
its
subsidiaries in any environmental litigation or impose upon Parent or any
of its
subsidiaries any Liability related to Hazardous Materials or Hazardous Materials
Activity.
(c) Compliance
with Environmental Laws.
Each of Parent, each of its subsidiaries, and their respective predecessors
and
affiliates have complied and are in compliance, in each case in all material
respects, with all applicable laws, rules, regulations, treaties and statutes
promulgated by any Governmental Entity in effect prior to or as of the date
hereof to prohibit, regulate or control Hazardous Materials or any Hazardous
Materials Activity.
3.15 Agreements.
(a) Section
3.15(a) of the Parent Schedule lists all written agreements between Parent
and
any of its officers, directors, employees or stockholders or any affiliate
thereof, and copies of each such agreement have been provided or made available
to Greenwich or Greenwich's counsel.
(b) Section
3.15(b) of the Parent Schedule lists all written agreements, to which Parent
or
any of its subsidiaries is a party or by which it is bound which (i) involve
obligations (contingent or otherwise) of, or payments to, Parent or such
subsidiary in excess of $100,000, (ii) are material to the conduct and
operations of Parent’s business or properties (including, without limitation,
the license of any intellectual property to or from Parent or any of its
subsidiaries), (iii) restrict or materially adversely affect the development,
manufacture, sale, marketing or distribution of Parent’s or any of its
subsidiary’s products or services, (iv) relate to the employment or compensation
of any employee or consultant, (v) are of duration of six months or more
and not
cancelable without penalty by Parent or any of its subsidiaries on 30 days
or
less notice or (vi) relate to the sale, lease, pledge or other disposition
of
any material assets of or to Parent or any of its subsidiaries.
(c) Neither
Parent nor any of its subsidiaries, nor to Parent’s knowledge any other party to
a Parent Contract (as defined below), is in breach, violation or default
under,
and neither Parent nor any of its subsidiaries has been notified that it
has
breached, violated or defaulted under, any of the material terms or conditions
of any of the agreements, contracts or commitments to which Parent or any
of its
subsidiaries is a party or by which it is bound that are required to be
disclosed in Sections 3.15(a) or 3.15(b) of the Parent Schedule (any such
agreement, contract or commitment, a “Parent Contract”) in such a manner as
would permit any other party to cancel or terminate any such Parent Contract,
or
would permit any other party to seek material damages or other remedies (for
any
or all of such breaches, violations or defaults, in the aggregate).
(d) Each
of
the Parent Contracts are legal, valid, binding and enforceable and in full
force
and effect with respect to the Parent and any of its subsidiaries, and to
Parent’s knowledge, with respect to each other party thereto, in either case
subject to the effect of bankruptcy, insolvency, moratorium or other similar
laws affecting the enforcement of creditors’ rights generally and except as the
availability of equitable remedies may be limited by general principles of
equity; and the Parent Contracts will continue to be legal, valid, binding
and
enforceable and in full force and effect immediately following the Closing
in
accordance with the terms thereof as in effect prior to the Closing subject
to
the effect of bankruptcy, insolvency, moratorium or other similar laws affecting
the enforcement of creditors’ rights generally and except as the availability of
equitable remedies may be limited by general principles of equity.
(e) Neither
Parent nor any of its subsidiaries have been notified that any party to any
of
the Parent Contracts intends to cancel, terminate, proposes to amend, not
renew
or exercise an option under any of Parent Contracts, whether in connection
with
the transactions contemplated hereby or otherwise nor is Parent or any of
its
subsidiaries aware of any intention by any party to any Parent Contract to
effect any of the foregoing.
3.16 Board
Approval.
The
Board of Directors of Parent and VQ Merger Sub have each, as of the date
of this
Agreement at a meeting duly called and held, duly and unanimously adopted
resolutions (i) approving this Agreement, the Merger and the transactions
contemplated hereby and thereby, (ii) determining that the terms of the Merger
and the transactions completed thereby are fair to and in the best interests
of
Parent and/or VQ Merger Sub and each of their stockholders, (iii) declaring
that
this Agreement and the Merger are advisable; (iv) in the case of VQ Merger
Sub,
recommending that the stockholders of VQ Merger Sub adopt this Agreement;
and
(v) in the case of Parent, approving the Merger Consideration.
3.17 Interim
Operations of VQ Merger Sub.
VQ
Merger Sub was formed solely for the purpose of engaging in the transactions
contemplated hereby and has engaged in no other business other than incident
to
its creation and this Agreement and the transactions contemplated
hereby.
3.18 Regulatory
Compliance.
Neither
Parent nor any of its subsidiaries, nor the business, assets or operations
thereof as presently conducted, are subject to the regulatory requirements
of
the U. S. Food and Drug Administration (“FDA”).
3.19
Valid
Issuances.
The
Parent Common Stock to be issued in the Merger, when issued in accordance
with
the provisions of this Agreement, will be duly authorized, validly issued,
fully
paid and nonassessable, free of all Encumbrances and not subject to preemptive
rights, and will be, subject to the accuracy of the representations of
Greenwich’s stockholders contained in each Stockholder Questionnaire (as defined
below), be exempt from the registration requirements of the Securities Act
and
applicable blue sky laws.
3.20
Insurance.
Parent
maintains insurance policies that: (a) insure against such risks, and are
in
such amounts, as are appropriate and reasonable, in the judgment of Parent’s
management, considering Parent’s properties, businesses and operations; (b) are
in full force and effect; and (c) are valid, outstanding and enforceable.
Neither Parent nor any of its subsidiaries has received or given notice of
cancellation with respect to any such insurance policies which are currently
in
effect.
3.21 Disclosure.
No
representation or warranty of the parties to this Agreement and no statement
in
the Parent Schedule, taken together, omits to state a material fact necessary
to
make the statements herein or therein, in light of the circumstances in which
they were made, not misleading.
ARTICLE
IV
CONDUCT
PRIOR TO THE EFFECTIVE TIME
4.1 Conduct
of Business by the Parties.
During
the period from the date of this Agreement and continuing until the earlier
of
the termination of this Agreement pursuant to its terms or the Effective
Time,
each of Greenwich, Parent and their respective subsidiaries shall carry on
their
respective business in the ordinary course and in substantial compliance
with
all applicable laws and regulations, pay their respective debts and taxes
when
due subject to good faith disputes over such debts or taxes, pay or perform
other material obligations when due subject to good faith disputes over such
obligations, and use their commercially reasonable efforts consistent with
past
practices and policies to (i) preserve intact their present business
organization, (ii) keep available the services of each of their present officers
and employees, respectively, and (iii) preserve their relationships with
customers, suppliers, distributors, licensors, licensees and others with
which
each party has business dealings material to their respective
business.
4.2 Covenants
of Parent.
