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EXHIBIT 10.4
AGREEMENT AND PLAN OF MERGER
DATED AS OF JANUARY 26, 1999
AMONG
▇▇▇▇▇▇-▇▇▇▇▇▇▇ COMPANY,
WLC ACQUISITION CORPORATION
AND
AGOURON PHARMACEUTICALS, INC.
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TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER . . . . . . . . . . . . . . 2
1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Effective Time . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Effects of the Merger . . . . . . . . . . . . . . . . . . . 3
1.5 Certificate of Incorporation . . . . . . . . . . . . . . . 3
1.6 By-Laws . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.7 Officers and Directors of Surviving Corporation . . . . . . 3
1.8 Effect of Merger on Capital Stock . . . . . . . . . . . . . 3
1.9 Dissenting Agouron Common Shares . . . . . . . . . . . . . 4
1.10 Agouron Stock Options . . . . . . . . . . . . . . . . . . 4
1.11 Certain Adjustments . . . . . . . . . . . . . . . . . . . 6
ARTICLE II
EXCHANGE OF CERTIFICATES . . . . . . . . . . 6
2.1 Exchange Fund . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Exchange Procedures . . . . . . . . . . . . . . . . . . . . 6
2.3 Distributions with Respect to Unexchanged Shares . . . . . 7
2.4 No Further Ownership Rights in Agouron Common Stock . . . . 8
2.5 No Fractional Shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock . . . . 8
2.6 Termination of Exchange Fund . . . . . . . . . . . . . . . 9
2.7 No Liability . . . . . . . . . . . . . . . . . . . . . . . 9
2.8 Investment of the Exchange Fund . . . . . . . . . . . . . . 9
2.9 Lost Certificates . . . . . . . . . . . . . . . . . . . . . 9
2.10 Withholding Rights . . . . . . . . . . . . . . . . . . . . 10
2.11 Further Assurances . . . . . . . . . . . . . . . . . . . . 10
2.12 Stock Transfer Books . . . . . . . . . . . . . . . . . . . 10
ARTICLE III
REPRESENTATIONS AND WARRANTIES . . . . . . . . . 11
3.1 Representations and Warranties of ▇▇▇▇▇▇-▇▇▇▇▇▇▇. . . . . . 11
(a) Organization, Standing and Power; Subsidiaries . . . 11
(b) Capital Structure . . . . . . . . . . . . . . . . . 12
(c) Authority; No Conflicts . . . . . . . . . . . . . . 13
(d) Reports and Financial Statements . . . . . . . . . . 15
(e) Information Supplied . . . . . . . . . . . . . . . . 16
(f) Board Approval . . . . . . . . . . . . . . . . . . . 17
(g) Litigation; Compliance with Laws . . . . . . . . . . 17
(h) Absence of Certain Changes or Events . . . . . . . . 18
(i) Environmental Matters . . . . . . . . . . . . . . . 19
(j) Brokers or Finders . . . . . . . . . . . . . . . . . 19
(k) Opinion of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial Advisor . . . . 19
(l) Accounting Matters . . . . . . . . . . . . . . . . . 19
3.2 Representations and Warranties of Agouron . . . . . . . . . 20
(a) Organization, Standing and Power; Subsidiaries . . . 20
(b) Capital Structure . . . . . . . . . . . . . . . . . 21
(c) Authority; No Conflicts . . . . . . . . . . . . . . 22
(d) Reports and Financial Statements . . . . . . . . . . 23
(e) Information Supplied . . . . . . . . . . . . . . . . 25
(f) Board Approval . . . . . . . . . . . . . . . . . . . 25
(g) Vote Required . . . . . . . . . . . . . . . . . . . 26
(h) Litigation; Compliance with Laws . . . . . . . . . . 26
(i) Absence of Certain Changes or Events . . . . . . . . 26
(j) Environmental Matters . . . . . . . . . . . . . . . 27
(k) Intellectual Property . . . . . . . . . . . . . . . 29
(l) Rights Agreement . . . . . . . . . . . . . . . . . . 29
(m) Brokers or Finders . . . . . . . . . . . . . . . . . 30
(n) Opinion of Agouron Financial Advisor . . . . . . . . 30
(o) Accounting Matters . . . . . . . . . . . . . . . . . 30
(p) Taxes . . . . . . . . . . . . . . . . . . . . . . . 30
(q) Certain Contracts . . . . . . . . . . . . . . . . . 32
(r) Employee Benefit Plans . . . . . . . . . . . . . . . 32
(s) Labor Matters . . . . . . . . . . . . . . . . . . . 34
(t) Affiliate Transactions . . . . . . . . . . . . . . . 35
(u) Material Contract Defaults . . . . . . . . . . . . . 35
(v) Insurance . . . . . . . . . . . . . . . . . . . . . 36
(w) Year 2000 Compliance . . . . . . . . . . . . . . . . 36
(x) Supply . . . . . . . . . . . . . . . . . . . . . . . 36
(y) Investigational Compounds and Viracept . . . . . . . 37
(z) Generic Drug Enforcement Act . . . . . . . . . . . . 37
3.3 Representations and Warranties of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and
Merger Sub . . . . . . . . . . . . . . . . . . . . . . . 37
(a) Organization . . . . . . . . . . . . . . . . . . . . 37
(b) Corporate Authorization . . . . . . . . . . . . . . 37
(c) Non-Contravention . . . . . . . . . . . . . . . . . 37
(d) No Business Activities . . . . . . . . . . . . . . . 38
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS . . . . . . 38
4.1 Conduct of Business of Agouron Pending the Merger . . . . . 38
4.2 Conduct of Business of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Pending the
Merger . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.3 Governmental Filings . . . . . . . . . . . . . . . . . . . 43
4.4 Control of Other Party's Business . . . . . . . . . . . . . 43
ARTICLE V
ADDITIONAL AGREEMENTS . . . . . . . . . . . 44
5.1 Preparation of Form S-4 and the Proxy Statement;
Stockholders Meeting . . . . . . . . . . . . . . . . . . 44
5.2. Accountant's Letters . . . . . . . . . . . . . . . . . . . 45
5.3 Access to Information . . . . . . . . . . . . . . . . . . . 46
5.4 Reasonable Best Efforts . . . . . . . . . . . . . . . . . . 47
5.5 No Solicitation of Transactions . . . . . . . . . . . . . . 49
5.6 Employee Benefits Matters . . . . . . . . . . . . . . . . . 50
5.7 Directors' and Officers' Indemnification and Insurance . . 53
5.8 Notification of Certain Matters. . . . . . . . . . . . . . 53
5.9 Public Announcements . . . . . . . . . . . . . . . . . . . 54
5.10 Listing of Shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock . . . . . 54
5.11 Affiliates . . . . . . . . . . . . . . . . . . . . . . . . 54
5.12 Amendment to the Rights Agreement . . . . . . . . . . . . 55
5.13 Divisional Stock Proposal . . . . . . . . . . . . . . . . 55
ARTICLE VI
CONDITIONS PRECEDENT . . . . . . . . . . . 55
6.1 Conditions to Each Party's Obligation to Effect the
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . 55
(a) Stockholder Approval . . . . . . . . . . . . . . . . 56
(b) No Injunctions or Restraints, Illegality . . . . . . 56
(c) HSR Act . . . . . . . . . . . . . . . . . . . . . . . 56
(d) NYSE Listing . . . . . . . . . . . . . . . . . . . . 56
(e) Effectiveness of the Form S-4 . . . . . . . . . . . 56
(f) Pooling . . . . . . . . . . . . . . . . . . . . . . . 56
6.2 Additional Conditions to Obligations of ▇▇▇▇▇▇-▇▇▇▇▇▇▇
and Merger Sub . . . . . . . . . . . . . . . . . . . . . . 57
(a) Representations and Warranties . . . . . . . . . . . 57
(b) Performance of Obligations of Agouron . . . . . . . 57
(c) Tax Opinion . . . . . . . . . . . . . . . . . . . . 57
(d) No Material Adverse Change . . . . . . . . . . . . . 58
(e) Rights Agreement . . . . . . . . . . . . . . . . . . 58
(f) Dissenting Agouron Shares . . . . . . . . . . . . . . 58
6.3 Additional Conditions to Obligations of Agouron. . . . . . 58
(a) Representations and Warranties . . . . . . . . . . . 58
(b) Performance of Obligations of ▇▇▇▇▇▇-▇▇▇▇▇▇▇. . . . . 59
(c) Tax Opinion . . . . . . . . . . . . . . . . . . . . 59
(d) No Material Adverse Change . . . . . . . . . . . . . 59
ARTICLE VII
TERMINATION AND AMENDMENT . . . . . . . . . . 59
7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . 59
7.2 Effect of Termination . . . . . . . . . . . . . . . . . . . 61
7.3 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . 61
7.4 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . 63
7.5 Extension; Waiver . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE VIII
GENERAL PROVISIONS . . . . . . . . . . . . 63
8.1 Non-Survival of Representations, Warranties and
Agreements . . . . . . . . . . . . . . . . . . . . . . . 63
8.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 64
8.3 Interpretation . . . . . . . . . . . . . . . . . . . . . . 65
8.4 Counterparts . . . . . . . . . . . . . . . . . . . . . . . 65
8.5 Entire Agreement; No Third Party Beneficiaries . . . . . . 65
8.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . . 66
8.7 Severability . . . . . . . . . . . . . . . . . . . . . . . 66
8.8 Assignment . . . . . . . . . . . . . . . . . . . . . . . . 66
8.9 Submission to Jurisdiction; Waivers . . . . . . . . . . . . 66
8.10 Enforcement . . . . . . . . . . . . . . . . . . . . . . . 67
8.11 Definitions . . . . . . . . . . . . . . . . . . . . . . . 67
LIST OF EXHIBITS
Exhibit Title
1.5 Certificate of Incorporation
1.7 Board of Directors of Surviving Corporation
3.2(z) Generic Drug Enforcement Act Barred Individuals
5.6(a) Employees Excluded from Certain Benefit Plans
5.11 Form of Affiliate Letter
AGREEMENT AND PLAN OF MERGER, dated as of January 26, 1999 (this
"Agreement"), among ▇▇▇▇▇▇-▇▇▇▇▇▇▇ COMPANY, a Delaware corporation ("▇▇▇▇▇▇-
▇▇▇▇▇▇▇"), WLC ACQUISITION CORPORATION, a California corporation and a direct
wholly-owned subsidiary of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ ("Merger Sub"), and AGOURON
PHARMACEUTICALS, INC., a California corporation ("Agouron").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of Agouron and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇
it advisable and in the best interests of each corporation and its respective
stockholders that Agouron and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ engage in a business combination
in order to advance the long-term strategic business interests of Agouron and
▇▇▇▇▇▇-▇▇▇▇▇▇▇;
WHEREAS, the combination of Agouron and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall be
effected by the terms of this Agreement through a merger as outlined below
(the "Merger");
WHEREAS, in furtherance thereof, the respective Boards of Directors
of Agouron and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ have approved the Merger, upon the terms and
subject to the conditions set forth in this Agreement, pursuant to which each
share of common stock, without par value, of Agouron ("Agouron Common Stock")
issued and outstanding immediately prior to the Effective Time (as defined in
Section 1.3), other than shares owned or held directly or indirectly by
Agouron, will be converted into the right to receive shares of voting common
stock, par value $1.00 per share, of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ ("▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common
Stock") as set forth in Section 1.8;
WHEREAS, for Federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations promulgated thereunder;
WHEREAS, for accounting purposes, it is intended that the Merger
shall be accounted for as a pooling of interests transaction under United
States generally accepted accounting principles ("GAAP"); and
WHEREAS, as a condition to its willingness to enter into this
Agreement, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ has required that, simultaneously with the
execution hereof, Agouron enter into the option agreement ("Stock Option
Agreement"), dated as of the date hereof, with ▇▇▇▇▇▇-▇▇▇▇▇▇▇, pursuant to
which Agouron is granting to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ an option to purchase up to 19.9%
of Agouron Common Stock on the terms and conditions set forth therein.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement and the Stock Option Agreement, and intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the California General
Corporation Law (the "CGCL"), Merger Sub shall be merged with and into
Agouron at the Effective Time. Immediately, following the Merger, the
separate corporate existence of Merger Sub shall cease and Agouron shall
continue as the surviving corporation (the "Surviving Corporation") under the
name Agouron.
1.2 Closing. Subject to the terms and conditions hereof, the
closing of the Merger and the transactions contemplated by this Agreement
(the "Closing") will take place on the second Business Day after the
satisfaction or waiver (subject to applicable law) of the conditions set
forth in Article VI (other than any such conditions which by their terms
cannot be satisfied until the Closing Date, which shall be required to be so
satisfied or waived on the Closing Date), unless another time or date is
agreed to in writing by the parties hereto (the actual time and date of the
Closing being referred to herein as the "Closing Date"). The Closing shall
be held at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, unless another place is agreed to in writing by
the parties hereto.
1.3 Effective Time. At the Closing the parties shall (i) file a
certificate of merger (the "Certificate of Merger") in such form as is
required by and executed in accordance with the relevant provisions of the
CGCL and (ii) make all other filings or recordings required under the CGCL.
The Merger shall become effective at such time as the Certificate of Merger
is duly filed with the California Secretary of State or at such subsequent
time as ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and Agouron shall agree and as shall be specified in
the Certificate of Merger (the date and time the Merger becomes effective
being the "Effective Time").
1.4 Effects of the Merger. At and after the Effective Time, the
Merger will have the effects set forth in the CGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time all
the property, rights, privileges, powers and franchises of Agouron and Merger
Sub shall be vested in the Surviving Corporation, and all debts, liabilities
and duties of Agouron and Merger Sub shall be the debts, liabilities and
duties of the Surviving Corporation.
1.5 Certificate of Incorporation. The certificate of incorporation
of Agouron, as in effect immediately prior to the Effective Time, shall be
amended and restated as of the Effective Time so as to read in its entirety
in the form set forth as Exhibit 1.5 and, as so amended and restated, shall
be the certificate of incorporation of the Surviving Corporation, until
thereafter changed or amended as provided therein or by applicable law.
1.6 By-Laws. At the Effective Time and without any further action
on the part of Agouron and Merger Sub, the By-Laws of Merger Sub shall be the
By-Laws of the Surviving Corporation and thereafter may be amended or
repealed in accordance with their terms or the Certificate of Incorporation
of the Surviving Corporation and as provided by law.
1.7 Officers and Directors of Surviving Corporation. The officers
of Agouron as of the Effective Time shall be the officers of the Surviving
Corporation, until the earlier of their resignation or removal or otherwise
ceasing to be an officer or until their respective successors are duly
elected and qualified, as the case may be. The directors of the Surviving
Corporation as of the Effective Time shall be as provided in Exhibit 1.7,
which individuals will serve as directors of the Surviving Corporation until
the earlier of their resignation or removal or otherwise ceasing to be a
director or until their respective successors are duly elected and qualified.
1.8 Effect of Merger on Capital Stock.
(a) At the Effective Time by virtue of the Merger and without any
action on the part of the holder thereof, each share of Agouron Common Stock
issued and outstanding immediately prior to the Effective Time (other than
shares of Agouron Common Stock held by Agouron, all of which shall be
canceled as provided in Section 1.8(c)) shall be converted into the right to
receive from ▇▇▇▇▇▇-▇▇▇▇▇▇▇ a fraction of a share of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common
Stock equal to the Exchange Ratio (as defined in Section 8.11), including the
corresponding percentage of a right to purchase shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇
Series A Preferred Stock (as defined in Section 3.1(b)) pursuant to the
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Rights Agreement (as defined in Section 3.1(b)), of ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ Common Stock (together with any cash in lieu of fractional shares of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock to be paid pursuant to Section 2.5, the "Merger
Consideration").
(b) As a result of the Merger and without any action on the part of
the holders thereof, at the Effective Time, all shares of Agouron Common
Stock shall cease to be outstanding and shall be canceled and retired and
shall cease to exist, and each holder of a certificate which immediately
prior to the Effective Time represented any such shares of Agouron Common
Stock (a "Certificate") shall thereafter cease to have any rights with
respect to such shares of Agouron Common Stock, except as provided herein or
by law.
(c) Each share of Agouron Common Stock issued and owned or held by
Agouron at the Effective Time shall, by virtue of the Merger, cease to be
outstanding and shall be canceled and retired and no stock of ▇▇▇▇▇▇-▇▇▇▇▇▇▇
or other consideration shall be delivered in exchange therefor.
(d) Each share of common stock, no par value, of Merger Sub issued
and outstanding immediately prior to the Effective Time, shall be converted
into issued, outstanding and unchanged as validly issued, fully paid and
nonassessable shares of common stock, no par value, of the Surviving
Corporation as of the Effective Time.
1.9 Dissenting Agouron Common Shares. Notwithstanding anything in
this Agreement to the contrary, shares of Agouron Common Stock whose holders
have perfected dissenters' rights under Section 1300 et seq. of the CGCL
("Dissenting Agouron Common Shares") shall not be converted into the right to
receive or be exchangeable for, the Merger Consideration provided for in
Section 1.8 hereof, but, instead, the holders thereof shall be entitled to
payment, by Agouron, of the value of such Dissenting Agouron Common Shares as
agreed upon or determined in accordance with the provisions of Section 1300
et seq. of the CGCL.
1.10 Agouron Stock Options.
(a) On or prior to the Effective Time, Agouron will take all action
necessary such that each Agouron Stock Option (as defined in Section 3.2(b))
that was granted pursuant to the Agouron Stock Option Plans (as defined in
Section 3.2(b)) prior to the Effective Time and which remains outstanding
immediately prior to the Effective Time shall cease to represent a right to
acquire shares of Agouron Common Stock and shall be converted, at the
Effective Time, into an option to acquire, on the same terms and conditions
as were applicable under the Agouron Stock Option, that number of shares of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock determined by multiplying the number of shares of
Agouron Common Stock subject to such Agouron Stock Option by the Exchange
Ratio, rounded, if necessary, to the nearest whole share of ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Common Stock, at a price per share equal to the per share exercise price
specified in such Agouron Stock Option divided by the Exchange Ratio all
adjusted for any fractional shares eliminated by rounding to ensure the
intrinsic value of the option at consummation is preserved; provided,
however, that in the case of any Agouron Stock Option to which Section 421 of
the Code applies by reason of its qualification under Section 422 of the
Code, the option price, the number of shares subject to such option and the
terms and conditions of exercise of such option shall be determined in a
manner consistent with the requirements of Section 424(a) of the Code.
(b) As soon as practicable after the Effective Time, ▇▇▇▇▇▇-▇▇▇▇▇▇▇
shall deliver to the holders of Agouron Stock Options appropriate notices
setting forth such holders' rights pursuant to the Agouron Stock Option Plans
and the agreements evidencing the grants of such Agouron Stock Options shall
continue in effect on the same terms and conditions (subject to the
adjustments required by this Section 1.10 after giving effect to the Merger
and the terms of the Agouron Stock Option Plans). To the extent permitted by
law, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall comply with the terms of the Agouron Stock Option
Plans and shall take such reasonable steps as are necessary or required by,
and subject to the provisions of, such Agouron Stock Option Plans, to have
the Agouron Stock Options which qualified as incentive stock options prior to
the Effective Time continue to qualify as incentive stock options of ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ after the Effective Time.
(c) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall take all corporate action necessary to
reserve for issuance a sufficient number of shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common
Stock for delivery upon exercise of Agouron Stock Options in accordance with
this Section 1.10. Promptly after the Effective Time, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall
file a registration statement on Form S-3 or Form S-8, as the case may be (or
any successor or other appropriate forms), with respect to the shares of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock subject to such options and shall use
commercially reasonable efforts to maintain the effectiveness of such
registration statement or registration statements (and maintain the current
status of the prospectus or prospectuses contained therein) for so long as
such options remain outstanding. With respect to those individuals who
subsequent to the Merger will be subject to the reporting requirements under
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), where applicable, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall administer the
Agouron Stock Option Plans in a manner consistent with the exemptions
provided by Rule 16b-3 promulgated under the Exchange Act.
1.11 Certain Adjustments. If, between the date of this Agreement
and the Effective Time, the outstanding ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock or
Agouron Common Stock shall have been changed into a different number of
shares or different class by reason of any reclassification,
recapitalization, stock split, split-up, combination or exchange of shares or
a stock dividend or dividend payable in any other securities shall be
declared with a record date within such period, or any similar event shall
have occurred, the Exchange Ratio shall be appropriately adjusted to provide
to the holders of Agouron Common Stock the same economic effect as
contemplated by this Agreement prior to such event.
ARTICLE II
EXCHANGE OF CERTIFICATES
2.1 Exchange Fund. Prior to the Effective Time, ▇▇▇▇▇▇-▇▇▇▇▇▇▇
shall appoint a commercial bank or trust company having net capital of not
less than $100,000,000, or a subsidiary thereof, to act as exchange agent
hereunder for the purpose of exchanging Certificates for the Merger
Consideration (the "Exchange Agent"). At or prior to the Effective Time,
▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall deposit with the Exchange Agent, in trust for the
benefit of holders of shares of Agouron Common Stock, certificates
representing the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock issuable pursuant to Section 1.8
in exchange for outstanding shares of Agouron Common Stock. ▇▇▇▇▇▇-▇▇▇▇▇▇▇
agrees to make available to the Exchange Agent from time to time as needed,
cash sufficient to pay cash in lieu of fractional shares pursuant to Section
2.5 and any dividends and other distributions pursuant to Section 2.3. Any
cash and certificates of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock deposited with the
Exchange Agent shall hereinafter be referred to as the "Exchange Fund".
2.2 Exchange Procedures. As soon as reasonably practicable after
the Effective Time, the Surviving Corporation shall cause the Exchange Agent
to mail to each holder of a Certificate (i) a letter of transmittal which
shall specify that delivery shall be effected, and risk of loss and title to
the Certificates shall pass, only upon delivery of the Certificates to the
Exchange Agent, and which letter shall be in customary form and have such
other provisions as ▇▇▇▇▇▇-▇▇▇▇▇▇▇ may reasonably specify and (ii)
instructions for effecting the surrender of such Certificates in exchange for
the applicable Merger Consideration. Upon surrender of a Certificate to the
Exchange Agent together with such letter of transmittal, duly executed and
completed in accordance with the instructions thereto, and such other
documents as may reasonably be required by the Exchange Agent, the holder of
such Certificate shall be entitled to receive in exchange therefor (A) one or
more shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock (which shall be in uncertificated
book-entry form unless a physical certificate is requested) representing, in
the aggregate, the whole number of shares that such holder has the right to
receive pursuant to Section 1.8 (after taking into account all shares of
Agouron Common Stock then held by such holder) and (B) a check in the amount
equal to the cash that such holder has the right to receive pursuant to the
provisions of this Article II, including cash in lieu of any fractional
shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock pursuant to Section 2.5 and dividends
and other distributions pursuant to Section 2.3. No interest will be paid or
will accrue on any cash payable pursuant to Section 2.3 or Section 2.5. In
the event of a transfer of ownership of Agouron Common Stock which is not
registered in the transfer records of Agouron, one or more shares of ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ Common Stock evidencing, in the aggregate, the proper number of
shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock, a check in the proper amount of cash
in lieu of any fractional shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock pursuant to
Section 2.5 and any dividends or other distributions to which such holder is
entitled pursuant to Section 2.3, may be issued with respect to such Agouron
Common Stock to such a transferee if the Certificate representing such shares
of Agouron Common Stock is presented to the Exchange Agent, accompanied by
all documents required to evidence and effect such transfer and to evidence
that any applicable stock transfer taxes have been paid.
2.3 Distributions with Respect to Unexchanged Shares. No dividends
or other distributions declared or made with respect to shares of ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ Common Stock with a record date after the Effective Time shall be
paid to the holder of any unsurrendered Certificate with respect to the
shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock that such holder would be entitled to
receive upon surrender of such Certificate and no cash payment in lieu of
fractional shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock shall be paid to any such
holder pursuant to Section 2.5 until such holder shall surrender such
Certificate in accordance with Section 2.2. Subject to the effect of
applicable laws, following surrender of any such Certificate, there shall be
paid to such holder of shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock issuable in
exchange therefor, without interest, (a) promptly after the time of such
surrender, the amount of any cash payable in lieu of fractional shares of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock to which such holder is entitled pursuant to
Section 2.5, and (b) at the appropriate payment date, the amount of dividends
or other distributions with a record date after the Effective Time but prior
to such surrender and a payment date subsequent to such surrender payable
with respect to such shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock.
2.4 No Further Ownership Rights in Agouron Common Stock. All shares
of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock issued and cash paid upon conversion of shares
of Agouron Common Stock in accordance with the terms of Article I and this
Article II (including any cash paid pursuant to Section 2.3 or 2.5) shall be
deemed to have been issued or paid in full satisfaction of all rights
pertaining to the shares of Agouron Common Stock. Until surrendered as
contemplated by this Article II, each Certificate shall be deemed at any time
after the Effective Time to represent only the right to receive upon such
surrender the Merger Consideration.
2.5 No Fractional Shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock.
(a) No certificates or scrip or shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common
Stock representing fractional shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock or book-
entry credit of the same shall be issued upon the surrender for exchange of
Certificates and such fractional share interests will not entitle the owner
thereof to vote or to have any rights of a shareholder of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or a
holder of shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock.
(b) Notwithstanding any other provision of this Agreement, each
holder of shares of Agouron Common Stock exchanged pursuant to the Merger who
would otherwise have been entitled to receive a fraction of a share of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock (after taking into account all Certificates
delivered by such holder) shall receive, in lieu thereof, cash (without
interest) in an amount equal to the product of (i) such fractional part of a
share of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock multiplied by (ii) the closing price for
a share of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock on the New York Stock Exchange, Inc.
("NYSE") Composite Transactions Tape on the date of the Effective Time or, if
such date is not a Business Day, the Business Day immediately following the
date on which the Effective Time occurs. As promptly as practicable after
the determination of the amount of cash, if any, to be paid to holders of
fractional interests, the Exchange Agent shall so notify ▇▇▇▇▇▇-▇▇▇▇▇▇▇, and
▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall cause the Surviving Corporation to deposit such amount
with the Exchange Agent and shall cause the Exchange Agent to forward
payments to such holders of fractional interests subject to and in accordance
with the terms hereof.
2.6 Termination of Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to the holders of Certificates for six months
after the Effective Time shall be delivered to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or otherwise on
the instruction of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and any holders of the Certificates who
have not theretofore complied with this Article II shall thereafter look only
to the Surviving Corporation and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ for the Merger Consideration
with respect to the shares of Agouron Common Stock formerly represented
thereby to which such holders are entitled pursuant to Section 1.8 and
Section 2.2, any cash in lieu of fractional shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common
Stock to which such holders are entitled pursuant to Section 2.5 and any
dividends or distributions with respect to shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common
Stock to which such holders are entitled pursuant to Section 2.3. Any such
portion of the Exchange Fund remaining unclaimed by holders of shares of
Agouron Common Stock five years after the Effective Time (or such earlier
date immediately prior to such time as such amounts would otherwise escheat
to or become property of any Governmental Entity (as defined in Section
3.1(c)(iii)) shall, to the extent permitted by law, become the property of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ free and clear of any claims or interest of any Person
previously entitled thereto.
2.7 No Liability. None of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, Merger Sub, Agouron, the
Surviving Corporation or the Exchange Agent shall be liable to any Person in
respect of any Merger Consideration from the Exchange Fund delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar law.
2.8 Investment of the Exchange Fund. The Exchange Agent shall
invest any cash included in the Exchange Fund as directed by ▇▇▇▇▇▇-▇▇▇▇▇▇▇
on a daily basis. Any interest and other income resulting from such
investments shall promptly be paid to ▇▇▇▇▇▇-▇▇▇▇▇▇▇.
2.9 Lost Certificates. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such Person of a bond
in such reasonable amount as the Surviving Corporation may direct as
indemnity against any claim that may be made against it with respect to such
Certificate, the Exchange Agent will deliver in exchange for such lost,
stolen or destroyed Certificate the applicable Merger Consideration with
respect to the shares of Agouron Common Stock formerly represented thereby,
any cash in lieu of fractional shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock, and
unpaid dividends and distributions on shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock
deliverable in respect thereof, pursuant to this Agreement.
2.10 Withholding Rights. Each of the Surviving Corporation and
▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any holder of
shares of Agouron Common Stock such amounts as it is required to deduct and
withhold with respect to the making of such payment under the Code and the
rules and regulations promulgated thereunder, or any provision of state,
local or foreign tax law. To the extent that amounts are so withheld by the
Surviving Corporation or ▇▇▇▇▇▇-▇▇▇▇▇▇▇, as the case may be, such withheld
amounts shall be treated for all purposes of this Agreement as having been
paid to the holder of the shares of Agouron Common Stock in respect of which
such deduction and withholding was made by the Surviving Corporation or
▇▇▇▇▇▇-▇▇▇▇▇▇▇, as the case may be.
2.11 Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of Agouron or Merger Sub, any
deeds, bills of sale, assignments or assurances and to take and do, in the
name and on behalf of Agouron or Merger Sub, any other actions and things to
vest, perfect or confirm of record or otherwise in the Surviving Corporation
any and all right, title and interest in, to and under any of the rights,
properties or assets acquired or to be acquired by the Surviving Corporation
as a result of, or in connection with, the Merger.
2.12 Stock Transfer Books. The stock transfer books of Agouron
shall be closed immediately upon the Effective Time and there shall be no
further registration of transfers of shares of Agouron Common Stock
thereafter on the records of Agouron. On or after the Effective Time, any
Certificates presented to the Exchange Agent or ▇▇▇▇▇▇-▇▇▇▇▇▇▇ for any reason
shall be converted into the Merger Consideration with respect to the shares
of Agouron Common Stock formerly represented thereby, any cash in lieu of
fractional shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock to which the holders thereof
are entitled pursuant to Section 2.5 and any dividends or other distributions
to which the holders thereof are entitled pursuant to Section 2.3.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of ▇▇▇▇▇▇-▇▇▇▇▇▇▇. Except as set
forth in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Disclosure Schedule delivered by ▇▇▇▇▇▇-▇▇▇▇▇▇▇
to Agouron prior to the execution of this Agreement (the "▇▇▇▇▇▇-▇▇▇▇▇▇▇
Disclosure Schedule") (each section of which qualifies the correspondingly
numbered representation and warranty or covenant to the extent specified
therein) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ represents and warrants to Agouron as follows:
(a) Organization, Standing and Power; Subsidiaries.
(i) Each of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and each of its Subsidiaries (as
defined in Section 8.11) is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization, has the requisite power and authority
to own, lease and operate its properties and to carry on its business
as now being conducted, except where the failure to be so organized,
existing and in good standing or to have such power and authority
would not reasonably be expected to have a Material Adverse Effect
(as defined in Section 8.11) on ▇▇▇▇▇▇-▇▇▇▇▇▇▇, and is duly qualified
and in good standing to do business in each jurisdiction in which the
nature of its business or the ownership or leasing of its properties
makes such qualification necessary other than in such jurisdictions
where the failure so to qualify or to be in good standing would not
reasonably be expected to have a Material Adverse Effect on ▇▇▇▇▇▇-
▇▇▇▇▇▇▇. The copies of the certificate of incorporation and by-laws
of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ which were previously furnished or made available
to Agouron are true, complete and correct copies of such documents as
in effect on the date of this Agreement.
(ii) Exhibit 21 to ▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ Annual Report on Form 10-K
for the year ended December 31, 1997 includes all the Subsidiaries of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ which as of the date of this Agreement are Significant
Subsidiaries (as defined in Rule 1-02 of Regulation S-X of the SEC).
All the outstanding shares of capital stock of, or other equity
interests in each such Significant Subsidiary have been validly
issued and are fully paid and nonassessable and are owned directly or
indirectly by ▇▇▇▇▇▇-▇▇▇▇▇▇▇, free and clear of all pledges, claims,
liens, charges, encumbrances and security interests of any kind or
nature whatsoever (collectively "Liens") and free of any other
restriction (including any restriction on the right to vote, sell or
otherwise dispose of such capital stock or other ownership interests)
other than Liens or restrictions that do not have a Material Adverse
Effect on ▇▇▇▇▇▇-▇▇▇▇▇▇▇. Except as set forth in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇
SEC Reports (as defined in Section 3.1(d)), as of the date of this
Agreement, neither ▇▇▇▇▇▇-▇▇▇▇▇▇▇ nor any of its Subsidiaries
directly or indirectly owns any equity or similar interest in, or any
interest convertible into or exchangeable or exercisable for, any
corporation, partnership, joint venture or other business association
or entity (other than Subsidiaries), that is or would reasonably be
expected to be material to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its Subsidiaries taken
as a whole.
(b) Capital Structure.
(i) As of December 31, 1998, the authorized capital stock of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ consisted of (A) 1,200,000,000 shares of ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ Common Stock of which 821,552,156 shares were outstanding and
140,429,452 shares were held in the treasury of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and
(B) 5,000,000 shares of Preferred Stock, par value $1.00 per share,
none of which were outstanding and 400,000 shares of which have been
designated as Series A Junior Participating Preferred Stock (the
"Series A Preferred Stock") and reserved for issuance upon exercise
of certain rights as set forth in the Amended and Restated Rights
Agreement dated as of March 25, 1997 between ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and First
Chicago Trust Company of New York, as rights agent (the "▇▇▇▇▇▇-
▇▇▇▇▇▇▇ Rights Agreement"). Since December 31, 1998 to the date of
this Agreement, there have been no issuances of shares of the capital
stock of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or any other securities of ▇▇▇▇▇▇-▇▇▇▇▇▇▇
other than issuances of shares pursuant to options or rights
outstanding as of December 31, 1998 under the Benefit Plans (as
defined in Section 8.11) of ▇▇▇▇▇▇-▇▇▇▇▇▇▇. All issued and
outstanding shares of the capital stock of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ are duly
authorized, validly issued, fully paid and nonassessable, and no
class of capital stock is entitled to preemptive rights. There were
outstanding as of December 31, 1998 no options, warrants or other
rights to acquire capital stock from ▇▇▇▇▇▇-▇▇▇▇▇▇▇ other than
options, restricted stock and share equivalents representing in the
aggregate the right to purchase 182,942,041 shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Common Stock under the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Company 1989 Stock Plan, as
amended to January 27, 1998, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Company 1992 Stock Plan,
as amended to January 27, 1998, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Company 1996 Stock
Plan, as amended to January 27, 1998 and Restricted Stock Plan for
Directors of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Company, as amended to January 28, 1992
(collectively, the "▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Plans").
(ii) No bonds, debentures, notes or other indebtedness of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ having the right to vote on any matters on which
holders of capital stock of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ may vote ("▇▇▇▇▇▇-▇▇▇▇▇▇▇
Voting Debt") are issued or outstanding.
(iii) Except as otherwise set forth in this Section 3.1(b) and
as contemplated by Section 1.8 and Section 1.10, as of the date of
this Agreement, there are no securities, options, warrants, calls,
rights, commitments, agreements, arrangements or undertakings of any
kind to which ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or any of its Subsidiaries is a party or
by which any of them is bound obligating ▇▇▇▇▇▇-▇▇▇▇▇▇▇ to issue,
deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or other voting securities of ▇▇▇▇▇▇-▇▇▇▇▇▇▇
or obligating ▇▇▇▇▇▇-▇▇▇▇▇▇▇ to issue, grant, extend or enter into
any such security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking. As of the date of this
Agreement, there are no outstanding obligations of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ to
repurchase, redeem or otherwise acquire any shares of capital stock
of ▇▇▇▇▇▇-▇▇▇▇▇▇▇.
(c) Authority; No Conflicts.