Except
as permitted or otherwise contemplated by the terms of this Agreement, without
the prior written consent of Greenwich, during the period from the date of
this
Agreement and continuing until the earlier of the termination of this Agreement
pursuant to its terms or the Effective Time, Parent shall not do any of the
following and shall not permit any of its subsidiaries to do any of the
following:
(a) Except
as
required by law or pursuant to the terms of Parent’s 2003 Stock Option Plan (the
“Parent Option Plan”) in effect as of the date hereof, waive any stock
repurchase rights, accelerate, amend or change the period of exercisability
of
options or restricted stock, or reprise options granted under any employee,
consultant, director or other stock plans or authorize cash payments in exchange
for any options granted under any of such plans;
(b) Except
as
required by applicable law, grant any severance or termination pay to any
officer or employee except pursuant to written agreements outstanding, or
policies existing, on the date hereof and as previously disclosed in writing
or
made available to Greenwich, or adopt any new severance plan, or amend or
modify
or alter in any manner any severance plan, agreement or arrangement existing
on
the date hereof;
(c) Declare,
set aside or pay any dividends on or make any other distributions (whether
in
cash, stock, equity securities or property) in respect of any capital stock
or
split, combine or reclassify any capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution
for any capital stock;
(d) Purchase,
redeem or otherwise acquire, directly or indirectly, any shares of capital
stock
of Parent or VQ Merger Sub, except (i) repurchases of unvested shares at
cost in
connection with the termination of the employment relationship with any employee
pursuant to stock option or purchase agreements in effect on the date hereof
(or
any such agreements entered into in the ordinary course of business consistent
with past practice by Parent with employees hired after the date hereof),
and
(ii) for the purpose of funding or providing benefits under any stock option
and
incentive compensation plans, directors plans, and stock purchase and dividend
reinvestment plans in accordance with past practice;
(f) Cause,
permit or submit to a vote of stockholders any amendments to the Parent Charter
Documents, the Merger Sub Charter Documents, or similar governing instruments
of
any subsidiary, other than in connection with the Reincorporation
Proposal;
(g) Acquire
or agree to acquire by merging or consolidating with, or by purchasing any
equity interest in or a portion of the assets of, or by any other manner,
any
business or any corporation, partnership, association or other business
organization or division thereof, or otherwise acquire or agree to enter
into
any joint ventures, strategic partnerships or strategic
investments;
(h) Sell,
lease, license, encumber or otherwise dispose of any properties or assets
except
in the ordinary course of business consistent with past practice, except
for the
sale, lease, licensing, encumbering or disposition of property or assets
which
are not material, individually or in the aggregate, to the business of Parent
or
any subsidiary;
(i) Incur
any
indebtedness for borrowed money or guarantee any such indebtedness of another
person, issue or sell any debt securities or options, warrants, calls or
other
rights to acquire any debt securities of Parent or any subsidiary, enter
into
any “keep well” or other agreement to maintain any financial statement condition
or enter into any arrangement having the economic effect of any of the foregoing
other than in connection with the financing of working capital consistent
with
past practice;
(j) Adopt
or
amend any employee stock purchase or employee stock option plan, or enter
into
any employment contract or collective bargaining agreement (other than offer
letters and letter agreements entered into in the ordinary course of business
consistent with past practice with employees who are terminable “at will”), pay
any special bonus or special remuneration to any director or employee, or
increase the salaries, wage rates, compensation or other fringe benefits
(including rights to severance or indemnification) of its directors, officers,
employees or consultants except, in each case, as may be required by
law;
(k) Pay,
discharge, settle or satisfy any litigation (whether or not commenced prior
to
the date of this Agreement) or any material Liabilities, other than the payment,
discharge, settlement or satisfaction, in the ordinary course of business
consistent with past practice or in accordance with their terms, of Liabilities
recognized or disclosed in the Parent Balance Sheet or incurred since the
date
of such financial statements, or waive the benefits of, agree to modify in
any
manner, terminate, release any person from or knowingly fail to enforce the
confidentiality or nondisclosure provisions of any agreement to which Parent
or
any subsidiary is a party or of which Parent or any subsidiary is a
beneficiary;
(l) Except
in
the ordinary course of business consistent with past practice, materially
modify, amend or terminate any Parent Contracts or waive, delay the exercise
of,
release or assign any material rights or claims thereunder without providing
prior notice to Greenwich;
(m) Except
as
required by GAAP, revalue any of its assets or make any change in accounting
methods, principles or practices;
(n) Make
any
Tax election or accounting method change (except as required by GAAP)
inconsistent with past practice that, individually or in the aggregate, is
reasonably likely to adversely affect in any material respect the Tax Liability
or Tax attributes of Parent or any subsidiary, settle or compromise any material
Tax Liability or consent to any extension or waiver of any limitation period
with respect to Taxes;
(o) Take
any
action that would prevent the Merger from qualifying as a reorganization
under
Section 368(a) of the Code; or
(p) Agree
in
writing or otherwise to take any of the actions described in Section 4.2
(a)
through (o) above.
4.3 Covenants
of Greenwich.
Except
as permitted or otherwise contemplated by the terms of this Agreement, without
the prior written consent of Parent, during the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
pursuant to its terms or the Effective Time, Greenwich shall not do any of
the
following and shall not permit any of its subsidiaries to do any of the
following:
(a) Except
as
required by law or pursuant to the terms of the Greenwich Option Plan in
effect
as of the date hereof, waive any stock repurchase rights, accelerate, amend
or
change the period of exercisability of options or restricted stock, or reprise
options granted under any employee, consultant, director or other stock plans
or
authorize cash payments in exchange for any options granted under any of
such
plans;
(b) Except
as
required by applicable law, grant any severance or termination pay to any
officer or employee except pursuant to written agreements outstanding, or
policies existing, on the date hereof and as previously disclosed in writing
or
made available to Parent, or adopt any new severance plan, or amend or modify
or
alter in any manner any severance plan, agreement or arrangement existing
on the
date hereof;
(c) Declare,
set aside or pay any dividends on or make any other distributions (whether
in
cash, stock, equity securities or property) in respect of any capital stock
or
split, combine or reclassify any capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution
for any capital stock;
(d) Purchase,
redeem or otherwise acquire, directly or indirectly, any shares of capital
stock
of Greenwich, except (i) repurchases of unvested shares at cost in connection
with the termination of the employment relationship with any employee pursuant
to stock option or purchase agreements in effect on the date hereof (or any
such
agreements entered into in the ordinary course of business consistent with
past
practice by Greenwich with employees hired after the date hereof), and (ii)
for
the purpose of funding or providing benefits under any stock option and
incentive compensation plans, directors plans, and stock purchase and dividend
reinvestment plans in accordance with past practice;
(e) Issue,
deliver, sell, authorize, pledge or otherwise encumber or propose any of
the
foregoing with respect to any shares of capital stock or any securities
convertible into shares of capital stock, or subscriptions, rights, warrants
or
options to acquire any shares of capital stock or any securities convertible
into shares of capital stock, or enter into other agreements or commitments
of
any character obligating it to issue any such shares or convertible securities,
or any equity-based awards (whether payable in shares, cash or otherwise)
other
than the issuance, delivery and/or sale of shares of Greenwich Common Stock
(as
appropriately adjusted for stock splits and the like) pursuant to the exercise
of stock options or warrants outstanding as of the date of this
Agreement;
(f) Cause,
permit or submit to a vote of stockholders any amendments to the Greenwich
Charter Documents;
(g) Acquire
or agree to acquire by merging or consolidating with, or by purchasing any
equity interest in or a portion of the assets of, or by any other manner,
any
business or any corporation, partnership, association or other business
organization or division thereof, or otherwise acquire or agree to enter
into
any joint ventures, strategic partnerships or strategic
investments;
(h) Sell,
lease, license, encumber or otherwise dispose of any properties or assets
except
in the ordinary course of business consistent with past practice, except
for the
sale, lease, licensing, encumbering or disposition of property or assets
which
are not material, individually or in the aggregate, to the business of
Greenwich;
(i) Incur
any
indebtedness for borrowed money or guarantee any such indebtedness of another
person, issue or sell any debt securities or options, warrants, calls or
other
rights to acquire any debt securities of Greenwich or any subsidiary, enter
into
any “keep well” or other agreement to maintain any financial statement condition
or enter into any arrangement having the economic effect of any of the foregoing
other than in connection with the financing of working capital consistent
with
past practice, which the parties specifically agree will include Greenwich
incurring additional indebtedness to PBI (defined in Section 5.7 below) under
the PBI Note (as defined in Section 5.7 below) prior to Closing for its expenses
and operating requirements;
(j) Adopt
or
amend any employee stock purchase or employee stock option plan, or enter
into
any employment contract or collective bargaining agreement (other than offer
letters and letter agreements entered into in the ordinary course of business
consistent with past practice with employees who are terminable “at will”), pay
any special bonus or special remuneration to any director or employee, or
increase the salaries, wage rates, compensation or other fringe benefits
(including rights to severance or indemnification) of its directors, officers,
employees or consultants except, in each case, as may be required by law;
provided, however, that Greenwich may terminate the Greenwich Option
Plan;
(k) Pay,
discharge, settle or satisfy any litigation (whether or not commenced prior
to
the date of this Agreement) or any material Liabilities, other than the payment,
discharge, settlement or satisfaction, in the ordinary course of business
consistent with past practice or in accordance with their terms, of Liabilities
recognized or disclosed in the Greenwich Balance Sheet or incurred since
the
date of such financial statements, or waive the benefits of, agree to modify
in
any manner, terminate, release any person from or knowingly fail to enforce
the
confidentiality or nondisclosure provisions of any agreement to which Parent
or
any subsidiary is a party or of which Parent or any subsidiary is a
beneficiary;
(l) Except
in
the ordinary course of business consistent with past practice, materially
modify, amend or terminate any Greenwich Contracts or waive, delay the exercise
of, release or assign any material rights or claims thereunder without providing
prior notice to Parent;
(m) Except
as
required by GAAP, revalue any of its assets or make any change in accounting
methods, principles or practices;
(n) Make
any
Tax election or accounting method change (except as required by GAAP)
inconsistent with past practice that, individually or in the aggregate, is
reasonably likely to adversely affect in any material respect the Tax Liability
or Tax attributes of Greenwich, settle or compromise any material Tax Liability
or consent to any extension or waiver of any limitation period with respect
to
Taxes;
(o) Take
any
action that would prevent the Merger from qualifying as a reorganization
under
Section 368(a) of the Code; or
(p) Agree
in
writing or otherwise to take any of the actions described in Section 4.3(a)
through 4.3(o) above.