(i) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ has all requisite corporate power and
authority to enter into this Agreement and the Stock Option Agreement
and to consummate the transactions contemplated hereby and thereby,
including, without limitation, the issuance of the shares of ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ Common Stock to be issued in the Merger (the "Share
Issuance"). The execution and delivery of this Agreement and the
Stock Option Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of ▇▇▇▇▇▇-▇▇▇▇▇▇▇. Each of
this Agreement and the Stock Option Agreement has been duly executed
and delivered by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and constitutes a valid and binding
agreement of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, enforceable against it in accordance
with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and similar laws
relating to or affecting creditors generally or by general equity
principles (regardless of whether such enforceability is considered
in a proceeding in equity or at law) or by an implied covenant of
good faith and fair dealing.
(ii) The execution and delivery of this Agreement and the Stock
Option Agreement by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ does not or will not, as the case
may be, and the consummation by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ of the Merger and the
other transactions contemplated hereby and thereby will not, conflict
with, or result in any violation of, or constitute a default (with or
without notice or lapse of time, or both) under, or give rise to a
right of termination, amendment, cancellation or acceleration of any
obligation or the loss of a material benefit under, or the creation
of a Lien on any assets (any such conflict, violation, default, right
of termination, amendment, cancellation or acceleration, loss or
creation, is hereinafter referred to as a "Violation") pursuant to:
(A) any provision of the certificate of incorporation or by-laws of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ or any material Subsidiary of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or (B)
except as would not reasonably be expected to have a Material Adverse
Effect on ▇▇▇▇▇▇-▇▇▇▇▇▇▇, subject to obtaining or making the
consents, approvals, orders, authorizations, registrations,
declarations and filings referred to in paragraph (iii) below, any
loan or credit agreement, note, mortgage, bond, indenture, lease,
benefit plan or other agreement, obligation, instrument, permit,
concession, franchise, license, judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or
any Subsidiary of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, or their respective properties or
assets.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any supranational,
national, state, municipal, local or foreign government, any
instrumentality, subdivision, court, administrative agency or
commission or other authority thereof, or any quasi-governmental or
private body exercising any regulatory, taxing, importing or other
governmental or quasi-governmental authority (a "Governmental
Entity"), is required by or with respect to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or any
Subsidiary of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ in connection with the execution and
delivery of this Agreement or the Stock Option Agreement by ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ or the consummation of the Merger and the other transactions
contemplated hereby, except for those required under or in relation
to (A) the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), (B) state securities or "blue sky" laws (the
"Blue Sky Laws"), (C) the Securities Act, (D) the Exchange Act, (E)
the CGCL with respect to the filing of the Certificate of Merger, (F)
rules and regulations of the NYSE and the Nasdaq National Market, (G)
antitrust or other competition laws of other jurisdictions, (H) the
Consent Decree of Permanent Injunction, dated August 16, ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, (I) the Investment Canada Act,
and (J) such consents, approvals, orders, authorizations,
registrations, declarations and filings the failure of which to make
or obtain would not reasonably be expected to have a Material Adverse
Effect on ▇▇▇▇▇▇-▇▇▇▇▇▇▇. Consents, approvals, orders,
authorizations, registrations, declarations and filings required
under or in relation to any of the foregoing clauses (A) through (I)
are hereinafter referred to as "Necessary Consents".
(d) Reports and Financial Statements.
(i) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ has filed all required registration
statements, prospectuses, reports, schedules, forms, statements and
other documents required to be filed by it with the SEC since January
1, 1998 (collectively, including all exhibits thereto, the "▇▇▇▇▇▇-
▇▇▇▇▇▇▇ SEC Reports"). Since such date, no Subsidiary of ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ is required to file any form, report, registration statement,
prospectus or other document with the SEC. None of the ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ SEC Reports, as of their respective dates (and, if amended or
superseded by a filing prior to the date of this Agreement or the
Closing Date, then on the date of such filing), contained or will
contain any untrue statement of a material fact or omitted or will
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC Reports together with any public announcements in
a news release issued by the Dow ▇▇▇▇▇ news service, PR Newswire or
any equivalent service (collectively, a "Dow ▇▇▇▇▇ News Release")
made by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ after the date hereof, taken as a whole, as of
the Effective Time will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances existing as of the Effective Time, not misleading.
Each of the financial statements (including the related notes)
included in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC Reports presents fairly, in all
material respects, the consolidated financial position and
consolidated results of operations and cash flows of ▇▇▇▇▇▇-▇▇▇▇▇▇▇
and its Subsidiaries as of the respective dates or for the respective
periods set forth therein, all in conformity with GAAP applied on a
consistent basis throughout the periods involved except as otherwise
noted therein, and subject, in the case of the unaudited interim
financial statements, to normal and recurring adjustments that were
not or are not expected to be material in amount. All of such
▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC Reports, as of their respective dates (and as of
the date of any amendment to the respective ▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC
Report), complied as to form in all material respects with the
applicable requirements of the Securities Act and the Exchange Act
and the rules and regulations promulgated thereunder.
(ii) Except as disclosed in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC Reports filed
prior to the date hereof, since December 31, 1997, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and
its Subsidiaries have not incurred any liabilities that are of a
nature that would be required to be disclosed on a balance sheet of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its Subsidiaries or the footnotes thereto prepared
in conformity with GAAP, other than (A) liabilities incurred in the
ordinary course of business or (B) liabilities that would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on ▇▇▇▇▇▇-▇▇▇▇▇▇▇.
(e) Information Supplied.
(i) None of the information supplied or to be supplied by
▇▇▇▇▇▇-▇▇▇▇▇▇▇ for inclusion or incorporation by reference in (A) the
registration statement on Form S-4 to be filed with the SEC by
▇▇▇▇▇▇-▇▇▇▇▇▇▇ in connection with the issuance of shares of ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ Common Stock in connection with the Merger, or any of the
amendments or supplements thereto (collectively, the "Form S-4")
will, at the time the Form S-4 is filed with the SEC, at any time it
is amended or supplemented or at the time it becomes effective under
the Securities Act, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and (B) the
proxy statement for use relating to the adoption by the stockholders
of Agouron of this Agreement or any of the amendments or supplements
thereto (collectively, the "Proxy Statement") will, on the date it is
first mailed to Agouron stockholders or at the time of the Agouron
Stockholders Meeting ( as defined in Section 5.1), contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading. The Form S-4 will comply as to form in
all material respects with the requirements of the Exchange Act and
the Securities Act and the rules and regulations of the SEC
thereunder.
(ii) Notwithstanding the foregoing provisions of this Section
3.1(e), no representation or warranty is made by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ with
respect to statements made or incorporated by reference in the Form
S-4 based on information supplied by Agouron for inclusion or
incorporation by reference therein.
(f) Board Approval. The Board of Directors of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, by
resolutions duly adopted by unanimous vote at a meeting duly called and held
and not subsequently rescinded or modified in any way (the "▇▇▇▇▇▇-▇▇▇▇▇▇▇
Board Approval"), has duly (i) determined that this Agreement and the Stock
Option Agreement, and the Merger are fair to and in the best interests of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its stockholders, and (ii) approved this Agreement and the
Stock Option Agreement, the Merger and the Share Issuance. To the Knowledge
of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, no state takeover statute is applicable to the Merger or
the Stock Option Agreement or the other transactions contemplated hereby.
(g) Litigation; Compliance with Laws.
(i) Except as disclosed in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC Reports filed
prior to the date of this Agreement and except for any FDA action
which may arise out of the Advisory Committee meeting related to
Rezulin that is currently scheduled for March 26, 1999, there is no
suit, action, investigation or proceeding pending or, to the
Knowledge of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, threatened, against or affecting ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ or any Subsidiary of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ having, or which would
reasonably be expected to have a Material Adverse Effect on ▇▇▇▇▇▇-
▇▇▇▇▇▇▇, nor is there any judgment, decree, injunction, rule or order
of any Governmental Entity or arbitrator outstanding against ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ or any Subsidiary of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ having, or which
reasonably would be expected to have a Material Adverse Effect on
▇▇▇▇▇▇-▇▇▇▇▇▇▇.
(ii) Except as disclosed in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC Reports filed
prior to the date of this Agreement and except as would not
reasonably be expected to have a Material Adverse Effect on ▇▇▇▇▇▇-
▇▇▇▇▇▇▇, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its Subsidiaries hold all permits,
licenses, variances, exemptions, orders and approvals of all
Governmental Entities which are necessary for the operation of the
businesses of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its Subsidiaries, taken as a whole
(the "▇▇▇▇▇▇-▇▇▇▇▇▇▇ Permits"). ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its Subsidiaries
are in compliance with the terms of the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Permits,
except where the failure so to comply would not reasonably be
expected to have a Material Adverse Effect on ▇▇▇▇▇▇-▇▇▇▇▇▇▇. Except
as disclosed in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC Reports filed prior to the
date of this Agreement, the businesses of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its
Subsidiaries are not being conducted in violation of, and ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ has not received any notices of violations with respect to,
any law, ordinance or regulation of any Governmental Entity, except
for possible violations which would not reasonably be expected to
have a Material Adverse Effect on ▇▇▇▇▇▇-▇▇▇▇▇▇▇.
(h) Absence of Certain Changes or Events. Except for liabilities
incurred in connection with this Agreement and the Stock Option Agreement, or
the transactions contemplated hereby, except as disclosed in the ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ SEC Reports filed prior to the date of this Agreement, except for any
FDA action which may arise out of the Advisory Committee meeting related to
Rezulin that is currently scheduled for March 26, 1999, and except as
permitted by Section 4.2, since January 1, 1999, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its
Subsidiaries have conducted their business only in the ordinary course and
there has not been (i) any change, circumstance or event which has had, or
would reasonably be expected to have, a Material Adverse Effect on ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ or (ii) any action taken by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or any of its Subsidiaries
during the period from January 1, 1999 through the date of this Agreement
that, if taken during the period from the date of this Agreement through the
Effective Time, would constitute a breach of Section 4.2.
(i) Environmental Matters. Except as would not reasonably be
expected to have a Material Adverse Effect on ▇▇▇▇▇▇-▇▇▇▇▇▇▇, (i) the
operations of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and, to the Knowledge of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, any
entity for which ▇▇▇▇▇▇-▇▇▇▇▇▇▇ may be responsible, has been and is in
compliance with all applicable Environmental Laws (as defined in Section
3.2(j)) and with all Environmental Permits (as defined in Section 3.2(j)),
and (ii) there are no pending or, to the Knowledge of ▇▇▇▇▇▇-▇▇▇▇▇▇▇,
threatened, actions, suits, claims, investigations or other proceedings
(collectively, "Actions") under or pursuant to Environmental Laws against
▇▇▇▇▇▇-▇▇▇▇▇▇▇ or, to the Knowledge of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, any entity for which
▇▇▇▇▇▇-▇▇▇▇▇▇▇ may be responsible, or involving any real property currently
or, to the Knowledge of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, formerly owned, operated or leased
by ▇▇▇▇▇▇-▇▇▇▇▇▇▇.
(j) Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any
broker's or finder's fee or any other similar commission or fee in connection
with any of the transactions contemplated by this Agreement or the Stock
Option Agreement, based upon arrangements made by or on behalf of ▇▇▇▇▇▇-
▇▇▇▇▇▇▇, except ▇▇▇▇▇▇▇, Sachs & Co. (the "▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial
Advisor"), whose fees and expenses will be paid by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ in
accordance with ▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ agreement with such firm.
(k) Opinion of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial Advisor. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ has
received the opinion of the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial Advisor, dated the date
of this Agreement, to the effect that, as of such date, the Exchange Ratio is
fair, from a financial point of view, to ▇▇▇▇▇▇-▇▇▇▇▇▇▇, a copy of which
opinion has been made available to Agouron.
(l) Accounting Matters. To the Knowledge of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, neither
▇▇▇▇▇▇-▇▇▇▇▇▇▇ nor any of its affiliates has taken or agreed to take any
action that would prevent ▇▇▇▇▇▇-▇▇▇▇▇▇▇ from accounting for the Merger as a
"pooling of interests". At or prior to the Closing Date, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ has
received a letter from its independent public accountants addressed to
▇▇▇▇▇▇-▇▇▇▇▇▇▇, to the effect that, based upon representations provided by
▇▇▇▇▇▇-▇▇▇▇▇▇▇, accounting for the Merger as a pooling of interests under
Opinion 16 of the Accounting Principles Board, applicable SEC rules and
regulations and other authoritative literature is appropriate if the Merger
is consummated and closed as contemplated by this Agreement.
3.2 Representations and Warranties of Agouron. Except as set forth
in the Agouron Disclosure Schedule delivered by Agouron to ▇▇▇▇▇▇-▇▇▇▇▇▇▇
prior to the execution of this Agreement (the "Agouron Disclosure Schedule")
(each section of which qualifies the correspondingly numbered representation
and warranty or covenant to the extent specified therein), Agouron represents
and warrants to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ as follows:
(a) Organization, Standing and Power; Subsidiaries.
(i) Each of Agouron and each of its Subsidiaries is a
corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or organization,
has the requisite power and authority to own, lease and operate its
properties and to carry on its business as now being conducted,
except where the failure to be so organized, existing and in good
standing or to have such power and authority would not reasonably be
expected to have a Material Adverse Effect on Agouron and is duly
qualified and in good standing to do business in each jurisdiction in
which the nature of its business or the ownership or leasing of its
properties makes such qualification necessary other than in such
jurisdictions where the failure so to qualify or to be in good
standing would not reasonably be expected to have a Material Adverse
Effect on Agouron. The copies of the certificate of incorporation
and by-laws of Agouron which were previously furnished or made
available to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ are true, complete and correct copies of
such documents as in effect on the date of this Agreement.
(ii) Exhibit 21 to Agouron's Annual Report on Form 10-K for the
year ended June 30, 1998, as amended ("Agouron 10-K", together with
Agouron's Form 10-Q for the quarterly period ended September 30, 1998
("Agouron September 98 10Q"), the "Agouron Reports") includes all the
Subsidiaries of Agouron which as of the date of this Agreement are
Significant Subsidiaries (as defined in Rule 1-02 of Regulation S-X
of the SEC). All the outstanding shares of capital stock of, or
other equity interests in, each such Significant Subsidiary have been
validly issued and are fully paid and nonassessable and are owned
directly or indirectly by Agouron, free and clear of all Liens and
free of any other restriction (including any restriction on the right
to vote, sell or otherwise dispose of such capital stock or other
ownership interests). Except as set forth in the Agouron Reports,
neither Agouron nor any of its Subsidiaries directly or indirectly
owns any equity or similar interest in, or any interest convertible
into or exchangeable or exercisable for, any corporation,
partnership, joint venture or other business association or entity,
that is or would reasonably be expected to be material to Agouron and
its Subsidiaries taken as a whole.
(b) Capital Structure.
(i) As of December 31, 1998, the authorized capital stock of
Agouron consisted of (A) 75,000,000 shares of Agouron Common Stock,
of which 31,728,847 shares were outstanding and (B) 2,000,000 shares
of Preferred Stock, without par value, none of which were outstanding
and 2,000 shares of which have been designated Series B Participating
Preferred Stock and reserved for issuance upon exercise of the rights
(the "Rights") distributed to the holders of Agouron Common Stock
pursuant to the Amended and Restated Rights Agreement dated as of
November 10, 1998, between Agouron and ▇▇▇▇▇ ▇▇▇▇▇▇ Shareholder
Services, L.L.C., as Rights Agent, as amended (the "Rights
Agreement"). Since December 31, 1998 to the date of this Agreement,
there have been no issuances of shares of the capital stock of
Agouron or any other securities of Agouron other than issuances of
shares (and accompanying Rights) pursuant to options or rights
outstanding as of December 31, 1998 under the Benefit Plans of
Agouron. All issued and outstanding shares of the capital stock of
Agouron are duly authorized, validly issued, fully paid and
nonassessable, and no class of capital stock is entitled to
preemptive rights. There were outstanding as of December 31, 1998 no
options, warrants or other rights to acquire capital stock from
Agouron other than (x) the Rights and (y) options representing in the
aggregate the right to purchase no more than 8,747,636 shares of
Agouron Common Stock (collectively, the "Agouron Stock Options")
under the Agouron Restated 1996 Stock Option Plan, Agouron 1985 Stock
Option Plan, Agouron 1990 Stock Option Plan, Agouron 1998 Stock
Option Plan, Agouron Restated Employee Stock Purchase Plan, the
Alanex Corporation 1993 Stock Plan and the Alanex Corporation 1996
Equity Incentive Plan and other individual Alanex stock option
agreements, as each such plan has been amended (collectively, the
"Agouron Stock Option Plans"). Section 3.2(b) of the Agouron
Disclosure Schedule sets forth a complete and correct list, as of
December 31, 1998, of the number of shares of Agouron Common Stock
subject to Agouron Stock Options or other rights to purchase or
receive Agouron Common Stock granted under the Benefit Plans of
Agouron or otherwise, the dates of grant and the exercise prices
thereof. No options or warrants or other rights to acquire capital
stock from Agouron have been issued or granted since December 31,
1998 to the date of this Agreement, other than pursuant to the Stock
Option Agreement or as permitted under Section 4.1 of this Agreement.
(ii) No bonds, debentures, notes or other indebtedness of
Agouron having the right to vote on any matters on which stockholders
may vote ("Agouron Voting Debt") are issued or outstanding.
(iii) Except as otherwise set forth in this Section 3.2(b), as
of the date of this Agreement, there are no securities, options,
warrants, calls, rights, commitments, agreements, arrangements or
undertakings of any kind to which Agouron or any of its Subsidiaries
is a party or by which any of them is bound obligating Agouron or any
of its Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other voting
securities of Agouron or any of its Subsidiaries or obligating
Agouron or any of its Subsidiaries to issue, grant, extend or enter
into any such security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking. As of the date of this
Agreement, there are no outstanding obligations of Agouron or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any
shares of capital stock of Agouron or any of its Subsidiaries.
(c) Authority; No Conflicts.
(i) Agouron has all requisite corporate power and authority to
enter into this Agreement and the Stock Option Agreement and to
consummate the transactions contemplated hereby and thereby, subject
in the case of the consummation of the Merger to the adoption of this
Agreement by the Required Agouron Vote (as defined in Section
3.2(g)). The execution and delivery of this Agreement and the Stock
Option Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of Agouron, subject in the
case of the consummation of the Merger to the adoption of this
Agreement by the Required Agouron Vote. Each of this Agreement and
the Stock Option Agreement has been duly executed and delivered by
Agouron and constitutes a valid and binding agreement of Agouron,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or affecting
creditors generally or by general equity principles (regardless of
whether such enforceability is considered in a proceeding in equity
or at law) or by an implied covenant of good faith and fair dealing.