4.4 No
Solicitation by Greenwich.
(a) Greenwich
shall not, nor shall it authorize or permit any officer, director or employee
of, or any investment banker, attorney or other advisor or representative
of,
Greenwich to, (i) directly or indirectly solicit, initiate or encourage the
submission of any Greenwich Takeover Proposal (as defined below), (ii) enter
into any agreement with respect to any Greenwich Takeover Proposal or (iii)
directly or indirectly participate in any discussions or negotiations regarding,
or furnish to any person any information with respect to, or take any other
action to facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Greenwich Takeover
Proposal; provided,
however,
that,
prior to receipt of the Greenwich Stockholder Approval, Greenwich may, to
the
extent required by the fiduciary obligations of the Board of Directors of
Greenwich, as determined in good faith by it based on the advice of outside
counsel, in response to a Greenwich Takeover Proposal that was not solicited
by
Greenwich and that did not otherwise result from a breach or a deemed breach
of
this Section 4.4(a), and subject to compliance with Section 4.3(c), (x) furnish
information with respect to Greenwich to any person pursuant to a customary
confidentiality agreement (as determined by Greenwich’s independent counsel) and
(y) participate in discussions or negotiations (including solicitation of
a
revised Greenwich Takeover Proposal) with such person regarding any Greenwich
Takeover Proposal. Without limiting the foregoing, it is agreed that any
violation of the restrictions set forth in the preceding sentence by any
executive officer of Greenwich or any affiliate, director or investment banker,
attorney or other advisor or representative of Greenwich, whether or not
such
person is purporting to act on behalf of Greenwich or otherwise, shall be
deemed
to be a breach of this Section 4.4(a) by Greenwich. For purposes of this
Agreement, “Greenwich
Takeover Proposal”
means
any proposal or offer for a merger, consolidation, dissolution,
recapitalization, or other business combination involving Greenwich, any
proposal for the issuance by Greenwich of a material amount of its equity
securities as consideration for the assets or securities of another person
or
any proposal or offer to acquire in any manner, directly or indirectly, a
material equity interest in, any voting securities of, or a substantial portion
of the assets of, Greenwich, other than the Merger and other transactions
contemplated hereby.
(b) Neither
the Board of Directors of Greenwich nor any committee thereof shall (i) withdraw
or modify, or propose to withdraw or modify, in a manner adverse to Parent
or VQ
Merger Sub, the approval or recommendation by the Board of Directors of
Greenwich or any such committee of this Agreement or the Merger, (ii) approve
any letter of intent, agreement in principle, acquisition agreement or similar
agreement relating to any Greenwich Takeover Proposal or (iii) approve or
recommend, or propose to approve or recommend, any Greenwich Takeover Proposal.
Notwithstanding the foregoing, if, prior to receipt of the Greenwich Stockholder
Approval, the Board of Directors of Greenwich receives a Superior Greenwich
Proposal (as defined below) and the Board of Directors of Greenwich determines
in good faith, based on the advice of outside counsel, that it is necessary
to
do so in order to comply with its fiduciary obligations, the Board of Directors
of Greenwich may withdraw or modify its approval or recommendation of the
Merger
and this Agreement and, in connection therewith, approve or recommend such
Superior Greenwich Proposal. For purposes of this Agreement, a “Superior
Greenwich Proposal”
means
any proposal made by a third party to acquire a material portion of the equity
securities or assets of Greenwich, pursuant to a tender or exchange offer,
a
merger, a consolidation, a liquidation or dissolution, a recapitalization,
a
sale of all or substantially all its assets or otherwise, on terms which
the
Board of Directors of Greenwich determines in its good faith judgment to
be more
favorable to the holders of Greenwich Common Stock than the Merger and the
transactions contemplated hereby (based on the written opinion, with only
customary qualifications, of Greenwich’s independent financial advisor), taking
into account all the terms and conditions of such proposal and this Agreement.
(c) Greenwich
promptly shall advise Parent orally and in writing of any Greenwich Takeover
Proposal or any inquiry with respect to or that could reasonably be expected
to
lead to any Greenwich Takeover Proposal, and the identity of the person making
any such Greenwich Takeover Proposal or inquiry including any change to the
material terms of any such Greenwich Takeover Proposal or inquiry. Greenwich
shall keep Parent fully informed of the status including any change to the
material terms of any such Greenwich Takeover Proposal or inquiry. Greenwich
shall not be required to comply with this Section 4.4(c) in any instance
to the
extent that the Board of Directors of Greenwich determines in good faith,
based
on the advice of outside counsel, that such compliance would in such instance
be
inconsistent with its fiduciary duties; provided,
however,
that
Greenwich shall promptly notify Parent of the fact of such
determination.
4.5 No
Solicitation by Parent or Subsidiaries.
(a) Parent
shall not, nor shall it permit any of its subsidiaries to, nor shall it
authorize or permit any officer, director or employee of, or any investment
banker, attorney or other advisor or representative of, Parent or any of
its
subsidiaries to, (i) directly or indirectly solicit, initiate or encourage
the
submission of any Parent Takeover Proposal (as defined below), (ii) enter
into
any agreement with respect to any Parent Takeover Proposal or (iii) directly
or
indirectly participate in any discussions or negotiations regarding, or furnish
to any person any information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes,
or may
reasonably be expected to lead to, any Parent Takeover Proposal; provided,
however,
that,
Parent may, to the extent required by the fiduciary obligations of the Board
of
Directors of Parent, as determined in good faith by it based on the advice
of
outside counsel, in response to a Parent Takeover Proposal that was not
solicited by Parent and that did not otherwise result from a breach or a
deemed
breach of this Section 4.5(a), and subject to compliance with Section 4.5(c),
(x) furnish information with respect to Parent to any person pursuant to
a
customary confidentiality agreement (as determined by Parent’s independent
counsel) and (y) participate in discussions or negotiations (including
solicitation of a revised Parent Takeover Proposal) with such person regarding
any Parent Takeover Proposal. Without limiting the foregoing, it is agreed
that
any violation of the restrictions set forth in the preceding sentence by
any
affiliate, director or executive officer of Parent or any subsidiary of Parent
or any investment banker, attorney or other advisor or representative of
Parent
or any subsidiary of Parent, whether or not such person is purporting to
act on
behalf of Parent or any subsidiary of Parent or otherwise, shall be deemed
to be
a breach of this Section 4.5(a) by Parent. For purposes of this Agreement,
“Parent
Takeover Proposal”
means
any proposal for a merger, consolidation, dissolution, dissolution,
recapitalization, or other business combination involving Parent or any
subsidiary of Parent, any proposal or offer for the issuance by Parent or
any
subsidiary of Parent of a material amount of its equity securities (other
than
pursuant to the Offering) as consideration for the assets or securities of
another person or any proposal or offer to acquire in any manner, directly
or
indirectly, an equity interest in, any voting securities of, or a substantial
portion of the assets of Parent or any subsidiary of Parent, other than the
Merger and the transactions contemplated hereby.
(b) Neither
the Board of Directors of Parent or VQ Merger Sub nor any committee thereof
shall (i) withdraw or modify, or propose to withdraw or modify, in a manner
adverse to Greenwich, the approval or recommendation by the Board of Directors
of Parent, VQ Merger Sub or any such committee of this Agreement or the Merger,
(ii) approve any letter of intent, agreement in principle, acquisition agreement
or similar agreement relating to any Parent Takeover Proposal or (iii) approve
or recommend, or propose to approve or recommend, any Parent Takeover Proposal.
Notwithstanding the foregoing, the Board of Directors of Parent receives
a
Superior Parent Proposal (as defined below) and the Parent Board determines
in
good faith, based on the advice of outside counsel, that it is necessary
to do
so in order to comply with its fiduciary obligations, the Board of Directors
of
Parent may withdraw or modify its approval or recommendation of the Merger
and
this Agreement and, in connection therewith, approve or recommend such Superior
Parent Proposal. For purposes of this Agreement, a “Superior
Parent Proposal”
means
any proposal made by a third party to acquire a material portion of the equity
securities or assets of Parent, pursuant to a tender or exchange offer, a
merger, a sale of all or substantially all its assets or otherwise, on terms
which the Board of Directors of Parent determines in its good faith judgment
to
be more favorable to the holders of Parent Common Stock than the Merger and
other transactions contemplated hereby (based on the written opinion, with
only
customary qualifications, of the Parent’s independent financial advisor), taking
into account all the terms and conditions of such proposal and this
Agreement.
(c) Parent
promptly shall advise Greenwich orally and in writing of any Parent Takeover
Proposal or any inquiry with respect to or that could lead to any Parent
Takeover Proposal, and the identity of the person making any such Parent
Takeover Proposal or inquiry and the material terms of any such Parent Takeover
Proposal or inquiry. Parent shall keep Greenwich fully informed of the status
including any change to the material terms of any such Parent Takeover Proposal
or inquiry. Parent shall not be required to comply with this Section 4.5(c)
in
any instance to the extent that the Parent Board determines in good faith,
based
on the advice outside counsel, that such compliance would in such instance
be
inconsistent with its fiduciary duties; provided,
however,
that
the Parent shall promptly notify Parent of the fact of such
determination.
ARTICLE
V
ADDITIONAL
AGREEMENTS
5.1 Public
Disclosure.
Parent
and Greenwich will consult with each other and agree before issuing any press
release or otherwise making any public statement with respect to the Merger
or
this Agreement and will not issue any such press release or make any such
public
statement prior to such agreement, except as may be required by law or any
listing agreement with a national securities exchange or Nasdaq, in which
case
reasonable efforts to consult with the other party will be made prior to
such
release or public statement.
5.2 Commercially
Reasonable Efforts; Notification.
(a) Upon
the
terms and subject to the conditions set forth in this Agreement, unless,
to the
extent permitted by Section 4.4(b) or 4.5(b), the Board of Directors of
Greenwich or the Parent approves or recommends a Superior Greenwich Proposal
or
Superior Parent Proposal, each of the parties agrees to use commercially
reasonable efforts to take, or cause to be taken, all actions, and to do,
or
cause to be done, and to assist and cooperate with the other parties in doing,
all things necessary, proper or advisable to consummate and make effective,
in
the most expeditious manner practicable, the Merger and the other transactions
contemplated by this Agreement, including to accomplish the following: (i)
causing the conditions precedent set forth in ARTICLE VI to be satisfied;
(ii)
obtaining all necessary actions or nonactions, waivers, consents, approvals,
orders and authorizations from Governmental Entities; (iii) making all necessary
registrations, declarations and filings (including registrations, declarations
and filings with Governmental Entities, if any); (iv) avoiding any suit,
claim,
action, investigation or proceeding by any Governmental Entity challenging
the
Merger or any other transaction contemplated by this Agreement; (v) obtaining
all consents, approvals or waivers from third parties required as a result
of
the transactions contemplated in this Agreement; (vi) defending any suits,
claims, actions, investigations or proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the
transactions contemplated hereby, including seeking to have any stay or
temporary restraining order entered by any court or other Governmental Entity
vacated or reversed; and (vii) executing or delivering any additional
instruments reasonably necessary to consummate the transactions contemplated
by,
and to fully carry out the purposes of, this Agreement.
(b) Parent
shall give prompt notice to Greenwich upon becoming aware that any
representation or warranty made by it or VQ Merger Sub contained in this
Agreement has become untrue or inaccurate, or of any failure of Parent or
VQ
Merger Sub to comply with or satisfy in any material respect 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, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.
(c) Greenwich
shall give prompt notice to Parent upon becoming aware that any representation
or warranty made by it contained in this Agreement has become untrue or
inaccurate, or of any failure of Greenwich to comply with or satisfy in any
material respect 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, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
5.3 Third
Party Consents.
On or
before the Closing Date, Parent and Greenwich will each use its commercially
reasonable efforts to obtain any consents, waivers and approvals under any
of
its respective agreements, contracts, licenses or leases required to be obtained
in connection with the consummation of the transactions contemplated
hereby.
5.4 Conveyance
Taxes.
Parent,
Greenwich and VQ Merger Sub shall cooperate in the preparation, execution
and
filing of all returns, questionnaires, applications, or other documents
regarding (i) any real property transfer gains, sales, use, transfer,
value-added, stock transfer and stamp Taxes, (ii) any recording, registration
and other fees, and (iii) any similar Taxes or fees that become payable in
connection with the transactions contemplated hereby. The Taxes described
in
this Section shall be paid equally by Parent and Greenwich.
5.5 Survival
after Closing.
All of
the covenants and obligations of the parties to this Agreement, which by
their
terms are to be performed or will become effective after the Closing, including
without limitation, those contained in Sections 1.6, 1.12, 5.4, 5.6, 5.7
and 5.8
shall survive the Closing. The respective representations and warranties
of the
parties contained in Articles II and III shall not survive the
Closing.
5.6 Tax
Covenants of Parent.
After the Effective Time of the Merger, Parent, either directly or through
Greenwich as long as Greenwich is within Parent’s “qualified group” within the
meaning of Regulations Section 1.368-1(d)(4)(ii) (the “Qualified Group”), will
continue at least one significant historic business line of Greenwich, or
use at
least a significant portion of Greenwich's historic business assets in a
business, in each case within the meaning of Regulations Section 1.368-1(d),
except that Greenwich's historic business assets may be transferred (a) to
a corporation that is another member of Parent’s Qualified Group, or (b) to
an entity taxed as a partnership if (i) one or more members of Parent’s
Qualified Group have active and substantial management functions as a partner
with respect to Parent’s historic business or (ii) members of Parent’s
Qualified Group in the aggregate own an interest in the partnership representing
a significant interest in Greenwich's historic business, in each case within
the
meaning of Regulations Section 1.368-1(d)(4)(iii).
5.7 Assumption
of Certain Indebtedness.
Parent
hereby agrees to assume the obligations of Greenwich under that certain Future
Advance Promissory Note, dated as of October 28, 2004 (the “PBI Note”), issued
by Greenwich to Paramount BioCapital Investments, LLC (“PBI”), and agrees that,
subject to the existing maturity date of the PBI Note, the indebtedness
evidenced by such Note shall be repaid in three equal installments as follows:
(i) one-third of the principal amount and all interest accrued to such date
upon
such time as Parent raises at least $5,000,000 in aggregate gross proceeds
from
the sale of its equity or debt securities in one or more transactions subsequent
to the date of this Agreement; (ii) one-third of the principal amount and
all
interest accrued to such date upon such time as Parent raises at least
$10,000,000 in aggregate gross proceeds from the sale of its equity or debt
securities (including the amount raised pursuant to clause (i)) in one or
more
transactions subsequent to the date of this Agreement; and (iii) the remaining
one-third of the principal amount shall be converted into shares of Parent
Common Stock at the final closing of the Offering upon the terms of the Offering
(as defined below).
5.8 Indemnification.
(a) Subsequent
to the Effective Time, the Greenwich Surviving Corporation shall indemnify
and
hold harmless each present and former director and officer of Greenwich
(collectively, the “Greenwich Indemnified Parties”) against all losses in
connection with any claim, action, suit, proceeding or investigation, whether
civil, criminal, administrative or investigative, arising out of or pertaining
to any action or omission in their capacity as director or officer occurring
before the Effective Time, whether asserted or claimed prior to, at or after
the
Effective Time, in each case to the fullest extent permitted under applicable
law and to the extent Greenwich has such obligation as of the date hereof,
whether under the Greenwich Charter Documents, individual indemnity agreements
or otherwise (and shall pay any expenses in advance of the final disposition
of
such action or proceeding to each Greenwich Indemnified Party to the fullest
extent permitted under applicable law, upon receipt from the Greenwich
Indemnified Party to whom expenses are advanced of an undertaking to repay
such
advances as required under applicable law) and such obligations shall survive
the Merger and shall continue in full force and effect until the expiration
of
the applicable statute of limitations with respect to any such claims against
such persons.
(b) In
the
event the Greenwich Surviving Corporation or any of its respective successors
or
assigns (i)
consolidates with or merges into any other entity and shall not be the
continuing or surviving corporation or entity of such consolidation or merger
or
(ii)
transfers all or substantially all of its properties and assets to any person
or
entity, then, and in each such case, provision shall be made by the Greenwich
Surviving Corporation so that the successors and assigns of the Greenwich
Surviving Corporation shall assume the obligations set forth in Section
5.8(a).
(c) The
rights of each covered person under this Section 5.8 shall be in addition
to any
rights such person may have under the Greenwich Charter Documents or the
comparable organizational documents of any of Greenwich’s subsidiaries, or under
applicable law or under any agreement with Greenwich or any of its subsidiaries.