(ii) The execution and delivery of this Agreement and the Stock
Option Agreement by Agouron does not or will not, as the case may be,
and the consummation by Agouron of the Merger and the other
transactions contemplated hereby and thereby will not, conflict with,
or result in a Violation pursuant to: (A) any provision of the
certificate of incorporation or by-laws of Agouron or any Subsidiary
of Agouron or (B) except as would not reasonably be expected to have
a Material Adverse Effect on Agouron, subject to obtaining or making
the consents, approvals, orders, authorizations, registrations,
declarations and filings referred to in paragraph (iii) below, any
loan or credit agreement, note, mortgage, bond, indenture, lease,
benefit plan or other agreement, obligation, instrument, permit,
concession, franchise, license, judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to Agouron or any
Subsidiary of Agouron or their respective properties or assets.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is
required by or with respect to Agouron or any Subsidiary of Agouron
in connection with the execution and delivery of this Agreement or
the Stock Option Agreement by Agouron or the consummation of the
Merger and the other transactions contemplated hereby, except the
Necessary Consents and such consents, approvals, orders,
authorizations, registrations, declarations and filings the failure
of which to make or obtain would not reasonably be expected to have a
Material Adverse Effect on Agouron.
(d) Reports and Financial Statements.
(i) Agouron has filed all required registration statements,
prospectuses, reports, schedules, forms, statements and other
documents required to be filed by it with the SEC since July 1, 1998
(collectively, including all exhibits thereto, the "Agouron SEC
Reports"). No Subsidiary of Agouron is required to file any form,
report, registration statement or prospectus or other document with
the SEC. None of the Agouron SEC Reports, as of their respective
dates (and, if amended or superseded by a filing prior to the date of
this Agreement or the Closing Date, then on the date of such filing),
contained or will contain any untrue statement of a material fact or
omitted or will omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
Agouron SEC Reports together with any public announcements in a Dow
▇▇▇▇▇ News Release made by Agouron after the date hereof, taken as a
whole, as of the Effective Time will not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances existing as of the Effective Time, not
misleading. Each of the financial statements (including the related
notes) included in the Agouron SEC Reports presents fairly, in all
material respects, the consolidated financial position and
consolidated results of operations and cash flows of Agouron and its
Subsidiaries as of the respective dates or for the respective periods
set forth therein, all in conformity with GAAP applied on a
consistent basis throughout the periods involved except as otherwise
noted therein, and subject, in the case of the unaudited interim
financial statements, to normal and recurring adjustments that were
not or are not expected to be material in amount. All of such
Agouron SEC Reports, as of their respective dates (and as of the date
of any amendment to the respective Agouron SEC Report), complied as
to form in all material respects with the applicable requirements of
the Securities Act and the Exchange Act and the rules and regulations
promulgated thereunder.
(ii) Except as disclosed in the Agouron Reports filed prior to
the date hereof, since June 30, 1998, Agouron and its Subsidiaries
have not incurred any liabilities that are of a nature that would be
required to be disclosed on a balance sheet of Agouron and its
Subsidiaries or the footnotes thereto prepared in conformity with
GAAP, other than (A) liabilities incurred in the ordinary course of
business or (B) liabilities that would not, either individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect on Agouron.
(e) Information Supplied.
(i) None of the information supplied or to be supplied by
Agouron for inclusion or incorporation by reference in (A) the Form
S-4 will, at the time the Form S-4 is filed with the SEC, at any time
it is amended or supplemented or at the time it becomes effective
under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and (B)
the Proxy Statement will, on the date it is first mailed to Agouron
stockholders or at the time of the Agouron Stockholders Meeting,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under
which they were made, not misleading. The Proxy Statement will
comply as to form in all material respects with the requirements of
the Exchange Act and the Securities Act and the rules and regulations
of the SEC thereunder.
(ii) Notwithstanding the foregoing provisions of this Section
3.2(e), no representation or warranty is made by Agouron with respect
to statements made or incorporated by reference in the Form S-4 or
the Proxy Statement based on information supplied by ▇▇▇▇▇▇-▇▇▇▇▇▇▇
or Merger Sub for inclusion or incorporation by reference therein.
(f) Board Approval. The Board of Directors of Agouron, by
resolutions duly adopted by unanimous vote of those voting at a meeting duly
called and held and not subsequently rescinded or modified in any way (the
"Agouron Board Approval"), has duly (i) determined that this Agreement and
the Merger are fair to and in the best interests of Agouron and its
stockholders, (ii) approved this Agreement and the Stock Option Agreement,
and the Merger, (iii) recommended that the stockholders of Agouron adopt this
Agreement, and approve the Merger and directed that this Agreement, and the
transactions contemplated hereby be submitted for consideration by Agouron's
stockholders at the Agouron Stockholders Meeting and (iv) confirmed that the
Agouron Stock Options will not accelerate as a result of the Merger unless
the optionee is involuntarily terminated by the Surviving Corporation within
one year of the Effective Time. To the Knowledge of Agouron, no state
takeover statute is applicable to the Merger or the Stock Option Agreement or
the other transactions contemplated hereby and thereby.
(g) Vote Required. The affirmative vote of the holders of a
majority of the outstanding shares of Agouron Common Stock to approve the
Merger (the "Required Agouron Vote") is the only vote of the holders of any
class or series of Agouron capital stock necessary to adopt this Agreement
and approve the Merger and the other transactions contemplated hereby.
(h) Litigation; Compliance with Laws.
(i) Except as disclosed in the Agouron Reports filed prior to
the date of this Agreement, there is no suit, action, investigation
or proceeding pending or, to the Knowledge of Agouron, threatened,
against or affecting Agouron or any Subsidiary of Agouron having, or
which would reasonably be expected to have a Material Adverse Effect
on Agouron, nor is there any judgment, decree, injunction, rule or
order of any Governmental Entity or arbitrator outstanding against
Agouron or any Subsidiary of Agouron having, or which reasonably
would be expected to have a Material Adverse Effect on Agouron.
(ii) Except as disclosed in the Agouron Reports filed prior to
the date of the Agreement and except as would not reasonably be
expected to have a Material Adverse Effect on Agouron, Agouron and
its Subsidiaries hold all permits, licenses, variances, exemptions,
orders and approvals of all Governmental Entities necessary for the
operation of the businesses of Agouron and its Subsidiaries, taken as
a whole (the "Agouron Permits"). Agouron and its Subsidiaries are in
compliance with the terms of the Agouron Permits, except where the
failure so to comply would not reasonably be expected to have a
Material Adverse Effect on Agouron. Except as disclosed in the
Agouron Reports filed prior to the date of this Agreement, the
businesses of Agouron and its Subsidiaries are not being conducted in
violation of, and Agouron has not received any notices of violations
with respect to, any law, ordinance or regulation of any Governmental
Entity, except for possible violations which would not reasonably be
expected to have a Material Adverse Effect on Agouron.
(i) Absence of Certain Changes or Events. Except for liabilities
incurred in connection with this Agreement and the Stock Option Agreement or
the transactions contemplated hereby and thereby, except as disclosed in the
Agouron Reports filed prior to the date of this Agreement, and except as
permitted by Section 4.1, since June 30, 1998, Agouron and its Subsidiaries
have conducted their business only in the ordinary course and there has not
been (i) any change, circumstance or event which has had, or would reasonably
be expected to have, a Material Adverse Effect on Agouron or (ii) any action
taken by Agouron or any of its Subsidiaries during the period from June 30,
1998 through the date of this Agreement that, if taken during the period from
the date of this Agreement through the Effective Time, would constitute a
breach of Section 4.1.
(j) Environmental Matters. Except as disclosed in Section 3.2(j) of
the Agouron Disclosure Schedule and except as would not reasonably be
expected to have a Material Adverse Effect on Agouron, (i) the operations of
Agouron and its Subsidiaries and, to the Knowledge of Agouron, any entity
for which any of them may be responsible, have been and are in compliance
with all applicable Environmental Laws and with all Environmental Permits,
(ii) there are no pending or, to the Knowledge of Agouron, threatened,
actions, suits, claims, investigations or other proceedings (collectively,
"Actions") under or pursuant to Environmental Laws against Agouron or its
Subsidiaries or, to the Knowledge of Agouron, any entity for which any of
them may be responsible, or involving any real property currently or, to the
Knowledge of Agouron, formerly owned, operated or leased by Agouron or its
Subsidiaries, (iii) Agouron and its Subsidiaries and, to the Knowledge of
Agouron, any entity for which any of them may be responsible, are not subject
to any Environmental Liabilities and, to the Knowledge of Agouron, no facts,
circumstances or conditions relating to, arising from, associated with or
attributable to any real property currently or, to the Knowledge of Agouron,
formerly owned, operated or leased by Agouron or its Subsidiaries or any
entity for which any of them may be responsible, or operations thereon would
reasonably be expected to result in Environmental Liabilities, (iv) to the
Knowledge of Agouron, all real property owned and all real property operated
or leased by Agouron or its Subsidiaries or any entity for which any of them
may be responsible is free of Hazardous Materials in conditions or
concentrations that would reasonably be expected to have an adverse effect on
human health or the environment and none of Agouron, any of its Subsidiaries
and any entity for which any of them may be responsible has disposed of any
Hazardous Materials on or about such premises, (v) to the Knowledge of
Agouron, no release, discharge, spillage or disposal of any Hazardous
Material and no soil, water or air contamination by any Hazardous Material
has occurred or is occurring in, from or on the premises the result of which
would have a Material Adverse Effect on Agouron, and (vi) Agouron has
provided to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ all Environmental Reports prepared or dated since
January 1, 1990, and any prior material Environmental Reports, in the
possession or control of Agouron or any of its Subsidiaries.
As used in this Agreement, "Environmental Laws" means any and all
laws, rules, orders, regulations, statutes, ordinances, guidelines, codes,
decrees, or other legally enforceable requirements (including, without
limitation, common law) of any international authority, foreign government,
the United States, or any state, local, municipal or other Governmental
Entity, regulating, relating to or imposing liability or standards of conduct
concerning protection of the environment or of human health, or employee
health and safety, including without limitation the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C.
Sections 9601 et seq., the Hazardous Materials Transportation Act, 49 U.S.C.
Sections 1801 et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
Sections 6901 et seq., the Clean Water Act, 33 U.S.C. Sections 1251 et seq.,
the Clean Air Act, 42 U.S.C. Sections 7401 et seq., the Toxic Substances
Control Act, 15 U.S.C. Sections 2601 et seq., the Federal Insecticide,
Fungicide and Rodenticide Act, 7 U.S.C., Sections 136 et seq., Occupational
Safety and Health Act 29 U.S.C. Sections 651 et seq. and the Oil Pollution
Act of 1990, 33 U.S.C. Sections 2701 et seq., as such laws have been amended
or supplemented, and the regulations promulgated pursuant thereto, and all
analogous state or local statutes. As used in this Agreement, "Environmental
Liabilities" with respect to any person means any and all liabilities of or
relating to such person or any of its Subsidiaries (including any entity
which is, in whole or in part, a predecessor of such person or any of such
Subsidiaries), whether vested or unvested, contingent or fixed, actual or
potential, known or unknown, which (i) arise under or relate to matters
covered by Environmental Laws or with respect to Hazardous Materials, and
(ii) relate to actions occurring or conditions existing on or prior to the
Closing Date. As used in this Agreement, "Environmental Permits" means any
and all permits, consents, licenses, approvals, registrations,
notifications, exemptions and any other authorization required under any
applicable Environmental Law. As used in this Agreement, "Environmental
Report" means any report, study, assessment, audit, or other similar document
that addresses any issue of noncompliance with, or liability under, any
Environmental Law that may affect Agouron or any of its Subsidiaries. As
used in this Agreement, "Hazardous Materials" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos,
pollutants, contaminants, radioactivity, and any other substances of any
kind, whether or not any such substance is defined as hazardous or toxic
under any Environmental Law, that is regulated pursuant to or could give rise
to liability under any Environmental Law.
(k) Intellectual Property. Except as would not reasonably be
expected to have a Material Adverse Effect on Agouron, (a) Agouron and each
of its Subsidiaries owns, or is licensed to use (in each case, free and clear
of any Liens), all Intellectual Property used in or necessary for the conduct
of its business as currently conducted; (b) to the Knowledge of Agouron, the
use of any Intellectual Property by Agouron and its Subsidiaries does not
infringe on or otherwise violate the rights of any Person and is in
accordance with any applicable license pursuant to which Agouron or any
Subsidiary acquired the right to use any Intellectual Property; (c) to the
Knowledge of Agouron, no Person is challenging, infringing on or otherwise
violating any right of Agouron or any of its Subsidiaries with respect to any
Intellectual Property owned by or licensed to Agouron or its Subsidiaries;
and (d) neither Agouron nor any of its Subsidiaries has received any written
notice of any pending claim with respect to any Intellectual Property used by
Agouron and its Subsidiaries and to the Knowledge of Agouron no Intellectual
Property owned or licensed by Agouron or its Subsidiaries is being used or
enforced in a manner that would result in the abandonment, cancellation or
unenforceability of such Intellectual Property.
For purposes of this Agreement, "Intellectual Property" shall mean
trademarks, service marks, brand names, certification marks, trade dress and
other indications of origin, the goodwill associated with the foregoing and
registrations in any jurisdiction of, and applications in any jurisdiction to
register, the foregoing, including any extension, modification or renewal of
any such registration or application; inventions, discoveries and ideas,
whether patentable or not, in any jurisdiction; patents, applications for
patents (including, without limitation, divisions, continuations, continued
prosecution applications, continuations in part and renewal applications),
and any renewals, extensions or reissues thereof, in any jurisdiction; know-
how, trade secrets and confidential information and rights in any
jurisdiction to limit the use or disclosure thereof by any person; writings
and other works, whether copyrightable or not, in any jurisdiction;
registrations or applications for registration of copyrights in any
jurisdiction, and any renewals or extensions thereof; and any similar
intellectual property or proprietary rights.
(l) Rights Agreement. The Board of Directors has approved an
amendment (such amendment is hereinafter referred to as the "Rights
Amendment") to the Rights Agreement so as to provide that: neither ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ nor Merger Sub will become an "Acquiring Person" and that no "Stock
Acquisition Date" or "Distribution Date" (as such terms are defined in the
Rights Agreement) will occur as a result of the approval, execution and
delivery of this Agreement or the Stock Option Agreement and the consummation
of the transactions contemplated hereby or thereby, and the Rights (as
defined in the Rights Agreement) will expire immediately prior to the
Effective Time. Promptly following the execution and delivery of this
Agreement, Agouron shall take all action necessary to make the Rights
Amendment effective.
(m) Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any
broker's or finder's fee or any other similar commission or fee in connection
with any of the transactions contemplated by this Agreement or the Stock
Option Agreement, based upon arrangements made by or on behalf of Agouron
except PaineWebber Incorporated and Westview Securities Inc. (the "Agouron
Financial Advisors"), whose fees and expenses will be paid by Agouron in
accordance with Agouron's agreements with such firms, copies of which have
been provided to ▇▇▇▇▇▇-▇▇▇▇▇▇▇.
(n) Opinion of Agouron Financial Advisor. Agouron has received the
opinion of PaineWebber Incorporated, dated the date of this Agreement, to the
effect that, as of such date, the Merger Consideration is fair, from a
financial point of view, to the holders of Agouron Common Stock, a copy of
which opinion has been made available to ▇▇▇▇▇▇-▇▇▇▇▇▇▇.
(o) Accounting Matters. To the Knowledge of Agouron, neither
Agouron nor any of its affiliates has taken or agreed to take any action that
would prevent ▇▇▇▇▇▇-▇▇▇▇▇▇▇ from accounting for the Merger as a "pooling of
interests". At or prior to the Closing Date, Agouron has received a letter
from its independent public accountants addressed to Agouron, to the effect
that, based upon representations provided by Agouron, accounting for the
Merger as a pooling of interests under Opinion 16 of the Accounting
Principles Board, applicable SEC rules and regulations and other
authoritative literature is appropriate if the Merger is consummated and
closed as contemplated by this Agreement.
(p) Taxes. Except as previously discussed between the parties,
Agouron and each of its Subsidiaries (which, for the purposes of this Section
3.2(p), shall include any predecessor of any Subsidiary and any incorporated
or unincorporated organization in which Agouron alone or together with its
Subsidiaries holds an interest of 40% or more of profits or losses) (i) have
prepared in good faith and duly and timely filed (taking into account any
extension of time within which to file) all material Tax Returns (as defined
below) required to be filed by any of them and all such filed Tax Returns are
complete and accurate in all material respects; (ii) to the Knowledge of
Agouron, have paid all Material Taxes that are shown as due and payable on
such filed Tax Returns or that Agouron or any of its Subsidiaries are
obligated to pay without the filing of a Tax Return; (iii) to the Knowledge
of Agouron, have paid all other Material charges, claims and assessments
received to date in respect of Taxes other than those being contested in good
faith for which provision has been made in accordance with GAAP on the most
recent balance sheet included in the Agouron 10-K; (iv) have properly accrued
on the balance sheet, in accordance with GAAP, all material contingent or
deferred Taxes that have not become due; (v) to the Knowledge of Agouron,
have withheld from amounts owing to any employee, creditor or other Person
all Material Taxes required by law to be withheld and have paid over to the
proper governmental authority in a timely manner all such withheld amounts to
the extent due and payable; (vi) as of the date hereof, have neither extended
nor waived any applicable statute of limitations with respect to United
States federal or state income or franchise Taxes and have not otherwise
agreed to any extension of time with respect to a United States federal or
state income or franchise Tax assessment or deficiency; (vii) have never been
members of any consolidated group for income tax purposes other than the
consolidated group of which Agouron is the common parent; and (viii) are not
parties to any tax sharing agreement or arrangement other than with each
other. As of the date hereof, there are not pending or threatened in writing
any audits, examinations, investigations, litigation, or other proceedings in
respect of Taxes of Agouron or any Subsidiary. No liens for Taxes exist with
respect to any of the assets or properties of Agouron or its Subsidiaries,
except for statutory liens for Taxes not yet due or payable or that are being
contested in good faith. Agouron has made available to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ true
and correct copies of the United States federal income Tax Returns filed by
Agouron and its Subsidiaries for each of the fiscal years ended June 30,
1998, 1997 and 1996. There is no contract or agreement, plan or arrangement
by Agouron or its Subsidiaries covering any person that, individually or
collectively, could give rise to the payment of any amount that would not be
deductible by Agouron or its Subsidiaries by reason of Section 280G of the
Code or would constitute compensation in excess of the limitation set forth
in Section 162(m) of the Code. As used in clauses (ii), (iii), and (v) of
this Section 3.2(p), the term "Material" shall mean an amount which, in the
aggregate, exceeds $1,000,000.