The provisions of and the rights granted under the Greenwich Charter Documents
and this Section 5.8 shall survive consummation of the Merger, are expressly
assumed by Parent, and are intended to benefit, and shall be enforceable
by,
each such person and his heirs and representatives.
5.9 Parent
Reincorporation.
(a) For
purposes of obtaining the approval of Parent’s shareholders to reincorporate
Parent under the laws of the State of Delaware (the “Reincorporation”), Parent
shall call a meeting of its shareholders as soon as practicable following
the
date hereof (the “Parent Shareholder Meeting”). Parent shall use its reasonable
best efforts to obtain approval of the proposed Reincorporation (the
“Reincorporation Proposal”). In connection with the solicitation of proxies for
the Parent Shareholder Meeting, the parties hereto shall cooperate in the
preparation of an appropriate proxy statement (such proxy statement, together
with any and all amendments or supplements thereto, the “Proxy
Statement”).
(b) Greenwich
shall furnish such information concerning Greenwich as is necessary in order
to
cause the Proxy Statement, insofar as it relates to Greenwich, to be prepared
in
accordance with Section 5.9(a). Greenwich shall also furnish to Parent, for
purposes of its preparation of the Proxy Statement, any required information
regarding any holders of Greenwich Common Stock or their affiliates. Such
information provided by Greenwich shall be true and correct in all material
respects and shall not omit any material fact necessary to make that information
not misleading. Greenwich agrees promptly to advise Parent if at any time
prior
to the Parent Shareholder Meeting any information provided by Greenwich in
the
Proxy Statement becomes incorrect or incomplete in any material respect,
and to
provide Parent the information needed to correct such inaccuracy or
omission.
(c) Subject
to the prior approval of this Agreement by the holders of Greenwich Common
Stock, Parent shall use all reasonable efforts to promptly prepare and submit
the Proxy Statement to the SEC at the earliest practicable date. Greenwich
authorizes Parent to utilize in the Proxy Statement the information under
Section 5.9(b) provided to Parent for the purpose of inclusion in the Proxy
Statement. Parent shall advise Greenwich promptly when the preliminary and
definitive Proxy Statement has been filed and shall furnish Greenwich with
copies of all such documents.
(d) At
the
time the Proxy Statement is mailed to the shareholders of Parent in order
to
obtain the vote of Parent’s shareholders necessary to approve the
Reincorporation Proposal (the “Requisite Parent Shareholder Vote”) and at all
times subsequent to such mailing until the Requisite Parent Shareholder Vote
has
been obtained, the Proxy Statement (including any amendments or supplements
thereto), with respect to all information set forth therein relating to Parent
and its shareholders, this Agreement and all other transactions contemplated
hereby, will (i) comply in all material respects with applicable provisions
of
the Exchange Act, including the rules and regulations promulgated thereunder,
and (ii) not contain any untrue statement of material fact or omit to state
a
material fact required to be stated therein or necessary to make the statements
contained therein, in light of the circumstances under which they are made,
not
misleading, except that, in each case, no such representations shall apply
to
any information, including financial statements, of or provided or confirmed
by
Greenwich in writing specifically for such Proxy Statement.
(e) Parent
shall bear all printing, filing and mailing costs in connection with the
preparation, filing and mailing of the Proxy Statement to its shareholders.
Greenwich and Parent shall each bear their own legal and accounting expenses
in
connection with review and preparation of the Proxy Statement.
5.10 Greenwich
Stockholders’ Meeting; Materials to Stockholders.
(a) Greenwich
shall, in accordance with Section 251 of the DGCL and the Greenwich Charter
Documents, duly call, give notice of, convene and hold a special meeting
of
Greenwich Stockholders (the “Greenwich Stockholder Meeting”) as promptly as
practicable after the date hereof for the purpose of considering and taking
action upon this Agreement and the Merger. Alternatively, Greenwich shall
use
its best efforts to obtain, in lieu of holding the Greenwich Stockholder
Meeting, the written consent of the number of Greenwich stockholders necessary
under the Greenwich Charter Documents and the DGCL to approve this Agreement
and
the Merger. Greenwich shall as promptly as practicable following the date
of
this Agreement prepare and mail or otherwise deliver to Greenwich stockholders
all information as may required to comply with the DGCL.
(b) Upon
execution of this Agreement, holders of a majority of the outstanding Greenwich
Common Stock shall enter into a voting agreement in substantially the form
attached hereto as Annex
III
(the
“Voting Agreement”), pursuant to which such stockholders shall agree to vote all
shares of Greenwich Common Stock held by them in favor of approval of the
Merger
and this Agreement.
5.11 Greenwich
Stockholder Questionnaires.
Each of
Parent and Greenwich shall take all necessary action on its part such that
the
issuance of the Merger Consideration to the Greenwich stockholders constitutes
a
valid “private placement” under the Securities Act. Without limiting the
generality of the foregoing, (1) Parent and Greenwich shall provide each
Greenwich stockholder with a stockholder qualification questionnaire in the
form
reasonably acceptable to both Parent and Greenwich (a “Stockholder
Questionnaire”) and (2) Greenwich shall use its best efforts to cause each
Greenwich stockholder to attest that (i) such stockholder is acquiring the
Merger Consideration for his, her or its sole account, for investment and
not
with a view to the resale or distribution thereof and (ii) that such stockholder
either (A) is an “accredited investor” as defined in Regulation D of the
Securities Act, (B) has such knowledge and experience in financial and business
matters that the stockholder is capable of evaluating the merits and risks
of
receiving the Merger Consideration, or (C) has appointed an appropriate person
reasonably acceptable to both Parent and Greenwich to act as the stockholder’s
purchaser representative in connection with evaluating the merits and risks
of
receiving the Merger Consideration.
ARTICLE
VI
CONDITIONS
TO THE MERGER
6.1 Conditions
to Obligations of Each Party to Effect the Merger.
The
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Closing Date of the
following conditions, any of which may be waived if waived in writing by
both
Parent and Greenwich:
(a) Approval
of Reincorporation Proposal.
Parent’s stockholders shall have approved the Reincorporation Proposal at the
Parent Shareholder Meeting in accordance with the applicable provisions of
the
MBCA, and such reincorporation shall have been effected in accordance with
the
applicable provisions of the MBCA and the DGCL.
(b) No
Order.
No
Governmental Entity shall have enacted, issued, promulgated, enforced or
entered
any statute, rule, regulation, executive order, decree, injunction or other
order (whether temporary, preliminary or permanent) which is in effect and
which
has the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger.
(c) Officers’
Certificate.
Each
party shall have furnished to the other a certificate of the Chief Executive
Officer and the Chief Financial Officer, dated as of the Effective Date,
in
which such officers shall certify that, to their best knowledge, the conditions
set forth in Section 6.2 or 6.3 (as applicable) have been fulfilled and are
true
and correct.
(d) Minimum
Offering.
Parent
shall have received irrevocable subscriptions or other irrevocable written
commitments from one or more investors obligating such investors to purchase,
on
terms and conditions satisfactory to Parent in its sole discretion, securities
of Parent for aggregate gross proceeds to it of at least $5,000,000 (the
“Offering”), whether in a private placement under Regulation D of the Securities
Act or otherwise, and the funds relating to such subscriptions or commitments
shall have been deposited into an escrow account.
(e) Confidential
Investor Questionnaire.
Holders
of at least ninety-eight percent (98%) of the outstanding shares of Greenwich
Common Stock shall have duly executed and delivered the Confidential Investor
Questionnaire to Greenwich.
(f) Registration
Rights Agreement. The
Registration Rights Agreement, substantially in the form attached hereto
as
Annex
IV,
shall
have been duly executed and delivered by the parties thereto.
(g) Escrow
Agreement.
The
Escrow Agreement shall have been duly executed and delivered by the parties
thereto.
(h) Greenwich
Appraisal Rights.
Holders
of not more than two percent (2%) of the outstanding shares of Greenwich
Common
Stock shall have validly exercised, or remained entitled to exercise, their
appraisal rights under Section 262 of the DGCL.
6.2 Additional
Conditions to Obligations of Greenwich.
The
obligation of Greenwich to effect the Merger shall be subject to the
satisfaction at or prior to the Closing Date of each of the following
conditions, any of which may be waived, in writing, exclusively by
Greenwich:
(a) Representations
and Warranties.