As used in this Agreement, (i) the term "Tax" (including, with
correlative meaning, the terms "Taxes" and "Taxable") includes all federal,
state, local and foreign income, profits, premium, franchise, gross receipts,
environmental, customs duty, capital stock, severance, stamp, payroll, sales,
employment, unemployment, disability, use, property, withholding, excise,
production, value added, occupancy and other taxes, duties or governmental
levies of any nature whatsoever, together with all interest, penalties and
additions imposed with respect to such amounts or filing requirements and any
interest in respect of such penalties and additions, and (ii) the term "Tax
Return" includes all returns and reports (including elections, declarations,
disclosures, schedules, estimates, information returns, claim for refund, and
amended returns) required to be supplied to a Tax authority relating to
Taxes.
(q) Certain Contracts. As of the date hereof except as filed as
part of the Agouron Reports, neither Agouron nor any of its Subsidiaries is a
party to or bound by (i) any "material contract" (as such term is defined in
Item 601(b)(10) of Regulation S-K of the SEC) or (ii) any non-competition
agreement or any other agreement or arrangement that limits or otherwise
restricts Agouron or any of its Subsidiaries or any of their respective
affiliates or any successor thereto or that would, after the Effective Time,
to the Knowledge of Agouron, limit or restrict ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or any of its
affiliates (including the Surviving Corporation) or any successor thereto,
from engaging or competing in any line of business or in any geographic area,
which agreement or arrangement would reasonably be expected to have a
Material Adverse Effect on ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its Subsidiaries (including the
Surviving Corporation and its Subsidiaries), taken together, after giving
effect to the Merger.
(r) Employee Benefit Plans.
(i) Section 3.2(r)(i) of the Agouron Disclosure Schedule contains a
true and complete list of each "employee benefit plan" (within the
meaning of Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), (including without limitation
multiemployer plans within the meaning of ERISA Section 3(37)),
stock purchase, stock option, severance, employment, change-in-
control, fringe benefit, collective bargaining, bonus, incentive,
deferred compensation and all other employee benefit plans,
agreements, programs, policies or other arrangements, whether or not
subject to ERISA, whether formal or informal, oral or written,
legally binding or not under which any employee or former employee of
Agouron or any of its Subsidiaries has any present or future right to
benefits or under which Agouron or any of its Subsidiaries has any
present or future liability. All such plans, agreements, programs,
policies and arrangements shall be collectively referred to as the
"Plans".
(ii) With respect to each Plan, Agouron has delivered or made
available to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ a current, accurate and complete copy (or,
to the extent no such copy exists, an accurate description) thereof
and, to the extent applicable, (A) any related trust agreement,
annuity contract or other funding instrument; (B) the most recent
determination letter; (C) any summary plan description and other
written communications (or a description of any oral communications)
by Agouron or any of its Subsidiaries to its employees concerning the
extent of the benefits provided under a Plan; and (D) for the three
most recent years: (I) the Form 5500 and attached schedules;
(II) audited financial statements; (III) actuarial valuation reports;
and (IV) attorney responses to auditors' requests for information.
(iii) (A) Each Plan has been established and administered in
accordance with its terms, and in compliance with the applicable
provisions of ERISA, the Code and other applicable laws, rules and
regulations and if intended to be qualified within the meaning of
Section 401(a) of the Code is so qualified; (B) with respect to any
Plan, no actions, suits or claims (other than routine claims for
benefits in the ordinary course) are pending or threatened;
(C) neither Agouron nor any other party has engaged in a prohibited
transaction, as such term is defined under Section 4975 of the Code
or Section 406 of ERISA, which would subject Agouron, the Surviving
Corporation, any of their Subsidiaries, Merger Sub or ▇▇▇▇▇▇-▇▇▇▇▇▇▇
to any taxes, penalties or other liabilities under Section 4975 of
the Code or Sections 409 or 502(i) of ERISA and Agouron has no other
liability under the Code with respect to any Plan, including
liability under any other provision of Chapter 43 of the Code;
(D) no Plan provides for an increase in benefits on or after the
Closing Date; and (E) each Plan may be amended or terminated
without obligation or liability (other than those obligations and
liabilities for which specific assets have been set aside in a trust
or other funding vehicle or reserved for on Agouron's September 30,
1998 balance sheet included in the Agouron September 98 10Q).
(iv) Neither Agouron nor any member of its Controlled Group has
ever maintained, sponsored, administered or contributed to an
employee benefit plan subject to Title IV of ERISA, a multiemployer
plan (within the meaning of Section 4001(a)(3) of ERISA) or a welfare
benefit plan that provide coverage or benefits to former employees
(other than benefit continuation rights under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended).
(v) No Plan exists which could result in the payment to any
employee of Agouron or any of its Subsidiaries of any money or other
property or rights or accelerate or provide any other rights or
benefits to any such employee as a result of the transactions
contemplated by this Agreement.
(vi) All individuals who are or have been eligible to participate
in the Plans based upon the eligibility provisions set forth therein
or under applicable law have been provided with a timely opportunity
to participate.
(s) Labor Matters. (1) Neither Agouron nor any of its Subsidiaries
is a party to, or bound by, any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor organization;
(2) to the Knowledge of Agouron, neither Agouron nor any of its Subsidiaries
is the subject of any proceeding asserting that it or any Subsidiary has
committed an unfair labor practice or sex, age, race or other discrimination
or seeking to compel it to bargain with any labor organization as to wages or
conditions of employment; (3) there are no current or threatened
organizational activities or demands for recognition by a labor organization
seeking to represent employees of Agouron or any Subsidiary, or labor strike
and no such activities have occurred during the past 24 months; (4) no
grievance, arbitration, complaint or investigation is pending or, to the
Knowledge of Agouron, threatened against Agouron or any of its Subsidiaries
which, individually or in the aggregate, would reasonably be expected to have
a Material Adverse Effect with respect to Agouron; (5) to the Knowledge of
Agouron, Agouron and each Subsidiary is in compliance with all applicable
laws (domestic and foreign), agreements, contracts, and policies relating to
employment, employment practices, wages, hours, and terms and conditions of
employment except for failures so to comply, if any, that individually or in
the aggregate could not reasonably be expected to have a Material Adverse
Effect with respect to Agouron; (6) Agouron has complied in all material
respects with its payment obligations to all employees of Agouron and its
Subsidiaries in respect of all wages, salaries, commissions, bonuses,
benefits and other compensation due and payable to such employees under any
Agouron policy, practice, agreement, plan, program or any statute or other
law; (7) Agouron is not liable for any severance pay or other payments to any
employee or former employee arising from the termination of employment under
any benefit or severance policy, practice, agreement, plan, or program of
Agouron, nor to the Knowledge of Agouron will Agouron have any liability
which exists or arises, or may be deemed to exist or arise, under any
applicable law or otherwise, as a result of or in connection with the
transactions contemplated hereunder or as a result of the termination by
Agouron of any persons employed by Agouron or any of its Subsidiaries on or
prior to the Effective Time of the Merger except as required by Code Section
4980B; and (8) Agouron is in compliance with its obligations pursuant to the
Worker Adjustment and Retraining Notification Act of 1988 ("WARN") and part 6
and 7 of Title I of ERISA, to the extent applicable, and all other employee
notification and bargaining obligations arising under any collective
bargaining agreement or statute.
(t) Affiliate Transactions. Except as disclosed in Section 3.2(t)
of the Agouron Disclosure Schedule, there are no material contracts,
commitments, agreements, arrangements or other transactions between Agouron
or any of its Subsidiaries, on the one hand, and any (i) officer or director
of Agouron or any of its Subsidiaries, (ii) record or beneficial owner of
five percent or more of the voting securities of Agouron or (iii) affiliate
(as such term is defined in Regulation 12b-2 promulgated under the Exchange
Act) of any such officer, director or beneficial owner, on the other hand.
(u) Material Contract Defaults.
(i) Agouron has provided or made available to ▇▇▇▇▇▇-▇▇▇▇▇▇▇
copies, and has provided a true and correct list to ▇▇▇▇▇▇-▇▇▇▇▇▇▇,
of all material contracts, agreements, commitments, arrangements,
leases, policies or other instruments to which it or any of its
Subsidiaries is a party or by which it or any such Subsidiary is
bound ("Material Contracts"). Neither Agouron nor any of its
Subsidiaries is, or has received any notice or has any Knowledge
that any other party is, in default (or would be in default but for
the lapse of time or the giving of notice or both) in any respect
under any such Material Contract, except for those defaults which
could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect on Agouron.
(ii) Agouron has made available to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ (x) true and
correct copies of all loan or credit agreements, notes, bonds,
mortgages, indentures and other agreements and instruments pursuant
to which any indebtedness for borrowed money of Agouron or any of
its Subsidiaries in an aggregate principal amount in excess of
$200,000 is outstanding or may be incurred and (y) accurate
information regarding the respective principal amounts currently
outstanding thereunder.
(v) Insurance. Agouron has provided or made available to ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ true, correct and complete copies of all policies of insurance to
which Agouron is a party or is a beneficiary or named insured. Agouron
maintains insurance coverage with reputable insurers in such amounts and
covering such risks as are in accordance with normal industry practice for
companies engaged in businesses similar to that of Agouron (taking into
account the cost and availability of such insurance).
(w) Year 2000 Compliance. (i) Except as disclosed on Section 3.2(w)
of the Agouron Disclosure Schedule, all computer hardware, firmware,
software, systems, databases, devices, machinery, equipment and related items
(including embedded microcontrollers in non-computer equipment), embedded
within their products, and/or necessary for Agouron and its Subsidiaries to
carry on their business as presently conducted ("Systems") are Year 2000
Compliant, or will be Year 2000 Compliant in sufficient time so as to avoid
causing a Material Adverse Effect with respect to Agouron. For purposes
hereof, "Year 2000 Compliant" means, when used with respect to the Systems,
that such Systems, whether used alone or in combination, will retain full
functionality and, without interruption, will correctly differentiate between
years, in different centuries, and will accurately process date/time data
from, into and between the twentieth and twenty-first centuries, including
leap year calculations and unusual date situations (e.g., 9/9/99).
(ii) Agouron and its Subsidiaries have (A) undertaken an assessment
of all Systems that could be adversely affected by a failure to be Year 2000
Compliant on a timely basis, (B) developed a plan and time line for becoming,
and for ensuring that their material suppliers become, Year 2000 Compliant on
a timely basis and (C) to date, implemented such plan in accordance with such
timetable in all material respects. Based on such inventory, review and
assessment, Agouron hereby represents and warrants to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ that the
estimated total remaining cost of rendering the Systems Year 2000 Compliant
is not expected to exceed $1,000,000.
(x) Supply. As of the date hereof, to the Knowledge of Agouron,
there are no circumstances or facts concerning third party suppliers of
active ingredient, bulk product and finished product to Agouron (as they
relate to Viracept) that would have a material adverse effect on the
continued supply of such materials.
(y) Investigational Compounds and Viracept. As of the date hereof,
Agouron has provided to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ all material information relating to
AG3340, ▇▇▇▇▇▇, ▇▇▇▇▇▇, AG7088 and AG1776 (the "Investigational Compounds")
and Viracept and to the Knowledge of Agouron, there are no circumstances or
facts relating to the Investigational Compounds or Viracept that would
individually or in the aggregate be reasonably likely to have a material
adverse effect on the development of the Investigational Compounds or the
marketing of Viracept.
(z) Generic Drug Enforcement Act. To the Knowledge of Agouron,
none of the individuals set forth on Exhibit 3.2(z) have ever (i) been
employed or contracted for services by Agouron, or (ii) contributed to the
development of any of the Investigational Compounds.
3.3 Representations and Warranties of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and Merger Sub.
▇▇▇▇▇▇-▇▇▇▇▇▇▇ and Merger Sub represent and warrant to Agouron as follows:
(a) Organization. Merger Sub is a corporation duly incorporated,
validly existing and in good standing under the laws of California and Merger
Sub is a direct wholly-owned subsidiary of ▇▇▇▇▇▇-▇▇▇▇▇▇▇.
(b) Corporate Authorization. Merger Sub has all requisite corporate
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance by
Merger Sub of this Agreement and the consummation by Merger Sub of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Merger Sub. This Agreement has been duly
executed and delivered by Merger Sub and constitutes a valid and binding
agreement of Merger Sub, enforceable against it in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors generally or by general equity principles (regardless of whether
such enforceability is considered in a proceeding in equity or at law) or by
an implied covenant of good faith and fair dealing.
(c) Non-Contravention. The execution, delivery and performance by
Merger Sub of this Agreement and the consummation by Merger Sub of the
transactions contemplated hereby do not and will not contravene or conflict
with the certificate of incorporation or by-laws of Merger Sub.
(d) No Business Activities. Merger Sub has not conducted any
activities other than in connection with the organization of Merger Sub, the
negotiation and execution of this Agreement and the consummation of the
transactions contemplated hereby. Merger Sub has no Subsidiaries.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
4.1 Conduct of Business of Agouron Pending the Merger. Agouron
covenants and agrees that, during the period from the date hereof to the
Effective Time, unless ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall otherwise agree in writing in
advance, the businesses of Agouron and its Subsidiaries shall be conducted
only in, and Agouron and its Subsidiaries shall not take any action except
in, the ordinary course of business and in a manner consistent with past
practice and in compliance with applicable laws; and Agouron and its
Subsidiaries shall each use its commercially reasonable efforts to preserve
substantially intact the business organization of Agouron and its
Subsidiaries, to keep available the services of the present officers,
significant employees and consultants of Agouron and its Subsidiaries and to
preserve the present relationships of Agouron and its subsidiaries with such
of the customers, suppliers, licensors, licensees, or distributors with which
Agouron or any of its Subsidiaries has significant business relations. By
way of amplification and not limitation, neither Agouron nor any of its
Subsidiaries shall, between the date of this Agreement and the Effective
Time, except as set forth in Section 4.1 of the Agouron Disclosure Schedule,
directly or indirectly do, or propose or commit to do, any of the following
without the prior written consent of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, which consent shall not
be unreasonably delayed (but may be withheld):
(a) Amend its Certificate of Incorporation or By-Laws or
equivalent organizational documents;
(b) Issue, deliver, sell, pledge, dispose of or encumber, or
authorize or commit to the issuance, sale, pledge, disposition or
encumbrance of, (A) any shares of capital stock of any class, or any
options, warrants, convertible securities or other rights of any kind
to acquire any shares of capital stock, or any other ownership
interest (including but not limited to stock appreciation rights or
phantom stock), of Agouron or any of its Subsidiaries (except for the
issuance of up to 6,108,552 shares of Agouron Common Stock issuable
upon exercise of outstanding options granted under the Agouron Stock
Option Plans) or (B) any assets of Agouron or any of its
Subsidiaries, except for sales of products and payments made pursuant
to existing contracts in the ordinary course of business and in a
manner consistent with past practice;
(c) Declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock;
(d) Reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock;
(e) (i) Acquire (by merger, consolidation or acquisition of
stock or assets) any corporation, partnership or other business
organization or division thereof or (except for the purchase of
inventory in the ordinary course of business) any assets; (ii)
transfer, lease, mortgage, or otherwise dispose of or subject to any
lien any of its assets (including capital stock of Subsidiaries),
(iii) incur any indebtedness for borrowed money or issue any debt
securities or assume, guarantee (other than guarantees for purchase
orders made in the ordinary course of business) or endorse, or
otherwise as an accommodation become responsible for, the obligations
of any person, or make any loans, advances or capital contributions
to, or investments in, any other person (other than borrowings
incurred with the prior written consent of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ (which
consent shall not be unreasonably withheld or delayed), in an
aggregate amount not to exceed $5,000,000); (iv) enter into any
material contract or agreement or enter into, or amend or terminate
any joint venture arrangements; (v) enter into any agreement as
licensee or licensor, (vi) enter into any commitments or
transactions material, individually or in the aggregate, to Agouron
and its Subsidiaries taken as a whole; (vii) authorize any single
capital expenditure which is in excess of $300,000 or capital
expenditures which are, in the aggregate, in excess of $750,000 for
Agouron and its Subsidiaries taken as a whole other than capital
expenditures reflected in Agouron's fiscal 1998 budget, a copy of
which has been delivered to ▇▇▇▇▇▇-▇▇▇▇▇▇▇; or (viii) enter into or
amend (other than a non-material amendment) any contract, agreement,
commitment or arrangement with respect to any of the matters set
forth in this Section 4.1(e);
(f) Except to the extent required under this Agreement or under
any existing employee and director benefit plans, agreements or
arrangements as in effect on the date of this Agreement and
previously delivered to ▇▇▇▇▇▇-▇▇▇▇▇▇▇, increase the compensation or
fringe benefits of any of its directors, officers or employees,
except for increases in salary or wages of employees of Agouron or
its Subsidiaries in the ordinary course of business in accordance
with past practice and bonuses paid for fiscal year 1998 in
accordance with Section 5.6(a) hereof, or grant any severance or
termination pay not currently required to be paid under existing
severance plans or enter into, or amend, any employment, consulting
or severance agreement or arrangement with any present or former
director, officer or other employee of Agouron or any of its
Subsidiaries, or establish, adopt, enter into or amend or terminate
any collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement,
deferred compensation, employment, termination, welfare, severance or
other plan, agreement, trust, fund, policy or arrangement for the
benefit of any directors, officers or employees;
(g) Except as may be required as a result of a change in law or
in generally accepted accounting principles, change any of the
accounting practices or principles used by it;
(h) Take, or permit any of its Subsidiaries to take, any
action that (without regard to any action taken or agreed to be taken
by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or any of its affiliates) would prevent (x) ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ from accounting for the business combination to be effected
by the Merger as a pooling of interests or (y) the Merger from
qualifying as a reorganization within the meaning of Section 368(a)
of the Code;
(i) Make any Tax election or settle or compromise any material
federal, state, local or foreign Tax liability, change any annual tax
accounting period, change any method of Tax accounting, enter into
any closing agreement relating to any Tax, surrender any right to
claim a Tax refund, or consent to any extension or waiver of the
limitations period applicable to any Tax claim or assessment;
(j) Settle or compromise any pending or threatened suit, action
or claim which is material or which relates to the transactions
contemplated hereby;
(k) Adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization
or other reorganization of Agouron or any of its Subsidiaries (other
than the Merger);
(l) Pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the
ordinary course of business and consistent with past practice, of
liabilities reflected or reserved against in the financial statements
of Agouron or incurred in the ordinary course of business and
consistent with past practice;
(m) Effectuate a "plant closing" or "mass layoff", as those
terms are defined in WARN, affecting in whole or in part any site of
employment, facility, operating unit or employee of Agouron or any of
its Subsidiaries;
(n) Fail to maintain in full force and effect the existing
insurance policies covering Agouron and its Subsidiaries and their
respective properties, assets and businesses or comparable
replacement policies to the extent available for a cost not exceeding
the current cost of such policy;
(o) Except as provided in Section 3.2(l), amend, modify or
waive any provision of the Rights Agreement, and shall not take any
action to redeem the Rights or render the Rights inapplicable to any
transaction (other than the Merger);
(p) Take, or offer or propose to take, or agree to take in
writing or otherwise, any of the actions described in Sections 4.1(a)
through 4.1(o) (other than an action described in Section 4.1(k) or
4.1(o), to the extent such action is permitted pursuant to Section
5.5) or any action which would make any of the representations or
warranties of Agouron contained in this Agreement untrue and
incorrect as of the date when made if such action had then been taken
or would result in any of the conditions set forth in Article VI not
being satisfied or materially delay the Closing.
Between the date of this Agreement and the Effective Time, Agouron
and its Subsidiaries shall:
(A) Notify and consult with ▇▇▇▇▇▇-▇▇▇▇▇▇▇ immediately (i)
after receipt of any material communication from the FDA or, before
giving any material submission to the FDA (including any IND Safety
Reports, Fifteen-day Alert Reports or Field Alert Reports, as the
case may be) with respect to Viracept or any of the Investigational
Compounds or (ii) prior to making any material change to a study
protocol, the addition of new trials, or a material change to the
development timeline for any of the Investigational Compounds; and
(B) Notify and consult with ▇▇▇▇▇▇-▇▇▇▇▇▇▇ prior to making any
material public announcement with respect to Viracept or any of the
Investigational Compounds.
4.2 Conduct of Business of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Pending the Merger. (a)
During the period from the date of this Agreement to the Effective Time of
the Merger (except as otherwise contemplated by the terms of this Agreement),
▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall use its reasonable best efforts to keep available the
services of their current officers and significant employees and preserve
their relationships with customers, suppliers, licensors, licensees, or
distributors having business dealings with them to the end that their
goodwill and ongoing businesses shall be unimpaired at the Effective Time of
the Merger.
(b) Without limiting the generality of the foregoing, during the
period from the date of this Agreement to the Effective Time, ▇▇▇▇▇▇-▇▇▇▇▇▇▇
shall not, without the prior consent of Agouron:
(i) Amend ▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ certificate of incorporation or by-
laws in a manner that would be materially adverse to the holders of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock;
(ii) Combine or reclassify or otherwise alter the ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Common Stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of
its capital stock; or
(iii) Take, or offer or propose to take, or agree to take in
writing or otherwise, any of the actions described in Sections
4.2(b)(i) through 4.2(b)(ii) or any action which would make any of
the representations or warranties of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ contained in this
Agreement untrue and incorrect as of the date when made if such
action had then been taken or (except as otherwise provided herein)
would result in any of the conditions set forth in Article VI not
being satisfied.
(c) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall not, and shall not permit any of its
Subsidiaries to, take any action that (without regard to any action taken or
agreed to be taken by Agouron or any of its affiliates) would (x) prevent
▇▇▇▇▇▇-▇▇▇▇▇▇▇ from accounting for the business combination to be effected by
the Merger as a pooling of interests, (y), it believes, prevent the Merger
from qualifying as a reorganization within the meaning of Section 368(a) of
the Code or (z) make any of the representations or warranties of ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ contained in this Agreement untrue and incorrect such that it would
have a Material Adverse Effect on ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or that would result in any
of the conditions set forth in Article VI not being satisfied or materially
delay the Closing.
4.3 Governmental Filings. Each of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ (to the extent
operational matters directly relate to this Agreement and the Merger) and
Agouron shall (a) confer on a regular and frequent basis with the other and
(b) report (to the extent permitted by law or regulation or any applicable
confidentiality agreement) on operational matters. Agouron and ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ shall file all reports required to be filed by each of them with the
SEC (and all other Governmental Entities) between the date of this Agreement
and the Effective Time and each of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ (to the extent any report,
announcement and publication relates to this Agreement and the Merger or
materially impacts the Merger) and Agouron shall (to the extent permitted by
law or regulation or any applicable confidentiality agreement) deliver to the
other party copies of all such reports, announcements and publications
promptly after the same are filed.
4.4 Control of Other Party's Business. Nothing contained in this
Agreement shall give Agouron, directly or indirectly, the right to control or
direct ▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ operations prior to the Effective Time. Nothing
contained in this Agreement shall give ▇▇▇▇▇▇-▇▇▇▇▇▇▇, directly or
indirectly, the right to control or direct Agouron's operations prior to the
Effective Time. Prior to the Effective Time, each of Agouron and ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ shall exercise, consistent with the terms and conditions of this
Agreement, complete control and supervision over its respective operations.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Preparation of Form S-4 and the Proxy Statement; Stockholders
Meeting. (a) Promptly following the date of this Agreement, Agouron and
▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall prepare and Agouron shall file with the SEC the Proxy
Statement, and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall prepare and file with the SEC the Form S-
4, in which the Proxy Statement will be included as a prospectus. Each of
Agouron and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall use its reasonable best efforts to have the
Form S-4 declared effective under the Securities Act as promptly as
practicable after such filing. Agouron will use its reasonable best efforts
to cause the Proxy Statement to be mailed to its stockholders as promptly as
practicable after the Form S-4 is declared effective under the Securities
Act. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall also take any action (other than qualifying to do
business in any jurisdiction in which it is not now so qualified) required to
be taken under any applicable state securities law in connection with the
issuance of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock in connection with the Merger, and
Agouron shall furnish all information concerning Agouron and the holders of
Agouron Common Stock and rights to acquire Agouron Common Stock pursuant to
the Agouron Stock Option Plans as may be reasonably required in connection
with any such action. Each of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and Agouron shall furnish all
information concerning itself to the other as may be reasonably requested in
connection with any such action and the preparation, filing and distribution
of the Form S-4 and the preparation, filing and distribution of the Proxy
Statement. Agouron, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and Merger Sub each agree to correct any
information provided by it for use in the Form S-4 or the Proxy Statement
which shall have become false or misleading.
(b) Agouron, acting through its Board of Directors, shall, subject
to and in accordance with its Certificate of Incorporation and By-Laws,
promptly and duly call, give notice of, convene and hold as soon as
practicable following the date upon which the Form S-4 becomes effective a
meeting of the holders of Agouron Common Stock (the "Agouron Stockholders
Meeting") for the purpose of voting to approve and adopt this Agreement and
the transactions contemplated hereby, and (i) recommend approval and adoption
of this Agreement and the transactions contemplated hereby, by the
stockholders of Agouron and include in the Proxy Statement such
recommendation and (ii) take all reasonable and lawful action to solicit and
obtain such approval. The Board of Directors of Agouron shall not withdraw,
amend or modify in a manner adverse to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ its recommendation
referred to in clause (i) of the preceding sentence (or announce publicly its
intention to do so), except that such Board of Directors shall be permitted
to withdraw, amend or modify its recommendation (or publicly announce its
intention to do so) if such Board of Directors determines in good faith,
based upon written advice of outside counsel, that it is obligated by their
fiduciary duties in accordance with California law to do so. Without
limiting the generality of the foregoing, (i) Agouron agrees that its
obligation to duly call, give notice of, convene and hold a meeting of the
holders of Agouron Common Stock, as required by this Section 5.1, shall not
be affected by the withdrawal, amendment or modification of the Board of
Directors' recommendation of approval and adoption of this Agreement and the
transactions contemplated hereby and (ii) subject to Agouron's rights
pursuant to Sections 5.5 and 7.1(h), Agouron agrees that its obligations
under this Section 5.1(b) shall not be affected by the commencement, public
proposal, public disclosure or communication to Agouron of any Acquisition
Proposal (as defined in Section 5.5).
(c) Agouron will cause its transfer agent to make stock transfer
records relating to Agouron available to the extent reasonably necessary to
effectuate the intent of this Agreement.
5.2. Accountant's Letters. (a) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall use reasonable
best efforts to cause to be delivered to Agouron a letter from ▇▇▇▇▇▇-
▇▇▇▇▇▇▇'▇ independent public accountants, dated the date on which the Form S-
4 shall become effective, addressed to ▇▇▇▇▇▇-▇▇▇▇▇▇▇, in form and substance
reasonably satisfactory to Agouron and customary in scope and substance for
comfort letters delivered by independent public accountants in connection
with registration statements similar to the Form S-4. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall
use reasonable best efforts to cause to be delivered to Agouron a letter from
▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ independent accountants dated as of the Closing Date,
stating that accounting for the Merger as a pooling of interests under
Opinion 16 of the Accounting Principles Board, applicable SEC rules and
regulations and other authoritative literature is appropriate if the Merger
is closed and consummated as contemplated by this Agreement.
(b) Agouron shall use reasonable best efforts to cause to be
delivered to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ a letter from Agouron's independent public
accountants, dated the date on which the Form S-4 shall become effective,
addressed to Agouron and ▇▇▇▇▇▇-▇▇▇▇▇▇▇, in form and substance reasonably
satisfactory to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and customary in scope and substance for
comfort letters delivered by independent public accountants in connection
with registration statements similar to the Form S-4. Agouron shall use
reasonable best efforts to cause to be delivered to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ a letter
from Agouron's independent public accountants, addressed to Agouron and
▇▇▇▇▇▇-▇▇▇▇▇▇▇, dated as of the Closing Date, stating that accounting for the
Merger as a pooling of interests under Opinion 16 of the Accounting
Principles Board, applicable SEC rules and regulations and other
authoritative literature is appropriate if the Merger is closed and
consummated as contemplated by this Agreement.
(c) Each of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and Agouron shall use reasonable best
efforts to cause (i) the transactions contemplated by this Agreement,
including the Merger, to be accounted for as a pooling of interests under
Opinion 16 of the Accounting Principles Board, applicable SEC rules and
regulations and other authoritative literature, and (ii) such accounting
treatment to be accepted by the SEC.
5.3 Access to Information. Upon reasonable notice, each party shall
(and shall cause its Subsidiaries to) afford to the officers, employees,
accountants, counsel, financial advisors and other representatives of the
other party reasonable access during normal business hours, during the period
prior to the Effective Time, to such of its properties, books, contracts,
commitments, records, officers and employees as the other party may
reasonably request and, during such period, such party shall (and shall cause
its Subsidiaries to) furnish promptly to the other party (a) a copy of each
report, schedule, registration statement and other document filed, published,
announced or received by it during such period pursuant to the requirements
of Federal or state securities laws, as applicable (other than documents
which such party is not permitted to disclose under applicable law), and (b)
consistent with its legal obligations, all other information concerning it
and its business, properties and personnel as such other party may reasonably
request; provided, however, that either party may restrict the foregoing
access to the extent that any law, treaty, rule or regulation of any
Governmental Entity applicable to such party requires such party or its
Subsidiaries to restrict access to any properties or information. The
parties will hold any such information which is non-public in confidence to
the extent required by, and in accordance with, the provisions of the
confidential disclosure agreements dated December 15, 1998 and December 23,
1998 between Agouron and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ (the "Confidentiality Agreements").
Any investigation by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or Agouron shall not affect the
representations and warranties of Agouron or ▇▇▇▇▇▇-▇▇▇▇▇▇▇, as the case may
be.
5.4 Reasonable Best Efforts.
(a) Subject to the terms and conditions of this Agreement, each
party will use its reasonable best efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate the Merger and
the other transactions contemplated by this Agreement as soon as practicable
after the date hereof, including (i) preparing and filing as promptly as
practicable all documentation to effect all necessary applications, notices,
petitions, filings, tax ruling requests and other documents and to obtain as
promptly as practicable all consents, waivers, licenses, orders,
registrations, approvals, permits, tax rulings and authorizations necessary
or advisable to be obtained from any third party and/or any Governmental
Entity in order to consummate the Merger or any of the other transactions
contemplated by this Agreement and (ii) taking all reasonable steps as may be
necessary to obtain all such material consents, waivers, licenses,
registrations, permits, authorizations, tax rulings, orders and approvals.
In furtherance and not in limitation of the foregoing, each party hereto
agrees to make an appropriate filing of a Notification and Report Form
pursuant to the HSR Act and any other Regulatory Law (as defined below) with
respect to the transactions contemplated hereby as promptly as practicable
after the date hereof and to supply as promptly as practicable any additional
information and documentary material that may be requested pursuant to the
HSR Act and any other Regulatory Law and to take all other actions necessary
to cause the expiration or termination of the applicable waiting periods
under the HSR Act as soon as practicable. Nothing in this Section 5.4(a)
shall require any of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its Subsidiaries or Agouron and its
Subsidiaries to sell, hold separate or otherwise dispose of or conduct their
business in a specified manner, or agree to sell, hold separate or otherwise
dispose of or conduct their business in a specified manner, or permit the
sale, holding separate or other disposition of, any assets of ▇▇▇▇▇▇-▇▇▇▇▇▇▇,
Agouron or their respective Subsidiaries or the conduct of their business in
a specified manner, whether as a condition to obtaining any approval from a
Governmental Entity or any other Person or for any other reason, if such
sale, holding separate or other disposition or the conduct of their business
in a specified manner would reasonably be expected to have a Material
Adverse Effect on ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its Subsidiaries (including the
Surviving Corporation and its Subsidiaries), taken together, after giving
effect to the Merger.
(b) Each of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and Agouron shall, in connection with the
efforts referenced in Section 5.4(a) to obtain all requisite material
approvals and authorizations for the transactions contemplated by this
Agreement under the HSR Act or any other Regulatory Law, use its reasonable
best efforts to (i) cooperate in all respects with each other in connection
with any filing or submission and in connection with any investigation or
other inquiry, including any proceeding initiated by a private party, (ii)
promptly inform the other party of any communication received by such party
from, or given by such party to, the Antitrust Division of the Department of
Justice (the "DOJ") or any other Governmental Entity and of any material
communication received or given in connection with any proceeding by a
private party, in each case regarding any of the transactions contemplated
hereby, and (iii) permit the other party to review any communication given by
it to, and consult with each other in advance of any meeting or conference
with, the DOJ or any such other Governmental Entity or, in connection with
any proceeding by a private party, with any other Person, and to the extent
permitted by the DOJ or such other applicable Governmental Entity or other
Person, give the other party the opportunity to attend and participate in
such meetings and conferences. For purposes of this Agreement, "Regulatory
Law" means the ▇▇▇▇▇▇▇ Act, as amended, the ▇▇▇▇▇▇▇ Act, as amended, the HSR
Act, the Federal Trade Commission Act, as amended, and all other federal,
state and foreign, if any, statutes, rules, regulations, orders, decrees,
administrative and judicial doctrines and other laws that are designed or
intended to prohibit, restrict or regulate actions having the purpose or
effect of monopolization or restraint of trade or lessening of competition.
(c) Subject to the terms and conditions of this Agreement, in
furtherance and not in limitation of the covenants of the parties contained
in Sections 5.4(a) and 5.4(b), if any administrative or judicial action or
proceeding, including any proceeding by a private party, is instituted (or
threatened to be instituted) challenging any transaction contemplated by this
Agreement as violative of any Regulatory Law, each of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and
Agouron shall cooperate in all respects with each other and use its
respective reasonable best efforts to contest and resist any such action or
proceeding and to have vacated, lifted, reversed or overturned any decree,
judgment, injunction or other order, whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents or restricts
consummation of the transactions contemplated by this Agreement.
Notwithstanding the foregoing or any other provision of this Agreement,
nothing in this Section 5.4 shall limit a party's right to terminate this
Agreement pursuant to Article VII.
(d) If any objections are asserted with respect to the transactions
contemplated hereby under any Regulatory Law or if any suit is instituted by
any Governmental Entity or any private party challenging any of the
transactions contemplated hereby as violative of any Regulatory Law, each of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ and Agouron shall use its reasonable best efforts to resolve
any such objections or challenge as such Governmental Entity or private party
may have to such transactions under such Regulatory Law so as to permit
consummation of the transactions contemplated by this Agreement.
(e) From and after the Effective Time, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ will not take
or cause or permit the Surviving Corporation to take, any action that it
believes would cause the Merger not to qualify as a tax free reorganization
under Section 368(a) of the Code.