The
representations and warranties of Parent and VQ Merger Sub set forth in this
Agreement shall be true and correct as of the date of this Agreement and
as of
the Closing Date as if made on and as of the Closing Date (except to the
extent
any such representation and warranty expressly speaks as of an earlier date)
and
Greenwich shall have received a certificate signed on behalf of Parent by
the
Chief Executive Officer of Parent to such effect; provided, however, that
notwithstanding anything herein to the contrary, this Section 6.2(a) shall
be
deemed to have been satisfied even if such representations or warranties
are not
so true and correct unless the failure of such representations or warranties
to
be so true and correct, individually or in the aggregate, has had, or is
reasonably likely to have, a Parent Material Adverse Effect.
(b) Agreements
and Covenants.
Each of
Parent and VQ Merger Sub shall have performed or complied with, in all material
respects, all agreements and covenants required by this Agreement to be
performed or complied with by them on or prior to the Closing Date, and
Greenwich shall have received a certificate to such effect signed on behalf
of
each of Parent and VQ Merger Sub by an authorized officer of
Greenwich.
(c) OTC
Bulletin Board.
At the
Effective Time, the Parent Common Stock shall be eligible for quotation and
in
good standing on the OTC Bulletin Board.
(d) No
Closing Material Adverse Effect.
Since
the date hereof, there has not occurred a Parent Material Adverse Effect.
For
purposes of the preceding sentence and Section 6.2(a), the occurrence of
any of
the following events or circumstances, in and of themselves and in combination
with any of the others, shall not constitute a Parent Material Adverse
Effect:
(1) any
litigation or threat of litigation filed or made after the date hereof
challenging any of the transactions contemplated herein or any stockholder
litigation or threat of stockholder litigation filed or made after the date
hereof resulting from this Agreement or the transactions contemplated herein
unless Greenwich shall conclude that it has or could have a Material Adverse
Effect on the Parent and Greenwich Surviving Corporation, taken as a whole;
and
(2) any
adverse change, event or effect that is demonstrated to be caused primarily
by
conditions generally affecting the United States economy.
(e) Corporate
Documents.
Greenwich shall have received a copy of the certificate of incorporation
of each
of the Parent and VQ Merger Sub, certified by the Secretary of the State
of
Delaware evidencing the good standing of Parent and VQ Merger Sub in such
jurisdiction.
(f) Federal
Tax Opinion.
Greenwich shall have received a tax opinion from its counsel, which opinion
may
be based on customary reliance and subject to customary qualifications, to
the
effect that for federal income tax purposes:
(i) Either
(A) the Merger will qualify as a reorganization under Section 368(a) of the
Code, and Greenwich, VQ Merger Sub and Parent will each be a party to the
reorganization within the meaning of Section 368(b) of the Code, or (B) the
Merger will qualify as an exchange described in Section 351 of the Code;
and
(ii) No
gain
or loss will be recognized by the stockholders of Greenwich upon their receipt
of the Merger Consideration pursuant to either (A) Section 354(a) of the
Code,
or (B) Section 351(a) of the Code.
(g) Legal
Opinion.
Parent
and VQ Merger Sub shall have received an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
&
Brand, LLP, counsel to Parent and VQ Merger Sub, dated as of the Effective
Time
to the effect that (1) each of Parent and VQ Merger Sub is a corporation
duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation; (2) the execution, delivery and performance
by
Parent and VQ Merger Sub of the Agreement and the consummation by Parent
and VQ
Merger Sub of the transactions contemplated thereby are within Parent and
VQ
Merger Sub’s corporate powers and have been duly authorized by all necessary
corporate and stockholder action; (3) the execution, delivery and performance
by
Parent and VQ Merger Sub of the Agreement and the consummation of the Merger
by
Parent and VQ Merger Sub require no action by or in respect of, or filing
with,
any Governmental Entity other than actions which have been taken, filings
which
have been made and the filing of the Certificate of Merger in accordance
with
Delaware Law and the filings necessary under Regulation D of the Securities
Ace
and applicable blue sky laws; (4) the execution, delivery and performance
by
Parent and VQ Merger Sub of the Agreement and the consummation by Parent
and VQ
Merger Sub of the transactions contemplated thereby do not and will not (x)
contravene or conflict with Parent or VQ Merger Sub’s Charter Documents, (y)
contravene or conflict with or constitute a violation of any provision of
any
law, regulation, judgment, injunction order or decree binding upon Parent
or VQ
Merger Sub and known to such counsel, or (z) constitute a default under or
give
rise to a right of termination, cancellation or acceleration of any right
or
obligation of Parent or VQ Merger Sub or to a loss of any benefit to which
Parent or VQ Merger Sub is entitled under any provision of any agreement,
contract or other instrument binding upon Parent or VQ Merger Sub filed as
an
exhibit to the Parent SEC Reports or any license, franchise, permit or other
similar authorization held by Parent or VQ Merger Sub and known to such counsel;
(5) this Agreement constitutes a valid and binding agreement of Parent and
VQ
Merger Sub (subject to customary exclusions and limitations); (6) assuming
the
receipt and accuracy of the attestations referred to in Section 5.11 for
each
Greenwich Stockholder, the issuance of the Merger Consideration, when issued
in
accordance with the provisions of this Agreement, will be duly authorized,
validly issued, fully paid and nonassessable, free of all Encumbrances and
not
subject to preemptive rights, and will be exempt from registration under
the
Securities Act and applicable blue sky laws.
6.3 Additional
Conditions to the Obligations of Parent and VQ Merger Sub.
The
obligations of Parent and VQ Merger Sub to effect the Merger shall be subject
to
the satisfaction at or prior to the Closing Date of each of the following
conditions, any of which may be waived, in writing, exclusively by
Parent:
(a) Representations
and Warranties.
The
representations and warranties of Greenwich set forth in this Agreement shall
be
true and correct as of the date of this Agreement and as of the Closing Date
as
if made on and as of the Closing Date (except to the extent any such
representation and warranty expressly speaks as of an earlier date) and Parent
shall have received a certificate signed on behalf of Greenwich by the Chief
Executive Officer of Greenwich to such effect; provided, however, that
notwithstanding anything herein to the contrary, this Section 6.3(a) shall
be
deemed to have been satisfied even if such representations or warranties
are not
so true and correct unless the failure of such representations or warranties
to
be so true and correct, individually or in the aggregate, has had, or is
reasonably likely to have, a Greenwich Material Adverse Effect.
(b) Agreements
and Covenants.
Greenwich shall have performed or complied with, in all material respects,
all
agreements and covenants required by this Agreement to be performed or complied
with by it at or prior to the Closing Date, and Parent shall have received
a
certificate to such effect signed on behalf of Greenwich by an authorized
officer of Greenwich.
(c) No
Closing Material Adverse Effect.
Since
the date hereof, there has not occurred a Greenwich Material Adverse Effect.
For
purposes of the preceding sentence and Section 6.3(a), the occurrence of
any of
the following events or circumstances, in and of themselves and in combination
with any of the others, shall not constitute a Greenwich Material Adverse
Effect:
(1) any
litigation or threat of litigation filed or made after the date hereof
challenging any of the transactions contemplated herein or any stockholder
litigation or threat of stockholder litigation filed or made after the date
hereof resulting from this Agreement or the transactions contemplated herein
unless Parent shall conclude that it has or could have a Greenwich Material
Adverse Effect; and
(2) any
adverse change, event or effect that is demonstrated to be caused primarily
by
conditions generally affecting the United States economy.
(d) Corporate
Documents.
Parent
shall have received a copy of the certificate of Incorporation of Greenwich,
certified by the Secretary of State of Delaware evidencing the goal standing
of
Greenwich is such jurisdiction.
(e) Legal
Opinion.
Parent
and VQ Merger Sub shall have received an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
&
▇▇▇▇▇▇ LLP, counsel to Greenwich dated as of the Effective Time to the effect
that (1) Greenwich is a corporation duly organized, validly existing and
in good
standing under the laws of its jurisdiction of incorporation; (2) the execution,
delivery and performance by Greenwich of the Agreement and the consummation
by
Greenwich of the transactions contemplated thereby are within Greenwich’s
corporate powers and have been duly authorized by all necessary corporate
and
stockholder action; (3) the execution, delivery and performance by Greenwich
of
the Agreement and the consummation of the Merger by Greenwich require no
action
by or in respect of, or filing with, any Governmental Entity other than actions
which have been taken, filings which have been made and the filing of the
Certificate of Merger in accordance with Delaware Law and the filings necessary
under Regulation D of the Securities Act and applicable blue sky laws; (4)
the
execution, delivery and performance by Greenwich of the Agreement and the
consummation by Greenwich of the transactions contemplated thereby do not
and
will not (x) contravene or conflict with the certificate of incorporation
or
bylaws of Greenwich, (y) contravene or conflict with or constitute a violation
of any provision of any law, regulation, judgment, injunction order or decree
binding upon Greenwich and known to such counsel, or (z) constitute a default
under or give rise to a right of termination, cancellation or acceleration
of
any right or obligation of Greenwich or to a loss of any benefit to which
Greenwich is entitled under any provision of any agreement, contract or other
instrument binding upon Greenwich, and designated in the Greenwich Schedule
or
any license, franchise, permit or other similar authorization held by Greenwich
and known to such counsel; (5) this Agreement constitutes a valid and binding
agreement of Greenwich (subject to customary exclusions and limitations);
and
(6) assuming the receipt and accuracy of the attestations referred to in
Section
5.11 for each Greenwich Stockholder, the issuance of the Merger Consideration
will be exempt from registration under the Securities Act and applicable
blue
sky laws.