5.5 No Solicitation of Transactions. Agouron agrees that neither it
nor any of its Subsidiaries nor any of the officers and directors of it or
its Subsidiaries shall, and that it shall direct and cause its and its
Subsidiaries' employees, agents and representatives (including any investment
banker, attorney or accountant retained by it or any of its Subsidiaries) not
to, directly or indirectly, initiate or solicit or take any action designed
to encourage or facilitate (including by way of furnishing information) any
inquiries or the making of any proposal or offer with respect to (i) a
merger, reorganization, share exchange, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
it or any of its Subsidiaries, or (ii) any purchase or sale of all or any
significant portion of the assets or 10% or more of the equity securities of
it or any of its Subsidiaries (any such proposal or offer being hereinafter
referred to as an "Acquisition Proposal"). Agouron further agrees that
neither it nor any of its Subsidiaries nor any of the officers and directors
of it or its Subsidiaries shall, and that it shall direct and cause its and
its Subsidiaries' employees, agents and representatives (including any
investment banker, attorney or accountant retained by it or any of its
Subsidiaries) not to, directly or indirectly, have any discussion with or
provide any confidential information or data to any person relating to an
Acquisition Proposal, or engage in any negotiations concerning an Acquisition
Proposal. Notwithstanding the foregoing, Agouron or its Board of Directors
shall be permitted to (A) to the extent applicable, comply with Rule 14e-2(a)
promulgated under the Exchange Act with regard to an Acquisition Proposal, or
(B) engage in any discussions or negotiations with, or provide any
information to, any person in response to an unsolicited bona fide written
Acquisition Proposal by any such person, if and only to the extent that, in
the case of the actions referred to in clause (B), (i) the Board of Directors
of Agouron concludes in good faith, based on the written advice of its
outside legal counsel, that the provision of such information or the engaging
in such negotiations or discussions is obligated by the directors' fiduciary
duties in accordance with California law, (ii) prior to providing any
information or data to any Person in connection with an Acquisition Proposal
by any such Person, the Board of Directors of Agouron receives from such
person an executed confidentiality agreement containing customary terms and
provisions and (iii) prior to providing any information or data to any Person
or entering into discussions or negotiations with any Person, the Board of
Directors of Agouron notifies ▇▇▇▇▇▇-▇▇▇▇▇▇▇ promptly of such inquiries,
proposals or offers received by, any such information requested from, or any
such discussions or negotiations sought to be initiated or continued with,
any of its representatives indicating, in connection with such notice, the
name of such Person and the material terms and conditions of any proposals or
offers. Agouron agrees that it will keep ▇▇▇▇▇▇-▇▇▇▇▇▇▇ informed, on a
prompt basis, of the status and terms of any such proposals or offers and the
status of any such discussions or negotiations. Agouron agrees that it will
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with
respect to any Acquisition Proposal or similar transaction or arrangement and
will not waive any rights under any confidentiality agreements entered into
with such parties. Agouron agrees that it will take the necessary steps to
promptly inform the individuals or entities referred to in the first sentence
of this Section 5.5 of the obligations undertaken in this Section 5.5.
5.6 Employee Benefits Matters.
(a) Continuation and Comparability of Benefits. From the Effective
Time until December 31, 2000, the Surviving Corporation shall provide
compensation and employee benefits under the Plans (as defined in Section
3.2(r)) to the employees of Agouron and its Subsidiaries employed as of the
Effective Time (except the employees entering into employment agreements and
listed on Exhibit 5.6(a)) (the "Agouron Employees") that are in the aggregate
no less favorable than those provided to such persons pursuant to the Plans
in effect on the date hereof; provided, however, that (i) the Agouron Stock
Purchase Plan shall be terminated as soon as practicable after the Effective
Time and shall not be considered in determining aggregate favorability under
this clause (a), (ii) the Surviving Corporation shall cause the Agouron
401(k) plan to be amended, effective as of the Effective Time (unless
prohibited as a tax-qualification matter) to provide for an additional
matching company contribution on behalf of eligible participants determined
as follows:
ADDITIONAL MATCHING ANNUAL REPORTED EARNINGS PER SHARE
COMPANY CONTRIBUTIONS (made with GROWTH (determined in the same manner
respect to each eligible as provided under the ▇▇▇▇▇▇-▇▇▇▇▇▇▇
participant's elective salary Savings & Stock Plan)
deferral)
10% 12.0% or greater, but less than 16.0%
25% 16.0% or greater, but less than 20.0%
35% 20.0% or greater
(iii) the Agouron Employees shall be eligible to enroll in the ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ Retirement Plan as of January 1, 2000, and (iv) the vacation
entitlement of the Agouron Employees accrued as of the Effective Time shall
not be reduced and will apply after the Effective Time with respect to these
Agouron Employees. Nothing herein shall prohibit any changes to the Plans
that may be (i) required by law (including, without limitation, any
applicable qualification requirements of Section 401(a) of the Code), (ii)
necessary as a technical matter to reflect the transactions contemplated
hereby or (iii) required for Agouron to provide or permit investment in its
securities. Furthermore, nothing herein shall require Surviving Corporation
to continue any particular Plan or prevent the amendment or termination
thereof (subject to the maintenance, in the aggregate, of the benefits as
provided in the preceding sentence). Notwithstanding the foregoing, not
later than January 1, 2001, Agouron Employees shall be transitioned to the
compensation-related programs (including salary structure, grades, bonus
policies and programs, salary administration practices, stock option and
other stock-related programs) of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ as determined by ▇▇▇▇▇▇-
▇▇▇▇▇▇▇, provided, however, that the base salary of any such employee will
not be reduced for a period of two years. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ will provide non-
qualified ▇▇▇▇▇▇-▇▇▇▇▇▇▇ stock option grants to the management-level
employees of Agouron on or about June 30, 1999, in accordance with ▇▇▇▇▇▇-
▇▇▇▇▇▇▇'▇ ▇▇▇▇▇ guidelines and effective as of January 1, 2000, such
management employees of Agouron will be eligible for stock options on a pro-
rata basis, in accordance with ▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ grant guidelines. For the
fiscal year ending June 30, 1999, the Surviving Corporation will administer
Agouron's bonus program in accordance with the past practice of Agouron,
subject to approval by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ management. For the period beginning
on July 1, 1999 and ending December 31, 1999, management employees of Agouron
shall be eligible for a bonus on a pro-rata basis reflecting the performance
of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and such employee, subject to the approval of ▇▇▇▇▇▇-
▇▇▇▇▇▇▇'▇ management.
(b) Pre-Existing Limitations; Service Credit. With respect to any
Benefit Plans in which any Agouron Employees first become eligible to
participate, on or after the Effective Time, and which are plans that the
Agouron Employees did not participate in prior to the Effective Time (the
"New Agouron Plans"), ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall: (A) waive all pre-existing
conditions, exclusions and waiting periods with respect to participation and
coverage requirements applicable to the Agouron Employees under any New
Agouron Plans in which such employees may be eligible to participate after
the Effective Time; provided that such Agouron Employee and covered family
members were enrolled in comparable coverage under the Benefit Plans of
Agouron on the Effective Time and continuously thereafter until the effective
time of coverage in the New Agouron Plans, and to the extent such waiver is
permissible under the insurance contracts of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, and (B)
recognize service of the Agouron Employees with Agouron accrued prior to the
Effective Time for purposes of eligibility to participate and vesting credit
in any New Agouron Plan in which such employees may be eligible to
participate after the Effective Time, to the extent such service is taken
into account under the applicable New Agouron Plan.
(c) Redundancies. Agouron Employees whose jobs are eliminated as a
result of the consummation of the transaction contemplated under this
Agreement shall receive severance payments in an amount due under the
severance policy of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ plus a completion bonus if such employee
performs in good faith in the job during a transition period determined by
the Chief Executive Officer of Agouron and approved by ▇▇▇▇▇▇-▇▇▇▇▇▇▇. The
amount of the completion bonus shall be based upon base salary and shall be
determined as follows:
Years of service with
Agouron and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ 0-4 years More than 4 years
Below manager 3 months 4 months
Manager 4 months 6 months
Director 9 months 12 months
5.7 Directors' and Officers' Indemnification and Insurance. The
Surviving Corporation shall, and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall cause the Surviving
Corporation to, (i) indemnify and hold harmless, and provide advancement of
expenses to, all past and present directors, officers and employees of
Agouron and its Subsidiaries to the same extent such persons are indemnified
or have the right to advancement of expenses as of the date of this Agreement
by Agouron pursuant to Agouron's certificate of incorporation, by-laws and
indemnification agreements, if any, in existence on the date hereof with any
directors, officers and employees of Agouron and its Subsidiaries for acts or
omissions occurring at or prior to the Effective Time (including for acts or
omissions occurring in connection with the approval of this Agreement and the
consummation of the transactions contemplated hereby), and (ii) cause to be
maintained for a period of six years after the Effective Time the current
policies of directors' and officers' liability insurance and fiduciary
liability insurance maintained by Agouron (provided that the Surviving
Corporation (or any successor) may substitute therefor policies of at least
the same coverage and amounts containing terms and conditions which are, in
the aggregate, no less advantageous to the insured) with respect to claims
arising from facts or events that occurred on or before the Effective Time;
provided, however, that in no event shall the Surviving Corporation be
required to expend in any one year an amount in excess of 200% of the annual
premiums currently paid by Agouron for such insurance; and, provided,
further, that if the annual premiums of such insurance coverage exceed such
amount, the Surviving Corporation shall be obligated to obtain a policy with
the greatest coverage available for a cost not exceeding such amount.
5.8 Notification of Certain Matters. Agouron shall give prompt
notice to ▇▇▇▇▇▇-▇▇▇▇▇▇▇, and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall give prompt notice to
Agouron, of (i) the occurrence or non-occurrence of any event the occurrence
or non-occurrence of which would be likely to cause any representation or
warranty contained in this Agreement to be untrue or inaccurate and (ii) any
failure of Agouron, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or Merger Sub, as the case may be, to
comply with or satisfy any covenant, condition or agreement to be complied
with or satisfied by it hereunder; provided, however, that the delivery of
any notice pursuant to this Section 5.8 shall not limit or otherwise affect
the remedies available hereunder to the party receiving such notice.
5.9 Public Announcements. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and Agouron shall develop
a joint communications plan and each party shall (i) ensure that all press
releases and other public statements with respect to this Agreement, the
Stock Option Agreement or the transactions contemplated hereby shall be
consistent with such joint communications plan, and (ii) unless otherwise
required by applicable law or by obligations pursuant to any listing
agreement with or rules of any securities exchange, consult with each other
before issuing any press release or otherwise making any public statement
with respect to this Agreement, the Stock Option Agreement or the
transactions contemplated hereby. In addition to the foregoing, except to
the extent disclosed in or consistent with the Proxy Statement in accordance
with the provisions of Section 5.1, neither ▇▇▇▇▇▇-▇▇▇▇▇▇▇ nor Agouron shall
issue any press release or otherwise make any public statement or disclosure
concerning the other party or the other party's business, financial condition
or results of operations without the consent of the other party, which
consent shall not be unreasonably withheld or delayed.
5.10 Listing of Shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock. ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ shall use its reasonable best efforts to cause the shares of ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ Common Stock to be issued in the Merger to be approved for listing on
the NYSE, subject to official notice of issuance, prior to the Closing Date.
5.11 Affiliates. (a) Promptly after execution and delivery of this
Agreement, Agouron shall deliver to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ a letter identifying all
persons who, in the opinion of Agouron, may be deemed at the time this
Agreement is submitted for adoption by the stockholders of Agouron,
"affiliates" of Agouron for purposes of Rule 145 under the Securities Act or
for purposes of qualifying the Merger for pooling of interests accounting
treatment under Opinion 16 of the Accounting Principles Board and applicable
SEC rules and regulations, and such list shall be updated as necessary to
reflect changes from the date thereof. Agouron shall use reasonable best
efforts to cause each person identified on such list to deliver to ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ not less than 30 days prior to the Effective Time, a written
agreement substantially in the form attached as Exhibit 5.11 hereto (an
"Affiliate Agreement"). Promptly after execution and delivery of this
Agreement, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall deliver to Agouron a letter identifying all
persons who, in the opinion of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, may be deemed "affiliates" of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ for purposes of qualifying the Merger for pooling of interests
accounting treatment under Opinion 16 of the Accounting Principles Board and
applicable SEC rules and regulations, and such list shall be updated as
necessary to reflect changes from the date hereof. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall use
reasonable best efforts to cause each person identified on such list to
deliver to Agouron not less than 30 days prior to the Effective Time, a
written agreement including the substance of paragraphs (C), (D) and (E) of
Exhibit 5.11 hereto.
(b) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall use its reasonable best efforts to publish
no later than 60 days after the end of the first month after the Effective
Time in which there are at least 30 days of post-Merger combined operations
(which month may be the month in which the Effective Time occurs), combined
sales and net income figures as contemplated by and in accordance with the
terms of SEC Accounting Series Release No. 135.
5.12 Amendment to the Rights Agreement. Except as expressly
contemplated by Section 3.2(1) of this Agreement, Agouron agrees that it will
not amend, modify or waive any provision of the Rights Agreement and shall
not take any action to redeem the Rights or render the Rights inapplicable to
any transaction, other than to permit another transaction that the Board of
Directors of Agouron has determined to accept pursuant to Section 5.5.
5.13 Divisional Stock Proposal. Agouron agrees not to implement the
proposal (the "Divisional Stock Proposal"), which such proposal would (i)
increase the number of shares of authorized common stock to 150,000,000
shares, (ii) create two series of common stock to reflect separately the
performances of Agouron's Oncology Division and its other businesses and
(iii) authorize the issuance of one or more additional series of common stock
from undesignated shares of common stock.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of Agouron, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and Merger Sub to effect
the Merger are subject to the satisfaction or waiver on or prior to the
Closing Date of the following conditions:
(a) Stockholder Approval. Agouron shall have obtained the Required
Agouron Vote in connection with the adoption of this Agreement by the
stockholders of Agouron.
(b) No Injunctions or Restraints, Illegality. (i) No Governmental
Entity or federal or state court of competent jurisdiction shall have
enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, executive order, decree, judgment, injunction or other order
(whether temporary, preliminary or permanent), in any case which is in effect
and which prevents or prohibits consummation of the Merger or any other
transactions contemplated in this Agreement; and (ii) no Governmental Entity
shall have instituted any action or proceeding (which remains pending at what
would otherwise be the Closing Date) before any United States court or other
governmental body of competent jurisdiction seeking to enjoin, restrain or
otherwise prohibit consummation of the transactions contemplated by this
Agreement.
(c) HSR Act. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or
shall have expired.
(d) NYSE Listing. The shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock to be
issued in the Merger and such other shares to be reserved for issuance in
connection with the Merger shall have been approved for listing on the NYSE,
subject to official notice of issuance.
(e) Effectiveness of the Form S-4. The Form S-4 shall have been
declared effective by the SEC under the Securities Act. No stop order
suspending the effectiveness of the Form S-4 shall have been issued by the
SEC and no proceedings for that purpose shall have been initiated or
threatened by the SEC.
(f) Pooling. Agouron shall have received and delivered to ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ independent public accountants, a letter from
its independent public accountants, dated as of the Closing Date, stating
that Agouron qualifies as a "combining company" in accordance with the
criteria set forth in Opinion 16 of the Accounting Principles Board,
applicable SEC rules and regulations and other authoritative literature and
accordingly is a poolable entity. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall have received and
delivered to Agouron, a letter from its independent public accountants, dated
as of the Closing Date, stating that accounting for the Merger as a pooling
of interests under Opinion 16 of the Accounting Principles Board, applicable
SEC rules and regulations and other authoritative literature is appropriate
if the Merger is closed and consummated as contemplated by this Agreement.
Notwithstanding the foregoing, the satisfaction of this Section 6.1(f) shall
not be a condition to the obligations of a party to effect the Merger if the
failure to satisfy this condition results from any action taken or agreed to
be taken by or on behalf of such party.
6.2 Additional Conditions to Obligations of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and
Merger Sub. The obligations of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and Merger Sub to effect the
Merger are subject to the satisfaction of, or waiver by ▇▇▇▇▇▇-▇▇▇▇▇▇▇, on or
prior to the Closing Date of the following conditions:
(a) Representations and Warranties. (i) Each of the
representations and warranties of Agouron set forth in this Agreement (read
without any materiality, Material or Material Adverse Effect qualifications)
shall be true and correct as of the date of this Agreement and as of the
Closing Date as though made on and as of the Closing Date (except to the
extent in either case that such representations and warranties speak as of
another date), except to the extent inaccuracies and breaches therein,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on Agouron. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall have received a
certificate of the chief executive officer and the chief financial officer of
Agouron to such effect.
(ii) There has been no intentional breach of the representations and
warranties of Agouron.
(b) Performance of Obligations of Agouron. (i) Agouron shall have
performed or complied with all agreements and covenants required to be
performed by it under this Agreement at or prior to the Closing Date, except
where the failure to so perform or comply would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on Agouron,
and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall have received a certificate of the chief executive
officer and the chief financial officer of Agouron to such effect.
(ii) Agouron shall not have intentionally breached any agreement or
covenant required to be performed by Agouron under this Agreement.
(c) Tax Opinion. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall have received from ▇▇▇▇▇▇▇▇▇,
Will & ▇▇▇▇▇, special tax counsel to ▇▇▇▇▇▇-▇▇▇▇▇▇▇, on or before the date
the Form S-4 shall become effective and, subsequently, on the Closing Date, a
written opinion dated as of such dates, based on appropriate representations
of Agouron and ▇▇▇▇▇▇-▇▇▇▇▇▇▇, to the effect that (i) the Merger will be
treated for federal income tax purposes as a reorganization within the
meaning of Section 368(a) of the Code and (ii) Agouron, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and
Merger Sub will each be a party to the reorganization within the meaning of
Section 368(b) of the Code.
(d) No Material Adverse Change. At any time on or after the date of
this Agreement there shall not have occurred any change, circumstance or
event that, individually or in the aggregate, has had or would reasonably be
expected to have a Material Adverse Effect on Agouron.
(e) Rights Agreement. No Share Acquisition Date or Distribution
Date shall have occurred pursuant to the Rights Agreement.
(f) Dissenting Agouron Shares. The aggregate number of shares of
Agouron Common Stock owned by Persons who have made a demand for purchase
under Section 1301 of the CGCL shall constitute less than 5% of all shares of
Agouron Common Stock outstanding as of the date of the meeting of the Agouron
Shareholders called for the purpose of voting on the Merger.