(f) Fairness
Opinion. Parent
shall have received the opinion of CRI International, dated the date of this
Agreement, to the effect that, as of such date, the consideration to be paid
in
the Merger by Parent is fair to Parent from a financial point of view, a
signed
copy of which opinion has been delivered to Parent.
(g) Amendment
of PBI
Note.
PBI
shall have agreed in writing to amend the PBI Note in the manner described
in
Section 5.7.
ARTICLE
VII
TERMINATION,
AMENDMENT AND WAIVER
7.1 Termination.
This
Agreement may be terminated at any time prior to the Effective Time, whether
before or after the Greenwich Stockholder Approval:
(a) by
mutual
written consent duly authorized by the Boards of Directors of Parent and
Greenwich; or
(b) by
either
Parent or Greenwich if the Merger shall not have been consummated by August
31,
2005 (such date, or such other date that may be agreed by mutual written
consent, being the “Outside Date”) for any reason; provided, however, that the
right to terminate this Agreement under this Section 7.1(b) shall not be
available to any party whose action or failure to act has been a principal
cause
of, or resulted in the failure of, the Merger to occur on or before such
date if
such action or failure to act constitutes a breach of this
Agreement;
(c) by
either
Parent or Greenwich if a Governmental Entity shall have issued an order,
decree
or ruling or taken any other action, in any case having the effect of
permanently restraining, enjoining or otherwise prohibiting the Merger, which
order, decree, ruling or other action shall have become final and nonappealable
or any law, order, rule or regulation is in effect or is adopted or issued,
which has the effect of prohibiting the Merger;
(d) by
Parent, on the one hand, or Greenwich, on the other, if any condition to
the
obligation of any such party to consummate the Merger set forth in Section
6.2
(in the case of Greenwich) or 6.3 (in the case of Parent) becomes incapable
of
satisfaction prior to the Outside Date; provided,
however,
that the
failure of such condition is not the result of a breach of this Agreement
by the
party seeking to terminate this Agreement;
(e) by
Parent
if, upon a vote at a duly held meeting to obtain approval of the Parent
shareholders of the Reincorporation Proposal, such approval is not obtained;
(f) by
Greenwich, if Parent or VQ Merger Sub breaches or fails to perform in any
material respect any of its respective representations, warranties or covenants
contained in this Agreement, which breach or failure to perform (i) would
give
rise to the failure of a condition set forth in Section 6.1 or 6.2, and (ii)
cannot be or has not been cured within 30 days after the giving of written
notice to Parent of such breach (provided that Greenwich is not then in material
breach of any representation, warranty or covenant in this
Agreement);
(g) by
Greenwich:
(i) if
the
Board of Directors of Parent or VQ Merger Sub or any committee thereof withdraws
or modifies in a manner adverse to Greenwich its approval or recommendation
of
this Agreement, or the Board of Directors of Parent or VQ Merger Sub or any
committee thereof resolves to take any of the foregoing actions;
(ii) if
(A)
Parent or any of its officers, directors, employees, representatives or agents
takes any of the actions that would be proscribed by Section 4.5 but for
the
exceptions therein allowing certain actions to be taken pursuant to the proviso
in the first sentence of Section 4.5(a) or the second sentence of Section
4.5(b)
or (B) Parent shall have given Greenwich the notification contemplated by
Section 7.5(c)(iii); or
(h) by
Greenwich prior to receipt of the Greenwich Stockholder Approval in accordance
with Section 7.5(b); provided,
however,
that
Greenwich shall have complied with all provisions thereof, including the
notice
provisions therein;
(i) by
Parent, if Greenwich breaches or fails to perform in any material respect
any of
its representations, warranties or covenants contained in this Agreement,
which
breach or failure to perform (i) would give rise to the failure of a condition
set forth in Section 6.1 or 6.3, and (ii) cannot be or has not been cured
within
30 days after the giving of written notice to Greenwich of such breach (provided
that neither Parent nor VQ Merger Sub is then in material breach of any
representation, warranty or covenant contained in this Agreement);
(j) by
Parent:
(i) if
the
Board of Directors of Greenwich or any committee thereof withdraws or modifies
in a manner adverse to Parent its approval or recommendation of this Agreement
or fails to recommend to Greenwich’s stockholders that they give the Greenwich
Stockholder Approval, or the Board of Directors of Greenwich or any committee
thereof resolves to take any of the foregoing actions;
(ii) if
the
Board of Directors of Greenwich fails to reaffirm in writing its recommendation
to Greenwich’s stockholders that they give the Greenwich Stockholder Approval
within five (5) days of Parent’s written request to do so (which request may be
made at any time that a Greenwich Takeover Proposal is pending), which
reaffirmation must also include the unconditional rejection of such Greenwich
Takeover Proposal;
(iii) if
(A)
Greenwich or any of its officers, directors, employees, representatives or
agents takes any of the actions that would be proscribed by Section 4.4 but
for
the exceptions therein allowing certain actions to be taken pursuant to the
proviso in the first sentence of Section 4.4(a) or the second sentence of
Section 4.4(b) or (B) Greenwich shall have given Parent the notification
contemplated by Section 7.5(b)(iii);
(k) by
Parent
in accordance with Section 7.5(c); provided,
however,
that
Parent shall have complied with all provisions thereof, including the notice
provisions therein.
7.2 Fees
and Expenses.
All
Expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such Expenses whether
or not the Merger is consummated; provided, however, that in the event that
this
Agreement is terminated by Greenwich pursuant to Sections 7.1(e) or 7.1(h)
or by
Parent pursuant to Section 7.1(k), then such terminating party shall promptly
reimburse the non-terminating party for all Expenses actually incurred in
connection with this Agreement, the Merger and the other transactions
contemplated hereby, up to a limit of $25,000. As used in this Agreement,
“Expenses” shall include all reasonable out-of-pocket expenses (including,
without limitation, all fees and expenses of counsel, accountants, experts
and
consultants to a party hereto and its affiliates) incurred by a party or
on its
behalf in connection with or related to the authorization, preparation,
negotiation, execution and performance of this Agreement and all other matters
relating to the closing of the Merger and the other transactions contemplated
hereby.
7.3 Amendment.
This
Agreement may be amended by the parties hereto by action taken by or on behalf
of their respective Boards of Directors at any time prior to the Effective
Time;
provided, however, that, after the approval and adoption of this Agreement
by
the stockholders of Greenwich, there shall not be any amendment that by law
requires further approval by the stockholders of Greenwich without the further
approval of such stockholders. This Agreement may not be amended by the parties
hereto except by execution of an instrument in writing signed on behalf of
each
of Parent, Greenwich and VQ Merger Sub.
7.4 Extension;
Waiver.
At any
time prior to the Effective Time, any party hereto may, to the extent legally
allowed, (i) extend the time for the performance of any of the obligations
or
other acts of the other parties hereto, (ii) waive any inaccuracies in the
representations and warranties made to such party contained herein or in
any
document delivered pursuant hereto and (iii) waive compliance with any of
the
agreements or conditions for the benefit of such party contained herein.
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, duly authorized by such party’s Board of Directors. Delay in exercising
any right under this Agreement shall not constitute a waiver of such right.
No
waiver of any provision of this Agreement shall be deemed or constitute a
waiver
of any other provision of this Agreement, whether or not similar, nor shall
such
waiver constitute a continuing waiver unless otherwise expressly
provided.
7.5 Procedure
for Termination.
(a) A
termination of this Agreement pursuant to Section 7.1 shall, in order to
be
effective, require in the case of Parent, VQ Merger Sub or Greenwich, action
by
its Board of Directors or the duly authorized designee of its Board of
Directors.
(b) Greenwich
may terminate this Agreement pursuant to Section 7.1(h) only if (i) the Board
of
Directors of Greenwich has received a Superior Greenwich Proposal, (ii) in
light
of such Superior Greenwich Proposal the Board of Directors of Greenwich shall
have determined (A) in good faith, based upon the advice of outside counsel,
that it is necessary for the Board of Directors of Greenwich to withdraw
or
modify its approval or recommendation of the Merger or this Agreement in
order
to comply with its fiduciary duty under applicable law or (B) in good faith
that
there is a substantial possibility that the Greenwich Stockholder Approval
will
not be obtained by reason of the existence of such Superior Greenwich Proposal,
(iii) Greenwich has notified Parent in writing of the determination described
in
clause (ii) above, (iv) at least five business days following receipt by
Parent
of the notice referred to in clause (iii) above, and taking into account
any
revised proposal made by Parent since receipt of the notice referred to in
clause (iii) above, such Superior Greenwich Proposal remains a Superior
Greenwich Proposal and the Board of Directors of Greenwich has again made
the
determinations referred to in clause (ii) above, (v) Greenwich is in compliance
with Section 4.4, (vi) the Board of Directors of Greenwich concurrently
approves, and Greenwich concurrently enters into, a definitive agreement
providing for the implementation of such Superior Greenwich Proposal and
(vii)
Parent is not at such time entitled to terminate this Agreement pursuant
to
Section 7.1(i).
(c) Parent
may terminate this Agreement pursuant to Section 7.1(k) only if (i) the Board
of
Directors of Parent has received a Superior Parent Proposal, (ii) in light
of
such Superior Parent Proposal the Board of Directors of Parent has determined
in
good faith, based upon the advice of outside counsel, that it is necessary
for
the Board of Directors of Parent to withdraw or modify its approval or
recommendation of the Merger or this Agreement in order to comply with its
fiduciary duty under applicable law and, (iii) Parent has notified Greenwich
in
writing of the determination described in clause (ii) above, (iv) at least
five
business days following receipt by Greenwich of the notice referred to in
clause
(iii) above, and taking into account any revised proposal made by Greenwich
since receipt of the notice referred to in clause (iii) above, such Superior
Parent Proposal remains a Superior Parent Proposal and the Board of Directors
of
Parent has again made the determinations referred to in clause (ii) above,
(v)
Parent is in compliance with Section 4.5, (vi) the Board of Directors of
Parent
concurrently approves, and Parent concurrently enters into, a definitive
agreement providing for the implementation of such Superior Parent Proposal
and
(vii) Greenwich is not at such time entitled to terminate this Agreement
pursuant to Section 7.1(f).
ARTICLE
VIII
GENERAL
PROVISIONS
8.1 Notices.
All
notices and other communications hereunder shall be in writing and shall
be
deemed given on the day of delivery if delivered personally or sent via telecopy
(receipt confirmed) or on the second business day after being sent if delivered
by commercial delivery service, to the parties at the following addresses
or
telecopy numbers (or at such other address or telecopy numbers for a party
as
shall be specified by like notice):
(a) if
to
Parent or VQ Merger Sub:
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Attn:
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Fax:
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With
a
copy to (which shall not constitute notice):
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Brand, LLP
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Attn:
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Fax:
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(b) if
to
Greenwich, to
Greenwich
Therapeutics, Inc.
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Attn:
President
Fax:
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With
a
copy to (which shall not constitute notice):
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▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
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Attn:
W.
▇▇▇▇▇ Mannheim, Esq.
Fax:
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8.2 Interpretation.
(a) When
a
reference is made in this Agreement to Exhibits, such reference shall be
to an
Exhibit to this Agreement unless otherwise indicated. When a reference is
made
in this Agreement to a Section, such reference shall be to a Section of this
Agreement. Unless otherwise indicated the words “include,”“includes” and
“including” when used herein shall be deemed in each case to be followed by the
words “without limitation.” The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way
the
meaning or interpretation of this Agreement. When reference is made herein
to
“the business of” an entity, such reference shall be deemed to include the
business of all direct and indirect subsidiaries of such entity. Reference
to
the subsidiaries of an entity shall be deemed to include all direct and indirect
subsidiaries of such entity.
(b) For
purposes of this Agreement, the term “knowledge” means with respect to a party
hereto, with respect to any matter in question, that any of the officers
of such
party has actual knowledge of such matter.
(c) For
purposes of this Agreement, the term “person” shall mean any individual,
corporation (including any non-profit corporation), general partnership,
limited
partnership, limited liability partnership, joint venture, estate, trust,
company (including any limited liability company or joint stock company),
firm
or other enterprise, association, organization, entity or Governmental
Entity.
(d) For
purposes of this Agreement, an “agreement,”“arrangement,”“contract,”“commitment” or “plan” shall mean a legally binding, written agreement,
arrangement, contract, commitment or plan, as the case may be.
(e) Unless
the context requires otherwise, all words use in this Agreement in the singular
number shall extend to and include the plural, all words in the plural number
shall extend to and include the singular, and all words in any gender shall
extend to and include all genders.
8.3 Counterparts.
This
Agreement may be executed in one or more counterparts, all of which shall
be
considered one and the same agreement and shall become effective when one
or
more counterparts have been signed by each of the parties and delivered to
the
other party, it being understood that all parties need not sign the same
counterpart.
8.4 Entire
Agreement; Third Party Beneficiaries.
This
Agreement and the documents and instruments and other agreements among the
parties hereto as contemplated by or referred to herein, including the Parent
Schedule and the Greenwich Schedule constitute the entire agreement among
the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof. Except as provided in Section 5.8,
nothing
in this Agreement is intended to or shall confer upon any other person any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement.
8.5 Severability.
In the
event that any provision of this Agreement, or the application thereof, becomes
or is declared by a court of competent jurisdiction to be illegal, void or
unenforceable, the remainder of this Agreement will continue in full force
and
effect and the application of such provision to other persons or circumstances
will be interpreted so as reasonably to effect the intent of the parties
hereto.
The parties further agree to replace such void or unenforceable provision
of
this Agreement with a valid and enforceable provision that will achieve,
to the
extent possible, the economic, business and other purposes of such void or
unenforceable provision.
8.6 Other
Remedies; Specific Performance.
Except
as otherwise provided herein, any and all remedies herein expressly conferred
upon a party will be deemed cumulative with and not exclusive of any other
remedy conferred hereby, or by law or equity upon such party, and the exercise
by a party of any one remedy will not preclude the exercise of any other
remedy.
The parties hereto agree that irreparable damage would occur in the event
that
any of the provisions of this Agreement were not performed in accordance
with
their specific terms or were otherwise breached. It is accordingly agreed
that
the parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction,
this
being in addition to any other remedy to which t they are entitled at law
or in
equity. In any action at law or suit in equity to enforce this Agreement
or the
rights of any of the parties hereunder, the prevailing party in such action
or
suit shall be entitled to receive a reasonable sum for its attorneys' fees
and
all other reasonable costs and expenses incurred in such action or
suit.
8.7 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of Delaware, regardless of the laws that might otherwise govern under
applicable principles of conflicts of law thereof.
8.8 Rules
of Construction.
The
parties hereto agree that they have been represented by counsel during the
negotiation and execution of this Agreement and, therefore, waive the
application of any law, regulation, holding or rule of construction providing
that ambiguities in an agreement or other document will be construed against
the
party drafting such agreement or document.
8.9 Assignment.
Other
than Parent’s assignment of this Agreement by operation of law as a result of
the merger contemplated by the Reincorporation, no party may assign either
this
Agreement or any of its rights, interests, or obligations hereunder without
the
prior written approval of the other parties. Subject to the preceding sentence,
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted assigns. Without
limiting the generality of the foregoing, the term “Parent” as used in this
Agreement shall refer to the surviving corporation in the merger contemplated
by
the Reincorporation.
8.10 Waiver
of Jury Trial.
EACH OF
PARENT, GREENWICH AND VQ MERGER SUB HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS
OF PARENT, GREENWICH AND VQ MERGER SUB IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE AND ENFORCEMENT HEREOF.
[Remainder
of page is blank; signatures follow]
| VioQuest Pharmaceuticals, Inc. | ||
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| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | |
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ |
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| Title: President and Chief Executive Officer | ||
| Greenwich Therapeutics, Inc. | ||
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| By: | /s/ J. ▇▇▇ ▇▇▇▇▇▇ | |
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Name: J. ▇▇▇ ▇▇▇▇▇▇ |
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| Title: President | ||
| VQ Acquisition Corp. | ||
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| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | |
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ |
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| Title: President and Chief Executive Officer | ||