6.3 Additional Conditions to Obligations of Agouron. The
obligations of Agouron to effect the Merger are subject to the satisfaction
of, or waiver by Agouron, on or prior to the Closing Date of the following
additional conditions:
(a) Representations and Warranties. (i) Each of the
representations and warranties of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ set forth in this Agreement
(read without any materiality or Material Adverse Effect qualifications)
shall be true and correct as of the date of this Agreement and as of the
Closing Date as though made on and as of the Closing Date (except to the
extent in either case that such representations and warranties speak as of
another date), except to the extent inaccuracies and breaches therein,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on ▇▇▇▇▇▇-▇▇▇▇▇▇▇. Agouron shall have received a
certificate of the chief executive officer and the chief financial officer of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ to such effect.
(ii) There has been no intentional breach of the representations and
warranties of ▇▇▇▇▇▇-▇▇▇▇▇▇▇.
(b) Performance of Obligations of ▇▇▇▇▇▇-▇▇▇▇▇▇▇. (i) ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ shall have performed or complied with all agreements and covenants
required to be performed by it under this Agreement at or prior to the
Closing Date, except where the failure to so perform or comply would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on ▇▇▇▇▇▇-▇▇▇▇▇▇▇. Agouron shall have received a certificate
of the chief executive officer and the chief financial officer of ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ to such effect.
(ii) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall not have intentionally breached any
agreement or covenant required to be performed by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ under this
Agreement.
(c) Tax Opinion. Agouron shall have received from Shearman &
Sterling counsel to Agouron, on or before the date the Form S-4 shall become
effective and, subsequently, on the Closing Date, a written opinion dated as
of such dates, based on appropriate representations of Agouron and ▇▇▇▇▇▇-
▇▇▇▇▇▇▇, to the effect that (i) the Merger will be treated for federal income
tax purposes as a reorganization within the meaning of Section 368(a) of the
Code; and (ii) Agouron, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and Merger Sub will each be a party to
the reorganization within the meaning of Section 368(b) of the Code.
(d) No Material Adverse Change. At any time on or after the date of
this Agreement, except for any FDA action which may arise out of the Advisory
Committee meeting related to Rezulin that is currently scheduled for March
26, 1999, there shall not have occurred any change, circumstance or event
that, individually or in the aggregate, has had or would reasonably be
expected to have a Material Adverse Effect on ▇▇▇▇▇▇-▇▇▇▇▇▇▇.
ARTICLE VII
TERMINATION AND AMENDMENT
7.1 Termination. This Agreement may be terminated and the Merger
contemplated hereby may be abandoned at any time prior to the Closing Date,
whether before or after approval of matters presented in connection with the
Merger by the stockholders of Agouron (except as otherwise stated herein):
(a) By mutual written consent of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and Agouron;
(b) By either ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or Agouron, if the Merger shall not
have been consummated on or before October 31, 1999 (other than due to the
failure of the party seeking to terminate this Agreement to perform its
obligations under this Agreement required to be performed at or prior to the
Effective Time);
(c) By ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or Agouron, if any required approval of the
stockholders of Agouron for this Agreement or the Merger shall not have been
obtained by reason of the failure to obtain the required vote upon a vote
held at a duly held meeting of stockholders or at any adjournment thereof;
(d) By ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or Agouron if any court or other governmental
body of competent jurisdiction shall have issued a final order, decree or
ruling or taken any other final action restraining, enjoining or otherwise
prohibiting the Merger and such order, decree, ruling or other action is or
shall have become final and nonappealable;
(e) By Agouron if prior to the Closing Date there shall have been a
breach of any representation, warranty, covenant or agreement on the part of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ contained in this Agreement, which breach would (i) give rise
to the failure of a condition set forth in Section 6.3(a) or (b) and (ii) is
incapable of being cured by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or is not cured within 30 days of
notice of such breach;
(f) By ▇▇▇▇▇▇-▇▇▇▇▇▇▇ if prior to the Closing Date there shall have
been a breach of any representation, warranty, covenant or agreement on the
part of Agouron contained in this Agreement, which breach would (i) give rise
to the failure of a condition set forth in Section 6.2(a) or (b) and (ii) is
incapable of being cured by Agouron or is not cured within 30 days of notice
of such breach; or the condition set forth in Section 6.2(d) has not or
cannot be satisfied;
(g) By ▇▇▇▇▇▇-▇▇▇▇▇▇▇ (i) if the Board of Directors of Agouron shall
have (a) failed to recommend or withdrawn, modified or amended in any respect
adverse to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or Merger Sub its approval or recommendation of
this Agreement, the Merger or any of the other transactions contemplated
herein or resolved to do so, or (b) approved or recommended an Acquisition
Proposal from a Person (other than ▇▇▇▇▇▇-▇▇▇▇▇▇▇) or resolved to do so, or
(ii) Agouron materially breaches any of its agreements set forth in Section
5.5;
(h) By Agouron, if as a result of an Acquisition Proposal the Board
of Directors, shall have determined in good faith, based upon its receipt of
the written advice of outside legal counsel, that the directors are obligated
by their fiduciary duties in accordance with California law to terminate this
Agreement and to approve the Acquisition Proposal; provided, however, that it
shall be a condition precedent to the termination of this Agreement by
Agouron pursuant to this Section 7.1(h) that Agouron shall have made the
payment of the fee and expenses required by Section 7.3; or
(i) By ▇▇▇▇▇▇-▇▇▇▇▇▇▇, if any person or group (as defined in Section
13(d)(3)of the Exchange Act) (other than ▇▇▇▇▇▇-▇▇▇▇▇▇▇, Merger Sub or any of
their affiliates) shall have become (x) the beneficial owner (as defined in
Rule 13d-3 promulgated under the Exchange Act) of at least 20% of the
outstanding shares of Agouron Common Stock or (y) shall have acquired 20% or
more of the assets of Agouron and its Subsidiaries, taken as a whole.
7.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 7.1, this Agreement shall forthwith become void
and there shall be no liability on the part of any party hereto except as set
forth in the confidentiality provisions of Section 5.3 and Sections 5.9, 7.3
and 8.1; provided, however, that nothing herein shall relieve any party from
liability for any willful breach hereof.
7.3 Fees and Expenses.
(a) If:
(i) This Agreement is terminated pursuant to Sections
7.1(g),(h) or (i); or
(ii) (x)(A) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or Agouron terminate this Agreement
pursuant to Section 7.1(c) if an Alternative Transaction or the
intention to propose an Alternative Transaction shall have been
publicly announced and not withdrawn prior to the Agouron
Stockholders Meeting, or (B) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ terminates this Agreement
pursuant to Section 7.1(f) if the Board of Directors of Agouron were
aware of the existence of an Alternative Transaction or the intention
to propose an Alternative Transaction and such Alternative
Transaction had not been withdrawn prior to such breach and (y) in
the case of (A) or (B), within 12 months thereafter, Agouron enters
into an agreement with respect to an Alternative Transaction or an
Alternative Transaction is consummated;
then Agouron shall pay to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and Merger Sub, (A) simultaneously
with any termination by Agouron contemplated by Section 7.3(a)(i), (B) within
one business day following any termination by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ contemplated by
Section 7.3(a)(i), and (C) within one business day following the occurrence
of one of the events described in clause (y) of Section 7.3(a)(ii), a fee, in
cash, of $60 million provided, however, that Agouron shall in no event be
obligated to pay more than one such fee with respect to all such occurrences
and such termination.
(b) Within one business day after the termination of this Agreement
pursuant to (i) Section 7.1(c) if an Alternative Transaction or the intention
to propose an Alternative Transaction shall have been publicly announced and
not withdrawn prior to the Agouron Stockholders Meeting, (ii) Section 7.1(f)
if the Board of Directors of Agouron were aware of the existence of an
Alternative Transaction or the intention to propose an Alternative
Transaction and such Alternative Transaction had not been withdrawn prior to
such breach or (iii) Sections 7.1(g),(h) or (i), Agouron shall pay all of
▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ and Merger Sub's Expenses (as defined below) up to a maximum
of $10 million in the aggregate.
For purposes of this Section 7.3, "Alternative Transaction" means any
of the following events: (i) the acquisition of Agouron by merger,
reorganization, share exchange, consolidation, business combination,
recapitalization, dissolution or otherwise by any person other than ▇▇▇▇▇▇-
▇▇▇▇▇▇▇, Merger Sub or any affiliate thereof (a "Third Party"); (ii) the
acquisition by a Third Party of 20% or more of the assets of Agouron and its
Subsidiaries, taken as a whole; (iii) the acquisition by a Third Party of 20%
or more of the outstanding shares of Agouron Common Stock; (iv) the adoption
by Agouron of a plan of liquidation or the declaration or payment of an
extraordinary dividend other than the Divisional Stock Proposal; or (v) the
repurchase by Agouron or any of its Subsidiaries of 20% or more of the
outstanding shares of Agouron Common Stock.
(c) Except as otherwise specifically provided herein, each party
shall bear its own Expenses in connection with this Agreement, the Stock
Option Agreement and the transactions contemplated hereby, except that each
of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and Agouron shall bear and pay one-half of the costs and
expenses incurred in connection with the filing, printing and mailing of the
Form S-4 and the Proxy Statement. As used in this Agreement, "Expenses"
includes all out-of-pocket expenses (including, without limitation, all fees
and expenses of counsel, accountants, investment bankers, 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 the transactions
contemplated hereby, including the preparation, printing, filing and mailing
of the Proxy Statement and the solicitation of stockholder approvals and all
other matters related to the transactions contemplated hereby.
7.4 Amendment. This Agreement may be amended by the parties hereto,
by action taken or authorized by their respective Boards of Directors, at any
time before or after approval of the matters presented in connection with the
Merger by the stockholders of Agouron, but, after any such approval, no
amendment shall be made which by law or in accordance with the rules of any
relevant stock exchange requires further approval by such stockholders
without such further approval. This Agreement may not be amended except by
an instrument in writing signed on behalf of each of the parties hereto.
7.5 Extension; Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken or authorized by their respective Boards of
Directors, 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
contained herein or in any document delivered pursuant hereto and (iii) waive
compliance with any of the agreements or conditions 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 a written instrument signed on behalf of such
party. The failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a waiver of
those rights.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Non-Survival of Representations, Warranties and Agreements.
None of the representations, warranties, covenants and other agreements in
this Agreement or in any instrument delivered pursuant to this Agreement,
including any rights arising out of any breach of such representations,
warranties, covenants and other agreements, shall survive the Effective Time
or the termination of this Agreement pursuant to Section 7.1, as the case may
be, except for those covenants and agreements contained herein and therein
that by their terms apply or are to be performed in whole or in part after
the Effective Time. Notwithstanding the foregoing, this Article VIII shall
survive the Effective Time and the confidentiality provisions of Section 5.3,
and Sections 5.9 and 7.3 shall survive the termination of this Agreement.
8.2 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed duly given (a) on the date of delivery if
delivered personally, or by telecopy upon confirmation of receipt, (b) on the
first Business Day following the date of dispatch if delivered by a
recognized next-day courier service, or (c) on the third Business Day
following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid. All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may
be designated in writing by the party to receive such notice:
(a) if to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or Merger Sub, to
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Vice President and General Counsel
with a copy to
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
(b) if to Agouron, to
Agouron Pharmaceuticals, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Vice President and General Counsel
with a copy to
Shearman & Sterling
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
8.3 Interpretation. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. 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. Whenever the words "include", "includes" or "including"
are used in this Agreement, they shall be deemed to be followed by the words
"without limitation".
8.4 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
both parties need not sign the same counterpart.
8.5 Entire Agreement; No Third Party Beneficiaries.
(a) This Agreement, the Stock Option Agreement and the
Confidentiality Agreements constitute the entire agreement and supersede all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof.
(b) This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and nothing in this Agreement, express or
implied, 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, other than Section 5.7 (which is intended to be for the benefit of
the Persons covered thereby and may be enforced by such Persons).
8.6 Governing Law. This Agreement shall be governed 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 laws.
8.7 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any law or public
policy, all other terms and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner in order that the transactions contemplated hereby are consummated as
originally contemplated to the greatest extent possible.
8.8 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto, in whole or in part (whether by operation of law or otherwise),
without the prior written consent of the other party, and any attempt to make
any such assignment without such consent shall be null and void, except that
Merger Sub may assign, in its sole discretion, any or all of its rights,
interests and obligations under this Agreement to any direct wholly owned
Subsidiary of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ without the consent of Agouron, but no such
assignment shall relieve Merger Sub of any of its obligations under this
Agreement. Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and assigns.
8.9 Submission to Jurisdiction; Waivers. Each of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and
Agouron irrevocably agrees that any legal action or proceeding with respect
to this Agreement or for recognition and enforcement of any judgment in
respect hereof brought by the other party hereto or its successors or assigns
may be brought and determined in the Courts of the State of New York and
each of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and Agouron hereby irrevocably submits with regard to
any such action or proceeding for itself and in respect to its property,
generally and unconditionally, to the nonexclusive jurisdiction of the
aforesaid courts. Each of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and Agouron hereby irrevocably
waives, and agrees not to assert, by way of motion, as a defense,
counterclaim or otherwise, in any action or proceeding with respect to this
Agreement, (a) any claim that it is not personally subject to the
jurisdiction of the above-named courts for any reason other than the failure
to lawfully serve process, (b) that it or its property is exempt or immune
from jurisdiction of any such court or from any legal process commenced in
such courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or
otherwise), and (c) to the fullest extent permitted by applicable law, that
(i) the suit, action or proceeding in any such court is brought in an
inconvenient forum, (ii) the venue of such suit, action or proceeding is
improper and (iii) this Agreement, or the subject matter hereof, may not be
enforced in or by such courts.
8.10 Enforcement. The parties 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. It is accordingly agreed
that the parties shall be entitled to specific performance of the terms
hereof, this being in addition to any other remedy to which they are entitled
at law or in equity.
8.11 Definitions. As used in this Agreement:
(a) "Beneficial ownership" or "beneficially own" shall have the
meaning under Section 13(d) of the Exchange Act and the rules and regulations
thereunder.
(b) "Benefit Plans" means, with respect to any Person, each employee
benefit plan, program, arrangement and contract (including, without
limitation, any "employee benefit plan," as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") and any
bonus, deferred compensation, stock bonus, stock purchase, restricted stock,
stock option, employment, termination, stay agreement or bonus, change in
control and severance plan, program, arrangement and contract) in effect on
the date of this Agreement or disclosed on the Agouron Disclosure Schedule or
the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Disclosure Schedule, as the case may be, to which such
Person or its Subsidiary is a party, which is maintained or contributed to by
such Person, or with respect to which such Person could incur material
liability under Section 4069, 4201 or 4212(c) of ERISA.
(c) "Board of Directors" means the Board of Directors of any
specified Person and any committees thereof.
(d) "Business Day" means any day on which banks are not required or
authorized to close in the City of New York.
(e) "Controlled Group" means any trade or business (whether or not
incorporated) under common control with Agouron within the meaning of
Sections 414(b), (c), (m) or (o) of the Code.
(f) "Exchange Ratio" means $60.00 divided by the ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Common Stock Price, rounded to the nearest 1/10,000, provided that the
Exchange Ratio shall not be less than .8108 nor more than .9300.
(g) "Known" or "Knowledge" means, (i) with respect to Agouron, the
knowledge of such party's President, Chief Financial Officer, General
Counsel, Senior Vice President-Commercial Affairs, Senior Vice President-
Development or Corporate Vice President - Head of Operations and (ii) with
respect to ▇▇▇▇▇▇-▇▇▇▇▇▇▇, the knowledge of such party's Chief Executive
Officer, Chief Financial Officer, General Counsel, Vice President-
Pharmaceutical Sector or Vice President, Corporate Development and Licensing.
(h) "Material Adverse Effect" means, with respect to any entity, an
effect, individually or in the aggregate, materially adverse to (i) the
business, financial condition or results of operations of such entity and its
Subsidiaries (including in the case of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, following the Merger,
the Surviving Corporation and its Subsidiaries) taken as a whole, (ii) the
development of the Investigational Compounds, taken as a whole, or the
marketing of Viracept or (iii) the ability of such party to consummate the
transactions contemplated by this Agreement and the Stock Option Agreement.
(i) "the other party" means, with respect to Agouron, ▇▇▇▇▇▇-▇▇▇▇▇▇▇
and means, with respect to ▇▇▇▇▇▇-▇▇▇▇▇▇▇, Agouron.
(j) "Person" means an individual, corporation, limited liability
company, partnership, association, trust, unincorporated organization, other
entity or group (as defined in the Exchange Act).
(k) "SEC" means the Securities and Exchange Commission.
(l) "Subsidiary" when used with respect to any party means any
corporation or other organization, whether incorporated or unincorporated,
(i) of which such party or any other Subsidiary of such party is a general
partner (excluding partnerships, the general partnership interests of which
held by such party or any Subsidiary of such party do not have a majority of
the voting interests in such partnership) or (ii) at least a majority of the
securities or other interests of which having by their terms ordinary voting
power to elect a majority of the Board of Directors or others performing
similar functions with respect to such corporation or other organization is
directly or indirectly owned or controlled by such party or by any one or
more of its Subsidiaries, or by such party and one or more of its
Subsidiaries.
(m) "▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock Price" means the average of the
closing sales prices of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock on the New York Stock
Exchange Composite Transactions Tape on each of the 10 consecutive trading
days up to and including the second immediately preceding trading day prior
to the date of the Agouron Stockholders Meeting.
______________________________
[Intentionally Left Blank]
IN WITNESS WHEREOF, ▇▇▇▇▇▇-▇▇▇▇▇▇▇, Merger Sub and Agouron have
caused this Agreement to be signed by their respective officers thereunto
duly authorized, all as of the date first written above.
▇▇▇▇▇▇-▇▇▇▇▇▇▇ COMPANY
By: /s/ ▇▇▇▇▇▇▇▇ ▇.▇. ▇▇ ▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇.▇. ▇▇ ▇▇▇▇
Title: President and Chief Operating Officer
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary
WLC ACQUISITION CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. Wild
---------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Wild
Title: President
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇
Title: Secretary
AGOURON PHARMACEUTICALS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Secretary